Financial Results Conference Call Today at 4:30
p.m. ET/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
third quarter ended September 30, 2017.
Revenue for the third quarter ended September 30, 2017 decreased
20% to $967,000 compared to $1,214,000 for the quarter ended
September 30, 2016. SaaS revenue increased 73% to $520,000 for the
third quarter, compared to approximately $300,000 during the second
quarter of 2017. Gross profit as a percentage of revenues increased
to 89.1% for the three months ended September 30, 2017 compared to
77.1% for the three months ended September 30, 2016. The Company’s
booked orders for the third quarter decreased 20% to approximately
$931,000 compared to $1,169,000 during the prior year comparable
quarter.
Operating expenses, which consist of selling, general and
administrative, and research and development expenses, increased by
approximately 16% or $267,000 to $1,944,000 for the three months
ended September 30, 2017 from $1,677,000 in the comparable prior
year period. The net loss for the three months ended September 30,
2017 was $1,075,000 or $0.08 per diluted share compared to a net
loss of $727,000 or $0.07 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 September 30, 2017 was
a loss of $888,000 compared to an Adjusted EBITDA loss of $490,000
for the third quarter of 2016. A reconciliation of net loss to
Adjusted EBITDA is provided elsewhere in this release.
“We are pleased with the sequential increase in our SaaS
revenues and we are confident that we have the right products at
the right time that will allow us to continue to execute our plans
for future growth,” stated Intellicheck Interim CEO Bill White. “We
are excited about the prospects ahead of us at a time when we see
several important indicators that point to what we believe will be
strong growth in product adoption in key markets. Although it has
taken longer than we anticipated, we have demonstrated our
software’s efficacy in the numerous market verticals we serve.”
“Additionally,” White concluded, “we have some significant
patents in the biometric space that we look forward to seeing
through to commercialization as we pursue our vision for innovative
product development that we believe will allow us to remain
competitive as technology evolves.”
The unaudited 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 September 30, 2017.
PART I – FINANCIAL INFORMATION Item 1.
FINANCIAL STATEMENTS INTELLICHECK, INC.
CONSOLIDATED BALANCE SHEETS ASSETS
September 30, December 31, 2017 2016 (Unaudited)
CURRENT ASSETS: Cash $ 8,940,762 $ 3,092,172
Accounts receivable, net of allowance of
$18,750 and $74,354 as of September 30, 2017 and December 31, 2016,
respectively
725,562 502,126 Inventory 81,591 70,547 Other current assets
312,977 165,473 Total current assets 10,060,892
3,830,318 NOTE RECEIVABLE, net of current portion 81,407
114,909 PROPERTY AND EQUIPMENT, net 211,256 270,776 GOODWILL
8,101,661 8,101,661 INTANGIBLE ASSETS, net 1,917,890 2,154,563
OTHER ASSETS 59,940 61,298 Total assets $
20,433,046 $ 14,533,525 LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $
98,433 $ 14,140 Accrued expenses 692,006 519,957 Deferred revenue,
current portion 706,972 825,538 Total current
liabilities 1,497,411 1,359,635 OTHER LIABILITIES: Deferred
revenue, long-term portion 100,348 177,306 Deferred rent -
61,133 Total liabilities 1,597,759 1,598,074
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS EQUITY:
Common stock - $.001 par value; 40,000,000
shares authorized; 14,981,633 and 10,718,553 shares issued and
outstanding, respectively
14,982 10,719 Additional paid-in capital 126,332,780 117,293,158
Accumulated deficit (107,512,475 ) (104,368,426 ) Total
stockholders' equity 18,835,287 12,935,451
Total liabilities and stockholders' equity $ 20,433,046 $
14,533,525
INTELLICHECK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2017
2016
2017
2016
REVENUES $ 966,690 $ 1,214,308 $ 2,630,684 $ 3,105,330 COST
OF REVENUES (105,013 ) (268,137 ) (419,083 ) (622,833 ) Gross
