ROCHESTER, N.Y., May 11, 2020 /PRNewswire/ -- Vuzix® Corporation
(NASDAQ: VUZI) ("Vuzix" or, the "Company"), a leading supplier of
Smart Glasses and Augmented Reality (AR) technologies and products,
today reported its first quarter results for the period ended
March 31, 2020.
"In our first quarter of 2020, we received initial and
subsequent follow-on orders for our M400 Smart Glasses from a
growing number of customers and partners involved in telemedicine,
which helped drive our M-Series Smart Glasses revenue up by 43%
year-over-year," said Paul
Travers, President and CEO of Vuzix. "We also had
demonstrable success with our Engineering Services efforts by
entering into an agreement with a second major U.S. defense
contractor to develop a customized waveguide-based optics
engine. We continued our expense management efforts and
successfully reduced our operating expenses by almost one million dollars on a comparable period over
period basis as we continue our efforts to achieve
profitability."
"The COVID-19 Pandemic had an impact on the day-to-day
operations of many domestic and foreign businesses, including
Vuzix, and despite a challenging enterprise environment, we
achieved modest revenue and gross profit growth in the
quarter. Vuzix advised non-production employees who could work
from home that they should set-up home offices so that production
employees could remain on-site assembling smart glasses over split
shifts, which minimized risk to floor personnel but still allowed
us to meet customer demand for our M400 and Vuzix Blade products,"
continued Mr. Travers.
The following table compares condensed elements of the Company's
summarized Consolidated Statements of Operations data for the three
months ended March 31, 2020 and 2019,
respectively:
|
|
|
|
For 3 Months
Ended March 31,
|
|
|
|
2020
|
|
|
2019
|
Sales:
|
|
|
|
|
|
|
Sales of
Products
|
|
|
$
|
1,371,509
|
|
|
$
|
1,373,371
|
Sales of Engineering
Services
|
|
|
|
160,206
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
Sales
|
|
|
|
1,531,715
|
|
|
|
1,373,371
|
|
|
|
|
|
|
|
|
|
Total Cost of
Sales
|
|
|
|
1,451,199
|
|
|
|
1,333,481
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
80,516
|
|
|
|
39,890
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
2,023,058
|
|
|
|
2,516,100
|
Selling and
Marketing
|
|
|
|
1,152,808
|
|
|
|
1,417,966
|
General and
Administrative
|
|
|
|
1,537,820
|
|
|
|
1,896,402
|
Depreciation and
Amortization
|
|
|
|
648,541
|
|
|
|
559,089
|
Impairment of Patents
and Trademarks
|
|
|
|
57,532
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
|
|
5,419,759
|
|
|
|
6,389,557
|
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
|
(5,339,243)
|
|
|
|
(6,349,667)
|
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
|
|
|
(22,381)
|
|
|
|
(10,094)
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
(5,361,624)
|
|
|
|
(6,359,761)
|
Loss Attributable
to Common Stockholders per Share
|
|
|
$
|
(0.18)
|
|
$
|
$
|
(0.25)
|
First Quarter 2020 Financial Results
For the three months ended March 31,
2020, total revenues increased $0.2
million to $1.5 million versus
the comparable period in 2019. The increase was driven by higher
sales of smart glasses products, which rose 8% year-over-year, and
engineering services revenue of $0.2
million versus none in the prior year's period.
There was an overall gross profit of $81,000 for the three months ended March 31, 2020 as compared to a gross profit of
$40,000 for the same period in 2019.
On a product cost of sales basis only, product direct costs were
54% of sales in the 2020 period as compared to 52% in the prior
year's period, the change primarily the result of lower selling
prices for the M300XL in the first quarter of 2020 versus the same
period in 2019.
Research and Development (R&D) expense was $2.0 million for the three months ended
March 31, 2020 compared to
$2.5 million for the comparable 2019
period, a reduction of approximately 20%. The decrease in R&D
expense was primarily due to reduced external consulting fees
related to Blade software development.
Selling and Marketing expense was $1.2
million for the three months ended March 31, 2020 compared to $1.4 million for the comparable 2019 period, a
reduction of approximately 19%. The decline was largely due to
decreases in advertising and trade show costs, salaries and
stock-based compensation and external consulting fees.
General and Administrative expense for the three months ended
March 31, 2020 was $1.5 million versus $1.9
million in the prior year's period, a reduction of
approximately 19%. The decline was largely due to decreases in
legal fees and IT and security consulting fees.
Total Operating Expenses decreased by $1.0 million for the three months ended
March 31, 2020, a reduction of
approximately 15%.
The net loss attributable to common stockholders after accrued
preferred share dividends for the three months ended March 31, 2020 was $5.9
million or $0.18 cents per
share versus a net loss of $6.8
million or $0.25 for the same
period in 2019.
