Identity and Access Management Cyber-Security Provider BIO-key’s Q1 Revenue Improved to $1.9M, Driven by 205% Increase in Software License Fees; Investor Call Today at 10am ET

Wall Township, New Jersey, UNITED STATES


WALL, N.J., May 16, 2022 (GLOBE NEWSWIRE) -- BIO-key® International, Inc. (Nasdaq: BKYI), an innovative provider of workforce and customer identity and access management (IAM) solutions featuring Identity-Bound Biometrics (IBB) and large-scale identity solutions, today reported results for its first quarter ended March 31, 2022 (Q1’22). BIO-key is hosting a conference call today at 10:00 a.m. ET (details below) to review its results and outlook.

BIO-key’s revenue improved 3% to $1.94M in Q1’22 from $1.89M in Q1’21 and 108% from $935K in Q4 2021 driven by a $981,000 increase in software license fees year over year. BIO-key is focused on growing its base of annual recurring software license fees which provide more predictable revenue trends and higher margins than its more episodic hardware revenues.

Recent Highlights:

  • Expanding PortalGuard Penetration with Local Government Customers, including New Deployments in Missouri, New Mexico, New York, South Dakota and Texas counties and municipalities.
  • March 8th acquisition of Swivel Secure Europe, an IAM solutions provider in Europe, the Middle East and Africa (EMEA) that generated approximately $3.1M in revenue and $578K in operating income in 2021. contributed $368K of revenue during the remainder of March, and substantially expands BIO-key’s global customer base, geographic reach, and long term growth potential.
  • Added New Enterprise Customers and Channel Alliance Program partners
  • Initial Hardware Deployments for Nigeria’s National Identity Management Commission’s National ID Enrollment Program in partnership with Sterling Bank Nigeria’s Specta online lending platform - BIO-key’s Pocket10 device for mobile biometric enrollments for agent banking is being deployed to support increased adoption and use of the National Identity Number and mobile banking and payments across the country.

BIO-key CEO Michael DePasquale commented, “As anticipated, we are off to a solid start in Q1’22, with software license sales increasing 205% year-over-year and 168% over Q4’21. This strong performance reflects growing momentum in our Annual Recurring Revenue (ARR) base from software licenses, which is a core focus and value driver for our business. While hardware remains an important component and differentiator in our business, its episodic nature can create some variability in our quarterly operating performance. Our Q1’22 performance included just 22 days of operating results from our Swivel Secure Europe operations acquired in March.

“Looking forward, we see an expanding worldwide opportunity to grow our software license revenue base, driven by the compelling security, scalability, ease of use and deployment, and customer value proposition of our PortalGuard IAM platform, along with an expanding array of security solutions. Customers are increasingly recognizing PortalGuard’s, flexibility and differentiated multi-factor authentication capabilities, with support for sixteen different factors including BIO-key’s industry-leading Identity Bound Biometric capabilities.

“PortalGuard continues to gain momentum in the higher education and municipal government verticals and with enterprises as a high-value, easy-to-deploy solution for hybrid access needs. The industry continues to recognize BIO-key as we recently earned four recent 2022 Cybersecurity Excellence Awards and a Security Today magazine 2022 Govies Government Security Award for PortalGuard, in the User Authentication/ Identification/Credentialing and Management category.

Outlook

“There is a clear and growing global need for enterprises of all kinds to protect their data and systems with stronger cybersecurity solutions. BIO-key has built a strong base of products, services and partnerships to address this substantial opportunity. Given the growing momentum in our business, complemented with the addition of Swivel Secure Europe and further progress advancing our opportunities in Africa, we remain confident in achieving our full-year 2022 revenue guidance of $10-13M. Approximately 70% of the lower end of this guidance range relates to contracted recurring software license revenue.

