UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 8, 2018
INTERLINK ELECTRONICS, INC.
(Exact Name of Registrant as Specified in Charter)
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Nevada |
001-37659 |
77-0056625 |
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(State or Other Jurisdiction |
(Commission |
(IRS Employer |
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of Incorporation) |
File Number) |
Identification No.) |
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31248 Oak Crest Drive, Suite 110 |
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Westlake Village, California |
91361 |
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(Address of Principal Executive Offices) |
(Zip Code) |
(805) 484-8855
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2018, Interlink Electronics, Inc. announced its financial results for the three and nine months ended September 30, 2018. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed as part of this Current Report on Form 8-K:
Exhibit
NumberDescription
99.1Press Release issued by Interlink Electronics, Inc. dated November 8, 2018.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: November 8, 2018 |
INTERLINK ELECTRONICS, INC. |
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By: |
/s/ Steven N. Bronson |
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Steven N. Bronson |
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Chief Executive Officer |
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Exhibit 99.1
Interlink Electronics Reports Third Quarter 2018 Results
November 8, 2018 6:00 AM PST
WESTLAKE VILLAGE, CA – (Business Wire) – Interlink Electronics, Inc. (NASDAQ: 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 three and nine months ended September 30, 2018. GAAP net income for the quarter was $99 thousand or $0.02 per share, reflecting a sharp decrease from the prior year’s results.
Consolidated Financial Highlights
(Amounts in thousands except per share data and percentages)
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Three months ended September 30, |
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Nine months ended September 30, |
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Consolidated Financial Results |
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2018 |
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2017 |
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$ ∆ |
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% ∆ |
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2018 |
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2017 |
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$ ∆ |
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% ∆ |
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Net revenue |
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$ |
1,920 |
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$ |
2,649 |
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$ |
(729) |
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(27.5) |
% |
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$ |
7,176 |
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$ |
8,797 |
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$ |
(1,621) |
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(18.4) |
% |
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Gross profit |
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$ |
1,048 |
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$ |
1,657 |
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$ |
(609) |
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(36.8) |
% |
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$ |
4,007 |
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$ |
5,454 |
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$ |
(1,447) |
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(26.5) |
% |
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Gross margin |
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54.6 |
% |
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62.6 |
% |
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55.8 |
% |
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62.0 |
% |
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Income from Operations |
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$ |
103 |
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$ |
532 |
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$ |
(429) |
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(80.6) |
% |
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$ |
752 |
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$ |
1,902 |
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$ |
(1,150) |
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(60.5) |
% |
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Net income |
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$ |
99 |
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$ |
352 |
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$ |
(253) |
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(71.9) |
% |
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$ |
576 |
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$ |
1,265 |
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$ |
(689) |
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(54.5) |
% |
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Earnings per share (basic and diluted) |
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$ |
0.02 |
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$ |
0.05 |
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$ |
(0.02) |
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$ |
0.08 |
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$ |
0.17 |
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$ |
(0.09) |
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EBITDA¹ |
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$ |
176 |
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$ |
579 |
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$ |
(403) |
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(69.6) |
% |
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EBITDA margin2 |
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9.2 |
% |
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21.9 |
% |
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TTM EBITDA¹ |
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$ |
1,195 |
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$ |
2,468 |
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$ |
(1,273) |
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(51.6) |
% |
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1 |
See attached schedules for reconciliation to GAAP numbers. |
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2 |
EBITDA margin is EBITDA divided by net revenue. |
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· |
Revenue in the third quarter of 2018 decreased approximately 28% to $1.9 million from $2.7 million in the same year-ago period, primarily due to the loss of a major customer who implemented a design change to their automotive product. However, revenue increased or remained steady in all other markets. |
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Gross margin decreased to 54.6% in the third quarter of 2018 from 62.6% in the same year-ago period. This decrease is consistent with the decrease in revenues, as there is less revenue to cover fixed costs and production overhead costs. |
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In the third quarter of 2018, net income was $99 thousand or $0.02 per basic and diluted share, compared to net income of $352 thousand or $0.05 per basic and diluted share in the same year-ago period. |
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The Company generated $176 thousand of EBITDA for the third quarter of 2018, compared with $579 thousand in the same period in 2017. For the trailing twelve-month period ending September 30, 2018, EBITDA was $1.2 million, down from $2.5 million in the comparable period ending September 30, 2017. |
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At September 30, 2018, the company had $6.4 million in cash and cash equivalents, and no debt. |
“The weaker financial results from the third quarter are disappointing, but not unexpected,” stated Steven N. Bronson, CEO of Interlink Electronics, Inc. “However, continuing to invest in R&D and product expansion is the right move and will lead us in a positive direction. This also includes taking advantage of this contraction to revamp our global sales organization to reflect broadened technology offerings and geographies.”
