BIO-key(R) International, Inc. Reports First Quarter 2014 Financial Results
May 01 2014 - 8:00AM
Marketwired
BIO-key(R) International, Inc. Reports First Quarter 2014 Financial
Results
Expects Sustained Growth in Second Quarter
WALL, NJ--(Marketwired - May 1, 2014) - BIO-key
International, Inc. (OTCQB: BKYI), a leader in fingerprint
biometric identification technologies, cloud-based mobile
credentialing and identity verification solutions, today reported
solid financial results for the first quarter of 2014, including
positive guidance for Q2, 2014.
Three Month
Comparisons
Total revenue for the three months ended March 31, 2014 was
$1.37 million compared to Q1'13 revenue of $805,000, an increase of
approximately 70%. Sales grew as a result of higher license
sales. "During the quarter, we signed our first OEM agreement
to supply our WEB-key client and matching algorithm to fingerprint
sensor manufacturers for the mobile device vertical," stated
Michael DePasquale, BIO-key Chairman and CEO. "Our topline
revenue was at the high end of our guidance and we expect to
continue to grow the business in 2014. We are finding a
receptive audience in identity access management channels and with
more market reports describing mediocre fingerprint sensor
performance in the mobile field, demand for our superior algorithm
and scalable, flexible solution is growing."
Q1'14 gross margin increased to 91% from 85% in
Q1'13. Operating expenses for Q1'14 increased 35%, year over
year, to $1,344,000 from approximately $995,000 in Q1'13. Net
loss for Q1'14 was ($299,000) as compared to Q1'13 net loss of
($316,000). The net loss in both periods is less than ($0.01)
per share. The Q1 '14 loss includes non-cash expenses of
$304,380, for fair-value adjustments, option issuance costs, and
depreciation and amortization. Mr. DePasquale continued, "We met
our topline goals for Q1, but missed the bottom line after
investing in additional development projects and higher than
expected non-cash expenses mostly related to outstanding
warrants."
Liquidity and Capital
Resources
The Company reported cash, cash equivalents, and accounts
receivables of $1.9 million as of March 31, 2014, as compared
to $2.3 million at December 31, 2013. BIO-key has no debt and
shareholder equity of $730,000. Mr. DePasquale concluded, "We
are off to a good start for 2014 and expect this momentum to
continue into the second quarter. As we mentioned during the
last call, we are interested in incremental sales hires, along with
potential additions to our engineering staff, in that
order. We anticipate that the market will continue to evolve
towards BIO-key and drive growing demand for our products."
Highlights from the first quarter included:
- Addition of new hospital customer Covenant Health Systems,
named among the top 100 integrated health systems in the
country. The organization is comprised of seven acute care
hospitals; inpatient and outpatient cancer, behavioral and
rehabilitation centers; home health; outpatient surgery and
diagnostic centers and physician offices throughout
Tennessee.
- Entered into a license agreement with IDEX and will
collaborate to deliver a sensor-to-server infrastructure
solution for trustworthy, yet simple and low-cost, in device
and online authentication for consumer applications and in
particular the smartphone, tablet, and PC markets.
- Introduced and demonstrated along with InterDigital a
groundbreaking multifactor authentication (MFAS) solution,
incorporating BIO-key's fingerprint technology for the Android
mobile platform at Mobile World Congress 2014 in Barcelona,
Spain.
- Jim Skidmore III joined BIO-key as Senior Vice President
Global Sales & Channel Development. Jim joins us with
more than 20 years of successful identity and
access management partner channel sales development
experience.
- Signed channel agreements with 10 leading Identity &
Access Management (IAM) technology resellers and VARs.
2014 Second Quarter
Outlook
For the Second Quarter of 2014, the Company expects revenue
between $1.0 million and $1.7 million. Gross margin is
expected to exceed 85%. The Company expects to generate
operating income with incremental revenue above the midpoint of the
guidance range. Further, the Company expects to exit the
second quarter with a modest sales backlog. The pipeline value
was approximately $15 million at the beginning of the quarter and
currently remains at approximately $15 million.
Conference Call and
Webcast
In conjunction with this release, BIO-key has scheduled a
conference call, which will be broadcast live over the Internet on
Thursday, May 1, 2014 at 10:00 a.m. Eastern Daylight
Time. Participate live via phone by dialing 1-877-317-6789
(U.S.) 1-412-317-6789 (International) and asking for the
BIO-key Call at least 10 minutes prior to the start time. Or join
the call live over the Internet by logging on to the web address
http://www.bio-key.com. A streaming audio replay of the
webcast will be available shortly after the call on www.bio-key.com
for a period of thirty days. You can also access the recorded call
by dialing 1-877-344-7529 and using access code 10045178
International callers should dial 1-412-317-0088 and use the same
access code.
