Lifeloc Reports Second Quarter 2020 Results

News provided by

Lifeloc Technologies

Aug 13, 2020, 18:51 ET

WHEAT RIDGE, Colo., Aug. 13, 2020 /PRNewswire/ -- Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol and drug testing devices, has announced financial results for the second quarter and for the six months ended June 30, 2020.

Second Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $1.320 million resulting in a quarterly net loss of $350 thousand, or $(0.14) per diluted share.  These results compare to net revenue of $2.338 million and net income of $219 thousand, or $0.09 per diluted share, in the second quarter of 2019.  Revenue for the current quarter declined 44% versus the second quarter last year.  Net revenue of $3,338 million and a net loss of $515 thousand, or $0.20 per diluted share, compare to net revenue of $4.406 million and net income of $250 thousand, or $0.10 per diluted share, for the same six months of 2019. 

This sales decline and the resulting loss are primarily a result of the global Covid-19 pandemic.  Travel bans, governmental orders, and social distancing guidelines continue to force severe contractions in demand in both domestic and international markets.  As an essential part of transportation and public safety, Lifeloc has continued operations during this time.  To encourage demand and assure users of the safety of Lifeloc brand breath alcohol testers, we commissioned an independent laboratory study to assess the risk of viral cross contamination between users.  As previously reported, this study showed no risk of viral cross contamination between users of Lifeloc brand breath alcohol testers.

We have implemented structural cost savings throughout the company.  Lifeloc is complying with all currently published SBA guidance on loan forgiveness, and we are hopeful that the Paycheck Protection loan obtained in May of $465 thousand will be forgiven.

Current market conditions do not change our vision that Lifeloc is becoming the world's leading provider of real-time alcohol and drug abuse detection and monitoring equipment. In fact, current conditions highlight the urgency of achieving this vision.  We continue to invest strongly in product development, and are currently focused on R.A.D.A.R. and SpinDx, which we expect to significantly impact performance.

Our new breath alcohol testers, the LX9 and LT7 have been released and are on the U.S. Department of Transportation Conforming Products List, are starting to find adoption both domestically and internationally. With highly flexible configuration, multiple language capability and a wide temperature use range, these breathalyzers are expected to facilitate future sales growth.  Additionally, our Easycal® G2 has broadened our automated calibration capability and is compatible with our existing installed base of professional breathalyzers as well as the new LX9 and LT7.  The G2 model also includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.

Likewise, the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing and is in final testing.  This new model has updated communication, improved GPS accuracy and mechanical reliability. These devices have alcohol monitoring capability and onboard biometrics that automatically verify the identity of the test subject and are intended as a tool for supervising offenders.  This alternative to incarceration represents a critical step in moving our business towards a recurring monitoring revenue model and is expected to contribute to an increase in revenue and earnings this year and in the future.

Our SpinDx-based marijuana breathalyzer remains a key product of interest in attempts to address the broadening legalization of marijuana. Legalization and decriminalization of marijuana only increases the need for a rapid, quantitative roadside test to identify drivers under the influence of marijuana.  The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter and to collect a testable sample from a vapor stream has been demonstrated in our laboratories, and we continue the development work needed to convert this technology into a simple-to-operate device that is suitable for roadside testing.  Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory.  We are targeting the end of 2021 for the first product release from this platform.

"COVID-19 and the impact of this pandemic dominate the current business environment," said CEO Dr. Wayne Willkomm.  "But we remain committed to accomplishing our vision of growing the monitoring portion of our business and developing products for real-time drug testing.  The Lifeloc board of directors endorses our commitment to research and development, even if losses persist until the release of the SpinDx and marijuana breathalyzer products."

About Lifeloc Technologies

Lifeloc Technologies, Inc. (OTC: LCTC) is a trusted U.S. manufacturer of evidential breath alcohol testers and related training and supplies for Workplace, Law Enforcement, Corrections and International customers.  Lifeloc stock trades over-the-counter under the symbol LCTC.  We are a fully reporting Company with our SEC filings available on our web site, www.lifeloc.com/investor.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements expressed or implied in this press release, including statements about our strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities, market size and growth, and return on investments in products and market, are based on information available to us on the date of this document, and we assume no obligation to update such forward-looking statements. Investors are strongly encouraged to review the section titled "Risk Factors" in our SEC filings.

