VerifyMe Reports Significant Revenue Growth in Second Quarter 2022 Results
- Quarterly revenue of $4.5 million, compared to $0.1 million in Q2 2021
- Significant growth from acquisition while continuing organic growth trend
- Net Loss of $12.6 million in Q2 2022 (inclusive of non-cash write off of $11.2 million related to the SPAC), compared to $1.4 million in Q2 2021
- Adjusted EBITDA(1) of ($0.3) million, compared to ($0.9) million in Q2 2021
- Cash of $3.8 million as of June 30, 2022
Rochester, NY – PRNewswire – August 15, 2022 – VerifyMe, Inc. (NASDAQ: VRME) (“VerifyMe,” “we,” “our,” or the “Company”), together with its subsidiary PeriShip Global LLC (“PeriShip Global”), provides brand owners time and temperature sensitive logistics, authentication, supply chain monitoring, and data-rich consumer engagement features using unique smartphone readable codes on their products, announced today the Company’s financial results for the second quarter ended June 30, 2022 (“Q2 2022”).
Key Financial Highlights for Q2 2022:
- Quarterly consolidated revenue of $4.5 million, an increase of 3,527% compared to $0.1 million for the three months ended June 30, 2021
- Gross profit of $1.7 million or 37% for the three months ended June 30, 2022, compared to $0.1 million or 79% for the three months ended June 30, 2021
- Net loss of $12.6 million or ($1.53) fully diluted loss per share for the three months ended June 30, 2022, which included approximately $11.2 million non-cash impairment related to the SPAC liquidation announced in July 2022, compared to a net loss of $1.4 million or ($0.18) fully diluted loss per share for the three months ended June 30, 2021
- Cash of $3.8 million as of June 30, 2022
Patrick White, VerifyMe’s CEO stated, “We are excited to share the impact that the acquisition of PeriShip has had on our financial results for the quarter in addition to our organic revenue growth of approximately 115%. Bear in mind that due to the timing of the acquisition PeriShip’s results were roughly 9 weeks of the 12-week quarter. In addition, historically PeriShip’s largest quarters are in the third and fourth quarter which are heavily influenced by vaccine distribution and holiday gift season. With the liquidation of G3 VRM Acquisition Corp. (the “SPAC”), which impacted our results for the quarter but not cashflow, now behind us, we look forward to focusing on our core businesses and sharing improved financial results for the remaining year.”
Recent Business Highlights
- Barrington Research analyst coverage and VerifyMe will present at their 15th Annual Barrington Research Virtual Fall Conference on September 8, 2022
- Added two former FedEx executives to Board of Directors of PeriShip Global
- Made the decision not to extend the period for the SPAC to consummate a business combination and accordingly the SPAC has dissolved and liquidated in accordance with its charter
- Initiated a new $1.5 million share repurchase program for a period of 12 months
Financial Results for the Three Months Ended June 30, 2022:
Revenue for the three months ended June 30, 2022, was $4.5 million, a 3,527% increase as compared to $0.1 million for the three months ended June 30, 2021. The increase in revenue is primarily related to the acquisition of the PeriShip business on April 22, 2022. Our legacy VerifyMe Solutions segment revenue increased by $0.1 million or approximately 115%, primarily from new customers using our authentication serialization technology.
Gross profit for the three months ended June 30, 2022, was $1.7 million, compared to $0.1 million for the three months ended June 30, 2021. The resulting gross margin was 37% for the three months ended June 30, 2022, compared to 79% for the three months ended June 30, 2021, principally due to the lower margins of our recently acquired PeriShip solutions segment.
Operating loss for the three months ended June 30, 2022, was $1.3 million, a decrease of $0.1 million compared to $1.4 million for the three months ended June 30, 2021. The decrease is primarily related to the increased gross profit, partially offset by the additional operating expenses from the acquisition of the PeriShip business.
Our net loss for the three months ended June 30, 2022, increased by $11.2 million to $12.6 million compared to a net loss of $1.4 million for the three months ended June 30, 2021. The increased loss was primarily due to the impairment of our equity investment of $11.2 million, partially offset by the decreases discussed above. The resulting loss per share for the three months ended June 30, 2022, was ($1.53) per diluted share, compared to a loss per diluted share of ($0.18) for the three months ended June 30, 2021.
