DENVER, April 23, 2014 /PRNewswire/ --
- Revenues from core distribution channels increased 51.7%
- Total revenues increased 47.6%
- Gross profit increased 174.3%
ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF) ("ID Watchdog" or the "Company"), provider of consumer-facing identity theft protection and resolution services, today announced its results for the 4th quarter ended December 31, 2013. All amounts are in U.S. dollars.
4th Quarter 2013 Highlights:
- Revenue: Revenue totaled $678,911 for the fourth quarter of 2013, an increase of $218,818, or 47.6%, from the fourth quarter of 2012. During the fourth quarter of 2013, revenue from our employee benefit and tech support channels, increased by 51.7% and contributed $153,879 to the total increase in revenues, while revenues from the ISekurity customers and our anti-virus customers contributed $82,391 and $31,147, respectively, to the total increase in revenues. These increases were partially offset by a $48,603 decrease in revenues from our legacy consumer marketing channel.
- Gross Profit: Gross profit increased by $326,864, or 174.3%, from $187,546 during the fourth quarter of 2012 to $514,410 during the fourth quarter of 2013. The gross margin rates for the fourth quarter of 2013 and 2012 were 75.8% and 40.8%, respectively. In the fourth quarter of 2012, we entered into a new data agreement which substantially decreased our cost of revenue beginning in January 2013.
- EBITDA: For the fourth quarter of 2013, EBITDA improved by $265,843 to $15,350 as compared with $(250,493) for the similar period in 2012. The improvement in EBITDA is due primarily to a $326,864 improvement in gross margin as described above.
- Cash Balances: Cash and cash equivalents as of December 31, 2013, totaled $552,694.
Full Year 2013 Highlights:
- Revenue: Revenue increased $549,753, or 30.4%, from $1,808,522 for the year ended December 31, 2012 to $2,358,275 for the year ended December 31, 2013. Revenue from our employee benefits and tech support channels, increased by 39.4% and contributed $417,576 to the total increase in revenues, while revenues of the ISekurity customers and our anti-virus customers contributed $276,396 and $100,173, respectively, to the total increase in revenues. These increases were partially offset by a $244,395 decrease in revenues from our consumer marketing channel.
- Gross Profit: Gross profit increased by $985,302, or 143.1%, from $688,663 in 2012 to $1,673,965 in 2013. The gross margin rates for the 2013 and 2012 were 71.0% and 38.1%, respectively.
- EBITDA: For 2013, EBITDA improved by $1,015,814 to $(313,689) as compared with $(1,329,503) in 2012. The improvement in EBITDA is due primarily to a $985,302 improvement in gross margin as described above.
ID Watchdog CEO, Michael Greene, stated, "We ended 2013 on a very strong note, both financially and operationally, as we continue to expand our customer base through our employee benefits and our tech support channels, which are our core focus for future growth. Gross margin improved substantially from the prior year and we continue to work to enhance our portfolio of identity theft protection services, while at the same time working to maintain our gross profit margin. Our success in building our employee benefits and our tech support channels position us well for accelerating growth in 2014 and beyond. We achieved a number of significant milestones in 2013, including generating positive EBITDA in the fourth quarter of the year, which is a first for the Company."
Mr. Jay Lewis, ID Watchdog's CFO, commented, "We enter 2014 with strong momentum and as we look at the quarter ended March 31, 2014, we expect core distribution revenue growth and total revenue growth of approximately 65% and 40%, respectively, with increasing EBITDA for the quarter and with our cash balances growing significantly to nearly $800,000, an increase of approximately $250,000 over the year end 2013 balances."
