[March 30, 2017] |
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Resonant Inc. Reports 2016 Financial Results and Provides Business Update
Resonant Inc. (NASDAQ: RESN), a designer of filters for radio frequency,
or RF, front-ends that specializes in delivering designs for difficult
bands and complex requirements, today announced financial results for
the year ended December 31, 2016 and provided a business update.
Management Commentary
"2016 proved to be a pivotal year for Resonant, as we transitioned from
a development stage company to one focused on customer engagement and
execution," said George B. Holmes, CEO of Resonant. "Throughout the past
year, our intent has been to focus on engaging with the right players
for specific designs that would show the greatest potential for revenue
in the shortest amount of time. And while we started 2016 with zero
active customers, MOUs or licensing agreements, we finished the year
strongly with six customers and over 25 sockets under development, a
majority of which are under formal licensing agreements that include
upfront, non-refundable payments and negotiated royalty rates.
"It's also worth noting that many of these new designs are in fact
extensions of contracts with existing customers who know our company and
technology intimately. Because of this, we believe it provides
validation that our customers are pleased with the work we are doing,
understand that our ISN + IP platform solutions can scale across several
products in their portfolio, and see the potential for long term
commercial success.
"In February 2017, we achieved our largest milestone to-date - our first
licensee reached the million unit shipment milestone of pre-production
filters to four separate OEMs, which largely de-risked our technology.
Delivering commercialized filters that utilize our proprietary design
automation platform, ISN®, positions Resonant to potentially see an
early ramp of royalty revenues in the second half of 2017.
"Looking ahead, we are confident our technology, tools and talent make
Resonant competitive and favorably positioned in the market, and expect
to see both additional follow on deals with existing customers and new
customer engagements. With a growing number of designs under development
and expanding customer pipeline, we are gaining momentum in our effort
to commercialize our innovative filter design capability, which we
expect to provide a roadmap to recurring royalty revenues well into the
future."
Customer Updates
To start 2017, one of Resonant's licensee customers, in February,
reached a very prominent early milestone - the shipment of over one
million pre-production parts to four separate handset Original Equipment
Manufacturers (OEMs). These are the first shipments by the customer
under the initial licensing agreement the parties executed in May 2016,
which covers three bands. Shipping these pre-production parts represents
one of the last steps before commercial acceptance of its designs as
Resonant transitions from a development-stage company into a
product-focused licensor with recurring royalty revenue.
In addition, Resonant successfully completed a private placement of $7.5
million with Longboard Capital in February, which we believe given our
current resources will provide sufficient funding for planned operations
into 2018. "Throughout 2016 and into 2017, Resonant has demonstrated
that it can execute against its strategic plan and retire risk," said
Brett Conrad, Managing Partner of Longboard Capital. "We look forward to
their continued execution as they transition their customers from
development partners into royalty revenue generators in the second half
of the year."
Finally, in March 2017, Resonant expanded a licensing agreement with an
existing tier one customer for three new designs using chip scale
packaging targeting difficult bands. The new license agreement
encompasses the development and licensing of a TDD filter, a FDD filter
and a quadplexer, all for the Chinese market.
Fourth Quarter and Full Year 2016 Financial Results
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Revenue for 2016 was $302,000 compared to none in 2015. The increase
was due to the revenue recognized in connection with the Company's
filter design development agreements. Resonant began the year with two
development agreements (MOUs) and ended the year with contracts for
greater than 25 filter designs.
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Research and development expenses for 2016 totaled approximately $6.4
million compared with $4.3 million for 2015, due to higher costs
associated with an increase in headcount and the associated activity
on various filter designs.
-
General and administrative expense for 2016 totaled approximately $8.5
million, compared with $4.9 million in 2015. The increase was
primarily due to increased payroll and travel costs associated with
the expansion of the Company's sales and marketing team and increased
business development efforts. Resonant also incurred $598,000 of legal
expenses, $295,000 of senior executive transition costs and $92,000 of
business acquisition costs.
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Operating loss in 2016 totaled $15.3 million, compared with $9.7
million in 2015. This increase was primarily due to higher G&A
expenses and R&D costs associated with the growth of our business.
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The net loss for 2016 was $15.2 million, compared with $9.7 million
for 2015. Diluted net loss per share in 2016 was $1.57, and was based
on 9.7 million shares outstanding. Diluted net loss per share in 2015
was $1.36, and was based on 7.2 million shares outstanding.
