Identity and Access Management Cyber-Security Provider BIO-key’s Q1 Revenue Improved to $1.9M, Driven by 205% Increase in Software License Fees; Investor Call Today at 10am ET
May 16 2022 - 7:58AM
BIO-key®
International, Inc.
(Nasdaq: BKYI), an innovative provider of workforce and customer
identity and access management (IAM) solutions featuring
Identity-Bound Biometrics (IBB) and large-scale identity solutions,
today reported results for its first quarter ended March 31, 2022
(Q1’22). BIO-key is hosting a conference call today at 10:00 a.m.
ET (details below) to review its results and outlook.
BIO-key’s revenue improved 3% to $1.94M in Q1’22
from $1.89M in Q1’21 and 108% from $935K in Q4 2021 driven by a
$981,000 increase in software license fees year over year. BIO-key
is focused on growing its base of annual recurring software license
fees which provide more predictable revenue trends and higher
margins than its more episodic hardware revenues.
Recent Highlights:
- Expanding PortalGuard
Penetration with Local Government
Customers, including New
Deployments in Missouri, New Mexico, New York, South Dakota and
Texas counties and municipalities.
- March
8th acquisition of Swivel Secure
Europe, an IAM solutions provider in Europe, the Middle
East and Africa (EMEA) that generated approximately $3.1M in
revenue and $578K in operating income in 2021. contributed $368K of
revenue during the remainder of March, and substantially expands
BIO-key’s global customer base, geographic reach, and long term
growth potential.
- Added New Enterprise
Customers and Channel Alliance Program partners
- Initial Hardware
Deployments for Nigeria’s National Identity Management Commission’s
National ID Enrollment Program in partnership with Sterling Bank
Nigeria’s Specta online lending platform - BIO-key’s
Pocket10 device for mobile biometric enrollments for agent banking
is being deployed to support increased adoption and use of the
National Identity Number and mobile banking and payments across the
country.
BIO-key CEO Michael DePasquale commented, “As
anticipated, we are off to a solid start in Q1’22, with software
license sales increasing 205% year-over-year and 168% over Q4’21.
This strong performance reflects growing momentum in our Annual
Recurring Revenue (ARR) base from software licenses, which is a
core focus and value driver for our business. While hardware
remains an important component and differentiator in our business,
its episodic nature can create some variability in our quarterly
operating performance. Our Q1’22 performance included just 22 days
of operating results from our Swivel Secure Europe operations
acquired in March.
“Looking forward, we see an expanding worldwide
opportunity to grow our software license revenue base, driven by
the compelling security, scalability, ease of use and deployment,
and customer value proposition of our PortalGuard IAM platform,
along with an expanding array of security solutions. Customers are
increasingly recognizing PortalGuard’s, flexibility and
differentiated multi-factor authentication capabilities, with
support for sixteen different factors including BIO-key’s
industry-leading Identity Bound Biometric capabilities.
“PortalGuard continues to gain momentum in the
higher education and municipal government verticals and with
enterprises as a high-value, easy-to-deploy solution for hybrid
access needs. The industry continues to recognize BIO-key as we
recently earned four recent 2022 Cybersecurity Excellence Awards
and a Security Today magazine 2022 Govies Government Security Award
for PortalGuard, in the User Authentication/
Identification/Credentialing and Management category.
Outlook
“There is a clear and growing global need for
enterprises of all kinds to protect their data and systems with
stronger cybersecurity solutions. BIO-key has built a strong base
of products, services and partnerships to address this substantial
opportunity. Given the growing momentum in our business,
complemented with the addition of Swivel Secure Europe and further
progress advancing our opportunities in Africa, we remain confident
in achieving our full-year 2022 revenue guidance of $10-13M.
Approximately 70% of the lower end of this guidance range relates
to contracted recurring software license revenue.
“Our revenue guidance represents growth of more
than 100% over 2021, benefitting from continued growth in software
license revenue, along with hardware and services revenue
contributions that are generally tied to specific projects. Our
positive outlook is supported by our strong capital position,
talented global management and product development teams, and
expanded global sales, marketing and channel partner footprint.
Further, we believe BIO-key is positioned to achieve break-even
operations starting at the lower end of this range, subject to our
mix of hardware and higher-margin software revenue.”
Financial Results
Q1’22 revenue increased 3% to $1.94M from $1.89M
in Q1’21, driven by a 205% increase in software license fees and a
modest increase in services revenue, which more than offset a
decline in hardware revenue. The year-ago period included $680,000
in hardware revenue related to the initiation of product shipments
for one of the Company’s large scale ID projects in Nigeria.
