Neonode Inc. (NASDAQ:NEON), the Optical Interactive Sensing
Technology Company, today reported financial results for the first
quarter ended March 31, 2017.
Recent Highlights:
- AirBar for MacBook Air and Windows 10 in 13.3, 14.0, 15.6 inch
sizes now shipping to distribution
- 2 additional printer customers are now shipping products bring
the total to 5 printer customers
- Signed 3 new OEM supply agreements for embedded sensor
modules
- Initial manufacturing of embedded sensor modules in various
sizes ranging from 42mm to 345mm
- Signed OEM agreement for development of embedded sensor module
for flexible OLED display
- Signed agreement with DigiKey for distribution, marketing and
sales of embedded sensor modules
“This quarter has been an inflection point for Neonode. Over the
past several quarters we have been focused on our new line of
embedded sensor modules incorporating our zForce Air technology for
OEM customers. We took concrete steps during the first quarter to
further develop the market for our new offerings. After our
investments in production technology, we now have a stable
manufacturing process that supports our growing business. During
the quarter, we signed an agreement with DigiKey to support the
global rollout of our sales and market efforts for our module
business. DigiKey is a leading global electronic components
distribution company that also provide global sales and marketing
support,” said Thomas Eriksson, Neonode CEO.
“We are working with several OEM customers on high volume
applications using our embedded sensor modules, such as the new
generation of flexible and curved displays. In addition, we signed
supply agreements with three new OEM customers to deliver modules
to them in 2017,” concluded Mr. Eriksson.
Financial Results for the quarter ended March 31,
2017
Total revenues for the three months ended March 31, 2017 and
2016 was $2.3 million and $3.1 million, respectively. Our revenues
for the three months ended March 31, 2017 and 2016 included $2.1
million and $2.5 million, respectively, from technology license
fees, a nominal non-recurring engineering fee (“NRE”) in 2017
compared to $0.7 million in 2016 and $0.2 million from sales of
AirBar in the first quarter of 2017. We began selling AirBar in
December 2016.
The decrease of 26% in total revenues for the three-month period
2017 as compared to the same period in 2016 is primarily due to a
decrease in engineering development fees and a onetime $0.3 million
increase in license fees in the first quarter 2016 related to a
catch-up of license fees from HP.
We expect an incremental increase in revenues from additional
license fee customers, growing sales from embedded sensor modules
and sales of AirBar during 2017.
Our combined total gross margin was 95% and 81% in the three
months ended March 31, 2017 and 2016. In the three months ended
March 31, 2017, license fees accounted for 91% of total revenue
compared to 79% in the same period in 2016. Gross margin on AirBar
sales in the three months ended March 31, 2017 was 52%.
Operating expenses decreased 19% to $3.1 million for the quarter
ended March 31, 2017 compared to $3.8 million for the same period
last year and we are on target with our $3 million quarterly
operating expenses.
We recorded a net loss of $0.9 million, or
$(0.02) loss per share, for the quarter ended March 31, 2017
compared to a net loss of $1.4 million, or $(0.03) loss per share
for the first quarter ended March 31, 2016.
During the first quarter of 2017, we invested approximately $0.8
million in inventory included on our balance sheet. In the quarter,
we manufactured 15,000 AirBar modules. In addition, our first
quarter operating expenses includes an investment of approximately
$0.4 million in cost related to manufacturing engineering and
production set up for embedded sensor modules.
Cash and accounts receivable totaled $2.7
million at March 31, 2017 compared to $5.0 million at December 31,
2016.
Conference Call Information
The Company will host a conference call Tuesday
May 9, 2017 at 10AM Eastern Daylight Time (EDT)/4PM Central
European Time (CET) featuring remarks by, and Q&A with, Thomas
Eriksson, CEO, Lars Lindqvist, CFO and David Brunton, Head of
Investor Relations.
The dial-in number for the conference call is
toll-free: (877) 539-0733 (U.S. domestic) or +1 (678) 607-2005
(international). To access the call all participants must use the
following Conference ID: #8342418. Please make sure to call at
least five minutes before the scheduled start time.
To register for the call, and listen online, please
click:http://event.on24.com/wcc/r/1408544-1/1227A661547F062D499075F1684E82C4
For interested individuals unable to join the
live event, a digital recording for replay will be available for 30
days after the call's completion – 5/9/2017 (13:00PM EDT) to
6/9/2017 (23:59PM EDT). To access the recording, please use one of
these Dial-In Numbers (800) 585-8367 or (404) 537-3406, and the
Conference ID #8342418.
