Sales of M300 Smart Glasses more than triple as pilots
convert and repeat customers place larger orders
ROCHESTER, N.Y., Aug. 9, 2018 /CNW/ -- Vuzix® Corporation
(NASDAQ: VUZI), a leading supplier of Smart Glasses, Augmented
Reality (AR) technologies and products for the consumer and
enterprise markets, today reported its second quarter financial
results for the period ended June 30,
2018.
Second Quarter 2018 Highlights
- Quarterly revenues of $2.6
million versus $1.3 million
for the second quarter of 2017, an increase of 100%.
- Record quarterly Vuzix smart glasses revenues of $1.8 million versus $0.7
million for the second quarter of 2017, an increase of
154%.
- Improved quarterly gross profit of $0.7
million versus a gross loss of $0.4
million for the second quarter of 2017.
- Record quarterly M300 Smart Glasses sales representing a 302%
year-over-year increase driven by orders from repeat customers and
conversions of pilot programs into commercial deployments.
- Broadened patent portfolio during the quarter by increasing the
number of patents and patents pending by 26 to 64 patents issued
and 71 patents pending.
- M300 pilot programs increased further to 850+; representing
approximately a 100% increase in the number of pilot programs since
December 2017.
- Completed FCC and EU CE Certification Processes for Vuzix
Blade® Smart Glasses and successfully launched the Vuzix Blade
Developer Center, a core part of our strategy to encourage Blade
application development and an enhanced support vehicle for our
burgeoning developer community.
Management Commentary
"With an expanding set of Smart Glasses AR products in place and
numerous emerging opportunities, 2018 is well on its way to be
another year of growth for Vuzix," said Paul Travers, President and CEO of Vuzix. "Pilot
conversions and repeat orders from customers fueled our enterprise
business during the quarter and our overall enterprise footprint
continues to grow and gain traction, driven by the Vuzix M300 Smart
Glasses and OEM deliveries to Toshiba of the AR100 to Windows-based
smart glasses we are building for them. During the second
quarter, the Company completed FCC and EU CE certification
processes for Vuzix Blade; launched the Blade developer center;
delivered Blade edge software for our developer community; and made
further advancements to the Blade companion apps for commercial
customers. As for our waveguide optics business, the Company
is currently negotiating NRE development engagements with three new
Tier-1 OEM customers across new and existing market
verticals."
The following table compares condensed elements of the Company's
summarized Consolidated Statement of Operations data for the
quarters ended June 30, 2018 and
2017:
|
|
|
For 3
Months
|
|
|
|
Ended June
30,
|
|
|
|
2018
|
|
2017
|
Sales:
|
|
|
|
|
|
Sales of
Products
|
|
|
$
|
2,647,583
|
|
$
|
904,947
|
Sales of Engineering
Services
|
|
|
|
-
|
|
|
420,314
|
|
|
|
|
|
|
|
|
Total
Sales
|
|
|
|
2,647,583
|
|
|
1,325,261
|
|
|
|
|
|
|
|
|
Total Cost of
Sales
|
|
|
|
1,977,410
|
|
|
1,754,748
|
|
|
|
|
|
|
|
|
Gross Profit
(Loss)
|
|
|
|
670,173
|
|
|
(429,487)
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
2,564,119
|
|
|
1,198,840
|
Selling and
Marketing
|
|
|
|
1,545,160
|
|
|
800,329
|
General and
Administrative
|
|
|
|
2,320,151
|
|
|
1,308,234
|
Depreciation and
Amortization
|
|
|
|
294,988
|
|
|
242,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
|
(6,054,245)
|
|
|
(3,979,969)
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
|
|
|
(94,198)
|
|
|
(90,130)
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
(6,148,443)
|
|
|
(4,070,099)
|
Loss per Share
after accrued Preferred
Dividends
|
|
|
$
|
(0.24)
|
|
$
|
(0.22)
|
Second Quarter 2018 Financial Results
For the three months ended June 30,
2018 total revenues were $2.6
million, an increase of 100% over the comparable period in
2017. The increase in revenues for the 2018 quarter was primarily
the result of strong M300 Smart Glasses sales, which increased 302%
over the comparative period.
