STOCKHOLM, Nov. 10, 2020 /PRNewswire/ -- Neonode Inc.
(NASDAQ: NEON), today reported financial results for the three and
nine months ended September 30,
2020.
FINANCIAL SUMMARY THIRD QUARTER 2020
- Net sales totaled $1.5 million
compared to $1.3 million for the same
period last year.
- Net loss attributable to Neonode Inc. totaled $1.6 million compared to a net loss of
$1.1 million for the same period last
year.
- Loss per share totaled $0.16
compared to a loss per share of $0.12
for the same period last year.
- Net cash used in operating activities totaled $1.8 million and $1.4
million for the three months ended September 30, 2020 and 2019, respectively.
BUSINESS HIGHLIGHTS DURING THE QUARTER
- The company completed a $13.9
million private placement financing transaction receiving
cash proceeds of $13.0 million, net
of offering costs. The company's CEO and two members of the Board
participated in the transaction purchasing a total of $3.1 million in stock.
- In addition, as part of the private placement financing
transaction, the company fully repaid $1.0
million in short-term working capital loans owed to the two
members of the Board.
- Continued marketing of touch sensor modules with a focus on
contactless touch applications with customers in the elevator and
interactive kiosk segments.
- Increased sales of touch sensor modules and evaluation kits to
end customers and value adding partners.
- Advanced discussions regarding several new development projects
around zForce® touch solutions with existing and
new customers, including in the avionics and industrial control
systems segments.
- Continued development and marketing of MultiSensing® platform
for driver and in-cabin monitoring in automotive
applications.
- Strengthened technical leadership through recruitment of Mr.
Atsushi Ishii as new Vice President
Engineering.
BUSINESS HIGHLIGHTS SINCE THE END OF THE QUARTER
- Expansion of sales team in North
America and Europe and of
partner network in Asia.
- Focused work on execution of marketing and business development
plans to drive sales.
- Continued trend of growing interest in the company's
contactless touch solutions and increased sales of touch sensor
modules and evaluation kits.
- Prototype development agreement signed with leading U.S.
defense contractor.
THE CEO'S COMMENTS
"License fees earned in the third quarter from our printer and
automotive customers continued to be at reduced levels due to
slower sales in the global markets amid the COVID-19 crisis. We
expect these markets to rebound in the future as the pandemic is
controlled but hesitate to speculate how quickly any recovery will
be. We also continue to see certain customers delaying decisions
regarding new development projects and investments due to
COVID-19-related challenges in their businesses, in particular in
Europe and North America. On the other side, COVID-19 has
also rapidly projected our technology into new areas of growth. Our
contactless touch sensor technology is an elegant, cost-effective
solution that can protect consumers from having to physically touch
surfaces on devices in public spaces. COVID-19 has been a
paradigm shift in global consumer behavior, where people want to
avoid touching buttons, keypads, and screens on public space
devices," commented Dr. Urban
Forssell, CEO of Neonode.
"We are currently engaged with numerous customers around the
world assisting them in development and product release of
innovative solutions for contactless touch in elevators and
self-service, multi-user kiosks. These customer activities have
resulted in an increase in the manufacture and shipment of
evaluation kits and sensors modules. We anticipate the worldwide
demand for our sensor modules will continue to build over the
coming quarters and years from these and new customer applications
in self-service kiosks, vending machines, elevators, and other
applications. We are also experiencing strong customer interest for
our touch and in-cabin monitoring solutions offerings from
customers in the military and avionics, industrial, and automotive
segments. To expand our reach and accelerate growth we continue to
build our sales and partner eco-system. For example, we recently
added four new value-added resellers in Asia and hired two highly qualified
salespersons. We also completed a significant financing transaction
that included the participation of several investment funds along
with company insiders. The proceeds from the financing not only
strengthen the company's cash position, but also provide the
liquidity to accelerate growth by adding critical assets needed to
meet growing customer demand," concluded Dr. Forssell.
FINANCIAL OVERVIEW FOR THE THREE AND NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2020
The increase of 14.1% in total net revenues for the three-month
period in 2020 as compared to the same period in 2019 was primarily
related to significantly higher revenues from sensor module sales
which was partially offset by slightly lower license revenues. The
decrease of 29.5% in total net revenues for the nine-month period
in 2020 as compared to the same period in 2019 was primarily
related to lower license revenues across all customers. In
accordance with our revenue recognition policy, we record unbilled
license fees using prior royalty revenue data. In 2020, due to the
uncertainty in the global economy, we recorded lower estimated
license fees than in the same period in 2019.
Our combined total gross margin was 86.6% and 89.6% for the
three and nine months ended September 30,
2020 and 95.1% and 95.3% for the three and nine months ended
September 2019, respectively. The
decrease in total gross margin in 2020 as compared to 2019 was
primarily due to the increase in sales of sensor modules with lower
gross margins compared to the 100% gross margin on license fees,
plus certain costs relating to inventory adjustments in 2020. Our
operating expense increased 24.8% and decreased 2.5% in the three
and nine months ended September 30,
2020, respectively, compared to same periods in 2019. The
increase for the three months in 2020 is primarily due to actual
and estimated one-time legal costs. The decrease for the nine
months period in 2020 is primarily related to lower staff expenses
and scrapped inventory included in the comparable periods in
2019.
Net loss attributable to Neonode Inc. for the three and nine
months ended September 30, 2020 was
$1.6 million and $4.3 million, or a loss of $0.16 and $0.45 per
share, respectively, compared to a net loss of $1.1 million and $2.9
million, or a loss of $0.12
and $0.33 per share, in the
comparable periods in 2019, respectively.
Cash used by operations was $1.8
million and $3.7 million for
three and nine months ended September 30,
2020, respectively, compared to $1.4
million and $2.9 million in
the same periods in 2019, respectively.
Cash and accounts receivable totaled $13.3 million on September
30, 2020 compared to $3.7
million at December 31,
2019.
CONFERENCE CALL INFORMATION
The company will host a conference call Tuesday November 10, 2020 at 10AM Eastern Standard Time (EST)/4PM Central European Time (CET) featuring remarks
by, and Q&A with, Urban
Forssell, CEO, Maria Ek, 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), +1 (678) 607-2005 (international) or 085
661 9361 (Stockholm, Sweden). To
access the call all participants must use the following Conference
ID: #6708249. Please make sure to call at least five minutes before
the scheduled start time.
To register for the call, and listen online, please
click:
https://event.on24.com/wcc/r/2796934/24252073E597983C0BA475E62DA1868F
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 - 11/10/2020
(13:00PM EST) to 11/24/2020 (23:59PM
EST). To access the recording, please use one of these
Dial-In Numbers (800) 585-8367, (855) 859-2056 or (404) 537-3406,
and the Conference ID #6708249.
Neonode will post a link to the presentation from the conference
call in the Investor Relations section of the Neonode website
www.neonode.com after the call.
For more information, please contact:
Investor Relations
David Brunton
E-mail: david.brunton@neonode.com
Phone: +1 925 768 0620
Chief Financial Officer
Maria Ek
E-mail: maria.ek@neonode.com
This information was brought to you by Cision
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Neonode Reports Third
Quarter Ended September 30, 2020 Financial Results
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