Biometric Authentication and Security Solutions Provider BIO-key Reports Q1 2018 Results

WALL, N.J., May 15, 2018 (GLOBE NEWSWIRE) -- BIO-key International, Inc. BKYI, an innovative provider of biometric authentication and security solutions, today reported results for its first quarter ended March 31, 2018 (Q1'18) and will host a conference call tomorrow, May 16th at 10:00 a.m. EDT (details below) to review its results and outlook.

Highlights:

BIO-key's CEO Michael DePasquale commented, "We continue to see solid growth opportunities across our software, hardware and consumer hardware product lines. However, as we have indicated and expected, BIO-key's quarterly performance will continue to fluctuate based on the timing of larger software and hardware agreements, creating variability in our year over year and sequential quarterly comparisons as we saw in Q1 2018. For this reason, we continue to focus investors on full year results and provide financial guidance for full year revenue as we believe this longer-term measure presents a more relevant performance metric for our business.

"We are working on a range of customer opportunities, partnerships and expanded distribution relationships, with a particular focus on opportunities across Asia, all of which support our positive outlook and guidance. Thus, we are maintaining our full year revenue guidance in the range of $8M - $12M.

"In summary, we are experiencing increasing enterprise engagement for the security, convenience, risk and reporting benefits of our biometric solutions. While sales cycles can remain lengthy with certain larger procurements, we are also seeing deployments being fast-tracked as a result of a data breach or a change in senior management priorities. We are active on a range of current opportunities while we continue to invest in new innovative applications for our technology – initiatives that we believe further expand our reach and revenue potential."

Q1 2018 Results

Q1'18 total revenue declined by $577,000 to $841,000 from $1,418,000 in Q1'17, principally due to lower software license and hardware reader revenue, partially offset by a $151,000 contribution from our new line of Bluetooth and Biometric-enabled locks.

Gross margin was negative 40% in Q1'18 compared to 53% in Q1'17, due principally to an increase in non-cash software license amortization to $660,000 in Q1'18 compared to $390,000 in Q1'17. Q1'18 operating expenses decreased 12% due to overhead reduction initiatives as well as reduced R&D expense due principally to the reallocation of certain R&D costs to cost of revenue.

BIO-key's Q1'18 net loss available to common stockholders was ($2,348,000), or ($0.30) per basic share, compared to ($1,557,000), or ($0.26) per basic share, in Q1'17. Per share results in 2018 and 2017 are based on a weighted average of 7.851 million and 6.095 million basic shares outstanding, respectively, reflecting the impact of the Company's 1-for-12 reverse split effected in December 2016.

At March 31, 2018, BIO-key's cash and cash equivalents improved to $1.3 million compared to $0.3 million at December 31, 2017.

Financial Guidance: 

Based on specific opportunities in discussion; product development, sales & marketing, partner and distribution initiatives; and recurring anticipated revenue streams, BIO-key is reiterating its full year revenue guidance of $8M-12M.  Within this guidance range, BIO-key would expect to generate positive cash flow from operations for the full year 2018.

Conversion of Preferred Stock into Common at $3.60 Per Share

The following table outlines Q1 and year to date conversions of convertible preferred stock into common stock.  BIO-key views these conversions as supportive, positive developments for the Company as they eliminate future convertible preferred dividend requirements on converted shares, enhance BIO-key's financial strength, and streamline the Company's capital structure.

 # Conv.

Shares

Converted to

Common
Accrued Conv.

Dividends

Converted into

Common
Conversion

Price
Common

Shares

Issued
DateReduction in

Annual

Dividends
Series B-1 2.5% Convertible Preferred60,420 $3.601,678,334 3/23/2018$151,050 
Accrued Series B-1 dividends $417,084$3.60115,857 3/23/2018 
       
Series A-1 6% Convertible Preferred39,088 $3.601,085,778 4/3/2018$234,528 
Accrued A-1 dividends $330,552$3.6091,820 4/3/2018 
  Totals $747,636    2,971,789  $385,578 

 

The foregoing conversions increased BIO-key's issued and outstanding common shares by 2.97 million shares to approximately 10.7 million, reduced accrued dividends totaling nearly $750,000, and reduced future annual dividend payments by approximately $386,000.

Conference Call and Webcast Replay

Date/Time:Wednesday, May 16, 2018 at 10 am ET
Dial-In number:877-418-5460 U.S. or 412-717-9594 (Intl.)
Webcast Replay:BKYI Q1 2018 Webcast & Replay Available for 30 days
Call Replay:877-344-7529 U.S. or 412-317-0088; Int'l code 10119967



About BIO-key International, Inc.
(www.bio-key.com)

BIO-key is revolutionizing authentication with biometric solutions that enable convenient and secure access to information and high-stakes transactions. We offer alternatives to passwords, PINs, tokens, and cards to make it easy for enterprises and consumers to secure their devices as well as information in the cloud. Our premium finger scanning devices, including SideSwipeTM SideTouchTM EcoIDTM and SidePassTM offer market-leading quality, performance and price. BIO-key is now bringing the power and ease of use of biometric technology to its recently launched TouchLockTM line of biometric and Bluetooth enabled padlocks – thereby providing even more ways to BIO-key your world!

BIO-key Safe Harbor Statement

All 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 ability to develop new products and evolve existing ones, customer and market acceptance of biometric solutions generally and our specific offerings, our ability to expand sales within existing customer relationships, our ability to raise additional capital, and our ability to attract and retain key personnel.  For a more complete description of these and other risk factors that may affect the future performance of BIO-key International, Inc., see "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and its 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. The Company undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made.

