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Lifeloc Reports 2020 Full Year Results

Lifeloc Technologies posted annual net revenue of $6.357 million resulting in 2020 after tax net loss of $922 thousand, or a loss of $0.38 per diluted share.  These results compare to net revenue of $8.752 million for 2019, with net income of $626 thousand, or $0.26 per diluted share.  The 2019 results included a one-time gain of $225 thousand from a licensing settlement. 

Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2020 fiscal year ended December 31, 2020. Lifeloc Reports 2020 Full Year Results

 

2020 Financial Highlights

The COVID-19 global pandemic and the government ordered shutdowns that came along with the pandemic significantly impacted our business.  These unprecedented circumstances caused a departure from Lifeloc’s consistent annual profitability and resulted in a 27% decline in revenues for 2020.  This pandemic has impacted operations, adding costs while suppressing our workplace, law enforcement and international markets.  Ironically, a recent study published online in the Journal of the American Medical Association Network shows an average increase in heavy alcohol drinking days of 19% during the pandemic and lockdown, indicating a greater need for Lifeloc products and potentially a pent-up market demand.  On top of the pandemic, extended protests across the country impacted domestic law enforcement, diverting attention and funding.  On a brighter note, with a greater emphasis on workplace hygiene, the pandemic did create openings and demonstrated the value of our hands-free Sentinel™ access control unit.

The Federal government’s response to the pandemic included efforts to stabilize the economy and employment.  The most relevant program to Lifeloc was the Paycheck Protection Program (PPP).  As previously reported in 2020, Lifeloc received a $465 thousand SBA guaranteed loan, which 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.  The financial impact of the forgiveness will be 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, thus enabling us to continue our product development efforts. 

Lifeloc qualified for and received a round two 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 when the program conditions are satisfied and the opportunity to apply becomes available. 

Despite all the challenges of 2020, Lifeloc has made substantial progress on several fronts toward our vision of becoming the leading company in real-time drug and alcohol detection and monitoring.  In 2020, Lifeloc was audited and achieved first time accreditation under the ISO 17034 standards.  As a result, our Plus 4™ alcohol simulator solution can now be called Certified Reference Solution.  As a result, we now have a few additional state governments evaluating Lifeloc as a preferred vendor of these solutions to their various facilities.  We believe we can manufacture and distribute this product more cost effectively than can the individual states. 

Concerns over virus spread led to significant attention to the hygiene and safety of every activity in the marketplace, including breath alcohol testing.  As previously reported, Lifeloc commissioned an independent third-party laboratory to test for any potential of viral cross contamination of test subjects using Lifeloc brand breath alcohol testers.  The conclusion was there is no risk of viral cross contamination using Lifeloc brand breath alcohol testers, which has increased confidence in the Lifeloc brand.

Our new platform LX9 and LT7 devices were introduced late in 2019.  Even in the difficult market conditions of 2020, the features and performance of the new L-series products has driven penetration and opened previously unaddressable market needs, such as requirements for a wide temperature range and fast customization in local languages.  We expect that most L-series sales will be incremental to FC-series devices rather than replacing FC-series sales. 

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 early 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.  This design has been finalized with several devices now in field testing and sales release planned very soon. 

Rapid detection of drugs of abuse is the best convergence of current market need and Lifeloc’s capabilities, and therefore this is our most important goal.  Additional resources are being deployed to finalizing the development of the SpinDx™ technology and the rapid, quantitative marijuana breathalyzer built on that platform.  We have improved the detection sensitivity for delta-9-THC as well as the device robustness.  Work continues to build this system into a device that can be used for roadside testing.

“2020 was a difficult year with the global pandemic adding costs and impacting demand and the way that we work,” commented Dr. Wayne Willkomm, President and CEO.  “We hope to see the continued pickup of our general business conditions as well as the broader adoption of the new LX platform and the imminent release of the redesigned R.A.D.A.R 200 devices return Lifeloc to growth and profitability.  Following the release of the R.A.D.A.R. 200 device, the next big milestone for Lifeloc will be the commercialization of the SpinDx platform.  Speeding the SpinDx commercialization will be prioritized even at the expense of 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.

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.

LIFELOC TECHNOLOGIES, INC.

Balance Sheets

 

ASSETS

       
             
     

December 31,

CURRENT ASSETS:

 

2020

   

2019

 

Cash

$

2,195,070

 

$

3,185,996

 

Accounts receivable, net

 

523,603

   

641,239

 

Inventories, net

 

2,498,126

   

1,986,299

 

Income taxes receivable

 

220,657

   

6,750

 

Prepaid expenses and other

 

77,962

   

18,857

 

      Total current assets

 

5,515,418

   

5,839,141

             

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

   

976,621

 

Training courses

 

432,375

   

432,375

 

Office equipment, software and space modifications

 

216,618

   

208,986

 

Sales and marketing equipment and space modifications

 

226,356

   

232,600

 

Research and development equipment, software and space modifications

 

190,818

   

172,429

 

Less accumulated depreciation

 

(2,277,839)

   

(1,959,541)

 

     Total property and equipment, net

 

2,563,288

   

2,879,645

             

OTHER ASSETS:

         
 

Patents, net

 

144,702

   

145,323

 

Deposits and other

 

164,798

   

74,027

 

Deferred taxes

 

148,142

   

86,658

 

     Total other assets

 

457,642

   

306,008

             
 

     Total assets

$

8,536,348

 

$

9,024,794

             

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

         
 

Accounts payable

$

333,851

 

$

261,798

 

Term loan payable, current portion

 

46,936

   

44,879

 

Paycheck Protection loan payable

 

465,097

   

 

Customer deposits

 

155,295

   

214,031

 