There was an overall gross profit of $0.7
million for the three months ended June 30, 2018 as compared to a gross loss of
$0.4 million for the same period in
2017. The product gross profit improvements for the 2018 over
2017 period reflects improved M300 margins and higher total overall
revenues on which to absorb the generally fixed manufacturing
overhead costs.
Research and Development (R&D) expense was $2.6 million for the three months ended
June 30, 2018 compared to
$1.2 million for the comparable 2017
period. The increase of R&D expense was primarily driven
by an increase in R&D staff, general research, and the
development costs of the new Blade Smart Glasses.
Selling and Marketing expense was $1.5
million for the three months ended June 30, 2018 compared to $0.8 million for the comparable 2017 period. The
increase of selling and marketing expense for the quarter ended
June 30, 2018 compared to the same
2017 period was primarily the result of salary and accrued
separation payments; increases in Vuzix app store and website
costs; and an increase in trade show costs.
General and administrative expense was $2.3 million for the three months ended
June 30, 2018 compared to
$1.3 million for the same period in
2017. The increase in general and administrative expense over the
prior year's second quarter was primarily the result of increased
salary and stock compensation costs as well as accrued separation
costs, and an increase in legal fees, offset by reductions in IR
and shareholder expenses.
The net loss after accrued preferred share dividends for the
three months ending June 30, 2018 was
$6.6 million or $0.24 cents per share versus a net loss of
$4.5 million or $0.22 for the same period in 2017. If one
were to exclude one-time costs related to recent officer
separations of $0.7 million accrued
in the second quarter the loss per share would have been
$0.22.
Net cash operating loss after adding back non-cash adjustments
for the second quarter of 2018 was $5.0
million as compared to our first quarter of 2018 cash usage
of $4.6 million. If one adds back the
one-time cash costs related to recent officer separations, the
losses for the second and first quarter of 2018 would have been
equivalent on a cash basis. As of June
30, 2018, the Company maintained cash and cash equivalents
of $29.2 million, and an overall
working capital position of $33.0
million.
"Our enterprise business continues to expand at a rapid pace
driven by continued success of our enterprise workhorse, the M300
Smart Glasses. Repeat customers continue to purchase them in larger
and larger quantities. The Company has added more than 400
new M300 pilot programs across a variety of industries so far in
2018 and fresh inbound inquiries from enterprise leads continue to
accelerate as our M300 enterprise customer installed base
deepens. We believe that there is strong pent-up demand for
the Vuzix Blade smart glasses by developers and this has resulted
in a reasonably sizable backlog of orders that the Company expects
to be fulfilled beginning in the third quarter of this year.
Furthermore, the much-anticipated public general commercial launch
of Vuzix Blade is rapidly approaching. While the first half
of 2018 is off to a strong start at Vuzix, we are expecting to
deliver significantly more revenue in the second half of 2018,
driven by expanding commercial and enterprise smart glasses
deployments, pilot conversions, and broad volume shipments of the
Vuzix Blade to developers, enterprise customers and consumers,"
said Paul Travers, President and CEO
of Vuzix.
Conference Call Information
Date: Thursday, August 9, 2018
Time: 4:30 p.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
Conference ID: 13682055
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
second quarter ended June 30,
2018.
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 replay will be available for 30 days, starting on August 9th, 2018, at approximately 5:30 p.m. (ET). To access the replay, please dial
877-660-6853 within the U.S. or Canada, or 201-612-7415 for international
callers. The conference ID# is 13682055.
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 virtual and augmented reality.
Vuzix holds 64 patents and 71 additional 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 2018 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,
Barcelona, Spain and Tokyo, Japan.
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.
Media and Investor Relations Contact:
Matt Margolis, Director of
Corporate Communications and Investor Relations, Vuzix Corporation
matt_margolis@vuzix.com Tel: (585) 359-5952
Ed McGregor, Director of
Institutional 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