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 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 made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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. These and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. 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.
Contact:
Interlink Electronics, Inc.
Steven N. Bronson, CEO
805-623-4184
APPENDIX
Consolidated Financial Information and Reconciliations: Third Quarter and Nine Months of 2018
INTERLINK ELECTRONICS, INC.
Condensed Consolidated Balance Sheets
(unaudited)
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September 30, |
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December 31, |
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2018 |
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2017 |
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(in thousands, except par value) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
6,436 |
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$ |
7,772 |
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Restricted Cash |
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5 |
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5 |
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Accounts receivable, net |
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835 |
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1,374 |
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Inventories |
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924 |
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1,195 |
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Prepaid expenses and other current assets |
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204 |
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338 |
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Total current assets |
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8,404 |
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10,684 |
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Property, plant and equipment, net |
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606 |
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525 |
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Intangibles, net |
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122 |
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69 |
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Deferred income taxes |
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370 |
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493 |
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Other assets |
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59 |
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59 |
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Total assets |
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$ |
9,561 |
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$ |
11,830 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
260 |
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$ |
255 |
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Accrued liabilities |
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331 |
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345 |
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Accrued income taxes |
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60 |
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103 |
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Total current liabilities |
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651 |
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703 |
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Total liabilities |
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651 |
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703 |
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Commitments and contingencies |
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— |
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— |
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Stockholders' equity |
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Preferred stock, $0.01 par value: 1,000 shares authorized, no shares issued or outstanding |
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— |
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— |
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Common stock, $0.001 par value: 30,000 shares authorized, 6,483 and 7,336 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively |
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7 |
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7 |
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Additional paid-in-capital |
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57,845 |
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60,527 |
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Accumulated other comprehensive income |
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(70) |
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41 |
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Accumulated deficit |
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(48,872) |
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(49,448) |
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Total stockholders' equity |
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8,910 |
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11,127 |
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Total liabilities and stockholders' equity |
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$ |
9,561 |
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$ |
11,830 |
INTERLINK ELECTRONICS, INC.
Condensed Consolidated Statements of Income and Comprehensive Income
(unaudited)
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Three months ended September 30, |
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Nine months ended September 30, |
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2018 |
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2017 |
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2018 |
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2017 |
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(in thousands, except per share data) |
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(in thousands, except per share data) |
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Revenue, net |
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$ |
1,920 |
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$ |
2,649 |
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$ |
7,176 |
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$ |
8,797 |
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Cost of revenue |
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872 |
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992 |
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3,169 |
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3,343 |
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Gross profit |
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1,048 |
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1,657 |
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4,007 |
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5,454 |
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Operating expenses: |
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Engineering, research and development |
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222 |
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230 |
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683 |
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565 |
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Selling, general and administrative |
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723 |
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895 |
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2,572 |
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2,987 |
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Total operating expenses |
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945 |
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1,125 |
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3,255 |
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3,552 |
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Income from operations |
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103 |
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532 |
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752 |
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1,902 |
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Other income (expense): |
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Other income (expense), net |
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50 |
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(4) |
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66 |
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13 |
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Income from continuing operations before income tax expense |
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153 |
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528 |
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818 |
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1,915 |
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Income tax expense |
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54 |
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176 |
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242 |
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650 |
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Net income |
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$ |
99 |
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$ |
352 |
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$ |
576 |
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$ |
1,265 |
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Earnings per share: basic and diluted |
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$ |
0.02 |
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$ |
0.05 |
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$ |
0.08 |
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$ |
0.17 |
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Weighted average common shares outstanding - basic |
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6,482 |
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7,336 |
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7,039 |
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7,332 |
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Weighted average common shares outstanding - diluted |
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6,579 |
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7,425 |
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7,129 |
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7,418 |
INTERLINK ELECTRONICS, INC.
Reconciliation of Consolidated Net Income to Consolidated EBITDA
(unaudited)
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Three months ended September 30, |
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Twelve months ended September 30, |
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2018 |
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2017 |
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2018 |
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2017 |
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(in thousands) |
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(in thousands) |
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Net income |
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$ |
99 |
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$ |
352 |
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$ |
571 |
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$ |
2,189 |
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Adjustments to arrive at earnings before interest, income taxes, depreciation and amortization (EBITDA): |
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Interest expense (income), net |
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— |
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(2) |
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(1) |
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(2) |
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Income tax expense |
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54 |
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176 |
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466 |
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109 |
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Depreciation and amortization expense |
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23 |
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|
53 |
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|
159 |
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|
172 |
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EBITDA |
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$ |
176 |
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$ |
579 |
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$ |
1,195 |
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$ |
2,468 |