Easycal® and R.A.D.A.R.® are registered trademarks of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.

Kristie LaRose 
Lifeloc Technologies, Inc. 
http://www.lifeloc.com
(303) 431-9500

LIFELOC TECHNOLOGIES, INC.

Condensed Balance Sheets

ASSETS



June 30,





2020

December 31,

CURRENT ASSETS:

(Unaudited)

2019

Cash

$

2,625,098

$

3,185,996

Accounts receivable, net

539,672

641,239

Inventories, net

2,430,448

1,986,299

Income taxes receivable

153,557

6,750

Prepaid expenses and other

107,777

18,857

      Total current assets

5,856,552

5,839,141







PROPERTY AND EQUIPMENT, at cost:





Land

317,932

317,932

Building

1,928,795

1,928,795

Real-time Alcohol Detection And Recognition equipment and software

569,448

569,448

Production equipment, software and space modifications

976,621

976,621

Training courses

432,375

432,375

Office equipment, software and space modifications

218,074

208,986

Sales and marketing equipment and space modifications

232,600

232,600

Research and development equipment, software and space modifications

172,429

172,429

Less accumulated depreciation

(2,144,016)

(1,959,541)

     Total property and equipment, net

2,704,258

2,879,645







OTHER ASSETS:





Patents, net

157,619

145,323

Deposits and other

132,850

74,027

Deferred taxes

98,174

86,658

     Total other assets

388,643

306,008








     Total assets

$

8,949,453

$

9,024,794







LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:





Accounts payable

$

358,482

$

261,798

Term loan payable, current portion

45,966

44,879

Paycheck Protection loan payable

465,097

-

Customer deposits

166,080

214,031

Accrued expenses

210,484

290,458

Deferred revenue, current portion

44,409

45,874

Reserve for warranty expense

45,000

45,000

      Total current liabilities

1,335,518

902,040







TERM LOAN PAYABLE, net of current portion and





debt issuance costs

1,301,023

1,324,467







DEFERRED REVENUE, net of current portion

3,166

6,066

      Total liabilities

2,639,707

2,232,573







COMMITMENTS AND CONTINGENCIES











STOCKHOLDERS' EQUITY:





Common stock, no par value; 50,000,000 shares





  authorized, 2,454,116 shares outstanding

4,635,727

4,603,304

Retained earnings

1,674,019

2,188,917

      Total stockholders' equity

6,309,746

6,792,221








      Total liabilities and stockholders' equity

$

8,949,453

$

9,024,794







LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)





Three Months Ended June 30,

REVENUES:

2020

2019

Product sales

$

1,265,698

$

2,166,634

Royalties

32,851

150,146

Rental income

21,489

20,942

Total

1,320,038

2,337,722







COST OF SALES

991,969

1,182,588







GROSS PROFIT

328,069

1,155,134







OPERATING EXPENSES:





Research and development

182,485

243,369

Sales and marketing

274,780

315,539

General and administrative

324,041

295,618

Total

781,306

854,526







OPERATING INCOME (LOSS)

(453,237)

300,608







OTHER INCOME (EXPENSE):





Interest income

3,242

7,850

Interest expense

(14,016)

(14,468)

Total 

(10,774)

(6,618)







NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

(464,011)

293,990







BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES

114,419

(75,270)







NET INCOME (LOSS)

$

(349,592)

$

218,720







NET INCOME (LOSS)PER SHARE, BASIC

$

(0.14)

$

0.09







NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.14)

$

0.09







WEIGHTED AVERAGE SHARES, BASIC

2,454,116

2,454,116







WEIGHTED AVERAGE SHARES, DILUTED

2,454,116

2,454,116

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)


