ROCHESTER, N.Y., March 16, 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 fourth quarter and full year
financial results for the period ended December 31, 2019.
"Despite the quarterly swings in our revenue, 2019 was a year of
many successful transitions and continued development and progress
for Vuzix on many fronts," said Paul
Travers, President and CEO of Vuzix. "On the product side,
we introduced and commenced shipment this fall of our M400, the
latest model currently available in our M-Series enterprise smart
glasses line and which offers industry leading performance and
capabilities. This was followed with the recent announcement of our
waveguide-based M4000, the first in a line of powerful see-through
enterprise-focused smart glasses. We also enhanced the features of
the Vuzix Blade to incorporate the feedback received from our
customers; the mid-2020 version of the Blade will incorporate
embedded stereo audio as well as an improved auto focus camera and
is now better suited for enterprise deployments in addition to
being a great prosumer product. On the applications side, we
expanded our support of our M-Series and Vuzix Blade Smart Glasses,
both internally and with dozens of new software partners."
"Final assembly of our M-Series products was successfully
relocated from China back to our
ISO 9001:2015 manufacturing facility in West Henrietta. We
have successfully scaled and matured the production of our M-Series
Smart Glasses, Vuzix Blades and waveguides and our operations are
now running with consistent yields across the board to meet our
planned needs in 2020," Mr. Travers continued. "Our cost reduction
programs also continue to yield success and we intend to strive for
further reductions in 2020 as we grow revenue and move toward
profitability. In terms of technology, we made steady progress
regarding the development of thinner waveguides with improved light
efficiencies and significantly smaller microLED-based display
engines. As a result of these developments we have seen an
acceleration and positive impact on our customer relationships,
both in terms of their smart glasses usage as well as potential OEM
projects."
The following table compares condensed elements of the Company's
summarized Consolidated Statements of Operations data for the
quarters and years ended December 31,
2019 and 2018, respectively. Readers should refer to our
Form 10-K for the year ended December 31,
2019, for additional information as well as important risk
factors:
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Three Months
Ended
December 31,
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|
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Twelve Months
Ended
December 31,
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|
|
2019
|
|
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2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
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|
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|
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Sales:
|
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|
|
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|
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|
|
|
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|
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Sales of
Products
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$
|
1,729,960
|
|
|
$
|
1,838,640
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|
|
$
|
5,997,453
|
|
|
$
|
7,692,102
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|
Sales of Engineering
Services
|
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222,530
|
|
|
|
140,850
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|
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673,151
|
|
|
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402,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
Sales
|
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1,952,490
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|
|
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1,979,490
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|
|
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6,670,604
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|
|
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8,094,368
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Cost of Products
and Eng. Services
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1,748,424
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1,679,426
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6,506,066
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|
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6,326,086
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Cost of Inventory
Reserve for Obsolescence
|
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4,572,659
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-
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4,572,659
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-
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Gross (Loss)
Profit
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(4,368,593)
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300,064
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(4,408,121)
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1,768,282
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Operating
Expenses:
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Research and
Development
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2,060,830
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3,290,369
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|
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8,900,837
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|
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10,378,728
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Selling and
Marketing
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1,198,921
|
|
|
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777,087
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4,215,611
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4,822,639
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General and
Administrative
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1,351,173
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|
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1,321,261
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|
|
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6,600,092
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|
|
|
6,973,238
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Depreciation and
Amortization
|
|
|
645,799
|
|
|
|
523,330
|
|
|
|
2,441,581
|
|
|
|
1,469,664
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|
Impairment of
Software Development Costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
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196,223
|
|
Gain (Loss) on
Inventory Revaluation and
Product
Discontinuance
|
|
|
-
|
|
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|
-
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-
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(211,416)
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Loss from
Operations
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(9,625,316)
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(5,611,983)
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(26,566,242)
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(21,860,794)
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Total Other Income
(Expense)
|
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41,331
|
|
|
|
48,124
|
|
|
|
89,872
|
|
|
|
(14,919)
|
|
|
|
|
|
|
|
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|
|
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Net
Loss
|
|
$
|
(9,583,985)
|
|
|
$
|
(5,563,859)
|
|
|
$
|
(26,476,370)
|
|
|
$
|
(21,875,713)
|
|
Loss per Share
after accrued Preferred
Dividends
|
|
$
|
(0.31)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.94)
|
|
|
$
|
(0.87)
|
|
|
|
|
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|
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Fourth Quarter 2019 Financial Results
For the three months ended December 31,
2019, total revenues were $2.0
million, reflecting a small 1.3% decrease versus the prior
year's period.
