Lifeloc Reports Second Quarter 2022 Results

Rhea-AI Summary

Lifeloc Technologies, Inc. (LCTC) reported Q2 2022 financial results with a net revenue of $2.180 million, up 26% year-over-year. Despite the revenue growth, the company faced a net loss of $(202) thousand, compared to a loss of $(110) thousand in Q2 2021. For the first six months, revenue totaled $4.341 million, with a net loss of $(346) thousand, impacted by increased R&D spending and supply chain disruptions. Lifeloc's new L-series devices are experiencing strong sales. The company is also focused on developing its SpinDx technology for rapid drug detection.

Positive

• Quarterly net revenue increased by 26%, reaching $2.180 million.
• Strong sales growth for new L-series devices featuring advanced technology.
• Development of SpinDx technology aims to meet increasing demand for rapid drug detection.

Negative

• Net loss of $(202) thousand reported for Q2 2022, up from $(110) thousand in Q2 2021.
• Ongoing high R&D expenses and supply chain disruptions affect profitability.

WHEAT RIDGE, Colo.,  Aug. 9, 2022 /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 second quarter ended June 30, 2022.

First Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $2.180 million in the second quarter of 2022, resulting in a quarterly net loss of $(202) thousand, or $(0.08) per diluted share. These results compare to net revenue of $1.730 million and quarterly net loss of $(110) thousand, or $(0.04) per diluted share in the second quarter of 2021. Revenue for the quarter increased 26% versus the second quarter last year, as demand continued to recover from the impact of the COVID-19 global pandemic and the government ordered shutdowns. Six-month net revenue of $4.341 million and a net loss of $(346) thousand, or $(0.14) per diluted share, compare to net revenue of $3.539 million and a net profit of $294 thousand, or $0.12 per diluted share, for the same six months of 2021. The income for the first six months of 2021 includes the benefit from the forgiveness of the first round SBA Paycheck Protection Program (PPP) loan of $465 thousand.   

Increasing research and development investment as well as supply chain disruption contributed to the net loss in this quarter despite increased revenue. Supply chain delays have added some costs, and component inflation has added more. The company implemented a broad price increase during the quarter in response to rising costs.

New platform LX9 and LT7 devices are producing strong sales growth. The L-series devices feature a high-resolution color display with a highly customizable user interface. Their features and performance 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 sales. The L-series devices are meeting the requirements of the most modern registration standards, such as SAI's (Standards Australia International) latest AS 3547:2019 standards for Breath Alcohol Detectors.

We believe our most important goal and best opportunity remains the convergence of the global need for rapid detection of drugs of abuse with Lifeloc's proven capability to build easy-to-use portable testing equipment.  We are focusing our research and development efforts on leveraging the SpinDx™ technology platform, sometimes referred to as "Lab on a Disk," to develop a series of devices and tests that can be used at roadside, emergency rooms and in workplace testing to get a rapid and quantitative measure for a panel of drugs of abuse, beginning with a device that allows for detection of delta-9-THC (the major intoxicating component of the cannabis plant) from a test subject's saliva.  We are also developing a device based on our recently updated LX9 breathalyzer that, when coupled with the SpinDx technology, will be our first marijuana breathalyzer system. In anticipation of possible SpinDx supply chain delays, we've already begun purchasing small quantities of components ahead of the initial production builds.

Our R.A.D.A.R.® 200 device has been introduced to the market, and the market feedback is that the device needs a few additional specific upgrades to gain widespread acceptance. The R.A.D.A.R. device promises to address a critical and valuable market need for self-administered alcohol monitoring. However, in late 2021, we determined that Lifeloc's full research and development resources must remain focused on completing the SpinDx development and bringing it to market. To maximize shareholder value, Lifeloc has created a new wholly owned subsidiary, Probation Tracker Inc. (PTI), to focus exclusively on development of R.A.D.A.R.® 300.  We intend to distribute the shares of PTI to our shareholders as a stock dividend once we've received the required regulatory approvals and expect PTI to work independently to develop R.A.D.A.R.® 300 and raise additional funds as needed to commercialize it. More details are available in our 10-Q for the second quarter of 2022 and will be forthcoming in subsequent filings.

