SANTA CLARA, Calif.,
Nov. 10, 2016 /PRNewswire/
-- UniPixel, Inc. (NASDAQ: UNXL), a provider of
Performance Engineered Films™ to the touchscreen and flexible
electronics markets, reported financial results for the third
quarter ended September 30, 2016.
Third Quarter 2016 Operational Highlights include:
- Initiated volume production, and commenced delivery, on touch
sensors for tablet product for a national telecom company;
- Awarded 6 additional program design wins since the beginning of
the third quarter, bringing to 24 the total number of design wins
since January 1, 2016;
- During the third quarter the Company continued to respond to
incoming requests for quotes for potential new programs;
- Achieving significant operating efficiencies at Colorado
Springs manufacturing facility, including a 49% material cost
reduction;
- The Company recently announced the closing of a $2.5 million accounts receivables credit facility
with Bridge Bank.
Management Discussion
Jeffrey A. Hawthorne, president
and chief executive officer of UniPixel, said, "Financial results
for the quarter came in as anticipated as the legacy programs that
were part of the April 2015
acquisition are approaching end-of-life status. We are currently
delivering to three of these legacy programs. We are also
delivering touchscreen sensors for a new 8-inch Android tablet that
we announced as a design win in January 2016. The tablet is
being offered by a major telecom company. As expected, this program
took eight months for the customer to move into production."
"As our legacy programs continue to wind down," continued Mr.
Hawthorne, "the next group of design awards, which came in March,
April and May this year, are expected to go into volume production
during the first two quarters of 2017. We are currently delivering
initial small volumes for five new devices and supplying
manufacturing validation units to an additional eight devices.
These initial shipments are laying the groundwork for a 2017 ramp
in production.
"Throughout 2016 we have been executing on process improvements
at our Colorado Springs manufacturing facility to maximize
operating efficiencies in order to effectively transition to volume
production in 2017," concluded Mr. Hawthorne. "Since the beginning
of calendar 2016 we have achieved material cost reductions of 49%
and have improved overall touch sensor yield by 35%. These
improvements, along with ongoing initiatives, will have a
significant impact on margins as revenue ramps in the first half of
2017 and continues in the second half of the year. This is an
exciting time in the history of UniPixel as we shift into scale
production. We look forward to successfully delivering leading-edge
technology to our customers for many years to come."
Third Quarter 2016 Results
For the three months ended September 30,
2016 revenues were $0.9
million compared to $1.0
million for the three months ended June 30, 2016 and $1.5
million for the three months ended September 30, 2015.
Cost of revenues under GAAP was $3.2
million for the three months ended September 30, 2016 compared to $3.9 million for the three months ended
June 30, 2016 and $4.7 million for the three months ended
September 30, 2015. Cost of revenue
includes certain non-cash charges, including amortization of
certain prepaid licenses, stock-based compensation and depreciation
of equipment as well as other non-cash charges, which totaled
$0.9 million during the third quarter
of 2016, and $1.2 million in the
third quarter of 2015. Excluding these non-cash charges, adjusted
non-GAAP cost of revenues was $2.3
million in the third quarter of 2016 and $3.5 million during the third quarter of
2015.
SG&A expense under GAAP was approximately $1.9 million for the three months ended
September 30, 2016 and June 30, 2016 and $1.7
million for the three months ended September 30, 2015. SG&A includes certain
non-cash and non-recurring charges, including depreciation,
stock-based compensation and severance, which totaled $0.5 million during the third quarter of 2016,
and $0.5 million in the third quarter
of 2015. Excluding these non-cash and non-recurring charges,
adjusted non-GAAP SG&A was $1.4
million during the third quarter of 2016, and $1.2 million during the third quarter of
2015.
Research and development ("R&D") expense under GAAP during
the three months ended September 30,
2016 was $3.1 million compared
to $1.0 million for the three months
ended June 30, 2016 and $1.5 million for the three months ended
September 30, 2015. For the third
quarter of 2016 we had a ramp of new product introductions related
to our program wins from early FY2016. R&D includes non-cash
charges for stock-based compensation and amortization of certain
prepaid licenses which totaled $0.5
million during the third quarter of 2016, and $0.3 million in the third quarter of 2015.