profit 861,677 946,171 2,211,601 2,482,497 OPERATING
EXPENSES Selling, general and administrative 1,459,234 1,268,915
3,984,478 5,115,838 Research and development 484,970 407,615
1,350,615 2,024,818 Total operating expenses
1,944,204 1,676,530 5,335,093 7,140,656
Loss from operations (1,082,527 ) (730,359 ) (3,123,492 )
(4,658,159 ) OTHER INCOME Interest and other income 7,682
3,437 13,337 12,630 Net loss $
(1,074,845 ) $ (726,922 ) $ (3,110,155 ) $ (4,645,529 ) PER
SHARE INFORMATION Loss per common share - Basic/Diluted $ (0.08 ) $
( 0.07 ) $ (0.27 ) $ ( 0.48 )
Weighted average common shares used in
computing per share amounts -
Basic/Diluted 13,167,955 10,246,629 11,565,340
9,680,010
INTELLICHECK, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the nine months ended September 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 - - 282,330 -
282,330 Issuance of common stock, net of costs 4,168,750 4,169
8,573,692 - 8,577,861 Exercise of stock options 10,000 10 10,090 -
10,100 Exercise of warrants 63,500 63 139,637 - 139,700 Vesting of
restricted stock 20,830 21 (21 ) - - Net loss - - -
(3,110,155 ) (3,110,155 ) BALANCE, September 30, 2017
14,981,633 $ 14,982 $ 126,332,780 $ (107,512,475 ) $
18,835,287
INTELLICHECK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September
30,
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (3,110,155
) $ (4,645,529 )
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 311,871 328,105 Noncash stock-based
compensation expense 282,330 802,623 Provision for doubtful
accounts (55,604 ) 12,764 Deferred rent (34,122 ) (27,115 ) Changes
in assets and liabilities: (Increase) decrease in accounts
receivable (167,832 ) 318,318 (Increase) decrease in inventory
(11,044 ) 491 (Increase) in other current assets (146,193 )
(120,776 ) Decrease (increase) in other assets 1,358 (1,498 )
Increase (decrease) in accounts payable and accrued expenses
229,331 (11,087 ) (Decrease) in deferred revenue (195,524 )
(127,079 ) Net cash used in operating activities (2,895,584 )
(3,470,783 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases
of property and equipment (15,678 ) (50,707 ) Collection of note
receivable 32,191 29,020 Net cash provided by (used
in) investing activities 16,513 (21,687 ) CASH FLOWS
FROM FINANCING ACTIVITIES: Net proceeds from issuance of common
stock 8,577,861 1,780,341
Net proceeds from issuance of common stock
from exercise of stock options
10,100 389,879
Net proceeds from issuance of common stock
from exercise of warrants
139,700 - Purchase and retirement of common stock -
(1,096,608 ) Net cash provided by financing activities 8,727,661
1,073,612 Net increase (decrease) in cash
5,848,590 (2,418,858 ) CASH, beginning of period 3,092,172
5,953,257 CASH, end of period $ 8,940,762
$ 3,534,399
A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA
follows:
(Unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2017
2016
2017
2016
Net loss $ (1,074,845 ) $ (726,922 ) $ (3,110,155 ) $ (4,645,529 )
Reconciling items: Interest and other – net (7,682 ) (3,437 )
(13,337 ) (12,630 ) Depreciation and amortization 103,271 104,935
311,871 328,105 Stock-based compensation costs 90,812
134,929 282,330 802,623 Adjusted EBITDA $
(888,444 ) $ (490,495 ) $ (2,529,291 ) $ (3,527,431 )
Earnings Conference Call Information
The Company will hold an earnings conference call today,
November 14, at 4:30 p.m. ET/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 webcast simultaneously and can
be accessed at http://www.investorcalendar.com/event/21668 by
clicking on the link to the webcast.
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, 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/.
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.
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 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171114005160/en/
Intellicheck, Inc.Investor Relations:Gar Jackson,
949-873-2789orMedia and Public Relations:Sharon Schultz,
302-539-3747
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