Revenues Increase 29% While Expenses Decrease
34%
Intellicheck Mobilisa, Inc. (NYSE MKT:IDN), a leader in identity
authentication, verification and validation solutions, today
announced its financial results for the third quarter ended
September 30, 2016.
Revenue for the third quarter ended September 30, 2016 increased
29% to $1,214,308 compared to Q2 2016. During the quarter, the
Company achieved an increase in bookings of 38% and a backlog
increase of 88% over Q2 2016. In addition, the Company realized a
decrease in operating expenses of 34% over Q2 2016 and a decrease
of 43% in operating expenses from Q1 2016. EBITDA loss in
the current quarter improved 62% over Q2 2016 to approximately
($490,000).
“During our earnings call last quarter, we shared our
expectation that the Company would achieve break-even in the first
half of 2017. We continue to support that projection as we see the
key indicators we believe will keep us on track to achieve that
projection," noted Intellicheck’s CEO Dr. William Roof.
The Company expects revenue growth to be fueled by a number of
key developments. Retail market adoption of Intellicheck's retail
technology solution products including Retail ID™ and Retail ID
Mobile™ is expected to rise. The Company is currently engaged in
some high profile opportunities with nationally recognized, major
retail institutions. Expanded opportunities with nationally
prominent financial institutions, including banks and payment
processors, are also expected to make significant contributions to
revenue growth.
Adoption of the Company's industry leading Age ID™ technology
solution is expected to increase in the coming quarters.
Intellicheck's Age ID identity authentication solution provides the
most up-to-date answer to the problem of spotting fake and altered
IDs, thereby filling an extensive market need to control fraud and
access to age restricted products including alcoholic beverages,
tobacco, and marijuana. Currently, there are 16 states and 17 law
enforcement authorities using Age ID nationwide.
The Company's award-winning Law ID™ technology solution is
anticipated to promote further revenue growth enhanced by
Intellicheck’s recently announced strategic partnership with Nlets,
the International Justice and Public Safety Network. This
partnership is projected to compress the sales cycle for the
technology solution, significantly, nationwide. Nlets has been the
primary mechanism for interstate law enforcement data exchange for
50 years. Nlets’ user population is made up of all of the United
States and its territories, all Federal agencies with a justice
component, selected international agencies, and a variety of
strategic partners that serve the law enforcement community
cooperatively exchanging data. Intellicheck is currently engaged
with a number of law enforcement organizations.
“When I assumed the responsibilities of CEO, we committed to our
partners and shareholders that we were embarking upon a new
direction for the Company. We have done that. We also committed to
a path to achieve revenue growth and profitability as we executed
our strategic plan for expanded market adoption of our cutting-edge
product offerings. We expanded and leveraged our robust patent
portfolio, and cut spending as we moved, on several fronts, to
enhance our position as an industry innovator. Since that time, we
planned and executed a number of strategic moves including the
purchase of a biometric patent portfolio, the reinvigoration of our
sales force and our outreach to target markets with communications
and marketing programs that are achieving results. We have also
introduced new products and have filed for key patents that will
allow us to continue our growth trajectory. I look forward to
reporting continued progress in the weeks and months ahead,” Dr.
Roof concluded.
The financial results reported today do not take into account
any adjustments that may be required in connection with the
completion of the Company’s review process and should be considered
preliminary until Intellicheck Mobilisa files its Form 10-Q for the
fiscal quarter ended September 30, 2016.
INTELLICHECK MOBILISA, INC.
CONSOLIDATED BALANCE SHEETS ASSETS September
30, December 31, 2016 2015 (Unaudited) CURRENT ASSETS: Cash and
cash equivalents $ 3,534,399 $ 5,953,257
Accounts receivable, net of allowance of
$12,764 and $18,411 as of September 30, 2016 and December 31, 2015,
respectively
827,890 1,158,972 Inventory 74,241 74,732 Other current assets
299,138 178,362 Total current assets
4,735,668 7,365,323 NOTES RECEIVABLE, net of current portion
121,477 150,496 PROPERTY AND EQUIPMENT, net 284,701 325,427
GOODWILL 8,101,661 8,101,661 INTANGIBLE ASSETS, net 2,233,454
2,470,127 OTHER ASSETS 61,298 59,800
Total assets $ 15,538,259 $ 18,472,834
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $ 99,649 $ 260,276 Accrued expenses 685,856
536,316 Deferred revenue, current portion 909,822
909,233 Total current liabilities 1,695,327 1,705,825
