March 30, 2016 -
Biometric software and hardware solution provider BIO-key International today reported results for its year ended December 31, 2015 and provided initial revenue guidance for 2016.
In 2015, BIO-key saw total revenue increase 31% to $5,261,225 compared to $4,005,856 in 2014. The improvement reflected increases in both software license and hardware revenue, more than offsetting a $560K decrease in services revenue, due principally to the completion of a large service contract at the end of 2014.
Gross margin decreased to 76% in 2015 as compared to 81% in 2014 due primarily to a higher level of lower margin hardware sales, as well as resale of third party software. Operating expenses increased 7% year over year, to $5,677,055 in 2015 from $5,296,226 in 2014, reflecting increased variable marketing expenses and higher general and administrative expenses, which offset a modest decrease in R&D spending. The 2015 net loss decreased slightly to ($1,857,306), or ($0.03) per basic share, versus a net loss of ($1,883,572), or ($0.03) per basic share, in 2014.
At year-end, BIO-key had cash, cash equivalents and net receivables of $7,712,483, compared to $1,468,973 in 2014.
BIO-key estimates that its full year 2016 revenues will grow to a targeted range of $7M – $9.5M, a growth rate of 35% to 83% versus 2015. The company anticipates that the revenue drivers for 2016 will include: sales growth in Asian markets from its subsidiary, BIO-key HK Ltd. and the China GoldJoy partnership; increased demand for BIO-key’s SideSwipe, SideTouch and ECO-ID fingerprint readers which support enterprise use of Windows 10’s native biometric capabilities; regulatory mandates for two factor authentication to protect electronic patient records as well e-prescriptions; expanding BIO-key’s base of OEM customers, and; development of mobile payment and other biometrics based technologies to be introduced in 2016.
The company says that because BIO-key’s sales initiatives involve a mix of software and hardware components and sales channels, it is difficult to predict the timing or size of expected sales opportunities so BIO-key is only providing initial full-year revenue guidance and the company expects its revenues to build as the year progresses.
BIO-key targets a blended gross margin ranging from 59% to 75%, depending on the mix of services, software and hardware sales during 2016.
BIO-key Chairman and CEO, Michael DePasquale, commented, “We are proud of our progress and feel BIO-key has emerged from 2015 a far stronger company with a broader array of technology solutions and growth opportunities around the globe. We believe we are well positioned to execute on our ambitious growth strategy and achieve record revenue and profitability in 2016.
Our optimism for the business is rooted in a growing base of sales channels and opportunities. These include OEM’s, distribution and reseller partners, healthcare and financial services institutions complying with regulatory mandates, domestic and international governments, online and mobile payment service providers and the potential from our hardware marketing partnership with Microsoft.
With our industry leading software and recently introduced hardware offerings we are well positioned to tap the global market for secure authentication technology.”