BIO-key(TM) Reports Q1 Revenue of $649,000; Affirms 2015 Revenue Guidance of $5M - $7M
WALL, NJ--(Marketwired - May 13, 2015) - BIO-key International, Inc. (OTCQB: BKYI), a leader in high-accuracy fingerprint biometric software technologies for mobile, enterprise and cloud-based identification and verification, today reported results for its first quarter ended March 31, 2015 (Q1'15) and provided an update on its full year 2015 revenue guidance range which remains $5M to $7M. BIO-key will host a conference call today at 10:00 a.m. EDT, details below.
Michael DePasquale, BIO-key Chairman and CEO, commented, "We made good progress across the business during the first quarter, helping to solidify our outlook for the balance of 2015 and beyond. Our go to market strategy builds upon our growing base of OEM and distribution relationships that substantially expand our reach as well as focused direct sales efforts. We added important new partnerships with Avnet and Aventura and with the introduction of our new high performance, low cost, finger scanner (EcoID), we are seeing new interest and demand from prospects around the globe who can now more cost effectively integrate finger biometrics for a wide range of applications.
"Though our Q1 sales performance fell below last year's level, this reflects the deal-driven nature of our software licensing efforts and was in-line with our anticipated range. Looking out over the balance of 2015, we are on target to achieve our full year revenue guidance of five to seven million dollars and expect to demonstrate the strength of our sales effort in our Q2 performance."
Recent Business Highlights Include:
•BIO-key partnered with HealthCast Inc. to deliver innovative Single Sign-On solutions and secure two-factor authentication for the Electronic Prescription of Controlled Substances (EPCS) to leading hospitals and hospital systems
•BIO-key selected to provide international financial services firm with customer and employee authentication solution
•BIO-key partnered with Aventura to provide a biometric authentication solution for the Electronic Prescribing of Controlled Substances (EPCS)
•Global Application Specific Licensing Agreement with Avnet to develop identification solutions integrating IBM middleware with BIO-key software for customers in the Americas, EMEA and Asia Pacific. Avnet is a major distributor of electronic components, IT solutions and embedded technology
•BIO-key Introduced EcoID, a compact USB touch fingerprint reader pairing the Active Thermal™ sensor from NEXT Biometrics with the superior accuracy of BIO-key's biometric algorithms and software, to deliver top quality at an unprecedented price point.
Q1 Results
Q1'15 revenue declined to $649,000 from $1,368,000 in Q1'14. The decrease was principally the result of the variability in timing of software license activity in the comparable periods. Service revenues were essentially unchanged in the Q1'15 and Q1'14 periods.
During Q1'15, BIO-key continued to ship biometric software solutions to support the roll-out of the AccuDose® product line of Aesynt (formerly McKesson) as well as the continued expansion of biometric ID deployments via commercial partners ChoicePoint / LexisNexis, Educational Biometric Technology, and Identimetrics.
Q1'15 gross margin declined to 79% from 91% in Q1'14, principally due to the decrease in software license revenue as well as an increase in costs related to non-recurring custom services revenue. Operating expenses for Q1'15 increased 8%, to $1,447,000 from $1,344,000 in Q1'14, principally due to an increase in non-cash share based compensation expenses as well as higher costs related to sales and marketing activities and legal expense. BIO-key reported a Q1'15 net loss of ($924,000), or ($0.01) per basic share, compared to a net loss of ($299,000), or ($0.00) per basic share, in Q1'14.
Liquidity and Capital Resources
BIO-key had cash and cash equivalents of $303,000 and total current assets of $1,207,000 at March 31, 2015, compared to $1,794,000 of total current assets at December 31, 2014. Net cash used for operations during Q1 '15 was $519,000 compared to $1,277,000 in Q1'14.
2015 Financial Guidance
BIO-key continues to expect full year 2015 revenue to range between $5.0 million and $7.0 million with a gross margin ranging between 75% and 80%. BIO-key's sales and marketing will focus on large enterprise and government opportunities that have been sourced directly or through partners. Such opportunities range in size from under $100,000 to several million dollars in certain cases. The Company's current pipeline of sales opportunities is valued at $30 million, as compared to $25 million at December 31, 2014 and $12.7 million at December 31, 2013.
Given the variability in the timing and size of potential contracts within the Company's pipeline of sales opportunities, quarterly financial performance is likely to vary significantly from quarter to quarter. BIO-key currently expects Q2 revenue to range between $1.5 million and $3.0 million. Of this amount, three quarters is expected to be derived from OEM, reseller and integration partner channels with the bulk of expected revenue coming from highly regulated industries, including healthcare and financial services. Gross margin is expected to be in the range of 75%-80%. BIO-key's quarterly break-even revenue run rate remain in the range of $1.5M-$1.75M.
Conference Call and Webcast Replay
Date/Time: Today -- Wednesday, May 13, 2015 at 10 a.m. EDT
Dial-In number: 1-877-418-5460 (U.S.), 412-717-9594 (Intl.), ask for the BIO-key call
Webcast Replay: available shortly after the call at www.bio-key.com