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On a non-GAAP basis, adjusted EBITDA for 2016, which excludes non-cash
charges for stock-based compensation and depreciation and
amortization, was $(11.9) million, or $(1.23) per fully diluted share.
This compared with non-GAAP adjusted EBITDA for 2015 of $(7.6)
million, or $(1.06) per fully diluted share.
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Cash and investments at December 31, 2016 totaled $9.8 million,
compared with $5.5 million at December 31, 2015. Subsequent to year
end, the company raised an additional $7.5 million in gross proceeds
from the sale of equity securities. Management believes it has
sufficient cash to support planned operations into 2018.
Conference Call
Management will host an investor conference call today at 1:30 p.m. PT
(4:30 p.m. ET) to discuss Resonant's fourth quarter and full year 2016
financial results, provide a corporate update, and conclude with a Q&A
from participants. To participate, please use the following information:
Date: Thursday, March 30, 2017 Time: 1:30 p.m. Pacific time U.S.
Dial-in: 1-877-407-3982 International Dial-in: 1-201-493-6780 Conference
ID: 13656211 Webcast: http://public.viavid.com/index.php?id=123096
Please dial in at least 10 minutes before the start of the call to
ensure timely participation.
A playback of the call will be available through April 30, 2017. To
listen, call 1-844-512-2921 within the United States or 1-412-317-6671
when calling internationally. Please use the replay pin number 13656211.
A webcast will also be available for 30 days on the IR section of the
Resonant website or by clicking here: RESN
FY16 Webcast.
Note about Non-GAAP Financial Measures
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 adjusted EBITDA, which is a non-GAAP
measure. Adjusted EBITDA is determined by taking net loss and adding
interest, taxes, depreciation, amortization, and stock-based
compensation. The company believes that this non-GAAP measure, viewed in
addition to and not in lieu of net loss, provides useful information to
investors by providing a more focused measure of operating results. This
metric is an integral part of the Company's internal reporting to
evaluate its operations and the performance of senior management. A
reconciliation of adjusted EBITDA to net loss, the most comparable GAAP
measure, is available in the accompanying financial tables below. The
non-GAAP measure presented herein may not be comparable to similarly
titled measures presented by other companies.
About Resonant Inc.
Resonant is creating software tools and IP & licensable blocks that
enable the development of innovative filter designs for the RF
front-end, or RFFE, for the mobile device industry. The RFFE is the
circuitry in a mobile device responsible for the radio frequency signal
processing and is located between the device's antenna and its digital
baseband. Filters are a critical component of the RFFE that selects the
desired radio frequency signals and rejects unwanted signals and noise.
For more information, please visit www.resonant.com.
About Resonant's ISN® Technology
Resonant can create designs for hard bands and complex requirements that
we believe have the potential to be manufactured for half the cost and
developed in half the time of traditional approaches. The Company's
large suite of proprietary mathematical methods, software design tools
and network synthesis techniques enable it to explore a much bigger set
of possible solutions and quickly derive the better ones. These improved
filters still use existing manufacturing methods (i.e. SAW) and can
perform as well as those using higher cost methods (i.e. BAW). While
most of the industry designs surface acoustic wave filters using a
coupling-of-modes model, Resonant uses circuit models and physical
models. Circuit models are computationally much faster, and physical
models are highly accurate models based entirely on fundamental material
properties and dimensions. Resonant's method delivers excellent
predictability, enabling achievement of the desired product performance
in roughly half as many turns through the fab. In addition, because
Resonant's models are fundamental, integration with its foundry and fab
customers is eased because its models speak the "fab language" of basic
material properties and dimensions.
Safe Harbor / Forward-Looking Statements
This press release contains forward-looking statements, which include
the following subjects, among others: the status of filter designs under
development, the capabilities of our filter designs, the timing and
amount of future royalty streams, the sufficiency of our cash for
planned operations, and the potential future licensing of our designs to
existing and new customers. Forward-looking statements are made as of
the date of this document and are inherently subject to risks and
uncertainties which could cause actual results to differ materially from
those in the forward-looking statements, including, without limitation,
the following: our limited operating history; our ability to complete
designs that meet customer specifications; the ability of our customers
(or their manufacturers) to fabricate our designs in commercial
quantities; changes in our expenditures and other uses of cash; the
ability of our designs to significantly lower costs compared to other
designs and solutions; the risk that the intense competition and rapid
technological change in our industry renders our designs less useful or
obsolete; our ability to find, recruit and retain the highly skilled
personnel required for our design process in sufficient numbers to
support our growth; our ability to manage growth; and general market,
economic and business conditions. Additional factors that could cause
actual results to differ materially from those anticipated by our
forward-looking statements are under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" in our most recent Annual Report (Form 10-K) or Quarterly
Report (Form 10-Q) filed with the Securities and Exchange Commission.