"Our sales continue to recover well in 2022," commented Dr. Wayne Willkomm, President and CEO. "The new L-series devices have grown from a small base to become a significant contributor to revenue and profit margin. Revenue from these is expected to provide the continued funding to push the SpinDx product platform across the finish line to commercialization. We expect research and development expenses to remain high in this push to complete the first of many products built on the SpinDx platform, prioritizing substantial value creation over short-term profitability.  We are working toward the goal of initial SpinDx sales this year."

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, performance, expectations about new and existing products, market demand, economic conditions, 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 
(303) 431-9500

 

LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets
			June 30, 2022 (Unaudited)			December 31, 2021
CURRENT ASSETS:
	Cash	$	2,251,315		$	2,571,668
	Accounts receivable, net		735,675			562,092
	Inventories, net		2,300,987			2,668,789
	Prepaid expenses and other		124,781			56,897
	Total current assets		5,412,758			5,859,446
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		988,738			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		467,485			456,685
	Less accumulated depreciation		(2,747,253)			(2,518,966)
	Total property and equipment, net		2,400,494			2,588,028
OTHER ASSETS:
	Patents, net		97,412			134,428
	Deposits and other		163,480			163,480
	Deferred taxes		315,486			204,449
	Total other assets		576,378			502,357
	Total assets	$	8,389,630		$	8,949,831
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Accounts payable	$	299,663		$	445,985
	Term loan payable, current portion		49,265			48,513
	Customer deposits		171,228			170,952
	Accrued expenses		240,193			298,530
	Deferred revenue, current portion		67,238			71,604
	Reserve for warranty expense		46,500			46,500
	Total current liabilities		874,087			1,082,084
TERM LOAN PAYABLE, net of current portion and
	debt issuance costs		1,243,807			1,267,551
DEFERRED REVENUE, net of current portion			6,806			6,430
	Total liabilities		2,124,700			2,356,065
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
	Common stock, no par value; 50,000,000 shares
	authorized, 2,454,116 shares outstanding		4,668,014			4,650,812
	Retained earnings		1,596,916			1,942,954
	Total stockholders' equity		6,264,930			6,593,766
	Total liabilities and stockholders' equity	$	8,389,630		$	8,949,831
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
		Three Months Ended June 30,
REVENUES:			2022			2021
	Product sales	$	2,144,813		$	1,674,045
	Royalties		12,572			33,652
	Rental income		22,639			21,939
	Total		2,180,024			1,729,636
COST OF SALES			1,516,389			1,124,218
GROSS PROFIT			663,635			605,418
OPERATING EXPENSES:
	Research and development		352,910			266,633
	Sales and marketing		276,669			214,124
	General and administrative		293,421			256,908
	Total		923,000			737,665
OPERATING INCOME (LOSS)			(259,365)			(132,247)
OTHER INCOME (EXPENSE):
	Interest income		1,190			813
	Interest expense		(10,817)			(13,544)
	Total		(9,627)			(12,731)
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES			(268,992)			(144,978)
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES			67,462			35,266
NET INCOME (LOSS)		$	(201,530)		$	(109,712)
NET INCOME (LOSS) PER SHARE, BASIC		$	(0.08)		$	(0.04)
NET INCOME (LOSS) PER SHARE, DILUTED		$	(0.08)		$	(0.04)
WEIGHTED AVERAGE SHARES, BASIC			2,454,116			2,454,116
WEIGHTED AVERAGE SHARES, DILUTED			2,454,116			2,454,116

 

