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Lifeloc Reports 2018 Full Year Results and DWAC/FAST Eligibility

LCTC | March 15, 2019

Lifeloc Reports 2018 Full Year Results and DWAC/FAST Eligibility

Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2018 fiscal year ended December 31, 2018.

2018 Financial Highlights

Lifeloc Technologies posted annual net revenue of $8.44 million resulting in 2018 after tax net income of $217 thousand, or $0.09 per diluted share. These results compare to net revenue of $7.99 million for 2017 full year, with net income of $15 thousand, or $0.01 per diluted share. Revenue for 2018 grew 6% over the prior year. Our balance sheet grew even stronger, with a growth in cash of $119 thousand and a debt reduction of $40 thousand.

This has been a transitional year for Lifeloc Technologies. In 2018 we made a significant investment in the upgrade of our enterprise resource planning (ERP) information infrastructure for improved efficiency and to handle a broadening product line. This has already contributed some sales growth through the upgraded e-Commerce portal. We are completing a multiyear R&D investment for the development of a completely new breathalyzer platform that will be introduced in 2019. And as these projects wind down, freed resources will be deployed to accelerating the development of our rapid drug detection based on the SpinDx™ technology, including a rapid, quantitative marijuana breathalyzer, as well as advancing our monitoring business, primarily through the Real-Time Alcohol Detection and Recognition (R.A.D.A.R.^®) device.

Our vision is that Lifeloc becomes the world’s leading company in real-time alcohol and drug abuse detection and monitoring. To that end, we continue to invest aggressively in research and development. This R&D investment amounted to over 13% of revenue for the year. Lifeloc is committed to bringing the most advanced alcohol breathalyzers, alcohol monitoring devices and marijuana breathalyzers to the market.

“We are glad to return to a year of growth, having achieved some modest revenue growth in 2018 through improving sales channels, even though there were no new product introductions this year,” commented Dr. Wayne Willkomm, President and CEO. “2019 will be different, with a pipeline of new breathalyzer and affiliated launches which will deliver more performance and value to our customers.”

In addition to operational investments, Lifeloc Technologies is pleased to announce that the Depository Trust Corporation (the "DTC") has approved its common stock for DWAC/FAST transfer through the Company's Transfer Agent, Corporate Stock Transfer, Inc. This newly approved stock transfer capability will enable Lifeloc's shareholders to transfer their shares of Lifeloc stock electronically after buying or selling, without the extra cost and burden associated with the processing of physical share certificates.

DWAC/FAST transfer expedites the transaction process, while also eliminating the risks associated with the loss and replacement of physical share certificates. "We are pleased to facilitate easier trading for our shareholders," said Dr. Willkomm. "Not only does becoming DWAC/FAST eligible provide our existing shareholders with new efficiencies, but we hope for more liquidity and better valuation in the open market, allowing us to continue expanding our shareholder base," he added.

About Lifeloc Technologies

Lifeloc Technologies, Inc. (OTC: LCTC) is a trusted U.S. manufacturer of evidential breath alcohol testers and related training and supplies for Workplace, Law Enforcement, Corrections and International customers. Lifeloc stock trades over-the-counter under the symbol LCTC. We are a fully reporting Company with our SEC filings available on our web site, www.lifeloc.com.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements expressed or implied in this press release, including statements about our strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities, market size and growth, and return on investments in products and market, are based on information available to us on the date of this document, and we assume no obligation to update such forward-looking statements. Investors are strongly encouraged to review the section titled “Risk Factors” in our SEC filings.

R.A.D.A.R.® is a registered trademark of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.


LIFELOC TECHNOLOGIES, INC.
Balance Sheets

ASSETS
			December 31,
CURRENT ASSETS:			2018			2017
	Cash and cash equivalents	$	2,788,327		$	2,669,455
	Accounts receivable, net		675,136			593,326
	Inventories, net		1,290,607			1,175,103
	Income taxes receivable		90,629			121,401
	Prepaid expenses and other		35,155			21,804
	Total current assets		4,879,854			4,581,089

PROPERTY AND EQUIPMENT, at cost:
	Land		317,932			317,932
	Building		1,928,795			1,928,795
	Real-time Alcohol Detection And Recognition equipment and software		569,448			569,448
	Production equipment and software		800,569			556,025
	Training courses		432,375			432,375
	Office equipment and software		241,836			204,282
	Sales and marketing equipment		219,797			216,330
	Research and development equipment and software		159,810			131,770
	Less accumulated depreciation		(1,649,203	)		(1,349,499	)
	Total property and equipment, net		3,021,359			3,007,458

