COPsync Announces Record 2015 Financial Results
March 28 2016 - 9:00AM
COPsync, Inc. (NASDAQ:COYN), which operates the nation's only law
enforcement in-car, real-time information sharing and data
communication network and the COPsync911™ threat-alert service for
schools, government buildings, hospitals and other potentially
at-risk facilities announces its financial results for the fiscal
year ended December 31, 2015.
Company Highlights for 2015
- NASDAQ Uplisting and Capital Raise: The
Company completed a $10.6 million underwritten public offering and
successful uplisting to the NASDAQ Stock Market in November 2015 to
accelerate business growth and enhance its corporate profile.
- Record Revenue: Total revenues reached a
record $6.1 million in fiscal 2015, a 4% increase compared to total
revenues of $5.9 million recorded in fiscal 2014. Total revenues in
the second half of 2015 increased 32% year-over-year to $3.7
million as the Company implemented a successful revamping of its
sales team in the second quarter.
- Increased Licensing and Subscription Revenue:
Software license/subscription revenues reached a record $3.3
million for fiscal 2015, increasing by 24% compared to $2.7 million
for 2014. Excluding fees for one-time services, the software
licenses/subscriptions increased by 13% to $3.0 million.
- Renewing Customer Growth: Billings for orders
from renewing customers increased 24% to $1.7 million in fiscal
2015 compared to $1.3 million in fiscal 2014.
- Improving Margins: Gross profit margin for
software license/subscription revenues increased to 57% in fiscal
2015 compared to 55% for fiscal 2014, while the Company’s overall
gross profit increased to 37% in fiscal 2015 compared to 36% in
fiscal 2014.
- Progressive Market Penetration: The Company
has established a significant footprint in Texas with the Company
now having customers in approximately 79% of the 254 counties in
the state. Additionally, the Company continued to expand its
presence outside of Texas, making further sales inroads in
Louisiana, Massachusetts and New Hampshire. At the end of fiscal
2015, the total number of operational customers on the COPsync
Network was 657, including 616 law enforcement agency customers and
847 subscribers to COPsync911.
CEO Comment on 2015 Results
“2015 was a pivotal year for COPsync as we laid
the foundation for the Company to achieve significant future
growth. Through the completion of our successful capital raise and
uplisting to the NASDAQ stock exchange, we now have the enhanced
corporate profile and capital to implement our aggressive business
plan to unlock the inherent and ever-growing value of our software
platform. The 2015 revamping of the sales organization continues,
and the aggregate changes are projected to accelerate our sales
significantly and increase the value of the business. We are
already beginning to see significant positive trends in our sales
metrics with the 13% increase in software licenses/subscriptions
and the 24% increase in billings from renewing customers. We see
these increases as important early indicators that the Company's
recurring revenue generating SaaS business model is beginning to
gain traction. We expect these favorable sales trends to continue
as we focus our efforts on building a solid high margin
subscription base and expanding into new states. As we continue the
expansion plans for our SaaS business, hardware sales over time
will become a smaller percentage of our overall business. With our
expansion plan firmly in place, we are at the right place at the
right time with the right products to establish COPsync as the
premier software provider for enhancing facility safety and
creating real-time information sharing and data interoperability
among law enforcement agencies across the country.”
Financial Highlights for FY
2015
- Revenues: Total revenues for fiscal 2015 rose
to a record $6.1 million, a 4% increase from revenues of $5.9
million recorded in fiscal 2014. The revenue increase was driven by
a 24% year over year increase in software licenses/subscriptions
revenues totaling $3.3 million. The increase in software
licenses/subscriptions revenues in 2015 was partially offset by a
decline in hardware, installation, and other revenue, which totaled
$2.8 million in 2015 compared to $3.2 million. The Company expects
its hardware sales to ebb and flow over time depending on the
nature of new and existing contracts. The Company expects future
revenues to be driven by ongoing organic growth, national expansion
of its COPsync and COPsync911 platforms, new products and increased
sales and marketing efforts and, potentially,
acquisitions.