Gross profit grew to $1.6M in Q1’22 from $1.1M
in Q1’21, due primarily to the increase of higher-margin license
fee revenue as a percentage of total revenue in the current-year
period.
Total operating expenses increased to $2.6M in
Q1’22 from $2.0M in Q1’21, reflecting a $0.4M increase in research,
development and engineering expense related to our recently
announced MobileAuth and IDaaS solutions and a $0.3M increase in
selling, general and administrative expense reflecting acquisition
expenses associated with Swivel Secure Europe.
BIO-key reported an operating loss of $1.0M in
Q1’22 vs. $0.8M in Q1’21, as the Company’s increase in gross profit
was more than offset by higher operating expenses intended to
support long term growth. BIO-key reported a Q1’22 net loss
available to common stockholders of $1.0M, or $0.12 per share,
compared to a Q1’21 net loss of $0.9M, or $0.11 per share. Weighted
average basic shares outstanding were approximately 7.9M in Q1’22
and 7.8M in Q1’21.
Financial StrengthBIO-key ended
the first quarter with working capital of $10.1M, including $5.8M
of cash and cash equivalents and $5.0M in inventory, and a book
value of $15.3M.
Conference Call Details |
Date /
Time: |
Today, Monday,
May 16th at 10 a.m. ET |
Call Dial In #: |
1-877-418-5460 U.S. or 1-412-717-9594
International |
Live Webcast / Replay: |
Investor Webcast & Replay – Available for 3 months. |
Audio Replay: |
1-877-344-7529 U.S. or 1-412-317-0088 Int’l; code 3884798 |
About BIO-key International,
Inc. (www.BIO-key.com)BIO-key has over two decades of
expertise in providing authentication technology for thousands of
organizations and millions of users and is revolutionizing
authentication with biometric-centric, multi-factor identity and
access management (IAM) solutions, including PortalGuard that
provides convenient and secure access to devices, information,
applications, and high-value transactions. BIO-key's patented
software and hardware solutions, with industry-leading biometric
capabilities, enable large-scale on-premises and
Identity-as-a-Service (IDaaS) solutions as well as customized
enterprise and cloud solutions.
BIO-key Safe Harbor
StatementAll statements contained in this press release
other than statements of historical facts 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 not guarantees of future
performance or events and are subject to risks and uncertainties
that may cause actual results to differ materially from those
included within or implied by such forward-looking statements.
These risks and uncertainties include, without limitation, our
history of losses and limited revenue; our ability to raise
additional capital; our ability to protect our intellectual
property; changes in business conditions; changes in our sales
strategy and product development plans; changes in the marketplace;
continued services of our executive management team; security
breaches; competition in the biometric technology and identity
access management industries; market acceptance of biometric
products generally and our products under development; our ability
to execute and deliver on contracts in Africa; our ability to
expand into Asia, Africa and other foreign markets; our ability to
integrate the operations and personnel of PistolStar and Swivel
Secure into our business; the duration and severity of the current
coronavirus COVID-19 pandemic and its effect on our business
operations, sales cycles, personnel, and the geographic markets in
which we operate; the duration and extent of continued
hostilities in Ukraine and its impact on our European customers,
delays in the development of products and statements of assumption
underlying any of the foregoing as well as other factors set forth
under the caption "Risk Factors" in our Annual Report on Form 10-K
for the year ended December 31, 2021 and 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. Except as required by law, we
undertake no obligation to disclose any revision to these
forward-looking statements whether as a result of new information,
future events, or otherwise.
