VerifyMe Reports Second Quarter 2023 Financial Results
- Quarterly revenue of
in Q2 2023, compared to$5.3 million in Q2 2022$4.5 million - Net loss of
in Q2 2023, compared to a net loss of$0.9 million in Q2 2022 (inclusive of write off of$12.6 million related to the SPAC)$11.2 million - Adjusted EBITDA(1) of
( in Q2 2023, primarily due to acquisition, integration and operating costs of$0.4) million ( , compared to$0.2) million ( in Q2 2022$0.3) million - Cash of
as of June 30, 2023$2.7 million
Key Financial Highlights for Q2 2023:
- Quarterly consolidated revenue of
for the three months ended June 30, 2023, an increase of$5.3 million 19% compared to for the three months ended June 30, 2022, primarily attributable to the acquisition of the PeriShip Global business in April 2022$4.5 million - Gross profit of
or$1.8 million 34% for the three months ended June 30, 2023, compared to or$1.7 million 37% for the three months ended June 30, 2022 - Net loss of
or ($0.9 million ) per diluted share for the three months ended June 30, 2023, compared to a net loss of$0.09 or ($12.6 million ) per diluted share for the three months ended June 30, 2022, which included approximately$1.50 non-cash impairment related to the SPAC liquidation$11.2 million - Adjusted net loss per diluted share(1) of (
), for the three months ended June 30, 2023, and ($0.11 ) for the three months ended June 30, 2022, after adjusting for severance expense, unrealized and realized loss on equity investment, change in fair value of contingent consideration and acquisition-related costs$0.10 - Adjusted EBITDA(1) of
( in Q2 2023, primarily due to acquisition, integration and operating costs of$0.4) million ( , compared to$0.2) million ( in Q2, 2022$0.3) million - Cash of
as of June 30, 2023$2.7 million
(1) | Adjusted EBITDA and Adjusted net loss per diluted share are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures" below for information about these non-GAAP measures. A reconciliation to the most directly comparable GAAP measure, net income (loss), and net loss per diluted share, respectively, are included as a schedule to this release. |
Adam Stedham, VerifyMe's CEO and President stated, "Since joining the Company in June of this year, we have defined two operating segment strategies aligned to our traceability services, and overhauled the executive team. Q2 2023 revenue is
Recent Business Highlights
- Adam Stedham was appointed CEO effective June 19, 2023
- Outlined our two business segments (Authentication & Precision Logistics)
- Strategic reorganization aimed at accelerating growth through leveraging our technology strengths, expanding marketing capabilities and optimizing overhead expenses
- Reorganized VerifyMe sales and marketing team
Financial Results for the Three Months Ended June 30, 2023:
Revenue for the three months ended June 30, 2023, was
Gross profit for the three months ended June 30, 2023, was
Operating loss for the three months ended June 30, 2023, was
Our net loss for the three months ended June 30, 2023, was
Adjusted EBITDA loss for the three months ended June 30, 2023, was
At June 30, 2023, VerifyMe had a
At June 30, 2023, VerifyMe had 10,190,433 shares issued and 9,842,765 shares outstanding.
Earnings Call
The Company has scheduled an earnings conference call and webcast for 11:00 a.m. ET on Thursday August 10, 2023. Prepared remarks regarding the company's financial and operational results will be followed by a question and answer period with VerifyMe's executive team. The conference call may be accessed via webcast at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=s45ujf2v or by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614 internationally, and requesting the "VerifyMe Call." The presentation slides broadcast via the webcast will also be available on the Investors section of the VerifyMe website the morning of the call. Participants must be logged in via telephone to submit a question to management during the call. Participants may optionally pre-register for the conference call and webcast at: https://dpregister.com/sreg/10181116/f9f8ae8850.
The webcast and presentation will be archived on the Investors section of VerifyMe's website and will remain available for 90 days.
