Lifeloc Technologies : Reports First Quarter 2021 Results

WHEAT RIDGE, Colo., May 12, 2021 /PRNewswire/ -- Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol and drug testing devices, has announced financial results for the first quarter ended March 31, 2021.

First Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $1.810 million resulting in a quarterly net income of $403 thousand, or $0.16 per diluted share.  These results compare to net revenue of $2.018 million and quarterly net loss of $(165) thousand, or $(0.07) per diluted share in the first quarter of 2020.  Revenue for the quarter declined 10% versus the first quarter last year, primarily from the impact of the COVID-19 global pandemic and the government ordered shutdowns.

As previously reported in 2020, Lifeloc received a $465 thousand SBA guaranteed loan through the Paycheck Protection Program (PPP).  These loans could be completely forgiven by the SBA if the proceeds were spent in accordance with the program rules.  Lifeloc complied with this program and applied for forgiveness in 2020, which was granted by the SBA in early 2021, with the financial benefit of the forgiveness realized in the first quarter of 2021.  The PPP program was quite successful in mitigating the negative effect of the significant demand suppression on cash flow from the pandemic while allowing Lifeloc to carefully reduce structural costs and retain critical personnel, with no compromise to our product development efforts. 

Lifeloc qualified for and received a second PPP loan of $471 thousand in Q1 of 2021.  As with the first loan, Lifeloc intends to comply with all requirements and will apply for forgiveness of this loan after the program conditions are satisfied and the application process is made available.

Our new platform LX9 and LT7 devices were introduced late in 2019.  Despite current difficult market conditions, the features (and performance) of the new L-series products have driven penetration by meeting previously unaddressable market needs, such as wider temperature ranges and fast customization that incorporates local languages.  We expect that most L-series sales will be incremental to FC-series devices rather than displacing FC-series sales.  "In January 2021 our L-series devices were certified to SAI's (Standards Australia International) latest AS 3547:2019 standards for Breath Alcohol Detectors. This achievement solidifies our ability to provide advanced breath alcohol detectors to a robust market and provides a product certification that is highly regarded in the Pacific Rim," said Mark Lary, Director of Regulatory Affairs.

We continue to invest in the significant growth opportunities of alcohol monitoring and drug detection.  The monitoring opportunity will be addressed primarily through the redesigned Real-Time Alcohol Detection and Reporting (R.A.D.A.R.^®) device.  Manufacture of the second generation R.A.D.A.R. 200 protype devices began in late 2020.  Testing of these redesigned R.A.D.A.R. devices and integration with the monitoring system has been extensive, requiring additional modification before final release.  The design has been finalized with several devices now in field testing by key customers and sales release planned this year.  Several upgrades have been made to the reporting system with an entirely new enrollment app to automate that process.

Our most important goal remains the convergence of the market need for rapid detection of drugs of abuse with Lifeloc's capabilities.  Resources have been committed to finalizing the development of the SpinDx™ technology platform and the rapid, quantitative marijuana breathalyzer built on that platform.  We have improved the detection sensitivity for delta-9-THC as well as the robustness of the device.  Work continues to develop this system into a device that can be used for roadside testing.

"We look forward to the continued improvement of general business conditions, especially within our customer base.  The last year has been particularly difficult for the travel industry and law enforcement," commented Dr. Wayne Willkomm, President and CEO.  "But our real growth driver is the strong pipeline of recent and coming product releases.  Additional features requested by various European law enforcement agencies are being added to the L-series platform. Together with the imminent release of the redesigned R.A.D.A.R 200 devices, this should develop a healthy recurring revenue stream. The next big milestone for Lifeloc will be completing the commercialization of the SpinDx platform – a major effort that will be prioritized over short-term profitability."

About Lifeloc Technologies

Lifeloc Technologies, Inc. (OTC: LCTC) is a trusted U.S. manufacturer of evidential breath alcohol testers and related training and supplies for Workplace, Law Enforcement, Corrections and International customers.  Lifeloc stock trades over-the-counter under the symbol LCTC.  We are a fully reporting Company with our SEC filings available on our web site, www.lifeloc.com/investor.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements expressed or implied in this press release, including statements about our strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities, market size and growth, and return on investments in products and market, are based on information available to us on the date of this document, and we assume no obligation to update such forward-looking statements. Investors are strongly encouraged to review the section titled "Risk Factors" in our SEC filings.

R.A.D.A.R.^® is a registered trademark of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.

Amy Evans 
Lifeloc Technologies, Inc. 
http://www.lifeloc.com 
[phone]

LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets
ASSETS
			March 31,
			2021			December 31,
CURRENT ASSETS:			(Unaudited)			2020
	Cash	$	2,317,035		$	2,195,070
	Accounts receivable, net		693,225			523,603
	Inventories, net		2,580,148			2,498,126
	Income taxes receivable		234,541			220,657
	Prepaid expenses and other		98,568			77,962
	Total current assets		5,923,517			5,515,418
PROPERTY AND EQUIPMENT, at cost:
	Land		317,932			317,932
	Building		1,928,795			1,928,795
	Real-time Alcohol Detection And Recognition equipment and software		569,448			569,448
	Production equipment, software and space modifications		958,785			958,785
	Training courses		432,375			432,375
	Office equipment, software and space modifications		216,618			216,618
	Sales and marketing equipment and space modifications		226,356			226,356
	Research and development equipment, software and space modifications		190,818			190,818
	Less accumulated depreciation		(2,341,432)			(2,277,839)
	Total property and equipment, net		2,499,695			2,563,288
OTHER ASSETS:
	Patents, net		141,738			144,702
	Deposits and other		164,798			164,798
	Deferred taxes		149,583			148,142
	Total other assets		456,119			457,642
	Total assets	$	8,879,331		$	8,536,348
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Accounts payable	$	355,819		$	333,851
	Term loan payable, current portion		46,612			46,936
	Paycheck Protection loan payable		471,347			465,097
	Customer deposits		161,465			155,295
	Accrued expenses		163,719			266,266
	Deferred revenue, current portion		44,154			41,053
	Reserve for warranty expense		46,500			46,500
	Total current liabilities		1,289,616			1,354,998
TERM LOAN PAYABLE, net of current portion and
	debt issuance costs		1,266,120			1,277,531
DEFERRED REVENUE, net of current portion			2,325			3,177
	Total liabilities		2,558,061			2,635,706
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
	Common stock, no par value; 50,000,000 shares
	authorized, 2,454,116 shares outstanding		4,650,812			4,633,655
	Retained earnings		1,670,458			1,266,987
	Total stockholders' equity		6,321,270			5,900,642
	Total liabilities and stockholders' equity	$	8,879,331		$	8,536,348
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
		Three Months Ended March 31,
REVENUES:			2021			2020
	Product sales	$	1,775,447		$	1,937,866
	Royalties		12,564			59,281
	Rental income		21,532			21,189
	Total		1,809,543			2,018,336
COST OF SALES			985,666			1,240,260
GROSS PROFIT			823,877			778,076
OPERATING EXPENSES:
	Research and development		307,212			296,897
	Sales and marketing		230,478			326,564
	General and administrative		350,120			356,887
	Total		887,810			980,348
OPERATING INCOME (LOSS)			(63,933)			(202,272)
OTHER INCOME (EXPENSE):
	Forgiveness of Paycheck Protection loan		465,097			-
	Interest income		499			7,176
	Interest expense		(13,517)			(14,131)
	Total other income (expense)		452,079			(6,955)
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES			388,146			(209,227)
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES			15,325			43,921
NET INCOME (LOSS)		$	403,471		$	(165,306)
NET INCOME (LOSS) PER SHARE, BASIC		$	0.16		$	(0.07)
NET INCOME (LOSS) PER SHARE, DILUTED		$	0.16		$	(0.07)
WEIGHTED AVERAGE SHARES, BASIC			2,454,116			2,454,116
WEIGHTED AVERAGE SHARES, DILUTED			2,454,116			2,454,116

 

Lifeloc Technologies, Inc.
Statements of Stockholders' Equity (Unaudited)
		Three Months Ended March 31,
		2021			2020
Total stockholders' equity, beginning balances		$	5,900,642		$	6,792,221
Common stock (no shares issued during periods):
	Beginning balances		4,633,655			4,603,304
	Stock based compensation expense related
	to stock options		17,157			32,111
	Ending balances		4,650,812			4,635,415
Retained earnings:
	Beginning balances		1,266,987			2,188,917
	Net income (loss)		403,471			(165,306)
	Ending balances		1,670,458			2,023,611
Total stockholders' equity, ending balances		$	6,321,270		$	6,659,026

 

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
			Three Months Ended March 31,
CASH FLOWS FROM OPERATING ACTIVITIES:			2021			2020
	Net income (loss)		$	403,471		$	(165,306)
	Adjustments to reconcile net income (loss) to net cash
	provided from (used in) operating activities-
		Forgiveness of Paycheck Protection loan (round 1)		(465,097)			-
	Depreciation and amortization			66,828			97,199
	Provision for doubtful accounts, net change			-			2,000
	Provision for inventory obsolescence, net change			-			36,765
	Deferred taxes, net change			(1,441)			(9,349)
	Reserve for warranty expense, net change			-			1,000
	Stock based compensation expense related to
	stock options			17,157			32,111
	Changes in operating assets and liabilities-
	Accounts receivable			(169,622)			1,201
	Inventories			(82,022)			(286,797)
	Income taxes receivable			(13,884)			(34,555)
	Prepaid expenses and other			(20,606)			(120,915)
	Accounts payable			21,968			218,563
	Customer deposits			6,170			(29,699)
	Accrued expenses			(102,547)			28,908
	Deferred revenue			2,249			(4,539)
		Net cash provided from (used in)
		operating activities		(337,376)			(233,413)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment			-			(9,088)
	Patent filing expense			-			(18,772)
		Net cash (used in) investing activities		-			(27,860)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from Paycheck Protection loan (round 2)			471,347			-
	Principal payments made on term loan			(12,006)			(11,391)
		Net cash provided from (used in)
		financing activities		459,341			(11,391)
NET INCREASE (DECREASE) IN CASH				121,965			(272,664)
CASH, BEGINNING OF PERIOD				2,195,070			3,185,996
CASH, END OF PERIOD			$	2,317,035		$	2,913,332
SUPPLEMENTAL INFORMATION:
	Cash paid for interest		$	13,246		$	13,860
	Cash paid for income tax		$	-		$	20,063

 

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SOURCE Lifeloc Technologies