Bioscrypt Reports Results for the First Quarter Ended March 31, 2007
License revenue growth increases by more than 100%; Integration of A4Vision underway Toronto, ON (May 14, 2007) – Bioscrypt Inc. (TSX: BYT), a leading provider of enterprise access control technology, today announced its financial results for the first quarter ended March 31, 2007.
Bioscrypt’s first quarter revenue of US$4.3 million increased 6% from the US$4.0 million reported during the same period in the previous year. Product gross margin for the quarter was 45%, an improvement of 1% relative to the 44% in the prior quarter and 2% narrower than the same quarter in 2006. Overall gross margins were 50%, reflecting the impact of a higher percentage of software licensing sales relative to overall revenue. “The first quarter of 2007 was successful for the organization on a number of fronts. We are particularly pleased to have completed the acquisition of A4Vision and to have begun the integration of the 3D facial recognition technology. We are also encouraged by the growth of our software revenue, as license revenue increased by more than 100%, enabling the Company to improve its overall margins,” said Robert L. Williams, president and CEO of Bioscrypt Inc. “2007 has begun with great promise and we look forward to executing on our business strategy and continuing to achieve the targets we have established.”
Operating expenses (excluding amortization, stock compensation expense and restructuring) for the quarter were US$3.4 million compared to US$2.6 million in the same period in the previous year. Bioscrypt’s loss before interest, tax, foreign exchange, depreciation and amortization (“EBITDA”)1 of US$2.0 million or $0.03 per share in the first quarter relative to an EBITDA loss of US$0.8 million or $0.01 per share for the same period in 2006. The first quarter net loss was US$2.7 million or $0.04 per share versus a net loss of US$1.4 million in 2006, or $0.02 per share. “Bioscrypt is determined to continue to be recognized as the market leader in the biometric access control market. As such, the Company will continue to pursue opportunities that strengthen our position,” said Bruce MacInnis, CFO of Bioscrypt Inc. “With the purchase of A4 in March, Bioscrypt incurred a number of restructuring and acquisition related charges, however, it also solidified its balance sheet, finishing the period with US$8.0 million in cash as a result of the private placement.” Product sales represented 90% of total sales or US$3.8 million on approximately 10,732 units sold. Sales of the MV Series units represented approximately 56% of total unit shipments and 29% of product revenue while sales of Veri-Series™ products represented approximately 44% of unit shipments and 71% of product revenue. The total number of units the Company has sold to date is now beyond 220,000. Licensing of software represented 10% of total sales and management anticipates that licensing revenue will account for approximately 10% of revenue for the year. Q1 Corporate Announcements Q1 New Product Developments - Bioscrypt introduced the world’s first 3D face recognition camera for use in authenticating individuals accessing a computer. Bioscrypt’s VisionAccess 3D DeskCam performs both verification and identification operations.
Q1 New Client Announcements CATSA selected a handheld rugged biometric reader from Labcal Technologies Inc. that incorporates Bioscrypt technology to authenticate employees in 29 Canadian airports. Bioscrypt and Labcal collaborated closely to integrate Bioscrypt’s award winning fingerprint matching algorithm in Labcal’s reader, the Be.U Mobile™. VeriSoft Access Manager Server will be offered to HP business PC users to deliver centralized, enterprise-class manageability of client systems. In addition, Bioscrypt will continue to work with HP to include Credential Manager for HP ProtectTools on its business notebooks and desktops. Bioscrypt’s VisionAccess 3D Face Readers were deployed at a Japanese Government Agency located in Tokyo. Employees will be identified based on a face match only, without the need for ID cards, keys or PIN technology. In using only biometric identification, the system eliminates the risk of tokens and keys being lost, stolen or misused.
Conference Call The Corporation will be hosting an earnings report conference call today at 4:30 p.m. Eastern Standard Time. The call can be accessed by phone by dialing 1-866-334-4934 or at www.vcall.com/IC/CEPage.asp?ID=116576. If you are unable to attend the original call, you may subsequently listen to the playback at 1-866-245-6755, account number 286, conference number 214414, for one week after the call or by going to www.vcall.com/IC/CEPage.asp?ID=116576. Financial Statements Attached About Bioscrypt Inc. Bioscrypt is an enterprise access control solution provider, enabling the unification of physical and logical access with its Door to Desktop® products. Bioscrypt’s hardware and software solutions deliver strong authentication processes to facilities, equipment, IT networks and computer applications and allow organizations to administer unified identities across the enterprise. Building on its proven expertise in biometric technology and its unique multi-factor authentication platform, Bioscrypt integrates all major secure authentication standards, transforming how organizations are bridging the gap between physical and logical access to create secure working environments. More information is available at http://www.bioscrypt.com/. 1 - EBITDA is defined by the company as operating revenues less operating expenses and therefore reflects earnings before interest, foreign exchange, taxes, depreciation and amortization. Bioscrypt uses EBITDA, amongst other measures, to assess the operating performance of its on-going business, and applies the use of such measure consistently from quarter to quarter. The term EBITDA does not have a standardized meaning prescribed by Canadian generally accepted accounting principles and therefore may not be comparable to similarly titled measures presented by other companies. EBITDA should not be construed as the equivalent of net cash flows from operating activities. Forward-looking (safe harbour) statement Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes," "plans," "expects," or "intends" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. - 30 - Bioscrypt and Door to Desktop® are registered trademarks and Veri-Series and VeriSoft are trademarks of Bioscrypt Inc. All other product and company names mentioned are the property of their respective owners and are mentioned for identification purposes only. For more information, contact:
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