Neonode Reports Quarter Ended September 30, 2012 Financial Results
18 design wins during the quarter
SANTA CLARA, Calif.--(BUSINESS WIRE)-- Neonode Inc. (NAS: NEON) , the MultiSensing touch technology company, today reported financial results for its third quarter and nine months ended September 30, 2012.
Third Quarter Highlights:
- 18 design wins during the quarter, bringing the year to date total to 58, of which 49 were for non e-readers
- Signed 2 new licensing agreements during the quarter for a total of 9 in the first nine months of 2012
- Launched the Smartphone I platform
- Launched a User Interface and Industrial Design licensing business that has initial design wins
- Opened a new office in Tokyo, Japan to accommodate growing new market design activity in the region
- Increased Intellectual Property activities to support new user interface licensing business
"I am extremely pleased with our success in penetrating four new high volume market segments. We currently have 13 design wins with some of the largest office equipment OEMs and 12 design wins for automotive infotainment systems, across a majority of the global automotive OEMs. We have 4 design wins in the mobile phone space, and are gaining significant attention in low-cost high-volume feature phone segments. I am also very excited to see that we are becoming the market's premier touch solution provider for toys and gaming devices for kids, where we have 5 design wins, including the MEEP tablet made by Oregon Scientific released to the market in August" stated Neonode CEO Thomas Eriksson.
"Although we have faced some near-term challenges, and the e-reader market has not been as significant as initially expected, we do expect most of our customers to launch other types of exciting products in 2013. We remain optimistic about the coming quarters and expect to achieve profitability and experience significant growth during 2013", concluded Eriksson.
Financial Results for the Third Quarter of 2012
For the third quarter ended September 30, 2012, net revenues increased 30% to $1.7 million, compared to $1.3 million for the same period in 2011 as a result of license fees related to customer product shipments plus an increase in our engineering fees. Cost of revenues for the third quarter of 2012 increased slightly to $337,000, compared to $333,000 for the third quarter of 2011. Product R&D for the third quarter of 2012 increased 277% to $1.5 million, compared to $385,000 in the third quarter of 2011 due to an increase in headcount in our engineering groups. Sales and marketing expenses for the third quarter of 2012 increased 124% to $920,000, compared to $411,000 in the third quarter of 2011 due to an increase in our sales staffing levels and marketing activities. General and administrative (G&A) expenses for the second quarter of 2012 increased 110% to $1.1 million from $518,000 in the third quarter of 2011 due primarily to staffing increases, legal expenses related to patent filings, corporate and SEC compliance and customer contracts. Total operating expense for the third quarter of 2012 includes $607,000 non-cash stock option and warrant expense compared to $42,000 for the same quarter in 2011.
Adjusted EBITDA, as defined, was a loss of $1.5 million for the quarter ended September 30, 2012, compared to a loss of $311,000 for the same period in 2011.
Net loss for the third quarter was $2.1 million, or $0.06 loss per share, compared with net loss of $1.9 million, or $0.07 loss per share, for the comparable quarter last year.
Financial Results for the Nine Months ended September 30, 2012
For the nine months ended September 30, 2012, net revenues increased 128% to $4.8 million, compared to $2.1 million for the same period in 2011 as a result of license fees related to customer product shipments plus an increase in our engineering fees. Cost of revenues for the nine months ended September 30, 2012 increased 49% to $1.1 million, compared to $726,000 for the same period of 2011 due to an increase in engineering development activities related to new customer products. Product R&D for the nine months ended September 30, 2012 increased 247% to $3.6 million, compared to $1.0 million in the same period of 2011 due to an increase in headcount in our engineering groups. Sales and marketing expenses for the nine months ended September 30, 2012 increased 205% to $3.4 million, compared to $1.1 million in the same period of 2011 due to an increase in our sales staffing levels and marketing activities. General and administrative (G&A) expenses for the nine months ended September 30, 2012 increased 64% to $3.8 million from $2.3 million in the same period of 2011 due primarily to salary expense, legal expenses related to patent filings, corporate and SEC compliance and customer contracts. Total operating expense for the nine months ended September 30, 2012 includes $3.0 million of non-cash stock option and warrant expense compared to $517,000 for the same period in 2011.
