Intellicheck Announces Fourth Quarter and Full-Year 2020 Financial Results

Rhea-AI Summary

Intellicheck, Inc. (Nasdaq: IDN) reported its financial results for Q4 and the full year ending December 31, 2020. Total revenue grew 6% to $3.08 million in Q4, with SaaS revenue increasing 18%. For the fiscal year, total revenue rose 40% to $10.74 million, while SaaS revenue saw a significant 54% growth. Net income improved to $558,000, marking a turnaround from a loss of $2.55 million in 2019. Gross profit margin was strong at 92.6% for Q4. With cash totaling $13.1 million, Intellicheck is well-positioned to leverage increasing demand for identity verification solutions amid growing concerns over identity theft.

Positive

• Total revenue increased by 40% to $10.74 million for 2020.
• SaaS revenue grew by 54% year-over-year, reaching $9.37 million.
• Gross profit margin improved to 92.6% in Q4 2020.

Negative

• Total operating loss of $259,651 for Q4 2020, despite a positive net income.

Intellicheck, Inc. (Nasdaq: IDN), an industry leader in identification authentication solutions, today announced its financial results for the fourth quarter and full-year ended December 31, 2020. Total revenue for the fourth quarter ended December 31, 2020 grew 6% to $3,078,000 versus $2,896,000 in the prior year comparable period. Quarter over Quarter SaaS revenue for the fourth quarter grew 18% and totaled $3,012,000 versus $2,557,000 in the prior year comparable period and grew 23% sequentially over the third quarter of 2020.

CEO Bryan Lewis said, “We continued to show solid growth with total revenue for fiscal year 2020 up 40% over 2019 and SaaS revenue up 54% during the same period. During the fourth quarter, total revenue was up 6% over fourth quarter 2019, but more importantly, SaaS revenue was up 18% over the same period. Sequentially, fourth quarter SaaS revenue was up 23% versus third quarter 2020. We believe that given COVID-19, and the impact on store traffic, those numbers bode well for the future.”

Lewis noted that the COVID-19 pandemic has served to fuel what were already surging rates of identity theft and fraud raising consumer and market awareness of the toll it takes. “In the past year, one in five Americans fell victim to identity theft or attempted identity theft. According to a new Harris Research Poll, identity theft has become top-of-mind for 3 in 5 Americans this year and 60% expect that they will suffer financial loss as victims of identity theft. The need is there, and we remain confident that we have an important role to play in meeting that need.”

Gross profit as a percentage of revenues was 92.6% for the three months ended December 31, 2020 versus 88.8% in the prior year comparable period.

Net income for the three months ended December 31, 2020 was $1,260,000 or $0.07 per diluted share versus $106,000 or $0.01 per diluted share for the comparable prior year period.

Adjusted EBITDA (earnings before gains on debt forgiveness, interest and other income, income taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) was $635,000 for the fourth quarter of 2020 as compared to $216,000 in the prior year comparable period. A reconciliation of adjusted EBITDA to net income (loss) is provided elsewhere in this release.

Total revenue for the full year ended December 31, 2020 grew 40% to $10,735,000 versus $7,664,000 in the prior year comparable period. Year over year SaaS revenue grew 54% and totaled $9,373,000 versus $6,102,000 in the prior year comparable period.

Gross profit as a percentage of revenue was 86.7% for the year ended December 31, 2020 versus 87.0% in the prior year comparable period.

Net income for the fiscal year ended December 31, 2020 improved to $558,000 or $0.03 per diluted share versus a net loss of ($2,549,000) or ($0.16) per diluted share in the prior year comparable period. Adjusted EBITDA (earnings before gains on debt forgiveness, interest and other income, income taxes, depreciation, amortization, stock-based compensation expense and certain non-recurring charges) improved by approximately $2.1 million to of $329,000 for fiscal 2020 versus a loss of ($1,813,000) for fiscal 2019. A reconciliation of adjusted EBITDA to net income (loss) is provided elsewhere in this release.

Cash at December 31, 2020 totaled $13.1 million and stockholders’ equity totaled $22.2 million at the end of the 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 audit process and should be considered preliminary until Intellicheck files its Form 10-K for the fiscal year ended December 31, 2020.

Conference Call Information

The Company will hold an earnings conference call on March 16 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.

A replay of the conference call will be available shortly after completion of the live event. To listen to the replay, please dial 877-660-6853 and use conference identification number 13717133. For callers outside the U.S., please dial 201-612-7415 and use conference identification number 13717133. The replay will be available beginning approximately two hours after the completion of the live event and will remain available until March 30, 2021.

