STOCKHOLM, Aug. 14, 2019 /PRNewswire/ -- Neonode Inc.
(NASDAQ: NEON), the optical interactive sensing technology company,
today reported financial results for the three and six months ended
June 30, 2019.
"We are growing our global sales presence and partner network
and have successfully promoted our selected use cases to customers
and at numerous trade shows. In addition, we have released updated
versions of our product offerings improving our competitive
position. These activities have resulted in an increased number of
on-going customer discussions and evaluations. I am confident that
we have created a foundation that will allow us to achieve future
revenue growth and profitability," said Håkan Persson, CEO of
Neonode Inc.
FINANCIAL SUMMARY FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2019
- Net sales totaled $1.7 million
and $3.7 million for the three and
six months ended June 30, 2019
compared to $1.9 million and
$4.3 million, respectively, for the
same periods last year.
- Net loss totaled $1.3 million and
$1.8 million for the three and six
months ended June 30, 2019 compared
to a net loss of $1.0 million and
$1.7 million, respectively, for the
same periods last year.
- Loss per share totaled $0.14 and
$0.21 for the three and six months
ended June 30, 2019 compared to a
loss per share of $0.16 and
$0.28, respectively, for the same
periods last year.
- Net cash used in operating activities totaled $1.5 million for the six months ended
June 30, 2019 compared to
$1.4 million for the same period last
year.
BUSINESS HIGHLIGHTS DURING THE QUARTER
- Signed collaboration agreement with Finetek Co., Ltd who will
serve as a system integrator and future electronic manufacturing
partner for Neonode zForce technology. For more information, see
our press release
https://www.neonode.com/neonode-and-finetek-sign-collaboration-agreement/
- Assigned a portfolio of patents not used in our current
business to Aequitas Technologies LLC as part of an agreement to
share potential proceeds generated from a licensing and
monetization program.
- Received purchase order for sensor modules of approximately
$0.6 million from industry leading
medical device OEM who will use our sensor module in a touch
display system for an X-Ray machine. Initial delivery began in
June 2019.
BUSINESS HIGHLIGHTS SINCE THE END OF THE QUARTER
- Signed agreement with Serial Microelectronics (HK) Limited to
promote and sell Neonode's sensor products
in China, Taiwan and Hong Kong. For more
information, see our press release
https://www.neonode.com/neonode-signs-serial-microelectronics-hk-as-distributor-to-chinese-market/
THE CEO'S COMMENTS
During the first six months of the year we have completed a
number of actions required to successfully re-align the company
according to our strategic use case focus and business plan.
Improved product performance
- Launched a performance-optimized zForce Touch Solution (CORE)
for basic touch use cases
- Released an updated version of zForce sensor modules enabling
extended range and 90-degree angle mount of the sensor to obtain
the same active detection area with new levels of design
freedom
Increased market activities
- Announced use cases for basic touch, high-image quality display
touch, ruggedized display touch and entry systems for automotive
systems
- Exhibited at several relevant industry trade shows to
communicate and promote Neonode's use case strategy
- Strenghtend relationships with existing customers, supply chain
partners and external sales representatives
Our strong use case focus is providing clarity of the best
application fit for our technology and has been received positively
by both customers and employees.
Our marketing and sales activities are directed towards our key
target markets; the U.S., Japan
and China and selected countries
in Europe. Participation at SID in
San Jose, Computex in Taiwan and
Sensor Expo in San Jose have generated a substantial number of
concrete leads and interest from potential customers, partners and
system suppliers. We continue to see strong market interest for our
product offerings, however customer project cycles are long in the
embedded market and, why continuous marketing and sales coverage is
key.
We are making progress in our discussions with both consumer
customers and automotive Tier 1s for IVI solutions ("In Vehicle
Infotainment"). A new printer customer in China has entered into a license agreement and
pre-paid initial license fees. We have had ongoing discussions with
other new potential printer customers in Asia with decisions expected later in the
year. For automotive IVI, we are in a number of evaluation projects
with Tier 1s and a specific program is identified for one OEM. Our
liftgate solution for automotive entry systems is progressing well
and we see a strong after market potential, paving the way for an
OEM standard product offering. After the quarter ended, we entered
into discussions with a major existing customer for a potential
monitor solution.
Our collaboration with Finetek is progressing well with several
business opportunities unfolding for monitors, liftgate systems and
steering wheel touch pads. Our objective is to have Finetek support
both our sensor module and licensing business and become a key
partner from a design and manufacturing perspective.
In order to increase our sales efforts and to improve our local
presence, we have strengthened our sales capability in China and the U.S. Our sales partner network
in the U.S., Canada and
Mexico is developing well and has
become operational with a growing number of opportunities in
evaluation phase. In July, we signed an agreement with Serial
Microelectronics to promote and sell our sensor modules in mainland
China, Taiwan and Hong
Kong. In addition, we are in discussions with sales
distributors in Japan and expect
an agreement to be signed in the near-term. We have identified and
are in negotiations with sales distributors to support our markets
in the United Kingdom and
Central Europe and are evaluating
other companies to provide coverage for the remainder of
Europe.
We have been active with Digi-Key for 17 months and have shipped
more than 840 evaluation kits globally, primarily to industrial
accounts in the U.S. and Asia. The
leads generated through this channel are continuously being
qualified through our local representatives and sales partners. We
anticipate that our new version of the zForce sensor module will be
introduced for sales in the fourth quarter 2019.