- Gross Profit: Gross profit for fiscal 2015
totaled $2.3 million compared to $2.1 million in fiscal 2014. Gross
profit percentage was 37% for fiscal 2015 compared to 36% in fiscal
2014. Gross profit percentage for software license/subscription
revenues increased to 57% in fiscal 2015 compared to 55% in fiscal
2014 while gross profit percentage for hardware, installation, and
other revenue was 14% compared to 21% in fiscal 2014.
- Operating Loss: Operating loss in fiscal 2015
was $4.0 million, compared to an operating loss of $4.1 million in
fiscal 2014. The decrease in operating loss in fiscal 2015 was
attributable to an increase in gross profit partially offset by an
increase in overall operating expenses. Total operating expenses
were $6.3 million in fiscal 2015 compared to $6.2 million in fiscal
2014. The increase in total operating expenses was a result of an
increase in sales and marketing expenses largely offset by a
decrease in G&A and research and development expenses. The
Company expects R&D expenses to increase in 2016 as additional
resources are invested in feature and functionality enhancements
designed to facilitate the sale of the Company’s COPsync Network
and COPsync911 service offerings across the U.S. and initiatives to
enhance further its technology platform so that it will be capable
of supporting millions of users.
- Net Loss: Net loss for fiscal 2015 was $6.4
million, compared to net loss of $4.2 million during the prior year
period. The increase in net loss in fiscal 2015 was mainly
attributable to a $2.2 million increase in other expenses, which
consisted of interest expense involving various debt instruments
and costs for beneficial conversion features relating to the
conversion of convertible promissory notes, notes payable, warrant
exercises and the conversion of Series B Preferred Stock. GAAP loss
per share in fiscal 2015 was $1.43 on 4.5 million weighted average
shares outstanding compared to $1.18 in fiscal 2014 on 3.7 million
weighted average shares outstanding. The net loss in 2015 was
attributable to an increase in sales, marketing, product
development and other expenses as described above.
- Cash Flow: Net Cash used in operations in
fiscal 2015 was $3.3 million compared to net cash used in
operations of $2.9 million during the prior year period.
- Selected Balance Sheet Items: As of December
31, 2015, the Company had $8.3 million in cash and cash equivalents
compared to $587,000 at year-end 2014. The Company had working
capital of $5.1 million and a current ratio of 2.08:1 as of
December 31, 2015, compared to negative working capital of $3.5
million and a current ratio of 0.28:1 as of December 31, 2014.
Business Outlook for 2016
Assessing the Company’s business outlook for
2016, COPsync CEO, Mr. Ronald A. Woessner stated, “We are pursuing
a two-pronged sales strategy to maximize our revenue growth as we
move through 2016. Our first objective is to purposefully and
relentlessly continue to add new subscribers to our customer base
in our home state of Texas with an eye toward reaching a critical
mass or “tipping point,” which we believe will enable COPsync to
secure virtually all of the estimated 76,000 Texas law enforcement
officers as COPsync Network subscribers. To this end, 23 percent of
the estimated 2642 Texas law enforcement agencies are customers; we
have at least one customer in approximately 79 percent of the 254
Texas counties, and we are only four county sheriff departments
short of having a majority of the 254 sheriffs’ departments using
the COPsync Network service. The second objective is to accelerate
our nationwide expansion efforts. We currently have COPsync Network
and COPsync911 threat-alert system customers in 10 states, and we
are planning or executing plans to secure customers in 5 – 6
additional states within the next four months. We are confident
that this strategy will drive revenue growth in 2016 and we look
forward to reporting on our progress in the coming quarters as we
expand the scope of the COPsync Network and COPsync911 threat-alert
system and thereby continue to march toward our objective of
creating one nationwide law enforcement in-car, real-time
information sharing and data communication network.”