Excluding these non-cash charges, adjusted non-GAAP R&D was
$2.6 million during the third quarter
of 2016, and $1.2 million during the
third quarter of 2015.
Net loss was $(7.6) million, or
$(0.17) per basic and diluted share
for the three months ended June 30,
2016, as compared to a net loss of $(10.0) million, or $(0.60) per basic and diluted share for the three
months ended September 30, 2015.
Adjusted EBITDA, a non-GAAP metric (see Table A), for the third
quarter of fiscal 2016 was $(5.4)
million compared to adjusted EBITDA of $(4.4) million in the third quarter of fiscal
2015.
As of September 30, 2016, the
Company maintained cash and cash equivalents of $6.5 million, working capital of $8.5 million and no convertible notes or debt on
the balance sheet. The Company recently closed on a $2.5 million accounts receivables credit facility
with Silicon Valley-based Bridge Bank.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with
accounting principles generally accepted in the United States of America ("GAAP"), the
Company has provided the following non-GAAP financial measures in
this release and the accompanying table: non-GAAP cost of
revenues, SG&A, R&D and adjusted EBITDA. These measures may
be different from non-GAAP financial measures used by other
companies, even when similar terms are used to identify such
measures.
The Company uses adjusted EBITDA as a non-GAAP financial
measure. The Company defines adjusted EBITDA (loss) to exclude
discontinued operations, debt issuance cost amortization, gains or
losses to changes in the warrant liability, accretion of the
discount on convertible notes, interest expense on convertible
note, depreciation, amortization of licenses, non-cash stock-based
compensation, restricted stock issuance expense and severance. The
Company believes that adjusted EBITDA and the other non-GAAP
financial measures are important indicators of the ongoing
operations of the Company's business and provide an additional tool
to compare business performance across periods and provide an
additional baseline for analyzing trends in the Company's
operations because these financial measures provide a view of our
operations that excludes items that management believes are not
reflective of the operating performance, such as items
traditionally removed from net earnings in the calculation of
EBITDA as adjusted.
The Company uses adjusted EBITDA in conjunction with traditional
GAAP operating performance measures as part of its overall
assessment of its performance, for planning purposes, including the
preparation of its annual operating budget, and to evaluate the
effectiveness of its business strategies. Management does not place
undue reliance on adjusted EBITDA as its only measure of operating
performance. As a result, these non-GAAP measures are provided to
supplement investors' overall understanding of, and an enhanced
level of transparency into, the Company's financial performance.
Adjusted EBITDA and the other non-GAAP financial measures should
not be considered as a substitute for other measures of financial
performance reported in accordance with GAAP. For reconciliation of
GAAP to the non-GAAP financial measures, including adjusted EBITDA,
see Table A that is included in the tables accompanying this
release.
Conference Call
The Company has scheduled a conference call to discuss its
financial results for the third quarter ended September 30, 2016. The call will be at
4:30 p.m. Eastern Time on
Thursday, November 10, 2016.
Participants can access the conference call by dialing (844)
861-5501 or (412) 317-6582 or can listen via a live internet
webcast available in the investor section of the Company's website
at www.unipixel.com/investors.
A teleconference replay of the call will be available at (877)
344-7529 or (412) 317-0088, confirmation code 10095708, through
November 17, 2016. A webcast replay
will be available in the investor section of the Company's website
at www.unipixel.com/investors for 90 days.
About UniPixel
UniPixel, Inc. (NASDAQ: UNXL) develops and markets Performance
Engineered Films for the touchscreen and flexible electronics
markets. The Company's roll-to-roll electronics manufacturing
process patterns fine line conductive elements on thin films. The
company markets its technologies for touch panel sensor, cover
glass replacement, and protective cover film applications under the
XTouch™ and Diamond Guard™ brands. For further information, visit
www.unipixel.com.
