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Interlink Electronics Reports First Quarter 2019 Results

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--

Interlink Electronics, Inc. (LINK), a world-leading trusted advisor and technology partner in the advancing world of human-machine interface (HMI) and force-sensing technologies, today announced its financial results for the first quarter 2019. GAAP net loss for the quarter was ($314) thousand or ($0.05) per share, both reflecting a significant decrease from the prior year’s results.

Consolidated Financial Highlights

(Amounts in thousands except per share data and percentages)

       
Three months ended March 31,
Consolidated Financial Results 2019     2018     $ ∆ % ∆  
 
Net revenue $ 1,450 $ 2,573 $ (1.123 ) (43.6 ) %
Gross profit $ 700 $ 1,411 $ (711 ) (50.4 ) %
Gross margin 48.3 % 54.8 %
 
Income (loss) from Operations $ (343 ) $ 219 $ (562 ) N/A
 
Net income (loss) $ (314 ) $ 118 $ (432 ) N/A
Earnings (loss) per share (basic and diluted) $ (0.05 ) $ 0.02
 
EBITDA $ (309 ) $ 259 $ (568 ) N/A
EBITDA margin1 (21.3 ) % 10.1 %

1 EBITDA margin is EBITDA divided by net revenue.

  • Revenue in the first quarter of 2019 decreased approximately 44% to $1.5 million from $2.6 million in the same year-ago period, primarily due to market challenges existing in many of the industries we serve.
  • Gross margin declined to 48% from 55% due to decrease in revenues, as less revenue was available to cover fixed costs and production overhead costs.
  • Net income deteriorated in the first quarter versus the prior-year period, driven primarily by unfavorable volume and timing-related mix, partially offset by lower SG&A costs.
  • EBITDA was negative ($309) for the quarter, representing the first quarter in five years for which the Company did not generate positive EBITDA. On a trailing-twelve basis, EBITDA was still positive at $442 thousand.
  • The company ended the period with $5.9 million in cash and cash equivalents. Coupled with no debt, its balance sheet remains robust.

“We had a very solid quarter in our Medical market, with sturdy sales and pipeline that remains robust and will continue to be a source for growth, although at a slower pace. These flat but encouraging results were more than offset by the anticipated year-over-year declines in Automotive and Industrial markets related to a sharp drop-off in shipments to some of our largest customers. Given the weaker than expected demand across all markets, we have implemented a variety of countermeasures to adjust our cost structure and limit the impact of the softness going forward,” said Steven N. Bronson, CEO of Interlink Electronics, Inc.

Investment in R&D has increased by more than 12% in the first quarter versus the prior-year period. “Our strategic investments include recruitment of scientific and engineering talents, development of technology platforms, growing our patent portfolio and expansion of advanced pilot manufacturing facilities. These initiatives will position Interlink for future growth and profitability. We plan to release new and patent-pending product platforms in the second half of this year that will include force sensing devices with significantly improved sensing range, enhanced rugged touchpad surfaces, and advanced matrix array sensing solutions,” Mr. Bronson stated.

Interlink makes available its annual financial statements, quarterly financial statements, and other significant reports and amendments to such reports, free of charge, on its website as soon as reasonably practicable after such reports are prepared. Please visit www.interlinkelectronics.com to view the Company’s financial results in more detail.

About Interlink Electronics, Inc.

Interlink Electronics is a world-leading trusted advisor and technology partner in the advancing world of human-machine interface (HMI) and force-sensing technologies. Interlink Electronics has led the printed electronics industry in its commercialization of its patented Force-Sensing Resistor (FSR®) technology, which has enabled rugged and reliable HMI solutions. For over 30 years, Interlink Electronics' solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world's top electronics manufacturers. Interlink Electronics has a proven track record of supplying HMI solutions for mission-critical applications in a wide range of markets, including, but not limited to, consumer electronics, automotive, industrial, and medical devices. Interlink Electronics serves a world-class customer-base from its our corporate headquarters in Westlake Village, California (greater Los Angeles area), our global research and development center in Singapore, our printed-electronics manufacturing facility in Shenzhen, China and our global distribution and logistics center in Hong Kong. We also maintain technical and sales offices in Japan and at various locations in the United States. For more information, please see our website at www.interlinkelectronics.com.

Forward Looking Statements

This release contains forward-looking statements. Forward-looking statements include, but are not limited to, the Company’s views on future financial performance and are generally identified by phrases such as “thinks,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management’s own knowledge and assessment of the Company’s industry, R&D initiatives, competition and capital requirements. Other factors and uncertainties that could affect the Company’s forward-looking statements include, among other things, the following: our success in predicting new markets and the acceptance of our new products; efficient management of our infrastructure; the pace of technological developments and industry standards evolution and their effect on our target product and market choices; the effect of outsourcing technology development; changes in the ordering patterns of our customers; a decrease in the quality and/or reliability of our products; protection of our proprietary intellectual property; competition by alternative sophisticated as well as generic products; continued availability of raw materials for our products at competitive prices; disruptions in our manufacturing facilities; risks of international sales and operations including fluctuations in exchange rates; compliance with regulatory requirements applicable to our manufacturing operations; and customer concentrations The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.

In addition to financial results presented in accordance with GAAP, this press release presents EBITDA and EBITDA margin, each of which is a non-GAAP measure. EBITDA is determined by taking net income and adding interest, income taxes, depreciation and amortization, and EBITDA margin is determined by dividing EBITDA by net revenue. Interlink believes that these non-GAAP measure, viewed in addition to and not in lieu of net income and gross margin, provide useful information to investors by providing more focused measures of operating results. These metrics are an integral part of Interlink’s internal reporting to evaluate its operations and the performance of senior management.

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