ID Watchdog Announces Results for the Third Quarter 2016

DENVER, Nov. 2, 2016 /PRNewswire/ --

• Employee Benefit revenues increased 124.2%
• Total revenues increased 85.3%
• Gross profit increased 89.5%

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 3rd quarter ended September 30, 2016. All amounts are in U.S. dollars.

3rd Quarter 2016 Highlights:

• Revenue: Revenue totaled $2,552,352 for the third quarter of 2016, an increase of $1,174,769, or 85.3%, from the third quarter of 2015.  Revenue from our Employee Benefit Channel increased $1,244,701, or 124.2%, from $1,001,814 for the three months ended September 30, 2015 to $2,246,515 for the three months ended September 30, 2016. 
• Gross Profit: Gross profit increased by $894,772, or 89.5%, from $1,000,287 during the third quarter of 2015 to $1,895,059 during the third quarter of 2016.  The gross margin rates for the third quarter of 2016 and 2015 were 74.2% and 72.6%, respectively.
• Operating Income:  For the third quarter of 2016, operating income improved by $58,538 to $244,585 as compared with $186,047 for the similar period in 2015.
• Adjusted EBITDA:  For the third quarter of 2016, adjusted EBITDA improved by $200,004 to $411,154 as compared with $211,150 for the similar period in 2015. Adjusted EBITDA margin as a percent of total revenue increased from 15.3% for quarter ended September 30, 2015 to 16.1% for the similar quarter in 2016.
• Cash Balances: Cash and cash equivalents as of September 30, 2016, totaled $1,552,253, an increase of $482,964 from our cash balances at December 31, 2015.

Fourth Quarter 2016 Guidance

ID Watchdog CEO, Michael Greene, stated, "We are pleased to report solid operating and financial performance in the third quarter of 2016, resulting in record third quarter revenue and Adjusted EBITDA of $2,552,352 and $411,154, respectively. We continue to experience exceptionally strong growth in our Employee Benefit Channel where revenue grew by over 124% and a solid improvement in our gross margin and Adjusted EBITDA margin of 74.2% and 16.1%, which expanded by 160 and 80 basis points (one basis point is equal to 1/100^th of 1%), respectively, over the similar period in 2015."

Mr. Greene continued, "As we look forward to the fourth quarter of 2016, we anticipate we will increase our Employee Benefit Channel revenue by 107%-111% over the prior year quarter with our Adjusted EBITDA margin projected to expand by between 100 and 380 basis points over the 7.9% Adjusted EBITDA margin reported in the fourth quarter of 2015.  Also, we currently plan to issue a press release in early to mid-January 2017 announcing our projected first quarter 2017 revenue."

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, 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
[email protected] 
www.idwatchdog.com

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SOURCE ID Watchdog, Inc.

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