Forward-looking statements are made as of the date of this release, and
we expressly disclaim any obligation or undertaking to update
forward-looking statements.
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Resonant Inc.
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Condensed Consolidated Statements of Operations
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Year Ended December 31, 2016
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Year Ended December 31, 2015
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REVENUE
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$
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302,000
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$
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-
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OPERATING EXPENSES
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R&D expenses
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6,443,000
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4,308,000
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G&A expenses
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8,455,000
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4,942,000
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Depreciation and amortization
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694,000
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491,000
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TOTAL OPERATING EXPENSES
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15,592,000
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9,741,000
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OPERATING LOSS
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(15,290,000
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)
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(9,741,000
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)
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OTHER INCOME (EXPENSE)
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Interest and investment income
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22,000
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27,000
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Other income
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(1,000
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)
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-
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TOTAL OTHER INCOME (EXPENSE)
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21,000
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27,000
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LOSS BEFORE INCOME TAXES
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(15,269,000
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)
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(9,714,000
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)
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Provision for (benefit from) income taxes
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(22,000
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)
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1,000
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NET (News - Alert) LOSS
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$
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(15,247,000
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)
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$
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(9,715,000
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)
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Foreign currency translation adjustment, net of tax
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$
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(51,000
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)
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$
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-
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COMPREHENSIVE LOSS
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$
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(15,298,000
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)
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$
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(9,715,000
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)
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NET LOSS PER SHARE - BASIC AND DILUTED
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$
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(1.57
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$
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(1.36
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)
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Weighted average shares outstanding - basic and diluted
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9,691,115
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7,160,567
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Resonant Inc.
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Condensed Consolidated Balance Sheets
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December 31, 2016
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December 31, 2015
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ASSETS
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Cash and cash equivalents
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5,084,000
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2,501,000
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Investments held-to-maturity
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4,747,000
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3,006,000
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Other current assets
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216,000
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138,000
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TOTAL CURRENT ASSETS
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10,047,000
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5,645,000
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PROPERTY AND EQUIPMENT, NET
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994,000
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992,000
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TOTAL NONCURRENT ASSETS
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2,158,000
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930,000
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TOTAL ASSETS
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13,199,000
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7,567,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Accounts payable and accrued expenses
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2,705,000
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1,045,000
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Other current liabilities
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299,000
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34,000
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TOTAL CURRENT LIABILITIES
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3,004,000
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1,079,000
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TOTAL LONG-TERM LIABILITIES
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62,000
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20,000
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STOCKHOLDERS' EQUITY
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Common stock
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12,000
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7,000
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Additional paid-in capital
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56,331,000
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37,373,000
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Accumulated other comprehensive loss
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(51,000
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)
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-
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Accumulated deficit
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(46,159,000
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)
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(30,912,000
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)
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TOTAL STOCKHOLDERS' EQUITY
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10,133,000
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6,468,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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13,199,000
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7,567,000
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Resonant Inc.
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Reconciliation of Non-GAAP Information
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(Unaudited)
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Year Ended December 31, 2016
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Year Ended December 31, 2015
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Net loss (GAAP)
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$
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(15,247,000
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)
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$
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(9,715,000
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)
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Add the following items:
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Other income
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21,000
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27,000
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Stock Compensation
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2,659,000
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1,611,000
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Provision for (benefit from) income taxes
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(22,000
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)
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1,000
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Depreciation and amortization
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694,000
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491,000
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Adjusted EBITDA (non-GAAP)
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$
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(11,895,000
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)
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$
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(7,585,000
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)
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NET EBITDA PER SHARE - BASIC AND DILUTED (non-GAAP)
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$
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(1.23
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)
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$
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(1.06
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)
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Weighted average shares outstanding - basic and diluted
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9,691,115
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7,160,567
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170330006151/en/
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