HIDDN: Financial results for the first quarter of 2019
(Oslo, 15 May 2019) Hiddn Solutions ASA (Hiddn, OSE: HIDDN) reported total revenues of NOK 3.7 million in the first quarter 2019, down from NOK 5.5 million in the corresponding quarter of 2018. The operating revenue in the first quarter of 2019 is primarily due to longer than expected lead times on critical components, including delays due to Chinese New Year and consequently deferred production start-up of new product line. Loss before tax was NOK 8.9 million compared to a loss before tax of NOK 11.5 million in first quarter of 2018. The company has now met the criteria for capitalization of development cost and capitalized development cost of NOK 3.6 million in first quarter of 2019. The negative cash flow used in operating activities was NOK 5.7 million, compared to a negative cash flow of NOK 12.9 million in the corresponding quarter of 2018. The Board of Directors has initiated a cost reduction program with a potential of reducing costs of NOK 7 million, for the rest of 2019
On 25 March 2019 Hiddn entered into a Letter of Intent for a potential business combination with Energos Group AS to add new business lines, providing technology and solutions to the global renewable energy production industry. The parties continue the process aiming at entering into a Share Purchase Agreement (SPA) for a business combination. Hiddn expects the SPA process to be concluded shortly.
“To fulfill new distribution channels Hiddn continued under first quarter to finalizing new and upgraded products. Putting these products into production, Hiddn, however experienced delays and a negative impact on possible shipments and sales. The need to continue strong cost control will continue, but we have also seen the need for cost reduction. This will be implemented without delay. The initiated cost reduction program for 2019 are aiming at reducing costs of up to NOK 7 million, for the rest of 2019. As soon as production and sales normalize, the company will reconsider company resources and cost level going forward. " says Carl Espen Wollebekk, CEO of Hiddn.
Hiddn reported revenues of NOK 3.7 million in the first quarter of 2019, down from NOK 5.5 million in the corresponding quarter in 2018. The operating revenues for Hiddn’s encryption products were NOK 0.9 million, compared to NOK 1.4 million in the corresponding quarter in 2018, following long lead times on critical components, including delays due to Chinese New Year and consequently a deferred production start-up. Loss before tax was NOK 8.9 million compared to a loss before tax of NOK 11.5 million in first quarter of 2018. The main reason for the improved operating result being that the company has now meet the criteria for capitalization of development cost, were development cost in first quarter of 2019 has been capitalized with NOK 3.6 million.
The gross margin ended at 39% for the period (41%), while the cash flow from operating activities improved to NOK -5.7 million (NOK -12.9 million). Hiddn raised NOK 20 million in a rights issue in the first quarter 2019, completed in April, to fund the current operations. Due to the low sales figures, Hiddn will initiate a cost reduction program to mitigate the effects from the production delay.
Hiddn plans to host an open investor presentation, to present the updated strategy after entering into a SPA and the subsequent issuing of an Information Memorandum discribing the business combination with Energos.
The first quarter 2019 financial report is enclosed.
ENDS
For further information, please contact:
Carl Espen Wollebekk, CEO, telephone: + 47 930 55 505 /e-mail: cew@hiddn.no
About Hiddn Solutions ASA
Hiddn Solutions ASA is listed on the Oslo Stock Exchange under the ticker HIDDN. The company is offering impenetrable proprietary hardware-based authentication and encryption products with a superior level of security as well as a wider product suite addressing all market segments looking for solutions to ensure that sensitive information stays confidential and unavailable to unauthorised access. Based on Hiddn's unrivalled and proven position in the high-end encryption market, Hiddn is implementing a strategy of adapting the proprietary technology to the high-volume markets to take advantage of the growing global security challenges and the arising regulatory requirements. Hiddn has established a product offering that addresses all market segments from the high-end security clients to the retail market, and established partnerships with some of the most important sales and distribution partners in Europe. Hiddn sees significant growth opportunities and rising demand from customers and is well on its way to solidify its leading position in the growing market for secure data storage.
For more information, please visit: www.hiddn.no
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