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME), together with its subsidiaries, PeriShip Global and Trust Codes Global, is a software driven logistics provider of high-touch, end-to-end logistics management. We provide logistics management from a sophisticated IT platform with proprietary databases, package and flight-tracking software, weather, and flight status monitoring systems, as well as dynamic dashboards with real-time visibility into shipment transit and last-mile events. In addition, VerifyMe and Trust Codes Global provide brand protection and brand enhancement solutions allowing brand owners to gather business intelligence. To learn more, visit https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements regarding revenue opportunities, recurring revenue, commercialization efforts, our sales pipeline and opportunities, and the acquisition of the business and assets of PeriShip, LLC and Trust Codes Global Limited. The words "believe," "may," "will," "beginning," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include our engagement in future acquisitions or strategic partnerships that increase our capital requirements or cause us to incur debt or assume contingent liabilities, the successful integration of our acquisitions (including the assets of PeriShip Global and Trust Codes Global), our reliance on one key strategic partner for shipping services in our Precision Logistics segment, competition including by our key strategic partner, seasonal trends in our business, severe climate conditions, the highly competitive nature of the industry in which we operate, our brand image and corporate reputation, impairments related to our goodwill and other intangible assets, economic and other factors such as recessions, downturns in the economy, inflation, global uncertainty and instability, the effects of pandemics, changes in
Use of Non-GAAP Financial Measures
This press release includes both financial measures in accordance with
VerifyMe's management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that both management and shareholders benefit from referring to EBITDA and Adjusted EBITDA in planning, forecasting and analyzing future periods. Additionally, the Company believes Adjusted EBIDTA is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company's core operating performance. In particular, with regard to our comparison of Adjusted EBITDA for the three and six months ended June 30, 2023, to the three and six months ended June 30, 2022, we believe that certain charges make a three and six month to three and six month comparison of net loss less useful to investors than a comparison of Adjusted EBITDA in understanding the results of operations. The Company's management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. The Company's management recognizes that EBITDA and Adjusted EBITDA, as non-GAAP financial measures, have inherent limitations because of the described excluded items.
The Company defines EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA represents EBITDA plus non-cash stock compensation expense, severance expense, unrealized (loss) gain on equity investment, realized loss on equity investment, impairment of intangibles, change in fair value of contingent consideration and one-time professional expenses for acquisitions. VerifyMe believes EBITDA and Adjusted EBITDA are important measures of VerifyMe's operating performance because they allow management, investors and analysts to evaluate and assess VerifyMe's core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.
Adjusted Net Loss per Diluted Share ("Adjusted EPS"), which is a non-GAAP financial measure, is defined as loss per diluted share excluding severance expense, unrealized gain (loss) on equity investment, realized loss on equity investment, change in fair value of contingent consideration and one-time professional expenses for acquisitions. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of our business operating results, including underlying trends.
A reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in a schedule to this press release. The Company believes that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules as the presentation here may not be comparable to other similarly titled measures of other companies.
VerifyMe, Inc. | ||||||||
As of | ||||||||
June 30, 2023 | December 31, 2022 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents including restricted cash | $ | 2,697 | $ | 3,411 | ||||
Accounts receivable, net of allowance for credit loss reserve, | 1,286 | 4,448 | ||||||
Unbilled revenue | 734 | 1,185 | ||||||
Prepaid expenses and other current assets | 308 | 333 | ||||||
Inventory | 47 | 81 | ||||||
TOTAL CURRENT ASSETS | 5,072 | 9,458 | ||||||
PROPERTY AND EQUIPMENT, NET | $ | 288 | 292 | |||||
RIGHT OF USE ASSET | 554 | 469 | ||||||
INTANGIBLE ASSETS, NET | 6,990 | 6,412 | ||||||
GOODWILL | 5,338 | 3,988 | ||||||