Accrued expenses

 

266,266

   

290,458

 

Deferred revenue, current portion

 

41,053

   

45,874

 

Reserve for warranty expense

 

46,500

   

45,000

 

      Total current liabilities

 

1,354,998

   

902,040

             

TERM LOAN PAYABLE, net of current portion and

         
 

debt issuance costs

 

1,277,531

   

1,324,467

             

DEFERRED REVENUE, net of current portion

 

3,177

   

6,066

 

      Total liabilities

 

2,635,706

   

2,232,573

             

COMMITMENTS AND CONTINGENCIES

         
             

STOCKHOLDERS’ EQUITY:

         
 

Common stock, no par value; 50,000,000 shares

         
 

  authorized, 2,454,116 shares outstanding

 

4,633,655

   

4,603,304

 

Retained earnings

 

1,266,987

   

2,188,917

 

      Total stockholders’ equity

 

5,900,642

   

6,792,221

             
 

      Total liabilities and stockholders’ equity

$

8,536,348

 

$

9,024,794

 

LIFELOC TECHNOLOGIES, INC.

Statements of Income

     
   

Years Ended December 31,

REVENUES:

 

2020

   

2019

 

Product sales

$

6,122,348

 

$

8,251,570

 

Royalties

 

148,398

   

411,111

 

Rental income

 

85,956

   

89,142

 

Total

 

6,356,702

   

8,751,823

             

COST OF SALES

 

4,176,156

   

4,815,820

             

GROSS PROFIT

 

2,180,546

   

3,936,003

             

OPERATING EXPENSES:

         
 

Research and development

 

1,007,297

   

1,038,227

 

Sales and marketing

 

1,074,249

   

1,240,773

 

General and administrative

 

1,254,503

   

1,175,788

 

Total

 

3,336,049

   

3,454,788

             

OPERATING INCOME (LOSS)

 

(1,155,503)

   

481,215

             

OTHER INCOME (EXPENSE):

         
 

Settlement proceeds

 

   

225,199

 

Interest income

 

14,294

   

38,750

 

Interest expense

 

(56,129)

   

(57,802)

 

Total 

 

(41,835)

   

206,147

             

NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

 

(1,197,338)

   

687,362

             

BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES  

 

275,408

   

(61,536)

             

NET INCOME (LOSS)

$

(921,930)

 

$

625,826

             

NET INCOME (LOSS) PER SHARE, BASIC

$

(0.38)

 

$

0.26

             

NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.38)

 

$

0.26

             

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

             
             
   

Years Ended December 31,

   

2020

 

2019

Total stockholders’ equity, beginning balances

$

6,792,221

 

$

6,160,737

             

Common stock (no shares issued during periods):

         
 

Beginning balances

 

4,603,304

   

4,597,646

 

Stock based compensation expense related

         
 

 to stock options

 

30,351

   

5,658

 

Ending balances

 

4,633,655

   

4,603,304

             

Retained earnings:

         
 

Beginning balances

 

2,188,917

   

1,563,091

 

Net income (loss)

 

(921,930)

   

625,826

 

Ending balances

 

1,266,987

   

2,188,917

             

Total stockholders’ equity, ending balances

$

5,900,642

 

$

6,792,221

 

LIFELOC TECHNOLOGIES, INC.

Statements of Cash Flows

               
     

Years  Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020

 

2019

 

Net income (loss)

$

(921,930)

 

$

625,826

 

Adjustments to reconcile net income (loss) to net cash

         
 

 provided from operating activities-

         
 

   Depreciation and amortization

 

364,336

   

412,529

   

  Provision for doubtful accounts, net change

24,000

   

 

   Provision for inventory obsolescence, net change

 

20,000

   

20,000

 

   Deferred taxes, net change

 

(61,484)

   

(6,789)

 

   Reserve for warranty expense, net change

 

1,500

   

5,000

 

   Stock based compensation expense related to

         
 

     stock options

 

30,351

   

5,658

 

Changes in operating assets and liabilities-

         
 

   Accounts receivable

 

93,636

   

33,897

 

   Inventories 

 

(531,827)

   

(715,692)

 

   Income taxes receivable 

 

(213,907)

   

83,879

 

   Prepaid expenses and other 

 

(59,105)

   

16,298

 

   Deposits and other 

 

(90,771)

   

66,425

 

   Accounts payable 

 

72,053

   

(81,985)

 

   Customer deposits 

 

(58,736)

   

194,766

 

   Accrued expenses 

 

(24,192)

   

39,546

 

   Deferred revenue 

 

(7,710)

   

(490)

   

           Net cash provided from (used in)

         
   

            operating activities

 

(1,363,786)

   

698,868

               

CASH FLOWS FROM INVESTING ACTIVITIES:

         
 

Purchases of property, equipment and space modifications

 

(27,477)

   

(256,906)

 

Patent filing expense

 

(18,796)

   

   

           Net cash (used in) investing activities

 

(46,273)

   

(256,906)

               

CASH FLOWS FROM FINANCING ACTIVITIES:

         
 

Proceeds from Paycheck Protection loan

 

465,097

   

 

Principal payments made on term loan

 

(45,964)

   

(44,293)

   

           Net cash provided from (used in) 

         
   

            financing activities

 

419,133

   

(44,293)

               

NET INCREASE (DECREASE) IN CASH

 

(990,926)

   

397,669

               

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

3,185,996

   

2,788,327

               

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,195,070

 

$

3,185,996

               

SUPPLEMENTAL INFORMATION:

         
 

Cash paid for interest

$

55,045

 

$

56,717

               
 

Cash paid for income tax

$

 

$

38,000

This news was shared to Prittle Prattle News via press release.

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