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
		Six Months Ended June 30,
REVENUES:			2022			2021
	Product sales	$	4,256,570		$	3,449,492
	Royalties		39,212			46,216
	Rental income		44,878			43,471
	Total		4,340,660			3,539,179
COST OF SALES			2,835,136			2,109,884
GROSS PROFIT			1,505,524			1,429,295
OPERATING EXPENSES:
	Research and development		742,934			573,845
	Sales and marketing		553,306			444,602
	General and administrative		646,254			607,028
	Total		1,942,494			1,625,475
OPERATING INCOME (LOSS)			(436,970)			(196,180)
OTHER INCOME (EXPENSE):
	Forgiveness of Paycheck Protection loan		-			465,097
	Interest income		1,622			1,312
	Interest expense		(21,727)			(27,061)
	Total		(20,105)			439,348
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES			(457,075)			243,168
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES			111,037			50,591
NET INCOME (LOSS)		$	(346,038)		$	293,759
NET INCOME (LOSS) PER SHARE, BASIC		$	(0.14)		$	0.12
NET INCOME (LOSS) PER SHARE, DILUTED		$	(0.14)		$	0.12
WEIGHTED AVERAGE SHARES, BASIC			2,454,116			2,454,116
WEIGHTED AVERAGE SHARES, DILUTED			2,454,116			2,454,116

 

Lifeloc Technologies, Inc.
Condensed Statements of Stockholders' Equity (Unaudited)
		Three Months Ended June 30,						Six Months Ended June 30,
		2022			2021			2022			2021
Total stockholders' equity, beginning balances		$	6,466,460		$	6,321,270		$	6,593,766		$	5,900,642
Common stock (no shares issued during periods):
	Beginning balances		4,668,014			4,650,812			4,650,812			4,633,655
	Stock based compensation expense related
	to stock options		-			-			17,202			17,157
	Ending balances		4,668,014			4,650,812			4,668,014			4,650,812
Retained earnings:
	Beginning balances		1,798,446			1,670,458			1,942,954			1,266,987
	Net income (loss)		(201,530)			(109,712)			(346,038)			293,759
	Ending balances		1,596,916			1,560,746			1,596,916			1,560,746
Total stockholders' equity, ending balances		$	6,264,930		$	6,211,558		$	6,264,930		$	6,211,558

 

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
			Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES:			2022			2021
	Net income (loss)		$	(346,038)		$	293,759
	Adjustments to reconcile net income to net cash
	provided from (used in) operating activities-
		Forgiveness of Paycheck Protection loan (round 1)		-			(465,097)
	Depreciation and amortization			267,455			133,657
	Provision for doubtful accounts, net change			-			(49,000)
	Provision for inventory obsolescence, net change			94,578			(5,000)
	Deferred taxes, net change			(111,037)			10,648
	Stock based compensation expense related to
	stock options			17,202			17,157
	Changes in operating assets and liabilities-
	Accounts receivable			(173,583)			73,553
	Inventories			273,224			7,166
	Income taxes receivable			-			(54,506)
	Prepaid expenses and other			(67,884)			(12,804)
	Deposits and other			-			966
	Accounts payable			(146,322)			(101,836)
	Customer deposits			276			8,130
	Accrued expenses			(58,337)			(54,102)
	Deferred revenue			(3,990)			3,930
		Net cash provided from (used in)
		operating activities		(254,456)			(193,379)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment			(40,753)			(58,461)
	Patent filing expense			-			-
		Net cash (used in) investing activities		(40,753)			(58,461)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Principal payments made on term loan			(25,144)			(23,986)
	Proceeds from Paycheck Protection loan (round 2)						471,347
		Net cash provided from (used in)
		financing activities		(25,144)			447,361
NET INCREASE (DECREASE) IN CASH				(320,353)			195,521
CASH, BEGINNING OF PERIOD				2,571,668			2,195,070
CASH, END OF PERIOD			$	2,251,315		$	2,390,591
SUPPLEMENTAL INFORMATION:
	Cash paid for interest		$	19,575		$	-

 

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SOURCE Lifeloc Technologies

FAQ

What are the financial results of Lifeloc Technologies for Q2 2022?

Lifeloc reported a Q2 2022 net revenue of $2.180 million but incurred a net loss of $(202) thousand.

How did Lifeloc's revenue compare in Q2 2022 to the previous year?

Lifeloc's revenue increased by 26% compared to Q2 2021, which was $1.730 million.

What are the key developments reported by Lifeloc Technologies?

Lifeloc is focusing on strong sales growth of its L-series devices and advancing its SpinDx technology for drug detection.

What factors affected Lifeloc's net loss in Q2 2022?

The net loss was influenced by high R&D expenses and supply chain disruptions despite increased revenue.