ID Watchdog, Inc. Consolidated Condensed Statements of Operations |
|
|
|
|
|
|
| Three months ended December 31, |
| Years ended December 31, |
|
| 2013 |
| 2012 |
| 2013 |
| 2012 |
|
|
|
|
|
|
|
|
|
Revenue |
| $ 678,911 |
| $ 460,093 |
| $ 2,358,275 |
| $ 1,808,522 |
Cost of revenue |
| 164,501 |
| 272,547 |
| 684,310 |
| 1,119,859 |
Gross profit |
| 514,410 |
| 187,546 |
| 1,673,965 |
| 688,663 |
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
General and administrative expense |
| 325,791 |
| 301,657 |
| 1,407,228 |
| 1,478,623 |
Sales and marketing expense |
| 173,269 |
| 136,382 |
| 580,426 |
| 539,543 |
Stock – based compensation expense |
| 246,315 |
| 74,075 |
| 376,536 |
| 519,971 |
Depreciation and amortization expense |
| 17,182 |
| 21,814 |
| 85,243 |
| 90,649 |
|
| 762,557 |
| 533,928 |
| 2,449,433 |
| 2,628,786 |
Operating loss |
| (248,147) |
| (346,382) |
| (775,468) |
| (1,940,123) |
|
|
|
|
|
|
|
|
|
EBITDA |
| 15,356 |
| (250,493) |
| (313,689) |
| (1,329,503) |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Gain (loss) on warrant liability |
| (618,942) |
| 140,614 |
| (698,805) |
| 524,772 |
Interest income |
| 160 |
| 124 |
| 257 |
| 5,135 |
Interest expense |
| (211,811) |
| (184,667) |
| (800,337) |
| (740,788) |
|
| (830,593) |
| (43,929) |
| (1,498,885) |
| (210,881) |
|
|
|
|
|
|
|
|
|
Net loss and comprehensive loss applicable to ordinary shares |
| $ (1,078,740) |
| $ (390,311) |
| $ (2,274,353) |
| $ (2,151,004) |
Basic and diluted net loss per share applicable to ordinary shares |
| $ (0.01) |
| $ (0.00) |
| $ (0.02) |
| $ (0.02) |
Weighted average number of shares outstanding - basic and diluted |
| 121,834,997 |
| 118,834,997 |
| 120,796.641 |
| 118,611,992 |
| ID Watchdog, Inc. Consolidated Condensed Balance Sheets |
|
|
|
| December 31,
2013 |
|
| December 31,
2012 |
|
|
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
| $ | 552,694 |
|
| $ | 319,073 |
|
|
| Accounts receivable |
|
| 173,042 |
|
|
| 144,561 |
|
|
| Prepaid expenses and other |
|
| 97,177 |
|
|
| 73,466 |
|
|
|
| Total current assets |
|
| 822,913 |
|
|
| 537,100 |
|
|
| Property and equipment, net |
|
| 80,168 |
|
|
| 153,735 |
|
|
| Customer agreements, net |
|
| 29,184 |
|
|
| — |
|
|
|
|
| Total Assets |
| $ | 932,265 |
|
| $ | 690,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
|
|
| Accounts payable, accrued liabilities and other |
| $ | 486,357 |
|
| $ | 534,708 |
|
|
| Current portion of credit facility |
|
| 119,986 |
|
|
| — |
|
|
| Deferred revenue |
|
| 568,224 |
|
|
| 267,056 |
|
|
|
| Total current liabilities |
|
| 1,174,567 |
|
|
| 801,764 |
|
|
| Credit facility, net |
|
| 283,923 |
|
|
| — |
|
|
| Deferred rent |
|
| 86,524 |
|
|
| 89,923 |
|
|
| Finance lease obligations, net of current portion |
|
| 30,807 |
|
|
| 44,875 |
|
|
| Series C Preferred mandatorily redeemable preferred shares, net of discount and conversion feature |
|
| 3,613,214 |
|
|
| 2,892,031 |
|
|
| Warrants liability |
|
| 798,635 |
|
|
| 99,830 |
|
|
|
|
| Total Liabilities |
|
| 5,987,670 |
|
|
| 3,928,423 |
|
|
|
|
| Total Shareholders' Deficit |
|
| (5,055,405) |
|
|
| (3,237,588) |
|
|
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
| $ | 932,265 |
|
| $ | 690,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Non-IFRS Financial Measure
To supplement the Company's consolidated financial results presented in accordance with International Financial Reporting Standards ("IFRS"), the Company reports EBITDA (operating income before depreciation and amortization and stock-based compensation) and uses this metric to measure the performance of our business. EBITDA is not a performance measure defined under IFRS and is not considered an alternative to income (loss) from operations or net earnings (loss) in the context of measuring the Company's performance. EBITDA does not have a standardized meaning and is therefore not likely to be comparable with similar measures used by other publically traded companies. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, taxes, interest payments, capital expenditures, debt principal reductions and other sources and uses of cash, and is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with IFRS.
Financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent quarterly reports and our annual report. These documents are available online at www.sedar.com and in the "Company Overview" section of our website at www.IDWatchdog.com.
About ID Watchdog, Inc.
ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides three-tiered comprehensive monitoring, detection and resolution for identity theft. ID Watchdog proactively detects identity theft problems at their source and provides immediate resolution services to ensure complete peace of mind for individuals. All the Company's services have been developed with input from industry experts; national consumer advocacy groups; federal, state, and local law enforcement agencies; consumer protection agencies; and adhere to guidelines published by the Consumer Federation of America. For more information, please visit www.IDWatchdog.com.
Forward-Looking Statement
This news release includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company's filings with Canadian regulators at www.sedar.com. ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Company Contact:
ID Watchdog, Inc.
Jay B. Lewis
Chief Financial Officer
303-339-8099
InvestorRelations@idwatchdog.com
www.idwatchdog.com
http://photos.prnewswire.com/prnh/20130829/NY71341LOGO
SOURCE ID Watchdog, Inc.