About NeonodeNeonode Inc. (NASDAQ:NEON)
develops and licenses optical interactive sensing technologies.
Neonode’s patented optical interactive sensing technology is
developed for a wide range of devices like automotive systems,
printers, PC devices, monitors, mobile phones, tablets and
e-readers. NEONODE and the NEONODE Logo are trademarks of Neonode
Inc. registered in the United States and other countries. AIRBAR is
a trademark of Neonode Inc. All other trademarks are the property
of their respective owners.
For more information please visit www.neonode.com.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These include, but are not limited to,
statements relating to expectations, future performance or future
events, and product cost, performance, and functionality matters.
These statements are based on current assumptions, expectations and
information available to Neonode management and involve a number of
known and unknown risks, uncertainties and other factors that may
cause Neonode's actual results, levels of activity, performance or
achievements to be materially different from any expressed or
implied by these forward-looking statements.
These risks, uncertainties, and factors are
discussed under "Risk Factors" and elsewhere in Neonode's public
filings with the U.S. Securities and Exchange Commission from time
to time, including Neonode's annual report on Form 10-K, quarterly
reports on Form 10-Q, and current reports on Form 8-K. You are
advised to carefully consider these various risks, uncertainties
and other factors. Although Neonode management believes that the
forward-looking statements contained in this press release are
reasonable, it can give no assurance that its expectations will be
fulfilled. Forward-looking statements are made as of today's date,
and Neonode undertakes no duty to update or revise them.
© 2017, Neonode Inc. All rights reserved.
Neonode is a registered trademark of Neonode Inc.
NEONODE INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(In thousands, except share and
per share amounts) |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
|
(Unaudited) |
|
|
|
(Audited) |
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,706 |
|
|
$ |
3,476 |
|
Accounts
receivable, net |
|
|
1,007 |
|
|
|
1,548 |
|
Projects
in process |
|
|
159 |
|
|
|
- |
|
Inventory |
|
|
1,544 |
|
|
|
696 |
|
Prepaid
expenses and other current assets |
|
|
2,007 |
|
|
|
1,949 |
|
Total
current assets |
|
|
6,423 |
|
|
|
7,669 |
|
|
|
|
|
|
|
|
|
|
Investment in joint
venture |
|
|
3 |
|
|
|
3 |
|
Property and equipment,
net |
|
|
2,008 |
|
|
|
2,031 |
|
Total
assets |
|
|
8,434 |
|
|
|
9,703 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,355 |
|
|
$ |
1,286 |
|
Accrued
payroll and employee benefits |
|
|
1,018 |
|
|
|
1,001 |
|
Accrued
expenses |
|
|
139 |
|
|
|
172 |
|
Deferred
revenues |
|
|
1,580 |
|
|
|
1,921 |
|
Current
portion of capital lease obligations |
|
|
233 |
|
|
|
228 |
|
Total
current liabilities |
|
|
4,325 |
|
|
|
4,608 |
|
|
|
|
|
|
|
|
|
|
Capital lease
obligations, net of current portion |
|
|
916 |
|
|
|
960 |
|
Total
liabilities |
|
|
5,241 |
|
|
|
5,568 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Series B
Preferred stock, 54,425 shares authorized with par value $0.001 per
share; 83 shares issued and outstanding at March 31, 2017 and
December 31, 2016. (In the event of dissolution, each share of
Series B Preferred stock has a liquidation preference equal to par
value of $0.001 per share over the shares of common
stock) |
|
|
- |
|
|
|
- |
|
Common
stock, 70,000,000 shares authorized with par value $0.001 per
share; 48,844,503 and 48,844,503 shares issued and outstanding at
March 31, 2017 and December 31, 2016, respectively |
|
|
49 |
|
|
|
49 |
|
Additional paid-in capital |
|
|
183,687 |
|
|
|
183,667 |
|
Accumulated other comprehensive loss |
|
|
(164 |
) |
|
|
(171 |
) |
Accumulated deficit |
|
|
(179,913 |
) |
|
|
(179,040 |
) |
Total
Neonode Inc. stockholders’ equity |
|
|
3,659 |
|
|
|
4,505 |
|
Noncontrolling interests |
|
|
(466 |
) |
|
|
(370 |
) |
Total stockholders'
equity |
|
|
3,193 |
|
|
|
4,135 |
|
Total