DEFERRED IMPLEMENTATION COSTS | 182 | 133 | ||||||
TOTAL ASSETS | $ | 18,424 | $ | 20,752 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion of debt | $ | 1,300 | $ | 500 | ||||
Accounts payable | 1,400 | 3,912 | ||||||
Other accrued expense | 723 | 902 | ||||||
Lease liability- current | 174 | 115 | ||||||
Contingent liability-short term | 122 | - | ||||||
TOTAL CURRENT LIABILITIES | 3,719 | 5,429 | ||||||
LONG-TERM LIABILITIES | ||||||||
Contingent liability-long term | $ | 831 | $ | - | ||||
Long-term lease liability | 389 | 359 | ||||||
Long-term derivative liability | 2 | 3 | ||||||
Term note | 1,125 | 1,375 | ||||||
TOTAL LIABILITIES | $ | 6,066 | $ | 7,166 | ||||
STOCKHOLDERS' EQUITY | ||||||||
Series A Convertible Preferred Stock, | - | - | ||||||
Series B Convertible Preferred Stock, | - | - | ||||||
Common stock, | 10 | 10 | ||||||
Additional paid in capital | 94,111 | 92,987 | ||||||
Treasury stock as cost; 347,668 and 389,967 shares at June 30, 2023 and December 31, | (792) | (949) | ||||||
Accumulated deficit | (80,921) | (78,459) | ||||||
Accumulated other comprehensive loss | (50) | (3) | ||||||
STOCKHOLDERS' EQUITY | 12,358 | 13,586 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 18,424 | $ | 20,752 |
Consolidated Statements of Operations | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
NET REVENUE | $ | 5,335 | $ | 4,497 | $ | 10,996 | $ | 4,658 | ||||||||
COST OF REVENUE | 3,515 | 2,812 | 7,422 | 2,850 | ||||||||||||
GROSS PROFIT | 1,820 | 1,685 | 3,574 | 1,808 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
General and administrative (a) | 2,342 | 2,535 | 5,098 | 4,000 | ||||||||||||
Research and development | 10 | 25 | 18 | 34 | ||||||||||||
Sales and marketing (a) | 506 | 447 | 1,000 | 746 | ||||||||||||
Total Operating expenses | 2,858 | 3,007 | 6,116 | 4,780 | ||||||||||||
LOSS BEFORE OTHER (EXPENSE) | (1,038) | (1,322) | (2,542) | (2,972) | ||||||||||||
OTHER (EXPENSE) INCOME | ||||||||||||||||
Interest expenses, net | (46) | (23) | (88) | (22) | ||||||||||||
Unrealized gain (loss) on equity investment | 30 | (246) | (2) | 6 | ||||||||||||
Realized loss on equity investment | - | (10,964) | - | (10,964) | ||||||||||||
Change in fair value of contingent consideration | 172 | - | 172 | - | ||||||||||||
Other (expense) income, net | - | - | (2) | 3 | ||||||||||||
TOTAL OTHER INCOME (EXPENSE), NET | 156 | (11,233) | 80 | (10,977) | ||||||||||||
NET LOSS | ||||||||||||||||
$ | (882) | $ | (12,555) | $ | (2,462) | $ | (13,949) | |||||||||
LOSS PER SHARE | ||||||||||||||||
BASIC | (0.09) | (1.50) | (0.26) | (1.78) | ||||||||||||
DILUTED | (0.09) | (1.50) | (0.26) | (1.78) | ||||||||||||
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | ||||||||||||||||
BASIC | 9,765,452 | 8,387,662 | 9,614,183 | 7,851,463 | ||||||||||||
DILUTED | 9,765,452 | 8,387,662 | 9,614,183 | 7,851,463 |
(a) | Includes share-based compensation of |
VerifyMe, Inc. | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net Loss (GAAP) | $ | (882) | $ | (12,555) | $ | (2,462) | $ | (13,949) | |||||||
Interest expense (income), net | 46 | 23 | 88 | 22 | |||||||||||
Income tax expense (benefit) | - | - | - | - | |||||||||||
Amortization and depreciation | 258 | 208 | 540 | 243 | |||||||||||
Total EBITDA (Non-GAAP) | (578) | (12,324) | (1,834) | (13,684) | |||||||||||
Adjustments: | |||||||||||||||
Stock based compensation | 19 | 5 | 41 | 92 | |||||||||||
Fair value of restricted stock and restricted stock units issued in exchange | 296 | 308 | 448 | 650 | |||||||||||
Severance | 29 | - | 332 | - | |||||||||||
Unrealized (gain) loss on equity investment | (30) | 246 | 2 | (6) | |||||||||||
Realized loss on equity investment | - | 10,964 | - | 10,964 | |||||||||||
Change in fair value of contingent consideration | (172) | - | (172) | - | |||||||||||
Impairment of intangibles | 34 | - | 34 | - | |||||||||||
One-time professional expenses for acquisitions | - | 498 | 278 | 623 | |||||||||||
Total Adjusted EBITDA (Non-GAAP) | $ | (402) | $ | (303) | $ | (871) | $ | (1,361) |
Consolidated EPS and Adjusted EPS Reconciliation Table | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Loss per share (GAAP) | $ | (0.09) | $ | (1.50) | $ | (0.26) | $ | (1.78) | |||||||
Severance expense, per share | - | - | 0.03 | - | |||||||||||
Unrealized (gain) loss on equity investment, per share | - | 0.03 | - | - | |||||||||||
Realized loss on equity investment, per share | - | 1.31 | - | 1.40 | |||||||||||
Change in fair value of contingent consideration, per share | (0.02) | - | (0.02) | - | |||||||||||
One-time professional expenses for acquisitions, per share | - | 0.06 | 0.03 | 0.08 | |||||||||||
Total Adjusted EPS (Non-GAAP) | $ | (0.11) | $ | (0.10) | $ | (0.22) | $ | (0.30) |
View original content to download multimedia:https://www.prnewswire.com/news-releases/verifyme-reports-second-quarter-2023-financial-results-301897858.html
SOURCE VerifyMe, Inc.