DENVER, CO — (Marketwire) — 11/30/12 — ID Watchdog, Inc. (TSX VENTURE: IDW) (PINKSHEETS: IDWAF)
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 results for the third quarter ended September 30, 2012. All amounts are in U.S. dollars.
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Revenue was $434,052 for the third quarter of 2012, a decrease of 2.9% from the third quarter of 2011. Our total average customer base increased by 10.9% year over year with our employee benefits customers increasing by 33.4%
Gross profit was $172,469 for the third quarter of 2012 as compared to $144,699 for the third quarter of 2011. The gross margin rate for the third quarter of 2012 and 2011 was 39.7% and 32.4%, respectively. Subsequent to the end of the third quarter, we entered into a new data agreement which will substantially decrease our cost of revenue beginning in January 2013. Had this agreement been in place at the beginning of the respective quarters, our gross profit for the third quarter of 2012 and 2011 would have been $292,469 and $264,699, respectively, with a gross profit margin of 67.4% for the third quarter of 2012.
General and administrative expense decreased by $138,482, or 33.3%, from the third quarter of 2011. G&A expense was 63.8% and 93.0% of revenue for the third quarter of 2012 and 2011, respectively.
Cash and cash equivalents at the end of the third quarter were $685,781.
ID Watchdog CEO, Michael Greene, commented, “We saw strong customer growth from both our employee benefits and our anti-virus/tech support channels during the quarter and we continue to make great progress in building our employee benefits broker network to drive long-term growth. We did experience a slight contraction in revenue during the third quarter as most of our new customers pay lower net subscription rates as compared to our existing customer base. However, our expectation is that we will experience much higher retention rates and lower unit sales and marketing costs to attract these new customers.” Mr. Greene added, “Through a combination of revenue growth, a substantial improvement in our gross margin beginning in January 2013 and further reductions in our operating costs, we look forward to generating positive operating income beginning in the second quarter of 2013.”
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 and in the “Company Overview” section of our website at .
About ID Watchdog, Inc.
ID Watchdog was founded in 2005 and is headquartered in Denver, Colorado. The Company provides patent-pending, 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 .
Forward-Looking Statement
This news release includes certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company-s control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed in the company-s filings with Canadian regulators at . ID Watchdog assumes no obligation to update the forward-looking statements of management beliefs, opinions, projections, or other factors should they change.
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:
ID Watchdog, Inc.
Jay B. Lewis
Chief Financial Officer
303-339-8099
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