Facebook – Corporate: BIO-key International

Twitter – Corporate: @BIOkeyIntl

Twitter – Investors: @BIO_keyIR

StockTwits: @BIO_keyIR



Investor & Media Contacts


William Jones, Tanya Kamatu

Catalyst Global

212-924-9800

bkyi@catalyst-ir.com

BIO-KEY International, Inc. and Subsidiary

CONDENSED CONSOLIDATED BALANCE SHEETS

  March 31,

2018
  December 31,

2017
 
  (Unaudited)     
ASSETS        
Cash and cash equivalents $1,299,631  $288,721 
Accounts receivable, net  305,176   2,875,946 
Due from factor  54,045   109,865 
Inventory  899,160   946,847 
Resalable software license rights  2,730,000   2,640,000 
Prepaid expenses and other  166,875   152,654 
Total current assets  5,454,887   7,014,033 
Resalable software license rights, net of current portion  7,196,348   7,933,808 
Accounts receivable, net of current portion  740,000   760,000 
Equipment and leasehold improvements, net  193,002   181,165 
Capitalized contract costs, net  365,367   - 
Deposits and other assets  8,712   8,712 
Intangible assets, net  175,449   181,104 
Total non-current assets  8,678,878   9,064,789 
TOTAL ASSETS $14,133,765  $16,078,822 
         
LIABILITIES        
Accounts payable $252,985  $499,230 
Accrued liabilities  524,680   688,023 
Dividends payable on preferred stock  369,486   630,408 
Deferred revenue  374,439   507,866 
Total current liabilities  1,521,590   2,325,527 
TOTAL LIABILITIES  1,521,590   2,325,527 
         
Commitments and contingencies        
STOCKHOLDERS' EQUITY:        
         
Series A-1 convertible preferred stock: authorized, 100,000 (liquidation

preference of $100 per share); issued and outstanding 62,596 of $.0001 par

value at March 31, 2018 and December 31, 2017, respectively
  6   6 
Series B-1 convertible preferred stock: authorized, 105,000 (liquidation

preference of $100 per share); issued and outstanding 44,580 and 105,000

of $.0001 par value at March 31, 2018 and December 31, 2017, respectively
  5   11 
Common stock — authorized, 170,000,000 shares; issued and outstanding;

9,493,936 and 7,691,324 of $.0001 par value at March 31, 2018 and

December 31, 2017, respectively
  949   769 
Additional paid-in capital  81,639,682   80,829,001 
Accumulated deficit  (69,028,467)  (67,076,492)
TOTAL STOCKHOLDERS' EQUITY  12,612,175   13,753,295 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $14,133,765  $16,078,822 



BIO-KEY International, Inc. and Subsidiary

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

  Three months ended

March 31,
 
  2018  2017 
         
Revenues        
Services $302,449  $320,587 
License fees  102,719   496,568 
Hardware  436,287   601,180 
Total revenues  841,455   1,418,335 
Costs and other expenses        
Cost of services  154,733   38,820 
Cost of license fees and other  1,024,712   622,114 
Total cost and other expenses  1,179,445   660,934 
Gross profit (loss)  (337,990)  757,401 
         
Operating expenses        
Selling, general and administrative  1,461,854   1,620,150 
Research, development and engineering  392,154   493,444 
Total operating expenses  1,854,008   2,113,594 
Operating loss  (2,191,998)  (1,356,193)
Other income        
Interest income  6   6 
Total other income  6   6 
Net loss  (2,191,992)  (1,356,187)
Convertible preferred stock dividends  (156,162)  (200,625)
Net loss available to common stockholders $(2,348,154) $(1,556,812)
         
Basic & Diluted Loss per Common Share $(0.30) $(0.26)
         
Weighted Average Shares Outstanding:        
Basic & Diluted  7,851,514   6,094,955 



BIO-KEY International, Inc. and Subsidiary

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

  Three Months Ended March 31, 
  2018  2017 
         
CASH FLOW FROM OPERATING ACTIVITIES:        
Net loss $(2,191,992) $(1,356,187)
Adjustments to reconcile net loss to cash provided by operating activities:        
Allowance for doubtful accounts  -   500,000 
Depreciation  21,020   7,819 
Amortization of intangible assets  5,655   3,402 
Amortization of software license rights  659,414   341,160 
Amortization of capitalized contract costs  18,668   - 
Stock based directors fees  16,512   5,003 
Share and warrant-based compensation for employees and consultants  533,421   156,086 
Change in assets and liabilities:        
Accounts receivable  2,590,770   1,000,775 
Due from factor  55,820   (64,253)
Capitalized contract costs  (144,018)  - 
Inventory  47,687   (105,527)
Software license rights  (11,954)  53,628 
Prepaid expenses and other  (14,221)  (13,171)
Accounts payable  (246,245)  (313,150)
Accrued liabilities  (163,343)  44,692 
Deferred revenue  (133,427)  (143,324)
Net cash provided by operating activities  1,043,767   116,953 
CASH FLOW FROM INVESTING ACTIVITIES:        
Capital expenditures  (32,857)  (13,893)
Net cash used for investing activities  (32,857)  (13,893)
CASH FLOW FROM FINANCING ACTIVITIES:        
Costs to issue preferred and common stock  -   (5,946)
Net cash used for financing activities  -   (5,946)
NET INCREASE IN CASH AND CASH EQUIVALENTS  1,010,910   97,114 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  288,721   1,061,307 
CASH AND CASH EQUIVALENTS, END OF PERIOD $1,299,631  $1,158,421 

 

Primary Logo

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress Releases
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!