Forward-looking Statements
All statements in this news release that are not based on
historical fact are "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
including the statement regarding UniPixel's estimated dates of
production, projected shipment of product, future revenues and
margins, and continuation of process improvements. Such
statements contain words such as "will," and "expect," or the
negative thereof or comparable terminology. These statements are
based on management's current expectations. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of risks,
uncertainties, and other factors, many of which are outside of our
control, that could cause actual results to materially differ from
such statements. These risks, uncertainties, and other factors
include, but are not limited to, the ability to recognize revenues,
the ability to extend product offerings into new areas or products,
the ability to compete in our currents markets, the ability to
commercialize licensed technology, unexpected occurrences that
deter the "bring to market" plan for products, trends and
fluctuations in the industry, changes in demand and purchasing
volume of customers, our ability to attract and retain qualified
personnel, our ability to raise additional capital, the ability to
move product sales to production levels, the success of product
sales in new markets or of recently produced product offerings, the
ability to enforce our intellectual property rights and those set
forth under Item 1A "Risk Factors" in our Annual Report on Form
10-K for the year ended December 31,
2015 and other current and periodic reports filed or
furnished from time to time with the SEC. All forward-looking
statements in this press release are made as of the date hereof,
based on information available to UniPixel as of the date hereof,
and UniPixel assumes no obligation to update any forward-looking
statement.
Trademarks in this release are the property of their respective
owners
Contact:
Joe Diaz,
Robert Blum, Joe Dorame
Lytham Partners, LLC
602-889-9700
unxl@lythampartners.com
Financial Tables to Follow
Table
A
|
Uni-Pixel,
Inc.
ITEMIZED
RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED
EBITDA
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(7,557)
|
|
$
|
(10,020)
|
|
$
|
(22,114)
|
|
$
|
(31,449)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issuance cost
amortization
|
|
|
—
|
|
|
451
|
|
|
526
|
|
|
827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on change
in warrant liability
|
|
|
229
|
|
|
(1,092)
|
|
|
907
|
|
|
(4,992)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of discount
on convertible notes
|
|
|
—
|
|
|
4,049
|
|
|
1,291
|
|
|
7,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/expense
|
|
|
3
|
|
|
193
|
|
|
12
|
|
|
424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
250
|
|
|
287
|
|
|
803
|
|
|
3,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
1,205
|
|
|
998
|
|
|
3,200
|
|
|
1,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense
|
|
|
123
|
|
|
380
|
|
|
410
|
|
|
1,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock
issuance
|
|
|
363
|
|
|
330
|
|
|
999
|
|
|
1,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
|
|
|
—
|
|
|
4
|
|
|
8
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA
|
|
$
|
(5,384)
|
|
$
|
(4,420)
|
|
$
|
(13,958)
|
|
$
|
(11,422)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UniPixel, Inc.
