STOCKHOLM, May 13, 2020 /PRNewswire/ -- Neonode Inc.
(NASDAQ: NEON), today reported financial results for the three
months ended March 31, 2020.
"The past few months have been challenging in light of the
global coronavirus pandemic. The company's operations have been
disrupted when we paused all travel and required our employees to
work remotely. The pandemic is also affecting our customers and we
expect to see sales volumes dropping for several printer and
automotive customers. Despite these headwinds, we continue to make
progress on our path towards growth with new customer development
projects and by actively engaging in new exciting sales
opportunities, but, having that said, it is important to note that
the lead time to acquiring new and profitable customers is fairly
long," said Urban Forssell, CEO
of Neonode Inc.
FINANCIAL SUMMARY FIRST QUARTER 2020
- Net sales totaled $1.3 million
compared to $2.0 million for the same
period last year.
- Net loss totaled $1.0 million
compared to a net loss of $0.6
million for the same period last year.
- Loss per share totaled $0.11
compared to a loss per share of $0.07
for the same period last year.
- Net cash used in operating activities totaled $1.0 million compared to $0.5 million for the same period last year.
BUSINESS HIGHLIGHTS DURING THE QUARTER
- Launch of new business area organization.
- Release of MultiSensing platform for driver and cabin
monitoring in automotive applications. Strong customer
interest; engaged with European premium OEM and shortlisted
for sourcing process for 2024+ platform design win.
- Discussions regarding several new development projects around
zForce touch and gesture sensing solutions with existing and new
customers, for example in the printer, white goods and industrial
segments.
- Expansion of partner network and increased focus on marketing
activities to drive sales of sensor modules.
BUSINESS HIGHLIGHTS SINCE THE END OF THE QUARTER
- Growing interest in the company's contactless touch solutions
and increased sales of sensor module evaluation kits.
- Increased OEM pipeline for additional driver and cabin
monitoring system proof of concepts in second half 2020.
THE BOARD OF DIRECTOR'S CHAIRMAN SUMMARY
- As we have earlier communicated, the company's Board of
Directors has started preparations for a dual public company
listing during the second half year on both Nasdaq New York and
Nasdaq Stockholm.
- There are several strong reasons for this:
-
- The company's headquarters, management team and all critical
operations are located in Stockholm
- A significant number of the company's shareholders are located
in Sweden
- A parallel listing in Stockholm would provide shareholders in
Sweden a more efficient
marketplace for trading shares and it would add to the company's
financing alternatives
- In general, we believe a Nasdaq Stockholm listing will enhance
overall shareholder value
THE CEO'S COMMENTS
"Although the current business environment is challenging, we
have been making steady progress towards rebuilding the company to
return to a path to growth and thereafter profitability. Our
comprehensive review of strategies and opportunities have resulted
in several measures. We have narrowed our focus to B2B and segments
and customer applications where our technologies have clear
technical advantages and add value.
We believe current and potential customers appreciate our
efforts to focus the business and that we are targeting attractive
business segments. We feel confident that we are on the right path
but, having said this, it is important to note that the lead time
to acquiring new and profitable customers is fairly long.
To support and execute on our overall strategy, we restructured
the company into three distinct and mutually supporting business
areas and are hiring new talented managers to run the sales and
business development activities in each. Our traditional business
around touch and gesture control have been placed into two separate
business areas: HMI Solutions for bespoke customer solutions and
HMI Products for standardized sensor modules. We also concluded
that Neonode is well positioned for significant growth in driver
and cabin monitoring in automotive applications, and formed a new
business area, Remote Sensing Solutions, to address this
opportunity. Our revenue and gross margin for each of these
business areas are included in our first quarter 2020 financial
statements.
The aim of the restructuring is to gain a stronger focus in the
organization and to facilitate a return to growth. We have
identified and started to address several segments where we have
competitive technology and/or price advantages including medical,
military, automotive, industrial equipment and white goods.
