Precise Biometrics and BIO-key report revenue gains ahead as new strategies bear fruit
Precise Biometrics has reported a dramatic improvement in its fiscal results for the first quarter of 2020, compared to the same period a year earlier, including revenue nearly twice as high and a profit of SEK 0.3 million (roughly US$30,500).
During the January to March quarter, Precise Biometrics reports sales of SEK 23.1 million ($2.4 million), up from SEK 12.1 million ($1.2 million) a year ago, a 91 percent increase, while net operating profit was SEK 100,000 ($10 thousand), after the company recorded both a net operating loss and an overall loss of SEK 7.9 million ($0.8 million) in Q1 2019. Earnings per share improved from a loss of SEK 0.02 to neutral.
The extension of the company’s partnership to supply software to Egis Technology has secured approximately SEK 60 million ($6.1 million) for the 2020 fiscal year, following a 2019 fiscal year in which the company’s total revenue was just under SEK 92 million ($9.4 million).
In a statement, Precise Biometrics CEO Stefan K. Persson says the company is debt free and has cash and equivalents of SEK 78.4 million ($8 million). He also notes Precise’s accelerated activities in the digital identity space, including a pilot with Friskis & Svettis and a commercial order from Exeger for its YOUNIQ facial recognition access control technology.
“Something we really take with us from the current pandemic in relation to our business is the importance of contactlessness, whether it is payments, access or other applications, where biometrics can best be used as a way of verifying the user’s identity. We see that demand is increasing and we are working closely with our partners to remain at the forefront of innovation, user-friendliness and security in order to continue to gain ground in our business areas,” comments Persson.
“I am happy and proud of how we have performed both financially and operationally so far, where each employee has done their utmost to maintain and strengthen our leading position.”
In a Q3 earnings announcement, Persson said Precise Biometrics “implemented a completely new strategy” in 2019.
BIO-key writes down uncollected software revenue to turn fiscal corner
BIO-key finished its fiscal 2019 year with revenue of $2.3 million, down 63 percent from $4 million in 2018, and a net loss of $14.6 million, or $1.03 per basic share. The impact of anticipated software license payments that were never collected and a transition to selling its SmartLock hardware only to the enterprise market, however, are now on the books, giving the company reason for optimism in 2020.
The company wrote down $7 million in 2019, including $5 million in anticipated software license payments for the year, to take them off its books, having determined they are unlikely to be collected.
In its preliminary Q1 2020 results, announced concurrently with its 2019 year-end, BIO-key reports revenues of $530,000, a modest decline from $552,000 in the first quarter of 2019, and again reflecting its exit from the retail lock business, according to the announcement. Gross margin, on the other hand, improved from a negative to 67 percent in the recently-ended quarter, and cost reduction efforts lowered its operating expenses from $1.8 million a year ago to $1.7 million.
Operating loss for BIO-key improved from $1.8 million to $1.3 million, and after fundraising activities, the company is in a better position in cash and accounts receivable.
Recent highlights include major contracts with a Nigerian government agency and a telecom in the country through a partner, and the adoption of the company’s technology by three more counties in Florida for election data security since its December update.
BIO-key CEO Michael DePasquale says the company will continue to invest in its portfolio of offerings. “In particular, we are working to provide a full suite of multi-factor authentication capabilities to allow our customers flexibility in addressing their needs across a wide variety of locations, devices and requirements,” he states. “We recognize such flexibility is an increasingly important capability and differentiator in the marketplace. By building on our core biometric strengths to put in place a full suite of multi-factor capabilities, we expect to substantially enhance BIO-key’s attractiveness in the market.”
The company has booked agreements totaling over $75 million over the next 24 months, and says it has absorbed revenue impact from transitioning to a more sustainable subscription or SaaS model.
“Reflecting actions taken in 2019, our Q1’20 bottom-line performance improved substantially compared to the same period in 2019, and we have a strong outlook for 2020,” DePasquale comments. “We expect to commence work on our large African contracts in the coming months and expect to receive upfront deposits to precede our efforts. Given their scale and expected duration, these projects alone position BIO-key for substantial revenue growth and for the full year 2020, and we are confident they will allow us to pursue other large-scale opportunities in Africa and on a global basis. We look to provide more visibility into the timing and expected impact of our Africa business as final planning is completed and the projects are underway.”
BIO-key is currently in a grace period for compliance with the Nasdaq’s $1 Minimum Closing Bid Price Requirement, which was recently extended to December 4, 2020. The shares are required to close at over $1 on ten consecutive days, and BIO-key closed above $1 for five consecutive days from April 30 to May 4.