Six Months Ended June 30,

REVENUES:

2020

2019

Product sales

$

3,203,564

$

4,136,735

Royalties

92,132

222,984

Rental income

42,678

46,764

Total

3,338,374

4,406,483







COST OF SALES

2,232,229

2,319,147







GROSS PROFIT

1,106,145

2,087,336







OPERATING EXPENSES:





Research and development

479,382

489,168

Sales and marketing

601,344

631,922

General and administrative

680,928

620,793

Total

1,761,654

1,741,883







OPERATING INCOME (LOSS)

(655,509)

345,453







OTHER INCOME (EXPENSE):





Interest income

10,418

17,272

Interest expense

(28,147)

(28,891)

Total 

(17,729)

(11,619)







NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

(673,238)

333,834







BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES  

158,340

(84,150)







NET INCOME (LOSS)

$

(514,898)

$

249,684







NET INCOME (LOSS) PER SHARE, BASIC

$

(0.20)

$

0.10







NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.20)

$

0.10







WEIGHTED AVERAGE SHARES, BASIC

2,454,116

2,454,116







WEIGHTED AVERAGE SHARES, DILUTED

2,454,116

2,454,116

Lifeloc Technologies, Inc.

Condensed Statements of Stockholders' Equity (Unaudited)









































Three Months Ended June 30,

Six Months Ended June 30,


2020

2019

2020

2019

Total shareholders' equity, beginning balances

$

6,659,026

$

6,193,863

$

6,792,221

$

6,160,737













Common stock (no shares issued during periods):











Beginning balances

4,635,415

4,599,808

4,603,304

4,597,646

Stock based compensation expense related to stock options












312

1,059

32,423

3,221

Ending balances

4,635,727

4,600,867

4,635,727

4,600,867













Retained earnings:











Beginning balances

2,023,611

1,594,055

2,188,917

1,563,091

Net income (loss)

(349,592)

218,720

(514,898)

249,684

Ending balances

1,674,019

1,812,775

1,674,019

1,812,775













Total shareholders' equity, ending balances

$

6,309,746

$

6,413,642

$

6,309,746

$

6,413,642

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)











Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020

2019

Net income (loss)

$

(514,898)

$

249,684

Adjustments to reconcile net income (loss) to net cash




 provided by (used in) operating activities-





   Depreciation and amortization

191,493

207,725

   Provision for doubtful accounts, net change

5,000

-

   Provision for inventory obsolescence, net change

42,265

7,500

   Deferred taxes, net change

(11,516)

(7,616)

   Stock based compensation expense related to





     stock options

32,423

3,221

Changes in operating assets and liabilities-





   Accounts receivable

96,567

(230,626)

   Inventories 

(486,414)

(662,940)

   Income taxes receivable 

(146,807)

90,629


  Prepaid expenses and other 

(88,920)

(94,426)

   Deposits and other 

(58,823)

62,883

   Accounts payable 

96,684

109,760


  Customer deposits 

(47,951)

120,330

   Accrued expenses 

(79,974)

24,770

   Deferred revenue 

(4,365)

16,657


           Net cash (used in)






            operating activities

(975,236)

(102,449)








CASH FLOWS FROM INVESTING ACTIVITIES:





Purchases of property and equipment

(9,088)

(128,614)

Patent filing expense

(18,772)

-


           Net cash (used in) investing activities

(27,860)

(128,614)








CASH FLOWS FROM FINANCING ACTIVITIES:





Principal payments made on term loan

(22,899)

(22,156)

Proceeds from Paycheck Protection loan

465,097

-


           Net cash provided from (used in) 






            financing activities

442,198

(22,156)








NET (DECREASE) IN CASH

(560,898)

(253,219)








CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

3,185,996

2,788,327








CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,625,098

$

2,535,108








SUPPLEMENTAL INFORMATION:





Cash paid for interest

$

27,605

$

28,349









Cash paid for income tax

$

20,063

$

-

SOURCE Lifeloc Technologies

Related Links

http://www.lifeloc.com

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