VerifyMe Provides 2024 Outlook Update
LAKE MARY, Fla., May 23, 2024 /PRNewswire/ -- VerifyMe, Inc. (NASDAQ: VRME) together with its subsidiaries, Trust Codes Global Limited ("Trust Codes Global") and PeriShip Global LLC ("PeriShip Global"), (together "VerifyMe," "we," "our," or the "Company") provides brand owners time and temperature sensitive logistics, supply chain traceability, authentication, anti-counterfeiting, and data-rich brand enhancement services, announced today an update on its 2024 outlook.
VerifyMe has been notified by its large global carrier customer that it will end subcontracting VerifyMe's Premium logistics service for one of its customers in June 2024. Discontinuing this contract is not due to any issues relating to the quality of the services provided by VerifyMe's Precision Logistics segment, but due to a strategic realignment of offerings by our global carrier customer. The change has no impact on Precision Logistics' Proactive services and is not expected to have an impact on the remaining Premium services within the Precision Logistics Segment. However, this discontinued contract with one customer represents a meaningful portion of the Premium services revenue. As a result of this change, we are updating our 2024 revenue guidance. We now anticipate the total VerifyMe 2024 revenue growth rate to be mid-single digit, as opposed to double digit growth. In addition, we expect the gross margin percentage for 2024 will be reduced, but we still anticipate the 2024 gross margin percentage for VerifyMe will still exceed the 2023 gross margin percentage. The Company is currently actively identifying strategies to reduce the impact of the gross margin reduction on adjusted EBITDA.
On February 6, 2024, the Company presented a five-year outlook for the Company. This outlook is primarily based upon the growth initiatives unrelated to Premium services within the Precision Logistics Segment. Adam Stedham, CEO and President of VerifyMe stated, "although the timing of this event is unfortunate for VerifyMe in achieving our 2024 goals, we continue to be making strong progress on our defined strategy, and I continue to focus on fully executing our five-year plan."
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME), together with its subsidiaries, PeriShip Global and Trust Codes Global, is a traceability and customer support services provider using specialized software and process technology. The company operates a Precision Logistics Segment and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions. VerifyMe serves customers worldwide. To learn more, visit https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "can," "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 whether the expected negative impact to revenue or gross margin due to the loss of the customer referenced above are granter than we currently anticipate, our customers and brands seek to use our product serialization on their products when utilizing Amazon Transparency, whether our competitors also collaborate with Amazon Transparency to develop competing products, our engagement in future acquisitions or strategic partnerships that increase our capital requirements or cause us to incur debt or assume contingent liabilities, the successful integration of our acquisitions (including the assets of PeriShip Global and Trust Codes Global), our reliance on one key global carrier for shipping services in our Precision Logistics segment, our global carrier partner developing technologies that compete with the services offered by our Precision Logistics segment, seasonal trends in our business, sever climate conditions, the highly competitive nature of the industry in which we operate, our brand image and corporate reputation, impairments related to our goodwill and other intangible assets, economic and other factors such as recessions, downturns in the economy, inflation, global uncertainty and instability, the effects of pandemics, changes in United States social, political, and regulatory conditions and/or a disruption of financial markets, reduced freight volumes due to economic conditions, reduced discretionary spending in a recessionary environment, global supply-chain delays or shortages, fluctuations in labor costs, raw materials, and changes in the availability of key suppliers, our history of losses, our ability to use our net operating losses to offset future taxable income, the confusion of our name brand with other brands, the ability of our technology to work as anticipated and to successfully provide analytics logistics management, our ability to manage our growth effectively, the small number of customers that account for our revenue, our ability to successfully develop and expand our sales and marketing capabilities, risks related to doing business outside of the U.S., intellectual property litigation, our ability to successfully develop, implement, maintain, upgrade, enhance, and protect our information technology systems, our reliance on third-party information technology service providers, our ability to respond to evolving laws related to information technology such as privacy laws, risks related to deriving revenue from some clients in the cannabis industry, 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, our ability to acquire new customers, 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, our ability to comply with the continued listing standards of the Nasdaq Capital Market, and our ability to timely pay amounts due and comply with the covenants under our debt facilities. 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.
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SOURCE VerifyMe, Inc.