INTELLICHECK, INC.
BALANCE SHEETS
DECEMBER 31, 2020 and 2019
		2020					2019
ASSETS
CURRENT ASSETS:
Cash		$	13,121,392				$	3,350,853
Accounts receivable, net of allowance of $42,974 and $42,055 as of December 31, 2020, and 2019, respectively			2,119,861					1,674,894
Other current assets			340,718					354,349
Total current assets			15,581,971					5,380,096
PROPERTY AND EQUIPMENT, net			138,870					181,731
GOODWILL			8,101,661					8,101,661
INTANGIBLE ASSETS, net			482,591					174,237
OPERATING LEASE RIGHT-OF-USE ASSET			31,131					151,668
OTHER ASSETS			4,250					7,778
Total assets		$	24,340,474				$	13,997,171
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	46,171				$	95,388
Accrued expenses			1,638,798					1,408,086
Operating lease liability, current portion			32,620					125,851
Deferred revenue, current portion			402,782					572,391
Total current liabilities			2,120,371					2,201,716
OTHER LIABILITIES
Deferred revenue, long-term portion			8,662					13,322
Operating lease liability, long-term portion			-					32,620
Total liabilities			2,129,033					2,247,658
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock – $.001 par value; 40,000,000 shares authorized; 18,410,458 and 16,041,650 shares issued and outstanding as of December 31, 2020 and 2019, respectively			18,410					16,042
Additional paid-in capital			138,569,746					128,668,583
Accumulated deficit			(116,376,715	)				(116,935,112	)
Total stockholders’ equity			22,211,441					11,749,513
Total liabilities and stockholders’ equity		$	24,340,474				$	13,997,171

 

INTELLICHECK, INC. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
		2020					2019
REVENUES		$	10,734,509				$	7,663,658
COST OF REVENUES			(1,425,802	)				(995,791	)
Gross profit			9,308,707					6,667,867
OPERATING EXPENSES
Selling, general and administrative			5,893,371					5,658,958
Research and development			3,674,987					3,656,679
Total operating expenses			9,568,358					9,315,637
Loss from operations			(259,651	)				(2,647,770	)
OTHER INCOME
Gain on forgiveness of unsecured promissory note			796,100					-
Interest and other income			21,948					99,059
Total other income			818,048					99,059
Net income (loss)		$	558,397				$	(2,548,711	)
PER SHARE INFORMATION:
Income (Loss) per common share -
Basic		$	0.03				$	(0.16	)
Diluted		$	0.03				$	(0.16	)
Weighted average common shares used in computing per share amounts -
Basic			17,324,150					15,792,470
Diluted			17,957,414					15,792,470

 

INTELLICHECK, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
												Additional										Total
		Common Stock										Paid-in					Accumulated					Stockholders’
		Shares					Amount					Capital					Deficit					Equity
BALANCE, December 31, 2018			15,638,765				$	15,639				$	127,290,467				$	(114,386,401	)			$	12,919,705
Stock-based compensation expense			-					-					584,865					-					584,865
Exercise of stock options, net of cashless exercise of 21,864 shares			73,008					73					89,427					-					89,500
Issuance of shares for vested restricted stock grants			9,807					9					(9	)				-					-
Exercise of warrants			320,070					321					703,833					-					704,154
Net loss			-					-					-					(2,548,711	)				(2,548,711	)
BALANCE, December 31, 2019			16,041,650				$	16,042				$	128,668,583				$	(116,935,112	)			$	11,749,513
Stock-based compensation expense			-					-					409,477					-					409,477
Issuance of common stock, net of costs			1,769,230					1,769					10,567,698					-					10,569,467
Exercise of stock options, net of cashless exercise of 94,300 shares			689,901					690					203,468					-					204,158
Issuance of shares for vested restricted stock grants			24,778					24					(24	)				-					-
Exercise of warrants			50,750					51					111,599					-					111,650
Settlement of executive bonuses with issuance of restricted stock units			14,993					15					84,695					-					84,710
Shares forfeited in exchange for withholding taxes			(180,844	)				(181	)				(1,475,750	)				-					(1,475,931	)
Net income			-					-					-					558,397					558,397
BALANCE, December 31, 2020			18,410,458				$	18,410				$	138,569,746				$	(116,376,715	)			$	22,211,441

 

