BIO-key Reports Record Revenue of $2.3M and Net Income of $753K for Q2 2015

WALL, N.J. - Aug. 14, 2015 - PRLog -- BIO-key International, Inc. , a leading fingerprint biometric identification software and technology provider, today reported record results for its second quarter ended June 30, 2015 and will host a conference call today at 10:00 a.m. EDT. The webcast will be available shortly after call at www.bio-key.com/events.

Q2 Highlights:

· Q2 ‘15 revenue increased to $2,272,804 compared to $402,879 in Q2 ’14, principally reflecting a $2.0 million license order from an existing international customer.

· Q2 ’15 net income rose to $753,000, or $0.01 per basic and diluted share, compared to a net loss of $1,026,286, or ($0.02) per basic and diluted share, in Q2 ’14.

· Executed a Memorandum of Understanding with an existing strategic partner Worldwide Touch Technology Holdings Limited regarding a proposed equity investment in BIO-key.

Michael DePasquale, Chairman and CEO of BIO-key commented, “BIO-key continues to see growth in demand for our products as enterprises and governments move to deploy stronger user authentication technologies. Network breaches, identity theft and fraud are on the rise as traditional password and other single factor authentication methods continue to fail. BIO-key’s proven, scalable and highly secure fingerprint biometric software solutions directly address this problem, providing security and convenience in a cost effective manner.”

“As previously announced and to support BIO-key’s ability to capitalize on growing industry demand, we are in discussions with Worldwide Touch Technology, an existing BIO-key partner with substantial reach in Asia, regarding a strategic partnership and substantial capital infusion. We believe this relationship would substantially broaden our distribution reach while providing additional capital and opportunities to jointly develop new products based on our collective biometric technologies.”

Q2 Results

BIO-key’s Q2 ’15 license fee revenue increased to $2,017,535 from $121,078 in Q2 ‘14, principally reflecting a large telecommunications license signed in Q2 ’15. Service revenues decreased slightly to $255,269 in Q2’15 from $281,711 in Q2’14. Total revenue for Q2 ’15 increased to $2,272,804 compared to $402,789 in Q2’14. In Q2, sales in highly regulated industries represented approximately 83% of total sales, with the OEM channel representing approximately 80% of total sales.

Q2’15 gross margin increased to 94% from 60% in Q2’14, principally due to the substantial increase in high-margin software license revenue. Q2 ’15 operating expenses rose 1% to $1,373,860 from $1,366,035 in Q2 ’14, reflecting increases in selling, general and administrative and reductions in research, development and engineering expense.

BIO-key reported Q2’15 net income of $753,146, or $0.01 per basic and diluted share, compared to a net loss of ($1,026,286), or ($0.02) per basic and diluted share, in Q2’14. Share and per-share figures have been adjusted to reflect a February 2015 1-for-2 reverse split.

Liquidity and Capital Resources

BIO-key had total current assets of $2,445,334, including cash and cash equivalents of $282,376, at June 30, 2015, compared to total current assets $1,793,884, including cash and cash equivalents $843,632 at December 31, 2014. BIO-key expects to receive proceeds from the $2.0M license order, net of factored amounts, during Q3 ’15. Net cash used for operations during the six months ended June 30, 2015 was ($505,599) compared to ($1,350,089) in the six months ended June 30, 2014.

2015 Financial Guidance

BIO-key remains on track to achieve its full year 2015 revenue guidance range of $5.0 million to $7.0 million, compared to revenue of $4.0 million in 2014. The Company’s 2015 year-to-date revenue is tracking to the midpoint of its full year guidance range. BIO-key currently expects its Q3 revenue to range between $700,000 and $1.5 million, versus $1.3 million in Q3 ’14.

Gross margin is expected to range between 75% and 80% in the Q3 and full year 2015 periods and BIO-key continues to believe it can achieve breakeven on a cash basis with annual revenues of roughly $6.5 million. Given the variability in the timing and size of potential contracts within the Company’s sales opportunity pipeline, BIO-key’s quarterly financial performance will likely vary significantly from quarter to quarter.

Underlying the Company’s 2015 financial guidance is its opportunity pipeline (the aggregate total of all deal opportunities that could book as revenue over the next twelve months), which is currently valued at $25.0 million, as compared to $25.0 million at December 31, 2014, and $30.0 million at March 31, 2015.

BIO-key Safe Harbor Statement

Certain statements contained in this press release may be construed as “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 subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements.  These risks and uncertainties include, without limitation, our history of losses and limited revenue, our ability to develop new products and evolve existing ones, the impact on our business of the recent financial crisis in the global capital markets and negative global economic trends, our ability to attract and retain key personnel.  For a more complete description of these and other risk factors that may affect the future performance of BIO-key International, Inc., see “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and its 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.  The Company also undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.