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Vuzix Delivers Strong Revenue and Gross Profit Growth in Second Quarter 2018Sales of M300 Smart Glasses more than triple as pilots convert and repeat customers place larger orders ROCHESTER, N.Y., Aug. 9, 2018 /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 second quarter financial results for the period ended June 30, 2018. Second Quarter 2018 Highlights
Management Commentary "With an expanding set of Smart Glasses AR products in place and numerous emerging opportunities, 2018 is well on its way to be another year of growth for Vuzix," said Paul Travers, President and CEO of Vuzix. "Pilot conversions and repeat orders from customers fueled our enterprise business during the quarter and our overall enterprise footprint continues to grow and gain traction, driven by the Vuzix M300 Smart Glasses and OEM deliveries to Toshiba of the AR100 to Windows-based smart glasses we are building for them. During the second quarter, the Company completed FCC and EU CE certification processes for Vuzix Blade; launched the Blade developer center; delivered Blade edge software for our developer community; and made further advancements to the Blade companion apps for commercial customers. As for our waveguide optics business, the Company is currently negotiating NRE development engagements with three new Tier-1 OEM customers across new and existing market verticals." The following table compares condensed elements of the Company's summarized Consolidated Statement of Operations data for the quarters ended June 30, 2018 and 2017:
Second Quarter 2018 Financial Results For the three months ended June 30, 2018 total revenues were $2.6 million, an increase of 100% over the comparable period in 2017. The increase in revenues for the 2018 quarter was primarily the result of strong M300 Smart Glasses sales, which increased 302% over the comparative period. There was an overall gross profit of $0.7 million for the three months ended June 30, 2018 as compared to a gross loss of $0.4 million for the same period in 2017. The product gross profit improvements for the 2018 over 2017 period reflects improved M300 margins and higher total overall revenues on which to absorb the generally fixed manufacturing overhead costs. Research and Development (R&D) expense was $2.6 million for the three months ended June 30, 2018 compared to $1.2 million for the comparable 2017 period. The increase of R&D expense was primarily driven by an increase in R&D staff, general research, and the development costs of the new Blade Smart Glasses. Selling and Marketing expense was $1.5 million for the three months ended June 30, 2018 compared to $0.8 million for the comparable 2017 period. The increase of selling and marketing expense for the quarter ended June 30, 2018 compared to the same 2017 period was primarily the result of salary and accrued separation payments; increases in Vuzix app store and website costs; and an increase in trade show costs. General and administrative expense was $2.3 million for the three months ended June 30, 2018 compared to $1.3 million for the same period in 2017. The increase in general and administrative expense over the prior year's second quarter was primarily the result of increased salary and stock compensation costs as well as accrued separation costs, and an increase in legal fees, offset by reductions in IR and shareholder expenses. The net loss after accrued preferred share dividends for the three months ending June 30, 2018 was $6.6 million or $0.24 cents per share versus a net loss of $4.5 million or $0.22 for the same period in 2017. If one were to exclude one-time costs related to recent officer separations of $0.7 million accrued in the second quarter the loss per share would have been $0.22. Net cash operating loss after adding back non-cash adjustments for the second quarter of 2018 was $5.0 million as compared to our first quarter of 2018 cash usage of $4.6 million. If one adds back the one-time cash costs related to recent officer separations, the losses for the second and first quarter of 2018 would have been equivalent on a cash basis. As of June 30, 2018, the Company maintained cash and cash equivalents of $29.2 million, and an overall working capital position of $33.0 million. "Our enterprise business continues to expand at a rapid pace driven by continued success of our enterprise workhorse, the M300 Smart Glasses. Repeat customers continue to purchase them in larger and larger quantities. The Company has added more than 400 new M300 pilot programs across a variety of industries so far in 2018 and fresh inbound inquiries from enterprise leads continue to accelerate as our M300 enterprise customer installed base deepens. We believe that there is strong pent-up demand for the Vuzix Blade smart glasses by developers and this has resulted in a reasonably sizable backlog of orders that the Company expects to be fulfilled beginning in the third quarter of this year. Furthermore, the much-anticipated public general commercial launch of Vuzix Blade is rapidly approaching. While the first half of 2018 is off to a strong start at Vuzix, we are expecting to deliver significantly more revenue in the second half of 2018, driven by expanding commercial and enterprise smart glasses deployments, pilot conversions, and broad volume shipments of the Vuzix Blade to developers, enterprise customers and consumers," said Paul Travers, President and CEO of Vuzix. Conference Call Information Date: Thursday, August 9, 2018 Participating on the call will be Vuzix' Chief Executive Officer and President Paul Travers and Chief Financial Officer Grant Russell, who together will discuss operational and financial highlights for the second quarter ended June 30, 2018. 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 August 9th, 2018, at approximately 5:30 p.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 13682055. 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 Ed McGregor, Director of Institutional Investor Relations, Vuzix Corporation [email protected] Tel: (585) 359-5985 Vuzix Corporation, 25 Hendrix Road, Suite A, West Henrietta, NY 14586 USA, Investor Information – [email protected] www.vuzix.com View original content with multimedia:http://www.prnewswire.com/news-releases/vuzix-delivers-strong-revenue-and-gross-profit-growth-in-second-quarter-2018-300695050.html SOURCE Vuzix Corporation |