OTHER ASSETS:
	Patents, net		158,147			177,244
	Deposits and other		140,452			259,037
	Deferred taxes		79,869			66,531
	Total other assets		378,468			502,812
	Total assets	$	8,279,681		$	8,091,359

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Accounts payable	$	343,783		$	297,096
	Term loan payable, current portion		43,207			42,101
	Customer deposits		19,265			48,763
	Accrued expenses		250,912			264,290
	Deferred revenue, current portion		44,218			53,137
	Reserve for warranty expense		40,000			40,000
	Total current liabilities		741,385			745,387

TERM LOAN PAYABLE, net of current portion and
	debt issuance costs		1,369,347			1,410,185

DEFERRED REVENUE, net of current portion			8,212			9,683

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
	Common stock, no par value; 50,000,000 shares
	authorized, 2,454,116 shares outstanding		4,597,646			4,580,177
	Retained earnings		1,563,091			1,345,927
	Total stockholders' equity		6,160,737			5,926,104
	Total liabilities and stockholders' equity	$	8,279,681		$	8,091,359


LIFELOC TECHNOLOGIES, INC.
Statements of Income

		Years Ended December 31,
REVENUES:			2018			2017
	Product sales	$	8,104,003		$	7,629,474
	Royalties		247,765			289,588
	Rental income		85,886			71,676
	Total		8,437,654			7,990,738

COST OF SALES			4,628,403			4,277,874

GROSS PROFIT			3,809,251			3,712,864

OPERATING EXPENSES:
	Research and development		1,121,827			1,076,763
	Sales and marketing		1,251,388			1,388,927
	General and administrative		1,165,413			1,114,534
	Total		3,538,628			3,580,224

OPERATING INCOME			270,623			132,640

OTHER INCOME (EXPENSE):
	Interest income		25,624			6,824
	Interest expense		(61,650	)		(60,705	)
	Total		(36,026	)		(53,881	)

NET INCOME BEFORE PROVISION FOR TAXES			234,597			78,759

(PROVISION FOR) FEDERAL AND STATE INCOME TAXES			(17,433	)		(64,156	)

NET INCOME		$	217,164		$	14,603

NET INCOME PER SHARE, BASIC		$	0.09		$	0.01

NET INCOME PER SHARE, DILUTED		$	0.09		$	0.01

WEIGHTED AVERAGE SHARES, BASIC			2,454,116			2,454,116

WEIGHTED AVERAGE SHARES, DILUTED			2,512,445			2,518,188


LIFELOC TECHNOLOGIES, INC.
Statements of Cash Flows

			Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES:			2018			2017
	Net income		$	217,164		$	14,603
	Adjustments to reconcile net income to net cash
	provided from (used in) operating activities-
	Depreciation and amortization			416,896			288,017
	Provision for doubtful accounts, net change			(5,000	)		-
	Provision for inventory obsolescence, net change			60,000			27,500
	Deferred taxes, net change			(13,338	)		43,196
	Reserve for warranty expense, net change			-			-
	Stock based compensation expense related to
	stock options			17,469			22,857
	Changes in operating assets and liabilities-
	Accounts receivable			(76,810	)		(97,929	)
	Inventories			(175,504	)		(366,994	)
	Income taxes receivable			30,772			(6,728	)
	Prepaid expenses and other			(13,351	)		30,268
	Deposits and other			118,585			(160,046	)
	Accounts payable			46,687			12,506
	Customer deposits			(29,498	)		(2,848	)
	Accrued expenses			(13,378	)		24,457
	Deferred revenue			(10,390	)		(10,128	)
		Net cash provided from (used in)
		operating activities		570,304			(181,269	)

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment			(402,147	)		(11,846	)
	Cash paid for equipment and software acquired
		in asset acquisition		-			(748,198	)
	Cash paid for patents and patent applications acquired
		in asset acquisition		-			(100,000	)
	Patent filing expense			(6,750	)		(17,217	)
		Net cash (used in) investing activities		(408,897	)		(877,261	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Principal payments made on term loan			(42,535	)		(44,079	)
		Net cash (used in) financing
		activities		(42,535	)		(44,079	)

NET INCREASE (DECREASE) IN CASH				118,872			(1,102,609	)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD				2,669,455			3,772,064

CASH AND CASH EQUIVALENTS, END OF PERIOD			$	2,788,327		$	2,669,455

SUPPLEMENTAL INFORMATION:
	Cash paid for interest		$	58,847		$	65,348

	Cash paid for income tax		$	-		$	40,096