Intellicheck Announces Second Quarter Financial Results - Intellicheck (NASDAQ:IDN)

Year Over Year SaaS Revenues Increased 107%

Gross Margin Increased to 91.8%

Intellicheck, Inc. IDN, an industry leader in identification authentication solutions, today announced its financial results for the second quarter ended June 30, 2018.

Revenue for the second quarter ended June 30, 2018 increased 5% to $1,001,418 versus $951,334 in the prior year comparable period. SaaS revenue in the second quarter grew 107% and totaled $625,000 versus $302,000 in the quarter ending June 30, 2017. Gross profit as a percentage of revenues improved to 91.8% for the three months ended June 30, 2018 versus 78.5% in the prior year comparable period.

Intellicheck CEO Bryan Lewis said, "The growth in SaaS based product revenue reflects the early success of our strategic plan in refocusing our efforts in our key markets and the importance of the steps we have taken to build a new sales organization and initiate operational changes."

Lewis said the path forward is well-defined, "We will continue our concentration on growing market traction for our key products, powering market opportunities to galvanize consistent growth."

The net loss for the three months ended June 30, 2018 was ($1,100,375) or ($0.07) per diluted share versus ($1,098,553) or ($0.10) per diluted share in the comparable prior year period. Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) was a loss of ($1,018,135) for the second quarter of 2018 versus a loss of ($902,211) in the prior year comparable period. A reconciliation of adjusted EBITDA to net loss is provided elsewhere in this release.

Cash at June 30, 2018 totaled $6.5 million and stockholders' equity totaled $14.7 million at the end of period.

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 period ended June 30, 2018.

Conference Call Information:

The Company will hold an earnings conference call today, August 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/29079 by clicking on the link to the webcast.

The webcast will be available for 14 days following the conference call.

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


INTELLICHECK, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS

		June 30,		December 31,
		2018		2017
		(Unaudited)
CURRENT ASSETS:
Cash	$	6,462,631	$	8,010,161
Accounts receivable, net of allowance of $24,375 and $18,750
at June 30, 2018 and December 31, 2017, respectively		473,704		652,627
Inventory		81,217		85,321
Other current assets		453,355		218,835
Total current assets		7,470,907		8,966,944

NOTE RECEIVABLE, net of current portion		50,287		71,138
PROPERTY AND EQUIPMENT, net		296,992		211,602
GOODWILL		8,101,661		8,101,661
INTANGIBLE ASSETS, net		385,075		463,578
OTHER ASSETS		9,742		67,181

Total assets	$	16,314,664	$	17,882,104

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	52,762	$	71,578
Accrued expenses		928,281		815,350
Deferred revenue, current portion		624,064		739,980
Total current liabilities		1,605,107		1,626,908

OTHER LIABILITIES:
Deferred revenue, long-term portion		48,751		87,736
Other long-term liabilities		7,863		158,407

Total liabilities		1,661,721		1,873,051

COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY:
Common stock - $.001 par value; 40,000,000 shares authorized;
15,625,329 and 15,009,246 shares issued and outstanding at
June 30, 2018 and December 31, 2017, respectively		15,625		15,009
Additional paid-in capital		127,228,475		126,416,869
Accumulated deficit		(112,591,157)		(110,422,825)
Total stockholders' equity		14,652,943		16,009,053

Total liabilities and stockholders' equity	$	16,314,664	$	17,882,104


INTELLICHECK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
		2018		2017		2018		2017

REVENUES	$	1,001,418	$	951,334	$	2,063,480	$	1,663,994
COST OF REVENUES		(82,393)		(204,634)		(182,862)		(314,070)
Gross profit		919,025		746,700		1,880,618		1,349,924

OPERATING EXPENSES
Selling, general and administrative		1,307,524		1,352,361		2,722,908		2,525,244
Research and development		755,097		495,048		1,383,133		865,645
Total operating expenses		2,062,621		1,847,409		4,106,041		3,390,889

Loss from operations		(1,143,596)		(1,100,709)		(2,225,423)		(2,040,965)

OTHER INCOME
Interest and other income		43,221		2,156		57,091		5,655

Net loss	$	(1,100,375)	$	(1,098,553)	$	(2,168,332)	$	(2,035,310)

PER SHARE INFORMATION
Loss per common share -
Basic/Diluted	$	(0.07)	$	(0.10)	$	(0.14)	$	(0.19)

Weighted average common shares used
in computing per share amounts -
Basic/Diluted		15,623,351		10,769,437		15,448,255		10,750,751


INTELLICHECK, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended June 30, 2018
(Unaudited)

					Additional				Total
	Common Stock				Paid-in		Accumulated		Stockholders'
	Shares		Amount		Capital		Deficit		Equity

BALANCE, January 1, 2018	15,009,246	$	15,009	$	126,416,869	$	(110,422,825)	$	16,009,053

Stock-based compensation expense	-		-		124,701		-		124,701
Exercise of stock options	593,838		594		686,927		-		687,521
Vesting of restricted stock	22,155		22		(22)		-		-
Net loss	-		-		-		(2,168,332)		(2,168,332)

BALANCE, June 30, 2018	15,625,239	$	15,625	$	127,228,475	$	(112,591,157)	$	14,652,943


INTELLICHECK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six months ended June 30,
		2018		2017

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,168,332)	$	(2,035,310)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		120,618		208,600
Stock-based compensation expense		124,701		191,518
Provision for doubtful accounts		5,625		-
Deferred rent		(6,002)		(22,215)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		173,298		(273,595)
Decrease (increase) in inventory		4,104		(11,580)
(Increase) in other current assets		(233,703)		(187,879)
Decrease in other assets		57,439		1,358
Increase in accounts payable and accrued expenses		107,980		93,792
(Decrease) in deferred revenue		(154,901)		(175,662)
(Decrease) in other long-term liabilities		(158,407)		-
Net cash used in operating activities		(2,127,580)		(2,210,973)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(127,505)		(12,794)
Collection of note receivable		20,034		19,185
Net cash (used in) provided by investing activities		(107,471)		6,391

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock from exercise
of stock options		687,521		10,100
Net proceeds from issuance of common stock from exercise
of warrants		-		137,500
Net cash provided by financing activities		687,521		147,600

Net decrease in cash		(1,547,530)		(2,056,982)

CASH, beginning of period		8,010,161		3,092,172

CASH, end of period	$	6,462,631	$	1,035,190

A reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA follows:


		(Unaudited)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2018		2017		2018		2017
Net loss	$	(1,100,375)	$	(1,098,553)	$	(2,168,332)	$	(2,035,310)
Reconciling items:
Interest and other income		(43,221)		(2,156)		(57,091)		(5,655)
Depreciation and amortization		61,468		103,780		120,618		208,600
Stock-based compensation expense		63,993		94,718		124,701		191,518
Adjusted EBITDA	$	(1,018,135)	$	(902,211)	$	(1,980,104)	$	(1,640,847)

About Intellicheck NYSE American: IDN Intellicheck is a trusted industry leader in technology solutions that provide real-time identification authentication and age verification. We make it possible for our clients to enhance safety and awareness, increase revenues, 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. For more information on Intellicheck, visit http://www.intellicheck.com/ and follow Intellicheck on Twitter @IntellicheckIDN, on Facebook https://www.facebook.com/intellicheckidn/, on Instagram @IntellicheckIDN, on LinkedIn https://www.linkedin.com/company/intellicheck-inc- and on YouTube https://www.youtube.com/user/ICMOBIL.

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 market and sell its products, any delays or difficulties in the Company's supply chain 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, together with 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.

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