Biometrics stocks: BIO-key doubles revenue, FPC reports supply chain impact, Identiv bouncing back
BIO-key’s third quarter revenue more than doubled from the same period a year earlier to $943,000, from $453,000, much of its coming from PortalGuard, and the company holds $18.4 million in cash after closing its $24.8 million underwritten public offering.
Sales of PortalGuard pushed the company’s gross margin to 78 percent for the quarter. In addition to several deployments of the AIM solution, recent highlights for BIO-key include implementation for use in voter registration in 45 counties across two U.S. states, deployment by a multinational agriculture company for secure system access by workers, and the expansion of its Channel Alliance Program to include 50 worldwide partners.
“Despite lingering business development challenges posed by the COVID-19 pandemic, Q3 proved a pivotal and exciting quarter for BIO-key as we completed the recapitalization of the Company and built revenue momentum for our new PortalGuard solution,” comments BIO-key CEO Michael DePasquale. “We began to see a return to more normalized sales and marketing dialogues following a very challenging Q2 during which most customer IT decision-making had been put on hold. We are now seeing business activity slowly moving to a more normal pace and level of engagement. Importantly, Q3’20 marked the first quarter incorporating results of our PistolStar/PortalGuard business, and we saw very strong traction for the solution, particularly within higher education institutions seeking to strengthen and streamline online access to educational resources for students, faculty and administration.”
BIO-key reports an operating loss of $1.3 million for the quarter, compared to a quarterly loss of $1.1 million a year earlier. Net loss was $3.3 million, or $0.06 per basic share, compared to losses of $1.8 million, or $0.13 per basic share in Q3 2019.
A $30 million project to provide biometric authentication for a Nigerian telecom is now slated to begin in 2021, and the company anticipates orders for $650,000 for the initial deployment in another large African contract expected to commence in Q4 of this year.
The company expects its fourth quarter fiscal performance to further build on its Q3 results.
Supply chain issues impact Fingerprint Cards earnings
Fingerprint Cards booked SEK 8.7 million (roughly US$1 million) in EBITDA for the third quarter of fiscal 2020, with an operating loss of SEK 4.6 million ($530,000) and earnings per share before dilution of negative SEK 0.01 as the pandemic impacted its supply chain and purchasing prices.
The same quarter a year earlier, FPC reported EBITDA of SEK 35.6 million ($4.1 million), and though its operating loss increased modestly from negative SEK 3.4 million ($394,000), earnings per share before dilution had reached SEK 0.02 in Q3 2019.
Overall revenues during the past quarter for Fingerprint Cards were SEK 294 million ($34 million), down from SEK 352.2 million ($40.9 million), and gross margin declined to 18 percent from 23 percent a year ago, as the shortage of production capacity at semiconductor manufacturers affected the company.
For the first nine months of fiscal 2020, FPC reports revenues of SEK 886.3 million ($102.8 million) and EBITDA of SEK 27 million ($3.1 million), for an operating result of negative SEK 39 million ($4.5 million). These results are compared to 2019’s first nine months revenue of SEK 1,077.2 million ($125 million), EBITDA of SEK 115.4 million ($13.4 million), and operating gain of SEK 900,000 ($104,000).
“Our assessment is that the situation of insufficient access to production capacity will continue in the short term, but we expect ongoing changes to our product mix to, over time, contribute to improved profitability,” states Fingerprint Cards President and CEO Christian Fredrikson. “As communicated earlier, we are planning for significant volume growth in the next few years, mainly in prioritized areas outside of the mobile phone industry. For this reason, the work to continue to broaden our supplier base is very important and we have intensified our efforts to secure more suppliers of key components, within as well as outside of mainland China.”
The company’s ultra-thin side-mounting FPC1540 sensor is having great success in the market, according to Fredrikson, demand continued to develop in the PC segment in line with FPC’s expectations, the results of efforts to enable large-scale launches of biometric payment cards are now being seen. Fredrikson says the company’s T-Shape sensor module’s latest generation delivers improved performance at a list cost below $3 per unit for volume production.
FPC’s FPC1520 sensor has been implemented on the Sharp Aquos Sense 4, and another Japanese OEM has launched a device with the FPC1035, bringing the total number of devices integrating Fingerprint Cards’ biometric sensors to 459, according to a Tweet.
Identiv identity reader business grows 38 percent
Revenues increased by 30 percent sequentially for Identiv to $24.9 million, with identity related revenue growing by 33 percent to $15.4 million, the company reports.
GAAP net income was $0.4 million, and while the company’s RFID business increased by 100 percent year-over-year, its identity readers sales also increased by 38 percent from a year earlier.
Highlights during the pervious quarter include the launch of Identiv’s FIDO2 security keys for remote workforces.
More generally, the company’s results reflect a bounce-back from lockdown conditions.
“The third quarter was another proof point of our growth potential as we near the inflection point of our business model,” says Identiv CFO Sandra Wallach. “With third quarter revenues of $24.9 million, we earned positive GAAP net income ahead of expectations, and we believe we will be non-GAAP free cash flow positive, as committed, during the fourth quarter and beyond. Given the line of sight we have into our building backlog and pipeline for 2021, we currently believe we have the ability to outpace the market and grow our revenues to $96 million to $102 million in 2021.”
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