ID Watchdog Announces Fourth Quarter and Full Year 2015 Results and Updated Guidance for First Quarter 2016

DENVER, April 7, 2016 /CNW/ --

  • Employee Benefit revenues increased 136.9%
  • Total revenues increased 50.1%
  • Gross profit increased 41.4%

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 final results for the fourth quarter and year ended December 31, 2015. All amounts are in U.S. dollars.

4th Quarter 2015 Highlights:

  • Revenue: Revenue totaled $1,424,021 for the fourth quarter of 2015, an increase of $475,185, or 50.1%, from the fourth quarter of 2014.  During the fourth quarter of 2015, revenue from our employee benefit channel contributed $622,315 to the total increase in revenues, which was partially offset by a decrease in the other revenue channels.
  • Gross Profit: Gross profit increased by $287,556, or 41.4%, from $694,130 during the fourth quarter of 2014 to $981,686 during the fourth quarter of 2015.  The gross margin rates for the fourth quarter of 2015 and 2014 were 68.9% and 73.2%, respectively.
  • Adjusted EBITDA:  For the fourth quarter of 2015, Adjusted EBITDA decreased by $74,677 to $111,929 as compared with $186,606 for the similar period in 2014.
  • Cash Balances: Cash and cash equivalents as of December 31, 2015, totaled $1,069,289, an increase of $182,813 from our cash balances at December 31, 2014.

Full Year 2015 Highlights:

  • Revenue: Total revenue increased $1,898,087, or 54.7%, from $3,469,468 for the year ended December 31, 2014 to $5,367,555 for the year ended December 31, 2015. Revenue from our employee benefits channel contributed $2,243,931 to the total increase in revenues, which was partially offset by a decrease in the other revenue channels.
  • Gross Profit: Gross profit increased by $1,390,558, or 56.1%, from $2,480,432 in 2014 to $3,870,990 in 2015.  The gross margin rates for the 2015 and 2014 were 72.1% and 71.5%, respectively.
  • Adjusted EBITDA:  For 2015, Adjusted EBITDA improved by $180,753 to $644,508 as compared with $463,755 in 2014.  The improvement in EBITDA is due primarily to a significant improvement in gross margin as noted above.

First Quarter 2016 Updated Guidance


Three Months
Ending March 31,
2015 Actual


Three Months Ending
March 31, 2016

Guidance


Change

vs.

2015

Employee Benefit Revenue

$882,754


$2,200,000 to $2,275,000


150% to 158%

Total Revenue

$1,269,686


$2,550,000 to $2,650,000


101% to 109%

Gross Margin

$922,037


$1,800,000 to $1,900,000


95% to 106%

Operating Income

$137,783


$200,000 to $250,000


45% to 81%

Adjusted EBITDA

$162,288


$230,000 to $280,000


42% to 73%

 

ID Watchdog CEO, Michael Greene, stated, "We are pleased to close out a very successful 2015, a year in which our Employee Benefit Channel revenues grew by over 137%, we delivered record Adjusted EBITDA of $644,508 and we are well positioned for continued strong growth in 2016.  The Employee Benefit Channel is one with a very high level of recurring revenue and a very low level of customer churn or attrition.  Given these revenue characteristics, we believe we will achieve record quarterly revenues throughout 2016 and exceed $10 million in revenue for calendar 2016."

 

ID Watchdog, Inc

Consolidated Statements of Operations








Three Months Ended

December 31,


Years Ended

December 31,



2015


2014

2015


2014

Revenue


$      1,424,021


$      948,836

$     5,367,555


$     3,469,468

Cost of revenue


442,335


254,706

1,496,565


989,036

Gross profit


981,686


694,130

3,870,990


2,480,432

Operating expense:








     General and administrative expense


375,947


268,340

1,418,033


1,265,555

Benefit broker commission expense


257,042


89,325

930,084


304,359

     Sales and marketing expense


236,768


149,859

878,365


446,763

     Share-based compensation expense


20,383


18,154

58,796


137,121

     Depreciation and amortization expense


13,042


11,513

46,259


59,476



903,182


537,191

3,331,537


2,213,274

Operating income (loss)


78,504


156,939

539,453


267,158

Other income (expense):








