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Identity and Access Management Solutions Provider BIO-key's Q4 Revenues Doubled to $1.1M and 2020 Revenues Rose 25% to $2.8M; Enters 2021 with $17M in Cash to Support Global Growth Initiatives; Investor Call Today at 10am ETWALL, N.J., March 25, 2021 (GLOBE NEWSWIRE) -- BIO-key International, Inc. (Nasdaq: BKYI), an innovative provider of biometric and multi-factor identity and access management (IAM) solutions for strong, convenient user authentication and large-scale identity applications, today reported results for its fourth quarter (Q4’20) and year ended December 31, 2020 (FY’20) and provided an initial outlook for 2021. BIO-key will host a conference call today at 10:00 a.m. ET (details below) to review its results and outlook. 2020 Highlights:
Recent Highlights:
BIO-key CEO Michael DePasquale commented, “2020 was a transformational year for BIO-key as we achieved pivotal milestones despite COVID-19 related challenges and disruptions. Business development activity was somewhat curtailed most of the year as enterprises struggled with the challenges posed by the pandemic. We recapitalized the Company following our mid-year acquisition of PortalGuard. Almost immediately, we began building momentum in our business, which is benefiting from IT security challenges driven by the shift to remote work and studies. “We look to take advantage of this trend by ramping up our sales and marketing initiatives and working to stay in front of customers to present our expanded suite of biometric and identity and access management solutions. We continue to see robust interest for our PortalGuard solution within the higher education and enterprise markets, particularly now that we have added a cloud-hosted, identity as a service solution (IDaaS) to our existing on-premises solution. PortalGuard IDaaS was launched in Q4 and was well received by both new and existing customers that are increasingly seeking to move their IT infrastructure to the ‘asset-light’ cloud model. “Certainly the move to cloud solutions has been significantly accelerated by the pandemic and the resulting work-from-home and study-from-home trends. This new off-premises computing dynamic has created unprecedented IT Security challenges as more users access mission critical data and applications outside the enterprise firewall. BIO-key is ideally suited to help enterprises meet these challenges with our attractively priced authentication and IAM solutions that support a wide array of multi-factor authentication options, including our core, patented biometric capabilities. “Following a growing number of significant security breaches including SolarWinds, the Cybersecurity and Infrastructure Security Agency (CISA) recommended using multi-factor authentication strategies everywhere, and the FBI has specifically highlighted the benefits of biometrics for authentication. Our core strength and unique biometric capabilities set BIO-key apart from the competition, particularly as our technology is scalable to any size ID platform. Though we offer a very comprehensive suite of solutions, we continue to identify and evaluate other biometric forms and other FIDO factors that could further enhance our product suite. “We continue to see substantial opportunity in Africa, and this week we commenced delivery for the first shipment of biometric fingerprint scanners in support of our initiatives in Nigeria and expect to record revenue of approximately $500K in Q1 with increasing activity throughout 2021. The launch reflects progress toward the normalization of business activity in Nigeria, which was delayed due to the global pandemic, as well as civil unrest and protests throughout the country. In addition to our projects in Nigeria, we are identifying and pursuing opportunities for other large-scale ID projects in neighboring countries, while also working to grow our base of relationships and channel partners across Africa. “BIO-key’s Channel Alliance Partner Program (CAP) continues to build and is expected to become a key driver for long term growth. Launched in late 2019, the program has grown to encompass more than 50 partners on a global basis. We are working to double our partner base in the coming months to generate additional growth throughout 2021. Currently, about 10% of our recurring revenue comes from the CAP program, and our goal is to push that toward 30% in the near-term. The program expands our paths to market by leveraging partner contacts, market knowledge, and their sales teams to reach new customers where our technology solutions are a good fit and the partner has an existing relationship. We recently expanded the program to target managed service providers (MSPs) and managed security service providers (MSSPs) in addition to other integrators and value-added resellers and are seeing strong demand. We are also targeting partners in key verticals including in Financial, Higher Education and Government where our solutions are already proven to provide substantial value. “The addition of PortalGuard to the BIO-key family has bolstered our in-house sales, marketing and R&D teams. We believe we now have the team and resources in place to take BIO-key to the next level and are making solid progress on driving revenue and most importantly, recurring revenue growth, as seen in our Q4 results. Outlook “As we enter fiscal 2021, we believe we are on-track for significant growth across the business, particularly as the global economy emerges from the impact of COVID-19. We currently expect full year revenues to range between $8M and $12M, with possible upside related to the pace of our African contracts, which remain difficult to project. The mid-point of this range would represent growth of more than 250% over FY’20 revenue and approximately 150% over FY’20 second half revenue annualized, as the second half included the full benefit of our PortalGuard acquisition. Depending on the mix of hardware and software revenues, we believe BIO-key is positioned to achieve profitability within our revenue guidance range.” Financial Results Q4’20 revenue approximately doubled to $1,064,000 from $535,000 in Q4’19, primarily due to a full quarter’s contribution related to the PistolStar/PortalGuard acquisition that closed on June 30, 2020. Revenues for FY 2020 improved to $2,837,000 from $2,268,000 in FY 2019 with the increase also attributable to the acquisition. Gross margin improved to 71% in Q4’20, as compared to negative 25% gross margin in Q4’19, due primarily to the write-off of lock inventory in the prior-year period. For the full year, gross margin improved to 72% in FY’20 versus negative 9% in FY’19 due to software amortization as well as to the write-off of lock inventory, neither of which recurred in FY’20. Q4’20 operating expenses before impairment increased to $2,175,000 from $2,042,000 in Q4’19, primarily reflecting the inclusion of PortalGuard operating expenses and increased marketing and sales expenses, offset by lower non-cash compensation expenses. The $133,000 or approximately 7% increase in total operating expenses before impairment supported a near 100% increase in revenues. BIO-key reported a net loss available to stockholders of $1.4M, or $0.18 per share, in Q4’20, compared to a net loss of $9.5M, or $5.29 per share, in Q4’19. Weighted average basic shares outstanding were approximately 7.8M in Q4’20 compared 1.8M in Q4’19. Q4’20 results reflect $16,000 of net interest expense, as compared to net interest expense of $396,000 in Q4’19. Q4’19 also included an intangible asset impairment charge of $7.0M related to the write down of resalable software license rights. In FY’20, net loss available to common shareholders was $9.8M, or $2.08 per share, including $4.3M of interest expense and a $499,000 loss related to the extinguishment of debt, partially offset by a gain of $341,000 for Paycheck Protection Program proceeds that were forgiven. In FY’19, net loss available to common shareholders was $14.6M, or $8.21 per share, including the $7.0M impairment charge and $1.1M of interest expense. Financial Strength
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All BIO-key shares issued and outstanding for all periods reflect BIO-key’s 1-for-8 reverse stock split, which was effective November 20, 2020. |