Net cash operating loss after adding back non-cash adjustments
for the first quarter of 2020 was $4.3
million as compared to $5.3
million for first quarter of 2019, a decrease of 19%. As of
March 31, 2020, the Company
maintained cash and cash equivalents of $6.1
million and an overall working capital position of
$11.8 million.
Management Outlook
"We have made steady progress so far this year to meet our
operating goals for 2020, but we have more work to do. The
COVID-19 Pandemic has disrupted business operations worldwide, but
it has also awakened the enterprise smart glasses industry,
particularly across telemedicine, field service and remote support
and manufacturing. Since mid-March, when businesses, states
and countries began to shut down and work remotely across the globe
due to COVID-19, Vuzix began to witness a pivoting of the
enterprise smart glasses industry," said Paul Travers, President and CEO of Vuzix. "We
have recently experienced increases in the average order size,
number of orders and re-orders from direct customers and resellers
for our M400 Smart Glasses. Thus far in our second quarter
ending June 30, 2020, smart glasses
revenue, along with revenues associated with recently signed
Engineering Services programs expected to conclude before quarter's
end, have already exceeded our 2020 first quarter revenues. We have
also expanded the number of our contracted Engineering Services
program engagements and are actively pursuing additional
Engineering Services and OEM programs. Additionally, we continue to
make great strides in our efforts to develop our next generation
waveguide and display engine technologies around MicroLEDs with new
strategic partners. Finally, in terms of our cash flow, Vuzix
has trimmed its operating costs and will continue to be prudent in
our spending while focusing on revenue generating initiatives that
can maximize our cash flow from operations."
Conference Call Information
Date: Monday, May 11, 2020
Time: 8:30 a.m. Eastern Time (ET)
Dial-in Number for U.S. & Canadian Callers:
877-709-8150
Dial-in Number for International Callers (Outside of the U.S. &
Canada): 201-689-8354
A live and archived webcast of the conference call will be
available on the investor relations page of the Company's website
at: https://ir.vuzix.com/
Participating on the call will be Vuzix' Chief Executive Officer
and President Paul Travers and Chief
Financial Officer Grant Russell, who
together will discuss operational and financial highlights for the
first quarter ended March 31,
2020.
To join the live conference call, please dial into the above
referenced telephone numbers five to ten minutes prior to the
scheduled conference call time.
A telephonic replay will be available for 30 days, starting on
May 11, 2020, at approximately
9:30 a.m. (ET). To access this
replay, please dial 877-660-6853 within the U.S. or
Canada, or 201-612-7415 for
international callers. The conference ID# is 13703061.
About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented
Reality (AR) technologies and products for the consumer and
enterprise markets. The Company's products include personal display
and wearable computing devices that offer users a portable
high-quality viewing experience, provide solutions for mobility,
wearable displays and augmented reality. Vuzix holds 157 patents
and patents pending and numerous IP licenses in the Video Eyewear
field. The Company has won Consumer Electronics Show (or CES)
awards for innovation for the years 2005 to 2020 and several
wireless technology innovation awards among others. Founded in
1997, Vuzix is a public company (NASDAQ: VUZI) with offices in
Rochester, NY, Oxford, UK, and Tokyo, Japan. For more information, visit
Vuzix website, Twitter and
Vuzix website, Twitter and Facebook pages.
Forward-Looking Statements Disclaimer
Certain statements contained in this news release are
"forward-looking statements" within the meaning of the Securities
Litigation Reform Act of 1995 and applicable Canadian securities
laws. Forward-looking statements contained in this release relate
to, among other things, the timing of new product releases, R&D
project successes, smart glass pilot to roll-out conversion rates,
future operating results, and the Company's leadership in the Smart
Glasses and AR display industry. They are generally identified by
words such as "believes," "may," "expects," "anticipates," "should"
and similar expressions. Readers should not place undue reliance on
such forward-looking statements, which are based upon the Company's
beliefs and assumptions as of the date of this release. The
Company's actual results could differ materially due to risk
factors and other items described in more detail in the Company's
Annual Reports and other filings with the United States Securities
and Exchange Commission and applicable Canadian securities
regulators (copies of which may be obtained at www.sedar.com or
www.sec.gov). Subsequent events and developments may cause these
forward-looking statements to change. The Company specifically
disclaims any obligation or intention to update or revise these
forward-looking statements as a result of changed events or
circumstances that occur after the date of this release, except as
required by applicable law.
Investor Relations Contact
Ed McGregor, Director of Investor
Relations, Vuzix Corporation ed_mcgregor@vuzix.com Tel: (585)
359-5985
Vuzix Corporation, 25 Hendrix Road, Suite A, West Henrietta, NY 14586 USA,
Investor Information – IR@vuzix.com www.vuzix.com
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SOURCE Vuzix Corporation