Lifeloc Reports Third Quarter 2020 Results

PR Newswire

WHEAT RIDGE, Colo., Nov. 11, 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 third quarter and for the nine months ended September 30, 2020.

Third Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $1.555 million resulting in a quarterly net loss of $213 thousand, or $(0.09) per diluted share.  These results compare to net revenue of $2.258 million and net income of $151 thousand, or $0.06 per diluted share, in the third quarter of 2019.  Revenue for the current quarter declined 31% versus the third quarter last year.  For the first nine months of 2020, net revenue was $4.893 million with a net loss of $728 thousand, or $(0.30) per diluted share, compared to net revenue of $6.664 million and net income of $401 thousand, or $0.16 per diluted share, for the same nine months of 2019. 

The global Covid-19 pandemic continues to suppress purchasing activities of many of our customers.  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, while taking important steps to mitigate the financial impact of the pandemic.  Lifeloc has received a Paycheck Protection Program (PPP) loan and has complied with all currently published SBA guidance on loan forgiveness and is hopeful that the PPP loan obtained in May of $465 thousand will be forgiven.  Following use of the PPP loan funds, structural costs savings were achieved through measures including staff reduction.

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.  To achieve this, we will continue to grow our research and development investment required to move our developments into the market.  Growing research and development spending could result in continued short term losses, even when sales return to pre-pandemic levels. 

Our new breath alcohol testers, the LX9 and LT7, have been released and are on the U.S. Department of Transportation Conforming Products List, and 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.

Additionally, several manufacturing runs of the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 have been produced.  Evaluation is beginning with key customers.  Recently added, the automated enrollment assistant application is providing real-time enrollment coaching, streamlining this process for customer productivity.  Additionally, 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 closer to 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.

“We are very excited to have some R.A.D.A.R. 200 units in customer’s hands for evaluation,” said CEO Dr. Wayne Willkomm.  “This is a critical step to enable a recurring revenue stream through a monitoring business.”

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.

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

LIFELOC TECHNOLOGIES, INC.

Condensed Balance Sheets


ASSETS

September 30,

2020

December 31,

CURRENT ASSETS:

(Unaudited)

2019

Cash

$

2,264,887

$

3,185,996

Accounts receivable, net

517,618

641,239

Inventories, net

2,518,996

1,986,299

Income taxes receivable

223,404

6,750

Prepaid expenses and other

67,916

18,857

      Total current assets

5,592,821

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

-2,220,032

-1,959,541

     Total property and equipment, net

2,628,242

2,879,645

OTHER ASSETS:

Patents, net

154,415

145,323

Deposits and other

163,480

74,027

Deferred taxes

97,846

86,658

     Total other assets

415,741

306,008

     Total assets

$

8,636,804

$

9,024,794


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

257,743

$

261,798

Term loan payable, current portion

46,128

44,879

Paycheck Protection loan payable

465,097

0

Customer deposits

182,810

214,031

Accrued expenses

212,359

290,458

Deferred revenue, current portion

37,494

45,874

Reserve for warranty expense

46,500

45,000

      Total current liabilities

1,248,131

902,040

TERM LOAN PAYABLE, net of current portion and

debt issuance costs

1,289,659

1,324,467

DEFERRED REVENUE, net of current portion

1,723

6,066

      Total liabilities

2,539,513

2,232,573

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:

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

  authorized, 2,454,116 shares outstanding

4,636,038

4,603,304

Retained earnings

1,461,253

2,188,917

      Total stockholders’ equity

6,097,291

6,792,221

      Total liabilities and stockholders’ equity

$

8,636,804

$

9,024,794

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)

Three Months Ended September 30,

REVENUES:

2020

2019

Product sales

$

1,502,034

$

2,083,044

Royalties

31,395

153,922

Rental income

21,639

21,189

Total

1,555,068

2,258,155

COST OF SALES

957,964

1,193,088

GROSS PROFIT

597,104

1,065,067

OPERATING EXPENSES:

Research and development

335,075

253,716

Sales and marketing

235,733

329,824

General and administrative

297,128

287,814

Total

867,936

871,354

OPERATING INCOME (LOSS)

-270,832

193,713

OTHER INCOME (EXPENSE):

Interest income

2,598

10,454

Interest expense

-14,051

-14,513

Total 

-11,453

-4,059

NET INCOME (LOSS) BEFORE (PROVISION FOR) BENEFIT FROM TAXES

-282,285

189,654

BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES

69,519

-38,129

NET INCOME (LOSS)

$

-212,766

$

151,525

NET INCOME (LOSS) PER SHARE, BASIC

$

(0.09)

$

0.06

NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.09)

$

0.06

WEIGHTED AVERAGE SHARES, BASIC

2,454,116

2,454,116

WEIGHTED AVERAGE SHARES, DILUTED

2,454,116

2,456,105

 

Lifeloc Technologies, Inc.

Condensed Statements of Stockholders’ Equity (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Total shareholders’ equity, beginning balances

$

6,309,746

$

6,413,642

$

6,792,221

$

6,160,737

Common stock (no shares issued during periods):

Beginning balances

4,635,727

4,600,867

4,603,304

4,597,646

Stock based compensation expense related
to stock options

311

2,437

32,734

5,658

Ending balances

4,636,038

4,603,304

4,636,038

4,603,304

Retained earnings:

Beginning balances

1,674,019

1,812,775

2,188,917

1,563,091

Net income (loss)

-212,766

151,525

-727,664

401,209

Ending balances

1,461,253

1,964,300

1,461,253

1,964,300

Total shareholders’ equity, ending balances

$

6,097,291

$

6,567,604

$

6,097,291

$

6,567,604

 

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020

2019

Net income (loss)

$

-727,664

$

401,209

Adjustments to reconcile net income (loss) to net cash

 provided by (used in) operating activities-

   Depreciation and amortization

270,984

316,150

   Provision for doubtful accounts, net change

3,899

   Provision for inventory obsolescence, net change

48,943

7,500

   Deferred taxes, net change

-11,188

-10,192

  Reserve for warranty expense, net change

1,500

1,000

   Stock based compensation expense related to

     stock options

32,734

5,658

Changes in operating assets and liabilities-

   Accounts receivable

119,722

-79,544

   Inventories 

-581,640

-768,790

   Income taxes receivable 

-216,654

90,629

  Prepaid expenses and other 

-49,059

-62,178

   Deposits and other 

-89,453

62,884

   Accounts payable 

-4,055

45,355

  Customer deposits 

-31,221

145,341

  Accrued  federal and state income tax 

105,346

   Accrued expenses 

-78,099

49,430

   Deferred revenue 

-12,723

23,706

           Net cash provided from (used in)

            operating activities

-1,323,974

333,504

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

-9,088

-166,488

Patent filing expense

-18,772

           Net cash (used in) investing activities

-27,860

-166,488

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments made on term loan

-34,372

-33,167

Proceeds from Paycheck Protection loan

465,097

           Net cash provided by (used in) 

            financing activities

430,725

-33,167

NET INCREASE (DECREASE) IN CASH

-921,109

133,849

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

3,185,996

2,788,327

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,264,887

$

2,922,176

SUPPLEMENTAL INFORMATION:

Cash paid for interest

$

41,384

$

42,590

Cash paid for income tax

$

20,063

$

 

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SOURCE Lifeloc Technologies