Neonode Reports Fourth Quarter and Year Ended December 31, 2018 Financial Results
STOCKHOLM, SWEDEN – March 7, 2019 – Neonode Inc. (NASDAQ: NEON), the Optical Interactive Sensing Technology Company, today reported financial results for the fourth quarter and year ended December 31, 2018.
- Revenue was $8.5 million, a decrease of 17% compared to prior year
- Operating expenses reduced 14% to $11.5 million compared to $13.4 million for prior year
- Net loss of $3.1 million, or $0.52 per share compared to $4.7 million, or $0.89 per share for prior year
- Cash used by operations of $2.9 million compared to $5.6 million in prior year
- Delivered latest upgrade version for touch on display technology
- Engaged in customer development projects for:
- Touch Interaction
- New printers
- New e-Readers
- Medical device display for X-Ray imaging system
- Aeronautical instrumentation displays
- Automotive display for next gen taxi meter system
- Mid Air Interaction and Object Sensing
- Automotive tailgate and door collision systems
- Touch Interaction
“During 2018, the company has reshaped its operations from primarily a technology development focus to one of providing customers with the best touch and gesture interaction technology in the market. This transition was important to increase customer momentum and put us on a path of revenue growth. During the year we developed a new business plan, developed relevant best use cases where our technology has a clear advantage, changed our sales and marketing focus and strengthened our cash position to provide the liquidity to support the new vision,” said Hakan Persson, CEO of Neonode.
“I am happy to report that we are making good progress. We recently released the next version of our touch on display license solution providing customers cost effective implementation and enhanced performance and the response has been positive. We have entered into design discussion for new printers, tablets, e-Reader and medical and aeronautical display systems along with a number of new automotive infotainment systems. In addition, we have started design activities using our mid-air interaction and object sensing solutions for automotive entry systems. In the embedded business it takes time to get from design to an OEM product release but we are on the right track,” concluded Mr. Persson.
Financial Results for the Fourth Quarter and Year Ended December 31, 2018
Net revenue for fiscal 2018 was $8.5 million, a 17% decrease, compared to 2017. License fee revenues decreased by 8% year over year, primarily due a 30% decrease from our e-Reader and a 24% decrease from our automotive customer, which was partially offset by a 3% increase in our printer revenues. Non-recurring engineering (“NRE”) fees decreased 52% year over year, due to a more focused acceptance criterion for custom design projects. License and NRE fees represented 93% and 4% of total revenue in 2018 compared to 85% and 7% in 2017, respectively.
In the fourth quarter of 2018, total net revenues were $2.4 million, a 23% increase compared to the third quarter of 2018 and a 28% decrease compared to the same period in 2017, respectively. License and NRE fees represented approximately 96% and 2% of total revenue in the fourth quarter of 2018 compared to 83% and 15% in the third quarter of 2018 and a 77% and 17% in the same quarter of 2017, respectively.
Our combined total gross margin was 89% in 2018 compared to 77% in 2017. The increase in 2018 is primarily due to AirBar inventory reserves recorded in cost of goods in 2017. Throughout 2018, we continued to reduce our cost structure which is reflected in a 14% decrease in operating expenses to $11.5 million for fiscal 2018 compared to $13.4 million for fiscal 2017.
Net loss for fiscal 2018 was $3.1 million, or $0.52 per share, compared to a net loss of $4.7 million, or $0.89 per share, in fiscal 2017.
In fiscal 2018, our operations used $2.9 million of cash, a 49% decrease from fiscal 2017. Our fourth quarter 2018 operations used $0.6 million of cash compared to $0.8 million for the third quarter 2018 and $0.9 million for the fourth quarter of 2017.
Cash and accounts receivable totaled $8.4 million and working capital was $8.2 million at December 31, 2018 compared to $6.8 million and $6.2 million at December 31, 2017, respectively.
Conference Call Information
The Company will host a conference call Thursday March 7, 2019 at 10AM Eastern Standard Time (EST)/4PM Central European Time (CET) featuring remarks by, and Q&A with, Hakan Persson, CEO, Lars Lindqvist, CFO and David Brunton, Head of Investor Relations.
The dial-in number for the conference call is toll-free: (877) 539-0733 (U.S. domestic) or +1 (678) 607-2005 (international). To access the call all participants must use the following Conference ID: #3089216. Please make sure to call at least five minutes before the scheduled start time.
To register for the call, and listen online, please click:
For interested individuals unable to join the live event, a digital recording for replay will be available for 30 days after the call's completion – 3/7/2019 (13:00PM EST) to 4/7/2019 (23:59PM EST). To access the recording, please use one of these Dial-In Numbers (800) 585-8367 or (404) 537-3406, and the Conference ID #3089216.
For more information, please contact:
Neonode Inc. (NASDAQ:NEON) develops, manufactures and sells advanced sensor modules based on the company's proprietary zForce AIR technology. Neonode zForce AIR Sensor Modules enable touch interaction, mid-air interaction and object sensing and are ideal for integration in a wide range of applications within the automotive, consumer electronics, medical, robotics and other markets. The company also develops and licenses user interfaces and optical interactive touch solutions based on its zForce CORE technology. To date, Neonode’s technology has been deployed in approximately 67 million products, including 4 million cars and 63 million consumer devices.
NEONODE, the NEONODE logo, ZFORCE and ZFORCE AIR are trademarks of Neonode Inc. registered in the United States and other countries.
For further 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.