OTHER LIABILITIES Deferred revenue, long-term portion
213,574 341,242 Deferred rent 72,240 99,355
Total liabilities 1,981,141 2,146,422
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS EQUITY:
Common stock - $.001 par value; 40,000,000
shares authorized; 10,548,983 and 9,878,906 shares issued and
outstanding, respectively
10,549 9,879 Additional paid-in capital 116,825,843 114,950,278
Accumulated deficit (103,279,274 ) (98,633,745 )
Total stockholders' equity 13,557,118
16,326,412 Total liabilities and stockholders' equity
$ 15,538,259 $ 18,472,834
INTELLICHECK MOBILISA,
INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2016
2015
2016
2015
REVENUES $ 1,214,308 $ 2,199,473 $ 3,105,330 $ $ 5,478,170
COST OF REVENUES (268,137 ) (803,484 )
(622,833 ) (2,446,392 ) Gross profit 946,171 1,395,989
2,482,497 3,031,778 OPERATING EXPENSES Selling, general and
administrative 1,268,915 2,083,137 5,115,838 5,087,682 Research and
development 407,615 692,310
2,024,818 1,869,063 Total operating expenses
1,676,530 2,775,447 7,140,656
6,956,745 Loss from operations (730,359
) (1,379,458 ) (4,658,159 ) (3,924,967 ) OTHER INCOME
(EXPENSE) Interest and other income 3,437 112,233 12,630 144,391
Interest expense - (572 ) -
(3,307 ) Net loss $ (726,922 ) $ (1,267,797 ) $
(4,645,529 ) $ (3,783,883 ) PER SHARE INFORMATION Loss per
common share - Basic/Diluted $ ( 0.07 ) $ ( 0.13 ) $ ( 0.48 ) $ (
0.39 )
Weighted average common shares used in
computing per share amounts -
Basic/Diluted 10,246,629 9,851,764
9,680,010 9,584,582
INTELLICHECK MOBILISA, INC. CONSOLIDATED STATEMENT
OF STOCKHOLDERS’ EQUITY
For the nine months ended September 30,
2016
(Unaudited)
Additional
Common
Stock
Paid-in Accumulated
Shares
Amount
Capital
Deficit
Total
BALANCE, January 1, 2016 9,878,906 $ 9,879 $ 114,950,278 $
(98,633,745 ) $ 16,326,412 Stock-based compensation expense
- - 802,623 - 802,623
Issuance of common stock, net of costs
1,200,000 1,200 1,779,141 - 1,780,341
Purchase and retirement of common
stock
(979,114 ) (979 ) (1,095,629 ) - (1,096,608 ) Exercise of stock
options 345,127 345 389,534 - 389,879 Vesting of restricted stock
104,064 104 (104 ) - - Net loss - - -
(4,645,529 ) (4,645,529 ) BALANCE,
September 30, 2016 10,548,983 $ 10,549 $ 116,825,843
$ (103,279,274 ) $ 13,557,118
INTELLICHECK MOBILISA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
2016
2015
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (4,645,529
) $ (3,783,883 )
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 328,105 798,072 Noncash stock-based
compensation expense 802,623 685,892 Provision for doubtful
accounts 12,764 - Gain on sale of wireless assets - (108,825 ) Gain
on sale of property and equipment - (31,500 ) Deferred rent (27,115
) (20,311 ) Changes in assets and liabilities: Decrease (Increase)
in accounts receivable 318,318 (832,929 ) Decrease in inventory 491
22,576 (Increase) in other current assets (120,776 ) (59,512 )
(Increase) Decrease in other assets (1,498 ) 12,207 (Decrease) in
accounts payable, accrued expenses (11,087 ) (90,223 ) (Decrease)
in deferred revenue (127,079 ) (336,329 ) Net cash
used in operating activities (3,470,783 ) (3,744,765
) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of patents
- (125,000 ) Purchases of property and equipment (50,707 ) (93,142
) Collection of note receivable 29,020 - Proceeds from sale of
property and equipment - 31,500 Proceeds from sale of wireless
assets - 30,000 Net cash used in
investing activities (21,687 ) (156,642 ) CASH
FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of
common stock 1,780,341 7,630,757
Net proceeds from issuance of common stock
from exercise of stock options
389,879 977 Purchase and retirement of common stock (1,096,608 ) -
Payments on note payable - (31,078 ) Net cash
provided by financing activities 1,073,612
7,600,656 Net decrease (increase) in cash and cash
equivalents (2,418,858 ) 3,699,249 CASH AND CASH
EQUIVALENTS, beginning of period 5,953,257
2,966,350 CASH AND CASH EQUIVALENTS, end of period $
3,534,399 $ 6,665,599 Supplemental disclosure
of noncash investing and financing activities: Issuance of notes
receivable related to sale of wireless division $ - $
200,000 Financing of property and equipment $ - $
31,078
A reconciliation of GAAP net loss to Adjusted EBITDA
follows:
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
Net loss $ (726,922 ) $ (1,267,797 ) $ (4,645,529 ) $ (3,783,883 )
Reconciling items: Interest and other – net (3,437 ) (111,661 )
(12,630
) (141,084 ) Depreciation and amortization 104,935 227,049 328,105
798,072 Stock-based compensation costs 134,929
418,484 802,623 685,892 Adjusted
EBITDA $ (490,495 ) $ (733,925 ) $ (3,527,431 ) $ (2,441,003 )
Earnings Conference Call Information
The Company will hold an earnings conference call on November 10
at 1:00 p.m. ET/10:00 a.m. PT to discuss operating results. To
listen to the earnings conference call, please dial 877-407-8037.