     Gain (loss) on warrant liability


(184,348)


439,249


81,609


399,317

     Interest expense, net


(202,516)


(205,782)


(937,885)


(845,537)

Gain (loss) on disposition of assets


1,000


1,000


Provision loss


(237,543)


(397,543)




(623,407)


233,467

(1,252,819)


(446,220)

Net income (loss) and comprehensive
     income (loss) applicable to ordinary
     shares


$      (544,903)


$       390,406

$     (713,366)


$     (179,062)

Basic and diluted net income (loss) per share 
     applicable to ordinary shares


$            (0.00)


$          (0.00)

$           (0.01)


$           (0.00)

Weighted average number of shares 
     outstanding - basic and diluted


121,834,997


121,834,997

121,834,997


121,834,997

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA



Three Months Ended
December 31,


Years Ended

December 31,


2015


2014


2015


2014

Net income (loss)

$     (544,903)


$      390,406

$      (713,366)


$     (179,062)

Depreciation and amortization expense

13,042


11,513


46,259


59,476

Interest expense, net

202,516


205,782


937,885


845,537

EBITDA

(329,345)


607,701

270,778


725,951

Loss (gain) on warrant liability

184,348


(439,249)


(81,609)


(399,317)

Share-based compensation expense

20,383


18,154


58,796


137,121

Loss (gain) on disposition of assets

(1,000)



(1,000)


Provision loss

237,543



397,543


Adjusted EBITDA

$       111,929


$      186,606


$        644,508


$       463,755

 

ID Watchdog, Inc

Consolidated Statements of Financial Position




December 31,
2015



December 31,
2014



ASSETS










Cash and cash equivalents


$

1,069,289



$

886,476



Trade receivable, net



311,136




168,602



Prepaid expenses and other



170,434




123,617



     Total current assets



1,550,859




1,178,695



Property and equipment, net



155,995




79,879



Customer agreements, net



15,781




22,482



     Total Assets


$

1,722,635



$

1,281,056














LIABILITIES










Accounts payable, accrued liabilities and other


$

1,173,852



$

977,657



Deferred revenue



473,481




439,794



Provision



350,000






Current portion of Credit Facility






84,422



     Total current liabilities



1,997,333




1,501,873



Credit Facility, net






99,500



Deferred rent



26,860




28,440



Finance lease obligations, net of current portion



17,641




14,876



Series C Preferred mandatorily redeemable
     preferred shares, net of discount and conversion feature



5,042,709




4,334,395



Warrants liability



317,709




399,318



     Total Liabilities



7,402,252




6,378,402



     Total Shareholders' Deficit



(5,679,617)




(5,097,346)



TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIT


$

1,722,635



$

1,281,056
















 

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 "Adjusted EBITDA" (net income (loss) before deducting net interest expense, income taxes, depreciation and amortization, share-based compensation, litigation provision, gain on disposition of assets and gain (loss) on warrant liability) and uses this metric to measure the performance of our business.  Adjusted EBITDA is not a performance measure defined under IFRS and is not considered an alternative to income from operations or net earnings (loss) in the context of measuring the Company's performance.  Adjusted EBITDA does not have a standardized meaning and is therefore not likely to be comparable with similar measures used by other publicly traded companies.  Adjusted EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, income 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 press release contains opinions, forecasts, projections, and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. Such forward-looking statements include, but are not limited to, statements about: future revenue and the growth of revenue including growth from our Employee Benefit Channel; anticipated expenditures; our business strategies; our ability to grow in both the near and long term and the funding of our growth opportunities; the plans, objectives, expectations and intentions of the company regarding revenue growth; the Company's financial position including liquidity and financial capacity, and the future development of the company's business.

The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance Company's filings with Canadian regulators at www.sedar.com. Furthermore, the forward-looking statements and financial outlook contained in this release are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements and financial outlook, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

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:
Jay B. Lewis
Chief Financial Officer
ID Watchdog, Inc.
303-339-8099
InvestorRelations@idwatchdog.com 
www.idwatchdog.com

Logo - http://photos.prnewswire.com/prnh/20130829/NY71341LOGO

SOURCE ID Watchdog, Inc.


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