There was an overall gross profit of $0.2
million for the three months ended December 31, 2019, before a $4.6 million inventory reserve for obsolescence
that was recorded in the fourth quarter, as compared to gross
profit of $0.3 million for the same
period in 2018.
Research and Development (R&D) expense was $2.1 million for the three months ended
December 31, 2019 compared to
$3.3 million for the comparable 2018
period. The decrease in R&D expense was primarily driven by a
year-over-year drop in external consulting fees related to the
Vuzix Blade and M400 products.
Selling and Marketing expense was $1.2
million for the three months ended December 31, 2019 compared to $0.8 million for the comparable 2018 period.
General and administrative expense for the three months ended
December 31, 2019 was $1.4 million versus $1.3
million in the prior year's period.
Net cash operating loss after adding back non-cash adjustments
for the fourth quarter of 2019 was $4.0
million, a $0.5 million
improvement versus the average quarterly rate for the first three
quarters of 2019.
Full Year 2019 Financial Results
For the full year ended December 31,
2019, total revenues were $6.7
million, a decrease of 18% over the comparable period in
2018. The decrease in revenues for the year was due to multiple
factors including price reductions on the M300XL and Vuzix Blade
Smart Glasses and customer deferrals related to the timing of the
production and delivery of the newer M400 Smart Glasses that
commenced in fall of 2019.
There was an overall gross profit of $0.2
million for the full year ended December 31, 2019, before a $4.6 million inventory reserve for obsolescence
that was recorded in the fourth quarter, as compared to gross
profit of $1.8 million for the same
period in 2018. Other factors contributing to the decline
included lower product sales, higher manufacturing overhead costs
with the move of production back from China and price reductions on the M300XL and
Vuzix Blade Smart Glasses implemented mid-year, partially due to
new product introductions.
Research and Development (R&D) expense was $8.9 million for the full year ended December 31, 2019 compared to $10.4 million for the comparable 2018 period, a
decrease of 14%, mainly the result of bringing further R&D work
in house for greater speed and efficiency rather than using more
costly external contractors.
Selling and Marketing expense was $4.2
million for the full year ended December 31, 2019 compared to $4.8 million for the comparable 2018 period, a
decrease of 13%.
General and administrative expense decreased by 5% for the full
year ended December 31, 2019,
reflecting a drop to $6.6 million
from $7.0 million in the prior year's
period.
The net loss attributable to common stockholders after accrued
preferred share dividends for the full year ending December 31, 2019 was $28.4 million or $0.94
cents per share versus a net loss of $23.7 million or $0.87 for the same period in 2018.
Net cash operating loss after adding back non-cash adjustments
for the full year of 2019 was $17.9
million as compared to the prior year's total of
$18.0 million.
As of December 31, 2019, the
Company maintained cash and cash equivalents of $10.6 million and an overall working capital
position of $16.4 million.
Management Outlook
"We are well-positioned to achieve significant top line growth
in 2020, thanks to the growing success of our current and new
M-Series and Vuzix Blade Smart Glasses along with new and existing
waveguide-based OEM engineering services programs," said
Paul Travers, President and CEO of
Vuzix. "Our manufacturing operations in West Henrietta, NY are now fully operational
and ready to support the expected increase in business. And while
the current global economic and public health issues indicate some
potential challenges for all of us, we feel our products and
services will be successful even in these environments as there has
never been a better time to work hands-free and remotely with AR
smart glasses than today. Our Smart Glasses and the many video
conferencing applications that work with them are tailor-made for
reducing the need for travel and helping to maintain remote
operations. Clearly, overall industry momentum is building as
customers recognize the value of AR glasses and are increasingly
gravitating toward the most wearable and functional products
available."
Conference Call Information
Date: Monday, March 16, 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
fourth quarter and full year ended December
31, 2019.
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 March 16, 2020, at approximately 9:30 a.m. (ET). To access the telephonic replay,
please dial 877-660-6853 within the U.S. or Canada, or 201-612-7415 for international
callers. The conference ID# is 13699933.
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 150 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 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