Adjusted EBITDA, as defined, was a loss of $4.1 million for the nine months ended September 30, 2012, compared to a loss of $2.6 million for the same period in 2011.
Net loss for the nine months ended September 30, 2012 was $7.2 million, or $0.22 loss per share, compared with net loss of $14.4 million, or $0.55 loss per share, for the comparable nine month period last year.
Note Regarding the Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including EBITDA and adjusted EBITDA, may be considered non-GAAP financial measures. Neonode believes this information is useful to investors because it provides a basis for measuring Neonode's available capital resources, the operating performance of Neonode's business and Neonode's cash flow, excluding interest expense, provision for income taxes, depreciation and amortization, stock-based compensation and other expense, net that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP"). Neonode's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating Neonode's operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by Neonode may not be comparable to similarly titled amounts reported by other companies.
Conference Call Information
The Company will host a conference call on Wednesday, November 14th at 10:00 a.m. Eastern Time featuring remarks by Thomas Eriksson, CEO of Neonode, and David Brunton, CFO of Neonode. Please use the following link to register for the call: https://us.reg.meeting-stream.com/neonode_111412/.
The dial-in number for the conference call is (877) 539-0733 (U.S. domestic) or (678) 607-2005 (international). All dial-in participants must use the following code to access the call: 41263502. Please call at least five minutes before the scheduled start time.
For interested individuals unable to join the live event, a link will be available on http://www.neonode.com/investor-relations for 30 days following the call. To access the replay of the call, use the following code: 41263502. Also, a replay of the call will be available through December 14, 2012 at (855) 859-2056 (U.S. domestic) or (404) 537-3406 (international).
Neonode Inc. (NAS: NEON) develops and licenses the next generation of MultiSensing™ touch technologies, enabling companies to differentiate themselves by making high performing touch solutions at a competitive cost. Neonode is at the forefront of providing unparalleled user experiences that offer significant advantages for OEM's. This includes state-of-the-art technology features such as low latency pen or brush sensing, remarkably high speed scanning, proximity-, pressure-, and depth sensing capabilities and object-size measuring.
Neonode's patented MultiSensing™ technology is developed for a wide range of devices like mobile phones, tablets and e-readers, toys and gaming consoles, printers and office equipment, automotive or inflight infotainment systems. NEONODE, the NEONODE Logo and zFORCE are trademarks of Neonode Inc. registered in the United States and other countries. MULTISENSING is a trademark of Neonode Inc. For more information please visit www.neonode.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to expectations, future performance or future events, and product cost, performance, and functionality matters. These statements are based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown risks, uncertainties and other factors that may cause Neonode's actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements.
These risks, uncertainties, and factors are discussed under "Risk Factors" and elsewhere in Neonode's public filings with the U.S. Securities and Exchange Commission from time to time, including Neonode's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no assurance that its expectations will be fulfilled. Forward-looking statements are made as of today's date, and Neonode undertakes no duty to update or revise them.
© 2012 Neonode Inc. All rights reserved. Neonode is a registered trademark of Neonode Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
|Prepaid expenses and other current assets||382||234|
|Total current assets||13,154||16,519|
|Property and equipment, net||340||108|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Total current liabilities||3,829||2,954|
|Commitments and contingencies|
|Series A Preferred stock, 444,541 shares authorized with par value $0.001 per|
|share; 83 shares issued and outstanding at September 30, 2012 and|
|December 31, 2011. (In the event of dissolution,|
|each share of Series A Preferred stock has a liquidation preference equal to|
|par value of $0.001 over the shares of common stock)||-||-|
|Series B Preferred stock, 54,425 shares authorized with par|
|value $0.001 per share; 95 and 114 shares issued and outstanding|
|at September 30, 2012 and December 31, 2011, respectively. (In the event of|
|dissolution, each share of Series B Preferred stock has a liquidation|
|preference equal to par value of $0.001 over the shares of common stock)||-||-|
|Common stock, 70,000,000 shares authorized with par value $0.001 per share;|
|33,125,319 and 32,778,993 shares issued and outstanding at|
|September 30, 2012 and December 31, 2011, respectively||33||33|
|Additional paid-in capital||146,067||142,955|
|Accumulated other comprehensive income||52||13|
|Total stockholders' equity||9,665||13,673|
|Total liabilities and stockholders' equity||$||13,494||$||16,627|