“Our revenue guidance represents growth of more than 100% over 2021, benefitting from continued growth in software license revenue, along with hardware and services revenue contributions that are generally tied to specific projects. Our positive outlook is supported by our strong capital position, talented global management and product development teams, and expanded global sales, marketing and channel partner footprint. Further, we believe BIO-key is positioned to achieve break-even operations starting at the lower end of this range, subject to our mix of hardware and higher-margin software revenue.”

Financial Results

Q1’22 revenue increased 3% to $1.94M from $1.89M in Q1’21, driven by a 205% increase in software license fees and a modest increase in services revenue, which more than offset a decline in hardware revenue. The year-ago period included $680,000 in hardware revenue related to the initiation of product shipments for one of the Company’s large scale ID projects in Nigeria.

Gross profit grew to $1.6M in Q1’22 from $1.1M in Q1’21, due primarily to the increase of higher-margin license fee revenue as a percentage of total revenue in the current-year period.

Total operating expenses increased to $2.6M in Q1’22 from $2.0M in Q1’21, reflecting a $0.4M increase in research, development and engineering expense related to our recently announced MobileAuth and IDaaS solutions and a $0.3M increase in selling, general and administrative expense reflecting acquisition expenses associated with Swivel Secure Europe.

BIO-key reported an operating loss of $1.0M in Q1’22 vs. $0.8M in Q1’21, as the Company’s increase in gross profit was more than offset by higher operating expenses intended to support long term growth. BIO-key reported a Q1’22 net loss available to common stockholders of $1.0M, or $0.12 per share, compared to a Q1’21 net loss of $0.9M, or $0.11 per share. Weighted average basic shares outstanding were approximately 7.9M in Q1’22 and 7.8M in Q1’21.

Financial Strength
BIO-key ended the first quarter with working capital of $10.1M, including $5.8M of cash and cash equivalents and $5.0M in inventory, and a book value of $15.3M.

Conference Call Details
Date / Time:Today, Monday, May 16th at 10 a.m. ET
Call Dial In #:1-877-418-5460 U.S. or 1-412-717-9594 International
Live Webcast / Replay:Investor Webcast & Replay – Available for 3 months.
Audio Replay:1-877-344-7529 U.S. or 1-412-317-0088 Int’l; code 3884798

About BIO-key International, Inc. (www.BIO-key.com)
BIO-key has over two decades of expertise in providing authentication technology for thousands of organizations and millions of users and is revolutionizing authentication with biometric-centric, multi-factor identity and access management (IAM) solutions, including PortalGuard that provides convenient and secure access to devices, information, applications, and high-value transactions. BIO-key's patented software and hardware solutions, with industry-leading biometric capabilities, enable large-scale on-premises and Identity-as-a-Service (IDaaS) solutions as well as customized enterprise and cloud solutions.

BIO-key Safe Harbor Statement
All statements contained in this press release other than statements of historical facts are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the "Act"). The words "estimate," "project," "intends," "expects," "anticipates," "believes" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Act. These statements are not guarantees of future performance or events and are subject to risks and uncertainties that may cause actual results to differ materially from those included within or implied by such forward-looking statements. These risks and uncertainties include, without limitation, our history of losses and limited revenue; our ability to raise additional capital; our ability to protect our intellectual property; changes in business conditions; changes in our sales strategy and product development plans; changes in the marketplace; continued services of our executive management team; security breaches; competition in the biometric technology and identity access management industries; market acceptance of biometric products generally and our products under development; our ability to execute and deliver on contracts in Africa; our ability to expand into Asia, Africa and other foreign markets; our ability to integrate the operations and personnel of PistolStar and Swivel Secure into our business; the duration and severity of the current coronavirus COVID-19 pandemic and its effect on our business operations, sales cycles, personnel, and the geographic markets in which we operate;  the duration and extent of continued hostilities in Ukraine and its impact on our European customers, delays in the development of products and statements of assumption underlying any of the foregoing as well as other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021 and other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements whether as a result of new information, future events, or otherwise.