About COPsync
COPsync, Inc. (NASDAQ:COYN) is a technology
company that improves law enforcement communication in a manner
that saves officers’ lives and helps them prevent and respond more
quickly to crime. Officers have instant access to actionable,
mission-critical data, share information, and communicate in
real-time with other officers and agencies, even those hundreds and
thousands of miles away. The COPsync Network™ also eliminates
manual processes and increases officer productivity by enabling
officers to write electronic tickets, accident reports, DUI forms,
arrest forms and incident and offense reports. COPsync’s
threat-alert system, COPsync911™, enables schools, courts,
hospitals, and other potentially at-risk facilities to
automatically and silently send emergency alerts directly to local
law enforcement officers in their patrol cars during a crisis,
thereby speeding first responder response times and saving minutes
when seconds count. The Company also sells VidTac®, a law
enforcement software-driven in-vehicle video system. Visit
www.copsync.com and www.copsync911.com for more information.
Safe Harbor Statement
Statements in this release that are not purely
historical facts or that depend upon future events, including
statements about forecasts of earnings, revenue, product
development, sales or other statements about anticipations,
beliefs, expectations, intentions, plans or strategies for the
future, may be forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. For
example, statements containing words like “expect,” “believe,”
“confident,” “estimated,” “future,” “plan,” “planning,”
“projected,” “strategy,” “pursuing,” “objective” and other similar
terms, express management’s current views concerning future events,
trends, contingencies or results, which may be considered
forward-looking statements. Specifically, the statements “…we laid
the foundation for the Company to achieve significant future
growth”; “…the aggregate changes are projected to accelerate our
sales significantly and increase the value of our business”; “We
expect these favorable sales trends to continue as we focus our
efforts on building a solid high margin subscription base and
expanding into new states”; “The Company expects future revenues to
be driven by ongoing organic growth, national expansion of its
COPsync and COPsync911 platforms, new products and increased sales
and marketing efforts and, potentially, acquisitions”; “The Company
expects R&D expenses to increase in 2016 as additional
resources are invested in feature and functionality enhancements
designed to facilitate the sale of the Company’s COPsync Network
and COPsync911 service offerings across the U.S. and initiatives to
enhance further its technology platform so that it will be capable
of supporting millions of users”; “We are pursuing a two-pronged
sales strategy to maximize our revenue growth as we move through
2016”; “…we believe will enable COPsync to secure virtually all of
the estimated 76,000 Texas law enforcement officers as COPsync
Network subscribers”; and “…we are planning on executing plans to
secure customers in 5 – 6 additional states within the next four
months” and “We are confident that this strategy will drive revenue
growth in 2016, and we look forward to reporting on our progress in
the coming quarters as we expand the scope of the COPsync Network
and COPsync911 threat-alert system.” These statements are all
highly dependent on a variety of factors, including the Company’s
ability to execute its strategy in other jurisdictions. Readers are
cautioned not to place undue reliance on forward-looking
statements. All forward-looking statements are based on information
available to the Company on the date this release was issued. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Any forward-looking statements involve
risks and uncertainties that could cause actual events or results
to differ materially from the events or results described in the
forward-looking statements, including risks or uncertainties
related to the Company’s ability to obtain and retain customers and
development, implementation and acceptance of its products and
services. Certain statements in this press release are highly
dependent on the Company’s ability to successfully execute its
strategy in Texas and other geographic areas; the Company’s ability
to successfully book new orders for its products and services and
renew its existing customers at anticipated renewal rates. The
Company may not succeed in adequately addressing and managing these
and other risks. Further information regarding factors that could
affect the Company’s financial, operating and other results can be
found in the risk factors section of the Company’s recent filing on
Form 10-K with the Securities and Exchange Commission.
Contact:
For COPsync: Ronald A. Woessner Chief Executive Officer
972-865-6192 invest@copsync.com
Fred SommerSenior ConsultantInvestor
RelationsAscendant Partners,
LLC.732-410-9810fred@ascendantpartnersllc.com