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Neonode Reports Fourth Quarter and Year Ended December 31, 2016 Financial ResultsSTOCKHOLM, Sweden, March 15, 2017 (GLOBE NEWSWIRE) -- Neonode Inc. (NASDAQ:NEON), the Optical Interactive Sensing Technology Company, today reported financial results for the fourth quarter and year ended December 31, 2016. Highlights:
“In 2016 we focused investments in the development of our technology and highly automated manufacturing processes. We are now able to offer embedded hardware sensors to our customers which allows them to reduce time to market for their products. Selling modules enable us to enter new markets and earn higher profits compared to licensing,” said Thomas Eriksson, Neonode CEO. “We reached a key milestone in December when we started shipping our first consumer electronics product, AirBar.” “AirBar is powered by our sensor modules which we now produce and ship in volume. In 2016, we established a global distribution channel with Ingram Micro and began shipping our 15.6 inch version for PCs. Consumers now can purchase AirBar through major retailers such as Amazon, Best Buy and Walmart. At CES in January 2017, we announced our new AirBar for Apple MacBook Air and new sizes for Windows based PCs. These products are scheduled to ship by the end of March 2017. To expand sales, AirBar will be available soon on Dell.com in the US and later in Europe and India,” continued Mr. Eriksson. “In 2016 licensing revenue increased driven by our automotive and printer customers. Automotive license revenues increased 126% over 2015 and printer license revenues increased 64%. Our customers continue to release new products and we expect license revenues to continue to increase in 2017. We now have licensing, modules and consumer products contributing to our total revenues,” concluded Mr. Eriksson. Financial Results for the Fourth Quarter and Year Ended December 31, 2016 Our revenue for fiscal 2016 was $10.2 million, an 8% decrease compared to $11.1 million in fiscal 2015. In 2016 the majority of our revenue was derived from license fees and we had much lower non-recurring engineering fees (“NRE”) compared to 2015. License fees represented 82% of our total revenue in 2016 compared to 63% in 2015 and increased a total of 18.5% in 2016 compared to 2015 primarily due to a 64% increase in license fees earned from our printer customers and a 126% increase in license fees earned from our automotive customers which was partially offset by a 49% decrease in license fees earned from our e-reader customers. NRE revenue decreased 58% in 2016 as compared to 2015 because we have been able to reduce the number of full custom design projects as we begin offering sensor modules to our customers. In 2016, we continued to earn NRE revenue from a limited number of design projects that are primarily targeted for future inclusion of sensor modules. 79% of our total NRE revenues in 2016 were earned from automotive projects. In Q4 2016, we started manufacturing and selling AirBar, our first branded consumer product using our sensor modules. We recorded $0.1 million of sales revenue and approximately $0.1 million to deferred revenue related to our AirBar shipments in 2016. Deferred revenue represents shipments of AirBar to our distributors that they purchased and held in inventory at year end. Our combined total gross margin is 87% in 2016 compared to 66% in 2015. The increase in gross margin is primarily due to a higher percentage of our total revenue is derived from license fees in 2016 compared to 2015. License fees have a 100% gross margin and to the extent they are a higher percentage of our total revenue our overall gross margin will be higher. In 2016, license fees accounted for 82% of total revenue compared to 63% in 2015. NRE projects accounted for the most of the remaining revenue and had a 25% gross margin in 2016 compared to 7% in 2015. Our cost of revenues for 2015 includes a $1.2 million one-time write-off related to cost to develop our zForce PLUS platform because we now primarily use zForce AIR in our new sensor modules. Operating expenses decreased 7% to $14.0 million for fiscal 2016 compared to $15.0 million for fiscal 2015. Research and development expense (“R&D”) increased 13% in 2016 to $7.1 million compared to $6.3 million in 2015. Included in R&D expense for 2016 are investments of $1.1 million of pre-production manufacturing start-up costs and approximately $0.8 million of non-recurring expenses related to final development of the new NN1003 ASIC. Our sales and marketing expenses for 2016 decreased 24% over 2015. The decrease is primarily related to decrease in salaries related to a reduction in headcount and a reduction in stock option expense. Total general & administrative expenses for 2016 decreased 18% over 2015. These decreases are primarily related to a decrease in salaries related to a reduction in headcount and a reduction in stock option expense. Net loss for fiscal 2016 was $5.3 million, or $0.12 per share, compared to a net loss of $7.8 million, or $0.19 per share, in fiscal 2015. Our revenue for the fourth quarter of fiscal 2016 is $2.9 million, a 3% decrease, compared to $3.0 million for the fourth quarter of 2015. Revenues for the fourth quarter of fiscal 2016 included $2.3 million from license fees, $0.5 million, from NRE fees and $0.1 million from sales of AirBar compared to revenues of $1.7 million from license fees and $1.3 million from NRE fees for the fourth quarter of 2015. Our gross margin was $2.5 million, or 89%, in 2016 compared to $1.2 million, or 39%, in the same quarter of 2015. Our cost of revenues in 2015 included the development write-offs discussed above. Our total operating expenses of $3.0 million for the fourth quarter of 2016 were on plan and were a 20% decrease, compared to $3.7 million for the fourth quarter 2015. Net loss for the fourth quarter of fiscal 2016 was $0.4 million, or $0.01 loss per share, compared to a net loss of $2.6 million, or $0.06 loss per share, for the fourth quarter in 2015. Cash and accounts receivable totaled $5.0 million at December 31, 2016 compared to $4.4 million at December 31, 2015. Common shares on a fully diluted basis including common stock, stock options and warrant outstanding totaled approximately 58.6 million shares on December 31, 2016 compared to approximately 46.5 million shares at December 31, 2015. Shelf Registration Filing Neonode today also is filing a shelf registration statement to replace the existing shelf registration statement filed by Neonode in 2014, which is set to expire in June after a three-year term. Under the replacement shelf registration statement, once declared effective by the Securities and Exchange Commission, Neonode may offer and sell from time to time in the future, in one or more offerings, common stock having a maximum aggregate offering price of $20 million. Conference Call Information Neonode will host a conference call Wednesday March 15, 2017 at 10AM Eastern Daylight Time (EDT)/3PM Central European Time (CET) featuring remarks by, and Q&A with, Thomas Eriksson, 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: #66598269. 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 – 3/15/2017 (13:00PM EDT) to 4/15/2017 (23:59PM EDT). To access the recording, please use one of these Dial-In Numbers (800) 585-8367 or (404) 537-3406, and the Conference ID #66598269. About Neonode 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. Disclaimer A shelf registration statement as described in this press release is being filed with the Securities and Exchange Commission but has not yet become effective. Securities may not be sold nor may offers to buy be accepted prior to the time the shelf registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offering of the securities covered by the shelf registration statement will only be by means of a prospectus and an accompanying prospectus supplement.
For more information, please contact: Investor Relations: David Brunton Email: [email protected] CFO Lars Lindqvist E-mail: [email protected] |
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