The escalating trade war between the US and China has made an impact on BIO-key‘s bottom line, the company’s CEO says.
The comments came via the fingerprint sensor specialist’s Q1 update for 2019, in which the company saw a $289,832 year-over-year drop in revenues, which came in at $551,623, compared to $841,455 in revenues a year ago. CEO Mike DePasquale attributed the drop largely to delays in the receipt of monthly payments from a China-based firm that had licensed BIO-key’s technology.
“We had anticipated recording as Q1’19 revenue the receipt of two payments totaling $1.1 million as we had done in Q4’18, however the payments have not yet been received,” DePasquale explained. “Candidly, the deteriorating state of U.S. – China trade relations the past few months has emerged as a significant impediment in cross border commerce and particularly in the case of intangible goods such as software.”
Nevertheless, BIO-key did show a year-over-year improvement in its net result, reporting a loss of $1.8 million, compared to a net loss of $2.3 million in Q1 of 2018. And the company emphasized other positive new developments from the quarter including major police deployments of its biometric authentication technology, a deal with a large aerospace defense contractor, and the launch of ID Director for SAML.
Looking ahead, BIO-key’s Q1 update asserted that its full-year revenue guidance of somewhere between $11 million and $14 million “remains achievable”, with the caveat that “based on additional data and collections experience in coming months, it may have to reduce its 2019 revenue and other guidance later in the year when it reports Q2 or Q3 results.” To some extent, that could be in the hands of the politicians as trade tensions continue, or abate.
May 17, 2019 – by Alex Perala