Financial Results Conference Call Today at 4:30
p.m. EDT/1:30 p.m. PT
Intellicheck, Inc. (NYSE American: IDN), an industry leader in
delivering real-time threat identification and identification
authentication that provides the antivirus to the epidemic of
counterfeit IDs, today announced its financial results for the
second quarter ended June 30, 2017.
Revenue for the second quarter ended June 30, 2017 increased 1%
to $951,000 compared to $940,000 for the quarter ended June 30,
2016. SaaS revenue increased approximately 117% to $300,000 for the
second quarter, compared to $138,000 for prior year comparable
period. The Company’s booked orders for the second quarter
increased 5.4% to approximately $895,000 compared to $849,000
during the prior year comparable quarter. Gross profit as a
percentage of revenues was 78.5% for the three months ended June
30, 2017 compared to 79.6% for the three months ended June 30,
2016. The slight decrease in gross profit was due to revenue mix
that included equipment sales related to a customer that concluded
a paid SaaS pilot and went live in all their retail stores late in
the second quarter.
Operating expenses, which consist of selling, general and
administrative, and research and development expenses, decreased by
approximately 27% or $681,000 to $1,847,000 for the three months
ended June 30, 2017 from $2,528,000 in the comparable prior year
period. The net loss for the three months ended June 30, 2017
improved 38% to $1,099,000 or $0.10 per diluted share compared to a
net loss of $1,775,000 or $0.19 per diluted share for the
comparable prior year period.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation expense and certain
non-recurring charges) for the quarter ended June 30, 2017 improved
30% to a loss of $902,000 compared to an Adjusted EBITDA loss of
$1,293,000 for the second quarter of 2016. A reconciliation of net
loss to adjusted EBITDA is provided elsewhere in this release.
“This quarter has been defined by important achievements
reflected in the demonstrated traction of Age ID and the
exceptional growth in adoption of Retail ID. This quarter also
marked the first implementation of our Retail ID Online product
that addresses the rapidly growing E-Commerce channel. Our Age ID
and Retail ID paid product pilots with major brands have exceeded
expectations with ROI’s yielding quick payback times as we realize
continued progress in converting from paid pilots to contracts. We
expect further advances as we increase pilots across key markets
with organizations ranging from credit card companies and
nationally recognized retail organizations to major concessionaires
that will allow us to build on key market momentum and further
growth of SaaS recurring revenue,” said Intellicheck CEO Dr.
William Roof.
“We believe that our successes have expanded our position across
key verticals and market recognition of our leadership based on our
demonstrated core competencies and our world-class products. We are
moving quickly to capitalize on this momentum as is evident in the
early third quarter capital raise undertaken with Oppenheimer &
Co. Inc. and Northland Capital. We intend to use the proceeds from
this raise to significantly increase our sales force and onboard
additional product engineers to expedite implementations, develop
incremental features and benefits that will present up-sell
opportunities, and further commercialize our biometric focused
patent. We believe that there is significant growth opportunity as
we remain focused on leveraging these successes with high gross
margin products and innovation to drive continued strong demand and
new market opportunities,” 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 files its Form 10-Q for the fiscal
quarter ended June 30, 2017.
PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS INTELLICHECK,
INC. CONSOLIDATED BALANCE SHEETS ASSETS
June 30, December 31, 2017 2016 (Unaudited) CURRENT ASSETS: Cash $
1,035,190 $ 3,092,172 Accounts receivable, net of allowance of
$74,354 as of June 30, 2017 and December 31, 2016, respectively
775,721 502,126 Inventory 82,127 70,547 Other current assets
354,134 165,473 Total current assets 2,247,172 3,830,318
NOTE RECEIVABLE, net of current portion 94,942 114,909 PROPERTY AND
EQUIPMENT, net 232,752 270,776 GOODWILL 8,101,661 8,101,661
INTANGIBLE ASSETS, net 1,996,781 2,154,563 OTHER ASSETS 59,940
61,298 Total assets $ 12,733,248 $ 14,533,525
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable $ 93,391 $ 14,140 Accrued expenses 573,416 519,957
Deferred revenue, current portion 695,852 825,538 Total current
liabilities 1,362,659 1,359,635 OTHER LIABILITIES: Deferred
revenue, long-term portion 131,330 177,306 Deferred rent - 61,133
Total liabilities
1,493,989
1,598,074
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS EQUITY:
Common stock - $.001 par value; 40,000,000 shares authorized;
10,808,027 and 10,718,553 shares issued and outstanding,
respectively 10,808 10,719 Additional paid-in capital 117,666,081
117,293,158 Accumulated deficit (106,437,630) (104,368,426) Total
stockholders' equity 11,239,259 12,935,451 Total liabilities
and stockholders' equity $ 12,733,248 $ 14,533,525
INTELLICHECK, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2017
2016
2017
2016
REVENUES $ 951,334 $ 940,354 $ 1,663,994 $ 1,891,022 COST OF
REVENUES (204,634) (191,654) (314,070) (354,696) Gross profit
746,700 748,700 1,349,924 1,536,326 OPERATING EXPENSES
Selling, general and administrative 1,352,361 1,830,147 2,525,244
3,846,923 Research and development 495,048 697,747 865,645
1,617,203 Total operating expenses 1,847,409 2,527,894 3,390,889
5,464,126 Loss from operations (1,100,709) (1,779,194)
(2,040,965) (3,927,800) OTHER INCOME Interest and other
income 2,156 4,078 5,655 9,193 Net loss $ (1,098,553) $
(1,775,116) $ (2,035,310) $ (3,918,607) PER SHARE
INFORMATION Loss per common share - Basic/Diluted $ (0.10) $ (0.19)
$ (0.19) $ (0.42) Weighted average common shares used in
computing per share amounts - Basic/Diluted 10,769,437 9,108,856
10,750,751 9,393,587
INTELLICHECK, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’
EQUITY