Engage with BIO-key
Facebook – Corporate:https://www.facebook.com/BIOkeyInternational/
LinkedIn – Corporate:https://www.linkedin.com/company/bio-key-international
Twitter – Corporate:@BIOkeyIntl
Twitter – Investors:@BIO_keyIR
StockTwits:BIO_keyIR


Media ContactInvestor Contact
Erin KnappWilliam Jones, David Collins
Matter CommunicationsCatalyst IR
BIO-key@matternow.comBKYI@catalyst-ir.com
914-260-3158212-924-9800


BIO-key International, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS


  March 31,
2022
  December 31,
2021
 
  (Unaudited)     
ASSETS        
Cash and cash equivalents $5,846,798  $7,754,046 
Accounts receivable, net  2,668,147   970,626 
Due from factor  51,850   49,500 
Note receivable, net of allowance  82,000   82,000 
Inventory  4,956,472   4,940,660 
Prepaid expenses and other  363,209   216,041 
Total current assets  13,954,691   14,012,873 
Resalable software license rights  46,247   48,752 
Investment – debt security, net  452,821   452,821 
Equipment and leasehold improvements, net  134,929   69,168 
Capitalized contract costs, net  279,789   249,012 
Deposits and other assets  8,712   8,712 
Note receivable, net of allowance  110,000   113,000 
Operating lease right-of-use assets  202,513   254,100 
Intangible assets, net  2,768,067   1,298,077 
Goodwill  1,648,481   1,262,526 
Total non-current assets  5,651,559   3,756,168 
TOTAL ASSETS $19,606,250  $17,769,041 
         
LIABILITIES        
Accounts payable $1,084,452  $427,772 
Accrued liabilities  896,702   828,997 
Government loan – Swivel  580,992   - 
Deferred revenue - current  798,830   565,355 
Operating lease liabilities, current portion  156,730   177,188 
Total current liabilities  3,517,706   1,999,312 
Deferred revenue – long term  54,699   67,300 
Operating lease liabilities, net of current portion  54,710   86,974 
Total non-current liabilities  109,409   154,274 
TOTAL LIABILITIES  3,627,115   2,153,586 
         
Commitments and Contingencies        
         
STOCKHOLDERS EQUITY        
Common stock — authorized, 170,000,000 shares; issued and outstanding; 8,406,451 and 7,853,759 of $.0001 par value at March 31, 2022 and December 31, 2021, respectively  841   786 
Additional paid-in capital  121,509,367   120,190,139 
Accumulated other comprehensive gain  43,800     
Accumulated deficit  (105,574,873)  (104,575,470)
TOTAL STOCKHOLDERS EQUITY  15,979,135   15,615,455 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $19,606,250  $17,769,041 


BIO-key International, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

  Three months ended
March 31,
 
  2022  2021  
         
Revenues        
Services $395,804  $380,022 
License fees  1,460,183   478,958 
Hardware  85,184   1,029,658 
Total revenues  1,941,171   1,888,638 
         
Costs and other expenses        
Cost of services  210,913   175,944 
Cost of license fees  73,230   38,969 
Cost of hardware  53,298   551,722 
Total costs and other expenses  337,441   766,635 
Gross Profit  1,603,730   1,122,003 
         
Operating expenses        
Selling, general and administrative  1,797,998   1,516,398 
Research, development and engineering  805,266   441,651 
Total operating expenses  2,603,264   1,958,049 
Operating loss   (999,534)  (836,046)
Other income (expense)        
Interest income  131   2,615 
Interest expense  -   (18,000)
Total other income (expense)  131   (15,385)
Net loss $(999,403) $(851,431)
         
Comprehensive loss:        
Net loss $(999,403) $(851,431)
Other comprehensive gain  43,800   - 
Comprehensive loss $(955,603) $(851,431)
Basic and Diluted Loss per Common Share $(0.12) $(0.11)
         
Weighted Average Shares Outstanding:        
Basic and Diluted  7,885,008   7,773,688