Recently, our first medical customer began selling a mobile
ultrasonic examination system using our sensor module and we are
currently engaging in customer projects in the military and white
goods markets.
An unexpected development that arose out of the coronavirus
pandemic is a focus on contactless touch applications for
elevators, self-service kiosks and other devices that are used in
public spaces where multiple people touch to activate. We have
showcased our contactless touch holographic displays providing
solutions for many of these applications and are in discussions
with companies who provide products for these markets. We believe
that the move to contactless touch interaction is just beginning
and will intensify as initial applications become a desired
requirement for devices used in public spaces.
In the business area Remote Sensing Solutions, we have increased
our marketing efforts towards automotive OEMs and Tier 1 suppliers,
which has been well received. We are currently engaged in
discussions around proof of concept projects with several customers
and have been shortlisted for a sourcing process for a 2024+
program with a European premium OEM.
The COVID-19 outbreak has had a negative impact on the company's
near term growth and overall business because of the global
economic slowdown and the negative effects of the virus outbreak on
our customers' businesses. We continue to monitor the developments
to mitigate the aforementioned risks but also recognize potential
opportunities with our optical touch and gesture control for safe
and germ free people transportation, access and daily tech
interface as well as applications within medical, transportation
and other systems," concluded Dr. Forssell.
FINANCIAL OVERVIEW FOR THE QUARTER
Net revenue for the quarter ended March
31, 2020 was $1.3 million, a
35.7% decrease, compared to the same period in 2019. HMI Solutions
were the majority of our total revenue and decreased by 39.1% in
2020 as compared to 2019, primarily due to an 87.8% decrease in
license fees earned from our e-reader customers and 41.8% decrease
in license fees earned from our printer customers and a 19.0%
decrease in license fees from our automotive customers. Revenue
from our HMI Products increased 60.0% for the comparable quarters
and partially offset the decrease in license fees. We sold
$98,000 of sensor modules in the
first quarter of 2020 compared to $50,000 in the same period of 2019.
Our combined total gross margin was 97% and 95% for the three
months ended March 31, 2020 and 2019,
respectively. The increase in total gross margin in 2020 as
compared to 2019 is primarily due to non-recurring engineering
within our business area HMI Products. For the three months ended
March 31, 2020, license fees
accounted for 90% of total revenue compared to 97% in the same
period in 2019. There were $27,000 of
NRE revenues for the three months ended March 31, 2020 compared $20,000 during the same period 2019. Our
operating expense decreased 9.3% in the first quarter of 2020
compared to 2019. The decrease is primarily related to lower staff
expenses and scrapped inventory included in the comparable quarter
in 2019.
Net loss attributable to the company for first quarter of 2020
was $1.0 million, or $0.11 per share, compared to a net loss of
$0.6 million, or $0.07 per share, in first quarter 2019.
Cash used by operations was $1.0
million for first quarter of 2020 compared to $0.5 million in the first quarter 2019.
Cash and accounts receivable totaled $2.3
million and working capital was $1.4
million at March 31, 2020
compared to $3.7 million and
$2.4 million at December 31, 2019, respectively.
PATENTS
The company's commitment to innovation and protecting our
inventions has resulted in two new patent grants, US10585530 and
US10534479, and two new patent applications being filed this
quarter, bringing the portfolio to a total of 122
patents.
ORGANIZATION AND STAFF
Neonode Inc., a Delaware
corporation, 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 first quarter, our company had a workforce of 57 people,
including 11 consultants compared to a workforce of 55 people at
the same date last year. Our workforce is primarily located in
Sweden.
FUTURE REPORTING DATES
Q2 Interim Report
2020
|
August 14,
2020
|
Q3 Interim Report
2020
|
November 10,
2020
|
For more information, please contact:
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-first-quarter-ended-march-31--2020-financial-results,c3110596
The following files are available for download:
https://mb.cision.com/Main/17297/3110596/1247021.pdf
|
Neonode Reports First
Quarter Ended March 31, 2020 Financial Results
|