For the six months ended June 30, 2017
(Unaudited)
Additional Total
Common
Stock
Paid-in Accumulated Stockholders’
Shares
Amount
Capital
Deficit
Equity
BALANCE, January 1, 2017 10,718,553 $ 10,719 $ 117,293,158 $
(104,368,426) $ 12,935,451 Cumulative adjustment upon
modified retrospective adoption of ASU 2016-09 - - 33,894 (33,894)
- Balance after adoption of recent accounting pronouncement
10,718,553 10,719 117,327,052 (104,402,320) 12,935,451
Stock-based compensation expense - - 191,518 - 191,518 Exercise of
stock options 10,000 10 10,090 - 10,100 Exercise of warrants 62,500
62 137,438 - 137,500 Vesting of restricted stock 16,974 17 (17) - -
Net loss - - - (2,035,310) (2,035,310) BALANCE, June 30,
2017 10,808,027 $ 10,808 $ 117,666,081 $ (106,437,630) $ 11,239,259
INTELLICHECK,
INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
Six months ended
June 30,
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,035,310)
$ (3,918,607) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 208,600 223,170
Noncash stock-based compensation expense 191,518 667,694 Deferred
rent (22,215) (17,559) Changes in assets and liabilities:
(Increase) Decrease in accounts receivable (273,595) 342,449
(Increase) in inventory (11,580) (2,245) (Increase) in other
current assets (187,879) (125,282) Decrease (Increase) in other
assets 1,358 (1,498) Increase in accounts payable and accrued
expenses 93,792 166,096 (Decrease) Increase in deferred revenue
(175,662) 41,157 Net cash used in operating activities (2,210,973)
(2,624,625) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases
of property and equipment (12,794) (39,316) Collection of note
receivable 19,185 19,249 Net cash provided by (used in) investing
activities 6,391 (20,067) CASH FLOWS FROM FINANCING
ACTIVITIES: Net proceeds from issuance of common stock - 1,780,800
Net proceeds from issuance of common stock from exercise of stock
options 10,100 - Net proceeds from issuance of common stock from
exercise of warrants 137,500 - Purchase and retirement of common
stock - (1,096,608) Net cash provided by financing activities
147,600 684,192 Net decrease in cash (2,056,982) (1,960,500)
CASH, beginning of period 3,092,172 5,953,257 CASH,
end of period $ 1,035,190 $ 3,992,757
A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA
follows:
(Unaudited) Three Months Ended Six
Months Ended June 30, June 30, 2017
2016 2017 2016 Net loss $ (1,098,553) $
(1,775,116) $ (2,035,310) $ (3,918,607) Reconciling items: Interest
and other income (2,156) (4,078) (5,655) (9,193) Depreciation and
amortization 103,780 116,377 208,600 223,170 Stock-based
compensation expense 94,718 369,664 191,518 667,694 Adjusted EBITDA
$ (902,211) $ (1,293,153) $ (1,640,847) $ (3,036,936)
Earnings Conference Call Information
The Company will hold an earnings conference call today, August
14, at 4:30 p.m. EDT/1:30 p.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 simultaneously webcast and can be
accessed at http://www.investorcalendar.com/event/19823. The
webcast will be available for 14 days following the conference
call.
About Intellicheck NYSE American: IDN
Intellicheck is the industry leader in technology solutions that
are the antivirus to the epidemic of counterfeit IDs providing
real-time threat identification and identification authentication.
Our technology solutions make it possible for our clients to
enhance the safety and awareness of their facilities and people,
improve customer service, and increase operational efficiencies.
Founded in 1994, Intellicheck has grown to serve dozens of Fortune
500 companies including retail and financial industry clients,
police departments, national defense clients at agencies, major
seaports, and military bases, and diverse state and federal
government agencies. The Company holds 25 patents including many
patents pertaining to identification technology. For more
information on Intellicheck, please visit
http://www.intellicheck.com/ and follow Intellicheck on Twitter
@IntellicheckIDN, on Instagram @IntellicheckIDN, on LinkedIn
https://www.linkedin.com/company/intellicheck-inc-, on Facebook
https://www.facebook.com/intellicheckidn/ on YouTube
https://www.youtube.com/user/ICMOBIL, and read Intellicheck’s
latest blog post at http://intellicheckidn.com/.
Safe Harbor Statement
Statements in this news release about Intellicheck’s future
expectations, including: the advantages of our products, future
demand for Intellicheck’s existing and future products, whether
revenue and other financial metrics will improve in future periods,
whether Intellicheck 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”). These statements, which
express management’s current views concerning future events,
trends, contingencies or results, appear at various places in this
website and use words like “anticipate,” “assume,” “believe,”
“continue,” “estimate,” “expect,” “forecast,” “future,” “intend,”
“plan,” “potential,” “predict,” “project,” “strategy,” “target” and
similar terms, and future or conditional tense verbs like “could,”
“may,” “might,” “should,” “will” and “would 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, 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’s products and
the presently anticipated growth in the commercial adoption of the
Company’s products and services, changing levels of demand for
Intellicheck’s current and future products, Intellicheck’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’s ability to successfully manufacture, market and sell
its products, Intellicheck’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’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’s
reports filed with the SEC. We do not assume any obligation to
update the forward-looking information.
Adjusted EBITDA
Intellicheck 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 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 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 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170814005205/en/
Intellicheck, Inc.Investor Relations:Gar Jackson,
949-873-2789orMedia and Public Relations:Sharon Schultz,
302-539-3747
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