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Idex’ strategic corporate change is scary but so are the weeks that follow

Idex’ strategic corporate change is scary but so are the weeks that follow
 

Switching from making components to making systems is a complex and jostling endeavor. Just ask Idex Biometrics, which is changing from biometric components to integrated access and payment systems.

The fingerprint-scanning company has just released a fiscal 2023 report that has more moving parts than a busload of kindergartners.

For the year ended December 31, Idex reported a loss net loss of $26.6 million, or $0.11 per basic and diluted share, on total revenue of $4.1 million.

That compares with a net loss for fiscal 2022 of $32.6 million, or $0.16, on revenue of $4 million.

Cuts in annual operating expenses helped narrow that loss. Expenses fell from $35.4 million in 2022 to $30.9 million in the just-completed fiscal year.

Some of those cuts were in R&D expenses. In the fourth quarter of 2023, expenses were cut $236,000.

During the fourth quarter, Idex reported a loss of $4.9 million, $0.02, on revenue of $484,000 million. This compares with a loss of $6.2 million, $0.02, on revenue of $1 million.

Executives acknowledged the precariousness of having a foot in two boats. Buyers of legacy goods have faced longer sales cycles than expected and weaker demand from their existing buyers.

The company claims it sees momentum building among buyers of its metal-card biometric product Pay and its Access digital access control software. But those claims did not make the kind of difference Idex needed in the fourth quarter.

A good deal of attention has been given to the metal cards with biometric authentication, but they are a premium product and, by definition, will not sell in the numbers that make a big impact on the bottom line.

Some market analysts, like those with Verified Market Reports, see high growth potential in the segment. They forecast a market near $22 billion by 2030.

In fact, the company does not have much of a runway right now. It says it does not have cash to fund operating and capital spending for the 12 months. That means executives will need to raise more money, maybe selling more debt or even finding a buyer for the company. They apparently saw it differently last fall.

They raised $3.1 million net of expenses in private debt in November and $8.6 million net of expenses in a convertible loan in December.

This post was updated at 5:27pm Eatern on March 6, 2024 to include the market forecast for metal payment cards.

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