Consolidated
Balance Sheets
(In thousands,
except per share data)
|
|
|
|
September 30,
2016
|
|
|
December 31,
2015
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
6,461
|
|
|
$
|
7,618
|
|
Restricted
cash
|
|
|
—
|
|
|
|
4,098
|
|
Account receivable,
net
|
|
|
767
|
|
|
|
334
|
|
Inventory
|
|
|
677
|
|
|
|
769
|
|
Debt issuance
costs
|
|
|
—
|
|
|
|
526
|
|
Prepaid
licenses
|
|
|
4,900
|
|
|
|
4,900
|
|
Prepaid
expenses
|
|
|
452
|
|
|
|
819
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
13,257
|
|
|
|
19,064
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
1,347
|
|
|
|
1,842
|
|
Other long-term
assets
|
|
|
13
|
|
|
|
13
|
|
Prepaid licenses, net
of current portion
|
|
|
1,954
|
|
|
|
5,629
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
16,571
|
|
|
$
|
26,548
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,521
|
|
|
$
|
1,150
|
|
Accrued
liabilities
|
|
|
855
|
|
|
|
780
|
|
Convertible notes
payable
|
|
|
—
|
|
|
|
2,773
|
|
Derivative
liability
|
|
|
1,369
|
|
|
|
491
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
4,745
|
|
|
|
5,194
|
|
|
|
|
|
|
|
|
|
|
Royalty liability,
net
|
|
|
700
|
|
|
|
1,175
|
|
Long term
liabilities
|
|
|
432
|
|
|
|
645
|
|
Long term
debt
|
|
|
—
|
|
|
|
450
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
5,877
|
|
|
|
7,464
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized, 45,043,730 shares
issued and outstanding at
September 30, 2016 and 32,170,778 shares issued and outstanding at
December 31, 2015
|
|
|
45
|
|
|
|
32
|
|
Additional paid-in
capital
|
|
|
181,954
|
|
|
|
168,243
|
|
Accumulated
deficit
|
|
|
(171,305)
|
|
|
|
(149,191)
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
10,694
|
|
|
|
19,084
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
16,571
|
|
|
$
|
26,548
|
|
|
|
UniPixel, Inc.
Condensed
Consolidated Statements of Operations
(In thousands,
except per share data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
907
|
|
|
$
|
1,498
|
|
|
$
|
2,714
|
|
|
$
|
2,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
3,231
|
|
|
|
4,701
|
|
|
|
11,431
|
|
|
|
8,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
(2,324)
|
|
|
|
(3,203)
|
|
|
|
(8,717)
|
|
|
|
(5,261)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
1,882
|
|
|
|
1,724
|
|
|
|
5,602
|
|
|
|
8,368
|
|
Research and
development
|
|
|
3,119
|
|
|
|
1,491
|
|
|
|
5,059
|
|
|
|
5,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(7,325)
|
|
|
|
(6,418)
|
|
|
|
(19,378)
|
|
|
|
(19,319)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issuance cost
amortization expense
|
|
|
—
|
|
|
|
(451)
|
|
|
|
(526)
|
|
|
|
(827)
|
|
Gain (loss) on change
in warrant liability
|
|
|
(229)
|
|
|
|
1,092
|
|
|
|
(907)
|
|
|
|
4,992
|
|
Accretion of discount
on convertible notes
|
|
|
—
|
|
|
|
(4,049)
|
|
|
|
(1,291)
|
|
|
|
(7,171)
|
|
Interest income
(expense), net
|
|
|
(3)
|
|
|
|
(194)
|
|
|
|
(12)
|
|
|
|
(424)
|
|
Other income
(expense), net
|
|
|
(232)
|
|
|
|
(3,602)
|
|
|
|
(2,736)
|
|
|
|
(3,429)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
$
|
(7,557)
|
|
|
$
|
(10,020)
|
|
|
$
|
(22,114)
|
|
|
$
|
(22,748)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations (note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on discontinued
operations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,093)
|
|
Loss on impairment of
property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,608)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,701)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(7,557)
|
|
|
$
|
(10,020)
|
|
|
$
|
(22,114)
|
|
|
$
|
(31,450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
$
|
(0.17)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.55)
|
|
|
$
|
(1.61)
|
|
Net loss
|
|
$
|
(0.17)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.55)
|
|
|
$
|
(2.22)
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
$
|
(0.17)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.55)
|
|
|
$
|
(1.61)
|
|
Net loss
|
|
$
|
(0.17)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.55)
|
|
|
$
|
(2.22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of basic common shares outstanding
|
|
|
45,036,089
|
|
|
|
16,595,889
|
|
|
|
40,359,715
|
|
|
|
14,154,871
|
|
Weighted average
number of diluted common shares outstanding
|
|
|
45,036,089
|
|
|
|
16,595,889
|
|
|
|
40,359,715
|
|
|
|
14,154,871
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/unipixel-reports-third-quarter-2016-financial-results-300360927.html
SOURCE Uni-Pixel, Inc.