For callers outside the U.S., please dial 201-689-8037.
The conference call will also be webcast simultaneously and can
be accessed at
http://www.investorcalendar.com/IC/CEPage.asp?ID=175422 by clicking
on the link to the webcast.
The webcast will be available for 14 days following the
conference call.
About Intellicheck Mobilisa
Intellicheck Mobilisa is an industry leader in identity
authentication, verification and validation solutions in both the
U.S. and Mexico. The Company holds 24 patents including many
patents pertaining to identification technology. Its identity
solutions support customers in the national defense, law
enforcement, retail, hospitality and financial markets. The
Company’s products scan, authenticate and analyze components of
identity documents including driver licenses, military
identification cards and other government forms of identification
containing magnetic stripe, barcode and smart chip information.
Once extracted from the identity card, the information can be used
to populate forms as well as provide safety, security and
efficiencies throughout these markets. For more information
regarding Intellicheck's innovative products, please visit
www.intellicheck.com.
Adjusted EBITDA
Intellicheck Mobilisa uses Adjusted EBITDA as a non-GAAP
financial performance measurement. Adjusted EBITDA is calculated by
starting with net income (loss) and adding back interest, income
taxes, impairments of long-lived assets and goodwill, depreciation,
amortization and stock-based compensation expense. Adjusted EBITDA
is provided to investors to supplement the results of operations
reported in accordance with GAAP. Management believes that Adjusted
EBITDA provides an additional tool for investors to use in
comparing Intellicheck Mobilisa financial results with other
companies that also use Adjusted EBITDA in their communications to
investors. By excluding non-cash charges such as impairments of
long-lived assets and goodwill, amortization, depreciation and
stock-based compensation, as well as non-operating charges for
interest and income taxes, investors can evaluate the Company's
operations and compare its results on a more consistent basis to
the results of other companies. In addition, adjusted EBITDA is one
of the primary measures that management uses to monitor and
evaluate financial and operating results.
Intellicheck Mobilisa considers Adjusted EBITDA to be an
important indicator of the Company's operational strength and
performance of its business and a useful measure of the Company's
historical operating trends. However, there are significant
limitations to the use of Adjusted EBITDA, because it excludes
interest income and expense, impairments of long-lived assets and
goodwill, and stock based compensation expense, all of which impact
the Company's profitability, as well as depreciation and
amortization related to the use of long-term assets, which benefit
multiple periods. Intellicheck Mobilisa believes that these
limitations are compensated by providing Adjusted EBITDA only as a
supplement to GAAP net income (loss) and clearly identifying the
difference between the two measures. Consequently, Adjusted EBITDA
should not be considered in isolation or as a substitute for net
income (loss) presented in accordance with GAAP. Adjusted EBITDA as
defined by the Company may not be comparable with similarly named
measures provided by other entities.
Safe Harbor Statement
Statements in this news release about Intellicheck Mobilisa’s
future expectations, including: the advantages of our products,
future demand for Intellicheck Mobilisa’s existing and future
products, whether revenue and other financial metrics will improve
in future periods, whether Intellicheck Mobilisa will be able to
execute its turn-around plan or whether successful execution of the
plan will result in increased revenues, whether sales of our
products will continue at historic levels or increase, whether
brand value and market awareness will grow, whether the Company can
leverage existing partnerships or enter into new ones, and all
other statements in this release, other than historical facts, are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 (“PSLRA”). This statement
is included for the express purpose of availing Intellicheck
Mobilisa, Inc. of the protections of the safe harbor provisions of
the PSLRA. It is important to note that actual results and ultimate
corporate actions could differ materially from those in such
forward-looking statements based on such factors as market
acceptance of Intellicheck Mobilisa’s products, changing levels of
demand for Intellicheck Mobilisa’s current and future products,
Intellicheck Mobilisa’s ability to reduce or maintain expenses
while increasing sales, customer results achieved using our
products in both the short and long term, success of future
research and development activities, Intellicheck Mobilisa’s
ability to successfully manufacture, market and sell its products,
Intellicheck Mobilisa’s ability to manufacture its products in
sufficient quantities to meet demand within required delivery time
periods while meeting its quality control standards, any delays or
difficulties in the Company’s supply chain, the success of the
Company’s sales and marketing efforts coupled with the typically
long sales and implementation cycle for its products, Intellicheck
Mobilisa’s ability to enforce its intellectual property rights,
changes in laws and regulations applicable to the Company’s
products, the Company’s continued ability to access
government-provided data, the risks inherent in doing business with
the government including audits and contract cancellations,
liability resulting from any security breaches or product failure,
and other risks detailed from time to time in Intellicheck
Mobilisa’s reports filed with the SEC. We do not assume any
obligation to update the forward-looking information.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161110005145/en/
Intellicheck Mobilisa, Inc.Media and Public Relations:Sharon
Schultz, 302-539-3747
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