In summary, we continue to execute on our plan and see positive
customer response with increasing on-going customer discussions and
evaluations. I'm confident we are moving in the right direction and
that our current investments in our sales coverage together with
strong cost control and cash flow focus will generate future
revenue growth and profitability.
FINANCIAL OVERVIEW FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2019
Revenues for the three and six months ended June 30, 2019 decreased by 8.8% and 12.4% year
over year, respectively. The decrease in the second quarter is
mainly due to a $0.3 million decrease
in license fees from one e-reader customer plus a $0.3 million and $0.5
million decrease in license fees from one printer customer
compared to the same periods in 2018, respectively. This decrease
is partly offset by an increase in license fees from other printer
and automotive customers together with an increase in revenues from
module sales. Operating expenses for the three months ended
June 30, 2019 are in line with the
same period previous year but lower by 10.1% for the six months
ended June 30, 2019 compared to the
same period in 2018. Net loss for the three and six months ended
June 30, 2019 increased by 31.1% and
10.9% compared to the same periods in 2018. Cash used by operations
during the six months ended June 30,
2019 increased by 3.1% year over year. Cash and accounts
receivables totaling $6.4 million per
June 30, 2019 is sufficient to
continue to execute according to our plan. Our second quarter Form
10-Q is available for download from the Investor Section of our
website at www.neonode.com
Financial Overview
Financial Overview
Amounts in USD
thousand unless otherwise stated
|
|
Three months
ended
June 30,
|
|
|
Six months
ended
June 30,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Net sales
|
|
|
$
1,710
|
|
|
|
$
1,876
|
|
|
|
$
3,722
|
|
|
|
$
4,251
|
|
|
Net sales decline
%
|
|
|
(8.8)
|
%
|
|
|
|
|
|
|
(12.4)
|
%
|
|
|
|
|
|
Gross margin
%
|
|
|
95.8
|
%
|
|
|
95.3
|
%
|
|
|
95.4
|
%
|
|
|
96.8
|
%
|
|
Operating
loss
|
|
|
$
(1,314)
|
|
|
|
$
(1,161)
|
|
|
|
$
(1,982)
|
|
|
|
$ (2,040)
|
|
|
Operating margin
%
|
|
|
(76.8)
|
%
|
|
|
(61.9)
|
%
|
|
|
(53.3)
|
%
|
|
|
(48.0)
|
%
|
|
Net cash used in
operating activities
|
|
|
|
|
|
|
|
|
|
|
$
(1,475)
|
|
|
|
$ (1,431)
|
|
|
Revenue Distribution by Business Model
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenue Distribution
By Business Model
|
|
Q2
|
|
|
Q2
|
|
|
Q2
|
|
|
Full year
|
|
|
Full year
|
|
License
fees
|
|
|
$
1,467
|
|
|
|
$
1,761
|
|
|
|
$
1,965
|
|
|
|
$
7,954
|
|
|
|
$
8,684
|
|
Sensor
modules
|
|
|
223
|
|
|
|
85
|
|
|
|
213
|
|
|
|
227
|
|
|
|
814
|
|
Non-recurring
engineering
|
|
|
20
|
|
|
|
30
|
|
|
|
151
|
|
|
|
357
|
|
|
|
743
|
|
License Fee Revenue Distribution per Market
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
License Fee Revenue
Distribution Per Market
|
|
Q2
|
|
|
Q2
|
|
|
Q2
|
|
|
Full year
|
|
|
Full year
|
|
Printers
|
|
|
$
1,073
|
|
|
|
$ 1,101
|
|
|
|
$
1,054
|
|
|
|
$
5,490
|
|
|
|
$
5,330
|
|
E-Readers and
Tablets
|
|
|
(46)
|
|
|
|
275
|
|
|
|
250
|
|
|
|
837
|
|
|
|
1,206
|
|
Automotive
|
|
|
440
|
|
|
|
385
|
|
|
|
661
|
|
|
|
1,627
|
|
|
|
2,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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PATENTS
On May 6, 2019, Neonode assigned a
portfolio of patents to Aequitas Technologies LLC. The portfolio
contains two patent families comprising nine US patents, five
non-U.S. patents and three pending U.S. patent applications that
are all outside of Neonode's currentbusiness. The assignment
provides Neonode the right to share potential proceeds generated
from a licensing and monetization program.
ORGANIZATION AND STAFF
Neonode Inc., a Delaware Incorporated Company, with its
executive head office in Stockholm,
Sweden are organized in four wholly owned subsidiaries
located in Sweden, Japan, Korea and Taiwan and with a majority owned subsidiary in
Kungsbacka, Sweden. At the end of
the second quarter, the company had a workforce of 56 people,
including eleven consultants compared to a workforce of 54 people
at December 31, 2018. The workforce
primarily is located in Sweden.
FUTURE REPORTING DATES
Q3 Interim Report 2019 November 6,
2019 (planned)
For More Information, Please
Contact:
Investor
Relations
David Brunton
E-mail: david.brunton@neonode.com
Chief Financial Officer
Maria
Ek
E-mail: maria.ek@neonode.com
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/neonode/r/neonode-reports-second-quarter-ended-june-30--2019-financial-results,c2880808
The following files are available for download:
https://mb.cision.com/Main/17297/2880808/1089948.pdf
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