BIO-key’s Q2 2017 revenues increased 113% to $0.9M
BIO-key International, Inc. issued its financial results for Q2 2017 where its total revenues saw a 113 percent increase to $886,881 as compared to Q2 2016.
The reported revenues did not include a $600,000 professional services contract executed in Q2 2017 which will be recognized during the second half of 2017.
Software license revenues were up 76 percent to reach $128,000 reflecting demand from both new and existing customers.
Meanwhile, hardware sales increased 281 percent to $467,000, reflecting broader distribution and increased demand for BIO-key’s fingerprint reader lines with plug and play integration to Windows 10.
The company’s Q2 2017 results also included $158,000 in revenue from initial shipments of BIO-key’s recently launched TouchLock line of biometric padlocks and bicycle locks in Asia.
For the first half of 2017, sales increased 172 percent to $2,305,216 from $846,406 in the prior-year period.
Gross margin decreased to 10.3 percent in Q2 2017 from 67.2 percent in Q2 2016, reflecting a higher percentage of hardware sales that carry lower margins.
Q2 2017 operating expenses increased to $1.8 million from $1.6 million, principally due to a $0.4 million increase in selling, general and administrative expenses.
The difference is primarily related to BIO-key’s Hong Kong subsidiary, commitment fees and commissions, offset by a $0.1 million reduction in research, development and engineering costs in the period.
BIO-key’s Q2 2017 net loss was ($1.8 million) as compared to ($1.4 million) in Q2 2016, which was primarily due to the decrease in gross margin and the increase in operating expenses.
For the first six months of 2017, BIO-key’s net loss was ($3.1 million) versus ($2.5 million) in the first half of 2016.
Based on the company’s year to date performance, combined with anticipated revenues and sales and marketing efforts for its hardware and software solutions, BIO-key management reiterates its 2017 revenue guidance range of $6 million to $12 million, with a gross margin range of 53 percent to 70 percent depending on the mix of software and hardware sales.
The company’s total cash and cash equivalents plus current receivables was approximately $1.8 million at June 30, 2017, as compared to approximately $2.6 million at December 31, 2016.
BIO-key reiterated several key highlights which occurred in the first half of 2017, such as raising $1 million through the sale of common stock, and its common stock being uplisted to Nasdaq Capital Market.
“We are encouraged by our sales and marketing progress on a global basis during the second quarter and first six months of 2017,” said Michael DePasquale, chairman and CEO of BIO-key. “Based on this performance and our pipeline of hardware and software opportunities, we remain very optimistic about BIO-key’s growth potential and reiterate our full-year financial guidance.
“We are particularly gratified to build upon our relationship with a Fortune 500 telecommunications customer that selected BIO-key to support their endpoint security implementations through a $600,000 professional service engagement we expect to fulfill over the next two quarters.