Customer Engagement

VerifyMe Reports Third Quarter 2022 Financial Results

VerifyMe, Inc.
  • Quarterly revenue of $5.2 million, compared to $0.3 million in Q3 2021
  • Net Loss of $0.6 million in Q3 2022, compared to Net Income of $7.2 million in Q3 2021 (inclusive of non-cash gain on equity investment of $8.2 million related to the SPAC in Q3 2021)
  • Adjusted EBITDA(1) of ($0.2) million, compared to ($0.6) million in Q3 2021
  • Cash of $3.7 million as of September 30, 2022

VerifyMe, Inc. (NASDAQ: VRME)  together with its subsidiary PeriShip Global LLC (“PeriShip Global”), (together “VerifyMe,” “we,” “our,” or the “Company”) provides brand owners time and temperature sensitive logistics, supply chain monitoring, authentication, and data-rich consumer engagement, announced today the Company’s financial results for its third quarter ended September 30, 2022 (“Q3 2022”).

Key Financial Highlights for Q3 2022:
  • Quarterly consolidated revenue of $5.2 million, an increase of 1,638% compared to $0.3 million for the three months ended September 30, 2021, primarily attributable to the acquisition of the PeriShip Global business in April 2022
  • Gross profit of $1.9 million or 36% for the three months ended September 30, 2022, compared to $0.2 million or 62% for the three months ended September 30, 2021
  • Net loss of $0.6 million or ($0.06) fully diluted loss per share for the three months ended September 30, 2022, compared to net income of $7.2 million or $0.95 fully diluted earnings per share for the three months ended September 30, 2021, which included approximately $8.2 million non-cash fair value gain related to the SPAC.
  • Cash of $3.7 million as of September 30, 2022

1

Adjusted EBITDA is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” below for information about this non-GAAP measure.

Patrick White, VerifyMe’s CEO stated, “The acquisition of the PeriShip Global business continues to improve our financial results as shown by our near breakeven adjusted EBITDA in the third quarter.  During the third quarter, PeriShip Global gained several new clients in the perishable food and beverage and health and beauty market sectors.  PeriShip Global began distribution of flu vaccines in August and we expect the majority of flu vaccines will be shipped by the end of November.  As a result of revenue related to shipping services for new clients, flu vaccines, and with the holiday season, we believe the fourth quarter will continue to be the largest revenue quarter of the PeriShip Global Segment sales cycle and we anticipate a positive adjusted EBITDA.”   Patrick White continued, “We are reviewing our go to market strategy to best reflect the combined strength of the legacy VerifyMe business and the PeriShip Global business. As we begin to identify the benefits of unifying, we are actively seeking new branding and naming that best reflects the integrated strength of the combined company.”

Recent Business Highlights
  • PeriShip Global entered into a new debt facility with PNC Bank, National Association including a $2 million four- year term loan and a $1 million revolving line of credit with a term of one-year which is currently unused
  • We entered into a multi-year contract extension with our strategic partner and largest customer of PeriShip Global
  • VerifyMe entered into a contract with international luxury apparel company providing brand protection
Financial Results for the Three Months Ended September 30, 2022:

Revenue for the three months ended September 30, 2022, was $5.2 million, a 1,638% increase as compared to $0.3 million for the three months ended September 30, 2021. The increase in revenue was primarily attributable to the acquisition of the PeriShip Global business on April 22, 2022, which accounted for 97% of the revenue for the quarter.

Gross profit for the three months ended September 30, 2022, was $1.9 million, compared to $0.2 million for the three months ended September 30, 2021. The resulting gross margin was 36% for the three months ended September 30, 2022, compared to 62% for the three months ended September 30, 2021, principally due to the lower margins of our recently acquired PeriShip Global subsidiary.

Operating loss for the three months ended September 30, 2022, was $0.9 million, a decrease of $0.1 million compared to $1.0 million for the three months ended September 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 Global business.

Our net loss for the three months ended September 30, 2022, was $0.6 million, compared to net income of $7.2 million for the three months ended September 30, 2021. The increased loss was primarily due to the unrealized gain on equity investment of $8.2 million in 2021, partially offset by a gain on extinguishment of debt of $0.3 million and the decreases discussed above.  The resulting loss per share for the three months ended September 30, 2022, was ($0.06) per diluted share, compared to an earnings per diluted share of $0.95 for the three months ended September 30, 2021.

Adjusted EBITDA for the three months ended September 30, 2022, was a loss of $0.2 million, an improvement of $0.4 million, compared to a loss of $0.6 million for the three months ended September 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 September 30, 2022, VerifyMe had a $3.7 million cash balance and $3.7 million in working capital.

As of September 30, 2022, VerifyMe had 9,341,002 shares issued and 9,035,411 shares outstanding.

Earnings Call

The Company has scheduled an earnings conference call and webcast for 11:00 a.m. Eastern Time on Thursday, November 10, 2022. Prepared remarks regarding the company’s financial and operational results will be followed by a question and answer period with VerifyMe’s executive management team. The conference call may be accessed via webcast at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=ONPFkrAV or by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614 internationally, and requesting the “VerifyMe Call.” The presentation slides broadcast via the webcast will also be available on the Investors section of the VerifyMe website the morning of the 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/10172822/f4f9e8d7ee.

The webcast and presentation will be archived on the Investors section of VerifyMe’s website and will remain available for 90 days.

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