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BIO-KEY International, Inc. and Subsidiary |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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March 31, |
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December 31, |
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2014 |
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2013 |
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(Unaudited) |
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ASSETS |
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Cash and cash equivalents |
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$ |
592,921 |
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$ |
2,023,349 |
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Accounts receivable, net of allowance for doubtful
accounts of $20,526 at March 31, 2014 and December 31, 2013 |
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1,345,961 |
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284,025 |
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Due from factor |
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10,560 |
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2,449 |
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Inventory |
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8,947 |
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9,376 |
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Prepaid expenses and other |
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86,433 |
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73,482 |
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Total
current assets |
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2,044,822 |
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2,392,681 |
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Equipment and leasehold improvements, net |
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118,603 |
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125,062 |
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Deposits and other assets |
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8,712 |
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8,712 |
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Intangible assets--less accumulated amortization |
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171,549 |
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174,950 |
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Total
non-current assets |
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298,864 |
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308,724 |
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TOTAL ASSETS |
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$ |
2,343,686 |
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$ |
2,701,405 |
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LIABILITIES |
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Accounts payable |
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$ |
323,842 |
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$ |
540,912 |
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Accrued liabilities |
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336,447 |
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338,321 |
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Deferred revenue |
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547,878 |
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528,160 |
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Total
current liabilities |
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1,208,167 |
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1,407,393 |
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Warrant liabilities |
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405,428 |
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243,077 |
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TOTAL LIABILITIES |
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$ |
1,613,595 |
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$ |
1,650,470 |
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STOCKHOLDERS' EQUITY: |
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Common stock -- authorized, 170,000,000 shares; issued
and outstanding; 115,995,974 of $.0001 par value at March 31, 2014
and 115,842,315 December 31, 2013 |
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11,599 |
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11,584 |
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Additional paid-in capital |
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55,888,278 |
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55,909,923 |
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Accumulated deficit |
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(55,169,786 |
) |
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(54,870,572 |
) |
TOTAL STOCKHOLDERS' EQUITY |
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730,091 |
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1,050,935 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ |
2,343,686 |
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$ |
2,701,405 |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three months ended March 31, |
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2014 |
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2013 |
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Revenues |
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Services |
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$ |
249,232 |
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$ |
276,960 |
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License fees and other |
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1,118,291 |
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527,683 |
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1,367,523 |
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804,643 |
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Costs and other expenses |
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Cost
of services |
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39,175 |
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40,715 |
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Cost
of license fees and other |
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78,049 |
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77,098 |
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117,224 |
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117,813 |
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Gross Profit |
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1,250,299 |
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686,830 |
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Operating Expenses |
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Selling, general and administrative |
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856,997 |
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732,076 |
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Research, development and engineering |
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486,567 |
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262,809 |
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Total Operating Expenses |
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1,343,654 |
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|
994,885 |
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Operating loss |
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(93,355 |
) |
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(308,055 |
) |
Other expenses |
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Interest income |
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2 |
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(7,524 |
) |
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Loss
on derivative liabilities |
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(204,948 |
) |
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- |
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Income taxes |
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|
(912 |
) |
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- |
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Total Other expenses |
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(205,858 |
) |
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(7,524 |
) |
Net (loss) income |
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$ |
(299,213 |
) |
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$ |
(315,579 |
) |
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Basic (Loss) Income per Common Share |
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$ |
* |
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$ |
* |
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Diluted (Loss) Income per Common Share |
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$ |
* |
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$ |
* |
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* Represents less than ($0.01) |
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Weighted Average Shares Outstanding: |
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Basic and diluted |
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115,876,461 |
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81,465,289 |
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About BIO-key BIO-key International, Inc., headquartered
in Wall, New Jersey, develops and delivers advanced identification
solutions to commercial and government enterprises, integrators,
and custom application developers. BIO-key's award winning, high
performance, scalable, cost-effective and easy-to-deploy biometric
finger identification technology accurately identifies and
authenticates users of wireless and enterprise applications. Our
solutions are used in local embedded OEM products as well as some
of the world's largest identification deployments to improve
security, guarantee identity, and help reduce identity
theft. BIO-key's technology is offered directly or by market
leading partners around the world. (http://www.bio-key.com)
BIO-key Safe Harbor Statement Certain statements contained in
this press release are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 (the
"Act"). The words "estimate," "project," "intends," "expects,"
"anticipates," "believes" and similar expressions are intended to
identify forward-looking statements. Such forward-looking
statements are made based on management's beliefs, as well as
assumptions made by, and information currently available to,
management pursuant to the "safe-harbor" provisions of the
Act. These statements are subject to certain risks and
uncertainties that may cause actual results to differ materially
from those projected on the basis of these statements. These
risks and uncertainties include, without limitation, our history of
losses and limited revenue, our ability to develop new products and
evolve existing ones, wider market acceptance of biometric
technologies, our ability to raise additional financing, and our
ability to attract and retain key personnel. For a more
complete description of these and other risk factors that may
affect the future performance of BIO-key International, Inc., see
"Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2013 and its other filings with the
Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date made. The Company undertakes no
obligation to disclose any revision to these forward-looking
statements whether to reflect events or circumstances after the
date hereof or otherwise.
Investor & Media Contact: BIO-key International, Inc.
Contact: Jay Meier Vice President Corporate Development Phone:
651-789-6116 eMail: Jay.meier@bio-key.com
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