April 3, 2014 -
BIO-key International has announced its financial results for the Fourth Quarter 2013, and the full fiscal year, ended December 31, 2013.
According to the company, total revenue for the three months ended December 31, 2013, was $327,500, which compres to Q4 2012 revenue of $1.48. This represents a decrease of approximately 78%. The company also says that its sales fell, year over year, primarily from lower license revenue.
“Despite disappointing financial performance, 2013 was a pivotal year for BIO-key,” Michael DePasquale, BIO-key’s Chairman and CEO said. “We met virtually all of our initiatives to prepare for what we believe is the beginning of a hyper-growth phase of development for us. With Apple, Samsing and other providers deploying fingerprint enabled smartphones, there is no doubt our market is here. Our marquee partnerships with InterDigital, IBM, CA and others drive or cloud-based strategy. Our most recent partnership with IDEX promises to put BIO-key technologies on mobile phones in the United States and abroad. We believe we are one of the only core fingerprint technology developers that can perform both cloud and on-device authentication and we may be the only biometric vendor that currently integrates to most of the popular security infrastructure solutions used by enterprises and governments worldwide.”
BIO-key’s Q4 2013 gross margin remained stable, sequentially ,at 78%, but fell from 90% in Q4 2012 as a result of lower license sales as a percentage of total sales. Operating expenses for Q4 2012 also increased 38% year over year, to $1,163,961 from roughly $842,000 in Q4 2012. The net loss for Q4 2013 was $1,039,595, compared to net income of $486,000 in Q4 2012.
“2013 was about important corporate development, strategic hires, strategic partnership, new operating processes and strategic planning,” DePasquale said. “With a refreshed and very experienced Board, we are ready for 2014, which we see as our break-out year.”
Reported previously in BiometricUpdate.com, the company recently added three new Directors to its board and appointed Michael DePasquale – the company’s CEO – to the Chairman post as well.
As for the fiscal year, ended December 31, 2013, total revenue was $1.99 million, as compared to $3.84 million in 2012. This represents a decrease of 48%. 2013 license and hardware revenue, as well as service revenue fell in 2013.
Gross margin for 2013 was 81%, which represents an 85% slip from 2012, primarily as a result of lower license revenue as a percentage of total revenue, the company says. Operaitng expense increased to $4.1 million from $3.2 million a year earlier. S,G&A expense also increased to $2.8 million in 2013, from $2.3 million in 2012, largely as a result of a one-time reversal of reserves for doubtful accounts in Q3 2012, as well as non-recurring legal expense in Q1 2013 or $130,000 related to the InterDigital transaction.
The company’s R&D exponse also increased 42% to $1.34 million from $947,000 in 2012 as new customer integrations and project development requirements increased. The net loss for 2013 was $2.6 million, as compared to break-even in 2012.
The company has also reported cash and cash equivalents of $2.02 million as of December 31, 2013, as compared to $83,989 at December 31, 2012. BIO-key says it has no long-term debt.
“Not only is BIO-key in its strongest financial position in years, but we are operationally prepared to capitalize on increased market demand and substantially grow our business,” DePasquale said. “Our pipeline is expanding and we are executing well on our strategic plan. We believe our sales visibility and prospects for both growth and more consistent revenue performance are improving, such that we can provide some guidance for our shareholders. We’ve got more work to do, but I’ve never been more excited about our prospects for Q1 and beyond.”
As for Q1 2014, the company expects revenue between $1.2 million and $1.4 million, with a gross margin expected to exceed 85%. BIO-key also expects to exit the first quarter with a modest sales backlog. The pipeline value was approximately $12 million at the beginning of the quarter and approximately $15 million at quarter-end.