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Vuzix Provides Business Update and Reports its Third Quarter 2017 Financial ResultsTotal third quarter revenue increased by 141% over the prior year ROCHESTER, N.Y., Nov. 9, 2017 /CNW/ -- Vuzix® Corporation (NASDAQ: VUZI), a leading supplier of Smart Glasses, Augmented Reality (AR) technologies and products for the consumer and enterprise markets, today reported its third quarter financial results for the period ended September 30, 2017. Third Quarter 2017 and recent highlights included:
Management Commentary "We saw direct product gross margin improvements from our flagship enterprise device, the M300 in the third quarter compared to the second quarter of 2017. And while our third quarter smart glasses sales were impacted by limited supply of inventory due to some manufacturing challenges related to the M300, the Company achieved record quarterly smart glasses product revenue despite these headwinds," said Paul Travers, President and CEO of Vuzix. "The manufacturing challenges have been addressed by our offshore contract manufacturer and their production line is now producing M300s in high volume. During the third quarter, we continued to leverage our industry leading optics and wearable display technology and added a third Tier-1 consumer electronic customer. This new Tier-1 customer is working with us to develop a consumer product using Vuzix waveguides and projector engines that is unrelated to smart glasses. The following table compares the Company's summarized Statement of Operations data for the quarter ended September 30, 2017:
Third Quarter 2017 Financial Results For the three months ended September 30, 2017 total revenues were $1,405,100, an increase of 141% compared to $582,549 for the three months ended September 30, 2016. The increase of revenue for the 2017 quarter was primarily the result of M300 Smart Glasses sales and engineering services for a specialized version of our smart glasses for Toshiba. There was an overall total gross loss of $92,001 for the three months ended September 30, 2017 as compared to a gross loss of $236,567 for the three months ended September 30, 2016. Product gross profit for the 2017 was $48,532 versus a loss of $236,567 for the 2016 quarterly period, reflecting improved M300 margins and higher total overall revenues on which to absorb the generally fixed manufacturing overhead costs. The 2017 quarter's overall negative gross margin was driven by the expected increase in completion costs related to the Toshiba development program, a fixed price contract, which resulted in the recognition of $140,533 loss on the revenues reported this quarter. Research and Development (R&D) expense was $1,506,307 for the three months ended September 30, 2017 compared to $2,177,957 for the three months ended September 30, 2016. The decrease of R&D expense for the quarter ended September 30, 2017 compared to the same period in 2016 was primarily driven by a $716,408 reduction in R&D development costs and related consultant fees as compared to the 2016 period, when the M300 Smart Glasses were still in development internally and with our outside contractors actively assisting in that development work; and the reclass of $152,231 of internal wages related to the Toshiba engineering program during third quarter when gross R&D compensation costs rose $167,922. Selling and Marketing expense was $908,797 for the three months ended September 30, 2017 compared to $839,497 for the three months ended September 30, 2016. The increase of selling and marketing expense for the quarter was primarily the result of increased marketing costs related to the M300 offset by a reduction in trade show costs. General and administrative expense was $1,612,542 for the three months ended September 30, 2017 compared to $1,274,698 for the three months ended September 30, 2016. The increase of general and administrative expense for the 2017 quarter compared to the same period in 2016 was primarily the result of increase salary and stock compensation costs due to the hiring of new accounting and internal IR personnel and the Company's new COO offset by reductions in Sarbanes-Oxley consultant expense and reduced spending on investors relations activities. The net loss for the three months ending September 30, 2017 after accrued preferred share dividends was $5,937,563 or $0.28 cents per share versus a net loss of $5,446,014 or $0.32 for the same period in 2016. As of September 30, 2017, the Company maintained cash and cash equivalents of $8,677,341, and an overall working capital position of $10,327,788. "Scaling up our enterprise smart glasses business in 2017 has come with many challenges, however despite temporary headwinds in manufacturing and product availability, this quarter represents our third consecutive quarter of record revenue," said Paul Travers, President and Chief Executive Officer of Vuzix. "Vuzix now has hundreds of active M300 pilot programs across a variety of industries and continues to see a fundamental shift occurring in the enterprise space from pilot programs moving to commercial volume multi-site rollouts. Our M300 gross margins continue to improve and with our various manufacturing processes and quality improvements in China, we are back on track to produce and deliver higher volumes to support our expectations of further growth in revenue in the fourth quarter of 2017 and beyond. The stage is set for another record year in 2018 for Vuzix driven by commercial enterprise smart glasses deployments and higher adoption rates." Conference Call Information Date: Friday, November 10, 2017 Participating on the call will be Vuzix' Chief Executive Officer and President Paul Travers, Chief Financial Officer Grant Russell, and Chief Operating Officer Paul Boris who together will discuss operational and financial highlights for the second quarter ended September 30, 2017. To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time. A replay will be available for 30 days, starting on November 10th, 2017, at approximately 11:00 a.m. (ET). To access the replay, please dial 877-660-6853 within the U.S. or Canada, or 201-612-7415 for international callers. The conference ID# is 13673083. About Vuzix Corporation Forward-Looking Statements Disclaimer Media and Investor Relations Contact: Matt Margolis, Director of Corporate Communications and Investor Relations, Vuzix Corporation [email protected] Tel: (585) 359-5952 Andrew Haag, Managing Partner, IRTH Communications Vuzix Corporation, 25 Hendrix Road, Suite A, West Henrietta, NY 14586 USA, View original content:http://www.prnewswire.com/news-releases/vuzix-provides-business-update-and-reports-its-third-quarter-2017-financial-results-300553430.html SOURCE Vuzix Corporation |