INTELLICHECK, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
		2020					2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	558,397				$	(2,548,711	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization			179,405					249,895
Stock-based compensation expense			409,477					584,865
Change in provision for doubtful accounts			919					17,380
Forgiveness of unsecured promissory note			(796,100	)				-
Changes in assets and liabilities:
(Increase) in accounts receivable			(445,886	)				(672,840	)
(Increase) in other current assets			(19,635	)				(28,317	)
Decrease in other assets			7,778					1,964
Increase in accounts payable and accrued expenses			260,892					703,223
(Decrease) in deferred revenue			(174,269	)				(148,309	)
Net cash used in operating activities			(19,022	)				(1,840,850	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of software license			(400,000	)				-
Purchases of property, plant and equipment			(44,900	)				(20,088	)
Collection on note receivable			29,017					42,120
Net cash (used in) provided by investing activities			(415,883	)				22,032
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock			10,569,467					-
Loan proceeds on unsecured promissory note under Paycheck Protection Program			796,100					-
Loan proceeds on unsecured promissory note under Economic Injury Disaster Loan program			10,000
Net proceeds from issuance of common stock from exercise of stock options			204,158					89,500
Proceeds from issuance of common stock from exercise of warrants			111,650					704,154
Withholding taxes paid on exercise of stock options and vesting of restricted stock units			(1,475,931	)				-
Loan payments on unsecured promissory note			(10,000	)				-
Net cash provided by financing activities			10,205,444					793,654
Net increase (decrease) in cash			9,770,539					(1,025,164	)
CASH, beginning of year			3,350,853					4,376,017
CASH, end of year		$	13,121,392				$	3,350,853
Supplemental disclosure of noncash investing and financing activities:
Settlement of executive bonuses with restricted stock units		$	84,710				$	-

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net income (loss) for certain reductions such as gains on debt forgiveness and interest and other income and certain addbacks such as 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 our 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 our operations and can compare the results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes gains on debt forgiveness, interest and other income, impairments of long-lived assets and goodwill, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with 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 us may not be comparable with similarly named measures provided by other entities.

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

		(Unaudited)
		Three Months Ended
		December 31,								Years Ended December 31,
		2020				2019				2020				2019
Net income (loss)	$	1,259,656			$	106,187			$	558,397			$	(2,548,711	)
Reconciling items:
Gain on forgiveness of unsecured promissory note		(796,100	)			-				(796,100	)			-
Interest and other income		(3,762	)			(34,681	)			(21,948	)			(99,059	)
Depreciation and amortization		52,262				73,861				179,405				249,895
Stock-based compensation expense		122,568				71,041				409,477				584,865
Adjusted EBITDA	$	634,624			$	216,408			$	329,231			$	(1,813,010	)

About Intellicheck Nasdaq: IDN

Intellicheck (Nasdaq: IDN) is a trusted industry leader in technology solutions that stop identity theft and fraud with real-time identification authentication and age verification. We make it possible for our clients to increase revenues, improve customer service, and increase operational efficiencies. The company is focused on partnering with banks, credit card issuers and retailers to prevent fraud. Intellicheck also serves law enforcement agencies, national defense clients and diverse state and federal government agencies. For more information on Intellicheck, visit us on the web and follow us on follow us on LinkedIn, Twitter, Facebook, and YouTube.

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, whether there will be any impact on sales and revenues due to an epidemic, pandemic or other public health issue 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 release and use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “sense”, “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 our products and the presently anticipated growth in the commercial adoption of our products and services; our ability to successfully transition pilot programs into formal commercial scale programs; continued adoption of our SaaS product offerings; changing levels of demand for our current and future products; our ability to reduce or maintain expenses while increasing sales; our ability to successfully expand the sales of our products and services into new areas including health care and auto dealerships; customer results achieved using our products in both the short and long term; success of future research and development activities; uncertainties around the duration and severity of the COVID-19 outbreak and its ultimate impact on our business and results of operations; our ability to successfully market and sell our products, any delays or difficulties in our supply chain coupled with the typically long sales and implementation cycle for our products; our ability to enforce our intellectual property rights; changes in laws and regulations applicable to the our products; our 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 our reports filed with the SEC. We do not assume any obligation to update the forward-looking information.

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FAQ

What were Intellicheck's Q4 2020 financial results?

Intellicheck reported Q4 2020 total revenue of $3.08 million, a 6% increase year-over-year.

How much did Intellicheck's total revenue grow for the fiscal year 2020?

Total revenue for fiscal year 2020 grew 40% to $10.74 million.

What is the net income for Intellicheck in 2020?

Intellicheck reported a net income of $558,000 for the fiscal year 2020.

What is the SaaS revenue growth for Intellicheck in 2020?

SaaS revenue grew 54% year-over-year, reaching $9.37 million in 2020.

When is Intellicheck's earnings conference call?

The earnings conference call is scheduled for March 16, 2021, at 4:30 p.m. ET.