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 fourth quarter and full-year 2018. GAAP net income for the full-year 2018, was $622 thousand or $0.09 per share, reflecting a decrease of approximately 51% over the prior year’s results. GAAP net income in the fourth quarter of 2018 was $46 thousand, versus a $5 thousand net loss reported in the fourth quarter of 2017.
Consolidated Financial Highlights
(Amounts in thousands except per share data and percentages)
|Three months ended December 31,||Year ended December 31,|
|Consolidated Financial Results||2018||2017||$ ∆||% ∆||2018||2017||$ ∆||% ∆|
|Income from Operations||$||(2||)||$||237||$||(239||)||N/A||$||750||$||2,139||$||(1,389||)||(64.9||)||%|
|Net income (loss)||$||46||$||(5||)||$||51||N/A||$||622||$||1,260||$||(638||)||(50.6||)||%|
|Earnings per share (basic and diluted)||$||0.01||$||(0.00||)||$||0.09||$||0.17|
1 EBITDA margin is EBITDA divided by net revenue.
- Revenue in the fourth quarter of 2018 decreased approximately 27% to $1.7 million from $2.4 million in the same year-ago period, primarily due to market challenges existing in many of the industries we serve. In addition, we lost a major customer in 2017 and developing replacement revenue is a slow process that has been felt throughout 2018. For the full-year 2018, revenue decreased approximately 20% to $8.9 million from $11.2 million in the comparable period of 2017.
- In spite of decreased revenues, gross margin remained strong at 52% in the fourth quarter of 2017 and 55% for the full year. Generally gross margin decreased from comparable periods in 2017 consistent with the decrease in revenues, as less revenue was available to cover fixed costs and production overhead costs.
- In the fourth quarter of 2018, net income increased to $46 thousand or $0.01 per basic and diluted share, versus a near break-even in the same year-ago period. During the fourth quarter of 2017, the Company recorded a non-cash and non-recurring charge of $169 thousand related to a remeasurement of the deferred tax assets and liabilities as a result of the enactment of the 2017 Tax Cut and Jobs Act, which was signed into law on December 22, 2017. For the full year, net income was $622 thousand or $0.09 per basic and diluted share compared to net income of $1.3 million or $0.22 per basic and diluted share in the comparable period of 2017.
- The Company generated approximately 1.0 million of EBITDA in 2018, compared with $2.3 million in the comparable period ending December 31, 2017.
- At December 31, 2018, the company had $6.1 million in cash and cash equivalents, and no debt.
“We were pleased to finish 2018 on solid ground despite a challenging market bubble that converged upon us,” stated Steven N. Bronson, CEO of Interlink Electronics, Inc. “Between the unexpected loss of a major customer in 2017, the scheduled expiration of existing long-term contracts, and unprecedented tariffs placed on several of our products that are manufactured in China, the perfect storm depressed revenues and profits throughout the year.”
In February, 2019, subsequent to year-end, the Company finalized intentions to voluntarily delist its common stock from the NASDAQ Capital Market and deregister its common stock under the Securities Exchange Act of 1934 and suspend its public reporting obligations. “The resulting reduction in operating expenses will allow us to invest greater amounts towards research and development and sales, which is a superior use of our limited resources,” Mr. Bronson stated.
On the research and development front, in 2018 Interlink completed the first phase of a state-of-the-art engineering facility in Singapore. In addition, the Company is in the process of creating a new wholly-owned subsidiary, Medtech Sensors Pte Ltd., which will be a Singapore based corporate innovation accelerator and technology venture arm of Interlink Electronics, Inc. Mr. Bronson continued, “We will pursue synergistic collaboration programs on technology and product development as well as scientific / PhD talent development with key strategic partners including funding agencies, venture capital, corporate labs and research organizations.”
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 2018 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. A reconciliation of EBITDA to net income, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.