liabilities and stockholders’ equity |
|
$ |
8,434 |
|
|
$ |
9,703 |
|
NEONODE INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except
per share amounts)(Unaudited) |
|
|
|
|
Three months ended March 31, |
|
|
|
2017 |
|
|
2016 |
|
Revenue: |
|
|
|
|
|
|
License fees |
|
$ |
2,121 |
|
|
$ |
2,468 |
|
Sensor module
sales |
|
|
210 |
|
|
|
- |
|
Non-recurring
engineering |
|
|
1 |
|
|
|
664 |
|
Total revenues |
|
|
2,332 |
|
|
|
3,132 |
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Sensor module |
|
|
101 |
|
|
|
- |
|
Non-recurring
engineering |
|
|
4 |
|
|
|
595 |
|
Total cost of
revenues |
|
|
105 |
|
|
|
595 |
|
|
|
|
|
|
|
|
|
|
Total gross margin |
|
|
2,227 |
|
|
|
2,537 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and
development |
|
|
1,315 |
|
|
|
1,949 |
|
Sales and
marketing |
|
|
702 |
|
|
|
816 |
|
General and
administrative |
|
|
1,088 |
|
|
|
1,060 |
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
3,105 |
|
|
|
3,825 |
|
Operating loss |
|
|
(878 |
) |
|
|
(1,288 |
) |
|
|
|
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
17 |
|
|
|
3 |
|
Other expense, net |
|
|
- |
|
|
|
41 |
|
Total other
expense |
|
|
17 |
|
|
|
44 |
|
|
|
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
|
(895 |
) |
|
|
(1,332 |
) |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
74 |
|
|
|
67 |
|
Net loss including
noncontrolling interests |
|
|
(969 |
) |
|
|
(1,399 |
) |
Less: Net loss
attributable to noncontrolling interests |
|
|
96 |
|
|
|
32 |
|
Net loss attributable
to Neonode Inc. |
|
$ |
(873 |
) |
|
$ |
(1,367 |
) |
|
|
|
|
|
|
|
|
|
Loss per common
share: |
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
Basic and diluted –
weighted average number of common shares outstanding |
|
|
48,845 |
|
|
|
43,810 |
|
NEONODE INC.CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(In
thousands)(Unaudited) |
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(969 |
) |
|
$ |
(1,399 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments |
|
|
7 |
|
|
|
(35 |
) |
Comprehensive loss |
|
|
(962 |
) |
|
|
(1,434 |
) |
Less: Comprehensive
loss attributable to noncontrolling interests |
|
|
96 |
|
|
|
32 |
|
Comprehensive loss
attributable to Neonode Inc. |
|
$ |
(866 |
) |
|
$ |
(1,402 |
) |
NEONODE INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited) |
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2017 |
|
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net
loss (including noncontrolling interests) |
|
$ |
(969 |
) |
|
$ |
(1,399 |
) |
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
20 |
|
|
|
114 |
|
Loss on
disposal of property and equipment |
|
|
- |
|
|
|
41 |
|
Depreciation and amortization |
|
|
160 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
542 |
|
|
|
697 |
|
Projects
in process |
|
|
(159 |
) |
|
|
36 |
|
Inventory |
|
|
(845 |
) |
|
|
- |
|
Prepaid
expenses and other current assets |
|
|
(31 |
) |
|
|
(325 |
) |
Accounts
payable and accrued expenses |
|
|
18 |
|
|
|
339 |
|
Deferred
revenues |
|
|
(341 |
) |
|
|
461 |
|
Net cash
(used in) provided by operating activities |
|
|
(1,605 |
) |
|
|
21 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchase
of property and equipment |
|
|
(104 |
) |
|
|
(156 |
) |
Net cash
used in investing activities |
|
|
(104 |
) |
|
|
(156 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Principal
payments on capital lease obligation |
|
|
(58 |
) |
|
|
(15 |
) |
Net cash
used in financing activities |
|
|
(58 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
(3 |
) |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash |
|
|
(1,770 |
) |
|
|
(142 |
) |
Cash at beginning of
period |
|
|
3,476 |
|
|
|
3,082 |
|
Cash at end of
period |
|
$ |
1,706 |
|
|
$ |
2,940 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure
of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid
for income taxes |
|
$ |
4 |
|
|
$ |
7 |
|
Cash paid
for interest |
|
$ |
17 |
|
|
$ |
3 |
|
For more information, please contact:
Investor Relations:
David Brunton
Email: david.brunton@neonode.com
CFO
Lars Lindqvist
E-mail: lars.lindqvist@neonode.com
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