Engage with BIO-key |
Facebook –
Corporate: |
https://www.facebook.com/BIOkeyInternational/ |
LinkedIn – Corporate: |
https://www.linkedin.com/company/bio-key-international |
Twitter – Corporate: |
@BIOkeyIntl |
Twitter – Investors: |
@BIO_keyIR |
StockTwits: |
BIO_keyIR |
Media
Contact |
Investor Contact |
Erin Knapp |
William Jones, David Collins |
Matter Communications |
Catalyst IR |
BIO-key@matternow.com |
BKYI@catalyst-ir.com |
914-260-3158 |
212-924-9800 |
BIO-key International, Inc. and SubsidiariesCONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
March 31,2022 |
|
|
December 31,2021 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,846,798 |
|
|
$ |
7,754,046 |
|
Accounts receivable, net |
|
|
2,668,147 |
|
|
|
970,626 |
|
Due from factor |
|
|
51,850 |
|
|
|
49,500 |
|
Note receivable, net of
allowance |
|
|
82,000 |
|
|
|
82,000 |
|
Inventory |
|
|
4,956,472 |
|
|
|
4,940,660 |
|
Prepaid expenses and
other |
|
|
363,209 |
|
|
|
216,041 |
|
Total current assets |
|
|
13,954,691 |
|
|
|
14,012,873 |
|
Resalable software license
rights |
|
|
46,247 |
|
|
|
48,752 |
|
Investment – debt security,
net |
|
|
452,821 |
|
|
|
452,821 |
|
Equipment and leasehold
improvements, net |
|
|
134,929 |
|
|
|
69,168 |
|
Capitalized contract costs,
net |
|
|
279,789 |
|
|
|
249,012 |
|
Deposits and other assets |
|
|
8,712 |
|
|
|
8,712 |
|
Note receivable, net of
allowance |
|
|
110,000 |
|
|
|
113,000 |
|
Operating lease right-of-use
assets |
|
|
202,513 |
|
|
|
254,100 |
|
Intangible assets, net |
|
|
2,768,067 |
|
|
|
1,298,077 |
|
Goodwill |
|
|
1,648,481 |
|
|
|
1,262,526 |
|
Total non-current assets |
|
|
5,651,559 |
|
|
|
3,756,168 |
|
TOTAL
ASSETS |
|
$ |
19,606,250 |
|
|
$ |
17,769,041 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,084,452 |
|
|
$ |
427,772 |
|
Accrued liabilities |
|
|
896,702 |
|
|
|
828,997 |
|
Government loan – Swivel |
|
|
580,992 |
|
|
|
- |
|
Deferred revenue -
current |
|
|
798,830 |
|
|
|
565,355 |
|
Operating lease liabilities,
current portion |
|
|
156,730 |
|
|
|
177,188 |
|
Total current liabilities |
|
|
3,517,706 |
|
|
|
1,999,312 |
|
Deferred revenue – long
term |
|
|
54,699 |
|
|
|
67,300 |
|
Operating lease liabilities,
net of current portion |
|
|
54,710 |
|
|
|
86,974 |
|
Total non-current liabilities |
|
|
109,409 |
|
|
|
154,274 |
|
TOTAL
LIABILITIES |
|
|
3,627,115 |
|
|
|
2,153,586 |
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Common stock — authorized, 170,000,000 shares; issued and
outstanding; 8,406,451 and 7,853,759 of $.0001 par value at March
31, 2022 and December 31, 2021, respectively |
|
|
841 |
|
|
|
786 |
|
Additional paid-in
capital |
|
|
121,509,367 |
|
|
|
120,190,139 |
|
Accumulated other
comprehensive gain |
|
|
43,800 |
|
|
|
|
|
Accumulated deficit |
|
|
(105,574,873 |
) |
|
|
(104,575,470 |
) |
TOTAL
STOCKHOLDERS’ EQUITY |
|
|
15,979,135 |
|
|
|
15,615,455 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
19,606,250 |
|
|
$ |
17,769,041 |
|
BIO-key International, Inc. and
SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
|
Three months endedMarch 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Services |
|
$ |
395,804 |
|
|
$ |
380,022 |
|
License fees |
|
|
1,460,183 |
|
|
|
478,958 |
|
Hardware |
|
|
85,184 |
|
|
|
1,029,658 |
|
Total revenues |
|
|
1,941,171 |
|
|
|
1,888,638 |
|
|
|
|
|
|
|
|
|
|
Costs and other expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
|
210,913 |
|
|
|
175,944 |
|
Cost of license fees |
|
|
73,230 |
|
|
|
38,969 |
|
Cost of hardware |
|
|
53,298 |
|
|
|
551,722 |
|
Total costs and other expenses |
|
|
337,441 |
|
|
|
766,635 |
|
Gross Profit |
|
|
1,603,730 |
|
|
|
1,122,003 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
1,797,998 |
|
|
|
1,516,398 |
|
Research, development and engineering |
|
|
805,266 |
|
|
|
441,651 |
|
Total operating expenses |
|
|
2,603,264 |
|
|
|
1,958,049 |
|
Operating loss |
|
|
(999,534 |
) |
|
|
(836,046 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
Interest income |
|
|
131 |
|
|
|
2,615 |
|
Interest expense |
|
|
- |
|
|
|
(18,000 |
) |
Total other income (expense) |
|
|
131 |
|
|
|
(15,385 |
) |
Net loss |
|
$ |
(999,403 |
) |
|
$ |
(851,431 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(999,403 |
) |
|
$ |
(851,431 |
) |
Other comprehensive gain |
|
|
43,800 |
|
|
|
- |
|
Comprehensive loss |
|
$ |
(955,603 |
) |
|
$ |
(851,431 |
) |
Basic and Diluted Loss per Common Share |
|
$ |
(0.12 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding: |
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
7,885,008 |
|
|
|
7,773,688 |
|
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