Adjusted EBITDA for the three months ended June 30, 2022, was a loss of $0.3 million, a decreased loss of $0.6 million, compared to a loss of $0.9 million for the three months ended June 30, 2021. Adjusted EBITDA is a non-GAAP financial measure. Please see “Use of Non-GAAP Financial Measures” for a discussion of this non-GAAP measure. A reconciliation to the most directly comparable GAAP measure, net loss, is included as a schedule to this release.
At June 30, 2022, VerifyMe had a $3.8 million cash balance and $4.0 million in working capital.
As of June 30, 2022, VerifyMe had 8,666,002 shares issued and 8,467,046 shares outstanding.
The Company has scheduled an earnings conference call and webcast for 11:00 a.m. Eastern Time on Tuesday, August 16, 2022. Prepared remarks regarding the company’s financial and operational results will be followed by a question and answer period with VerifyMe’ executive management team. The conference call may be accessed via webcast at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=INYqmNgS or by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614 internationally, and requesting the “VerifyMe Call.” Participants must be logged in via telephone to submit a question to management during the call. Participants may optionally pre-register for the conference call and webcast at: https://dpregister.com/sreg/10169959/f3e2ff549a.
The webcast will be archived on the Investors section of VerifyMe’s website and will remain available for 90 days.
For the full financial tables please click here.
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME), is a technology solutions provider specializing in products to connect brands with consumers and, through our wholly owned subsidiary, PeriShip Global, LLC, providing brands with high-touch, end-to-end logistics management for their products. We provide logistics management from a sophisticated IT platform with proprietary databases, package and flight-tracking software, weather, and flight status monitoring systems, as well as dynamic dashboards with real-time visibility into shipment transit and last-mile events. In addition, VerifyMe technologies give brand owners the ability to gather business intelligence while engaging directly with their consumers. VerifyMe technologies also provide brand protection and supply chain functions such as counterfeit prevention, authentication, serialization, and track and trace features for labels, packaging and products. For additional information, please visit: https://www.verifyme.com .
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements regarding revenue opportunities, recurring revenue, commercialization efforts, our sales pipeline and opportunities, and the acquisition of the assets of PeriShip, LLC. The words “believe,” “may,” “anticipate,” “intend,” “should,” “plan,” “could,” “potential,” “opportunity,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the impact of the COVID-19 pandemic, intellectual property litigation, the successful development of our sales and marketing capabilities, the successful integration of our acquisitions (including the acquisition of the assets of PeriShip, LLC), our ability to retain key management personnel, our ability to work with partners in selling our technologies to businesses, production difficulties, our inability to enter into contracts and arrangements with future partners, issues which may affect the reluctance of large companies to change their purchasing of products, acceptance of our technologies and the efficiency of our authenticators in the field. These risk factors and uncertainties include those more fully described in VerifyMe’s Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Use of Non-GAAP Financial Measures
This press release includes both financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”), as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to and should not be considered as alternatives to any other GAAP financial measures. They may not be indicative of the historical operating results of VerifyMe nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.
VerifyMe’s management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that both management and shareholders benefit from referring to EBITDA and Adjusted EBITDA in planning, forecasting and analyzing future periods. The Company’s management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. The Company’s management recognizes that EBITDA and Adjusted EBITDA, as non-GAAP financial measures, have inherent limitations because of the described excluded items.
The Company defines EBITDA as net income (loss) before income tax expense (benefit), interest expense, depreciation and amortization. Adjusted EBITDA represents EBITDA plus stock-based compensation and the fair value of options, restricted stock awards, restricted stock units, and warrants issued in exchange for services, loss on equity investments and one-time professional expenses for acquisitions. VerifyMe believes EBITDA and Adjusted EBITDA are important measures of VerifyMe’s operating performance because they allow management, investors and analysts to evaluate and assess VerifyMe’s core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.
A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net income (loss), calculated in accordance with GAAP is included in this press release. The Company believes that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.