STOCK TITAN

Interlink Electronics Reports Fourth Quarter and Fiscal Year 2021 Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Negative)
Tags
Rhea-AI Summary

Interlink Electronics (NASDAQ: LINK) reported a 9% increase in annual revenue to $7.5 million for 2021, with Q4 revenue at $1.6 million, down 17% year-over-year. The year-end gross profit rose to $4.1 million, reflecting a 4% increase. However, net loss in Q4 was $977,000, equating to a loss per share of $0.16. The company raised $5 million from a preferred stock offering, aimed at working capital and potential acquisitions. Despite challenges, Interlink expresses optimism for 2022, forecasting quarterly revenue over $2 million.

Positive
  • Year-over-year revenue increased by $590 thousand, up 9% to $7.5 million.
  • $5 million raised from preferred stock offering for working capital and acquisitions.
  • Forecast for Q1 2022 revenue to exceed $2 million, with expectations for annual growth.
Negative
  • Q4 revenue decreased by 17% to $1.6 million due to lower sales in consumer and medical markets.
  • Q4 gross margin declined to 47.1% from 58.2% in the prior year.
  • Net loss for the year increased to $734,000 from a net income of $113,000 in 2020.

Year over Year Revenue Increased $590 Thousand

$5 Million in Gross Proceeds from Preferred Stock Offering During the Fourth Quarter

IRVINE, Calif., March 29, 2022 /PRNewswire/ -- Interlink Electronics, Inc. (NASDAQ: LINK), an industry-leading trusted advisor and technology partner in the advancing world of human-machine interface (HMI) and force-sensing technologies, today announced its financial results for the three months and year ended December 31, 2021. Revenue for the year was $7.5 million, up 9% from the prior year. Additionally, Interlink Electronics completed a private placement preferred stock offering during the fourth quarter of 2021 that raised gross proceeds of $5.0 million.


Consolidated Financial Highlights


(Amounts in thousands except per share data and percentages)





























Three months ended December 31, 


Twelve months ended December 31, 

Consolidated Financial Results

2021



2020




$ ∆


% ∆




2021


2020



$ ∆


% ∆





























Revenue

$

1,623



$

1,947



$

(324)


(16.6)

%


$

7,478


$

6,888



$

590


8.6

%

Gross profit

$

765



$

1,134



$

(369)


(32.5)

%


$

4,058


$

3,902



$

156


4.0

%

Gross margin


47.1

%



58.2

%









54.3

%


56.6

%


































Income (loss) from operations

$

(411)



$

220



$

(631)


nm



$

(79)


$

110



$

(189)


nm





























Net income (loss)

$

(977)



$

53



$

(1,030)


nm



$

(734)


$

113



$

(847)


nm


Earnings (loss) per

common share – diluted

$

(0.16)



$

0.01



$

(0.17)


nm



$

(0.12)


$

0.02



$

(0.14)


nm





























EBITDA1

$

(369)



$

247



$

(616)


nm



$

152


$

297



$

(145)


(48.8)

%

EBITDA margin2


(22.7)

%



12.7

%









2.0

%


4.3

%







nm: Not meaningful
1 See attached schedules for reconciliation to GAAP measurements
2 EBITDA margin is EBITDA divided by revenue

  • Revenue in the fourth quarter of 2021 decreased 17% to $1.6 million from $1.9 million in the same year–ago period, primarily due to lower sales of our custom products in the consumer and medical markets, partly offset by higher demand of our custom products in the industrial market. The 9% increase in year-over-year revenue from $6.9 million last year to $7.5 million this year was driven by increased shipments of our custom products to our industrial market customers. Revenue for the first quarter of 2022 is forecasted to exceed $2.0 million, and the Company expects revenue for the 2022 year to exceed the 2021 revenue level.
  • Gross margin declined to 47.1% in the current quarter from 58.2% in the year–ago quarter, and declined to 54.3% in the current year from 56.6% in the prior year, due to changes in product and customer mix, increases in production headcount and corresponding labor costs, and provisions for certain excess inventories.
  • Operating income (loss) was a loss of $(411) thousand for the fourth quarter of 2021, compared with income of $220 thousand in the same period in 2020. Operating income (loss) was impacted by lower gross profit and increased operating expenses for engineering, research and development activities, along with increased general and administrative costs for personnel and fees for professional services. Operating income (loss) for the current year was a loss of $(79) thousand, compared with income of $110 thousand in 2020. Operating expenses for the year increased approximately $345 thousand (or 9%) from the prior year primarily due to investments in product development activities, administrative personnel, and fees for professional services on strategic initiatives. For one such strategic initiative, during the quarter and year ended December 31, 2021, respectively, the Company incurred approximately $46 thousand and $97 thousand of legal costs in connection with pursuit of an acquisition, for which the Company withdrew its merger pursuit in early 2022 following mutual agreement with the target.
  • In the fourth quarter of 2021, after–tax net (loss) was $(977) thousand, or $(0.16) per diluted common share, compared to after–tax net income of $53 thousand, or $0.01 per diluted common share, in the same year–ago period. After tax net income (loss) for 2021 was impacted by a $629 thousand non-cash charge to record a valuation allowance on domestic deferred tax assets due to recent cumulative taxable losses in the U.S. jurisdiction.
  • EBITDA for the fourth quarter of 2021 was negative $(369) thousand, compared with EBITDA of $247 thousand in the same period in 2020. For the twelve-month period ended December 31, 2021, EBITDA was $152 thousand, compared with EBITDA of $297 thousand in 2020. The declines in EBITDA were primarily the result of increased operating expenses incurred for investments in product development and other strategic initiatives.
  • Interlink ended the year with $10.8 million in cash and cash equivalents. During the fourth quarter of 2021, Interlink completed its private placement preferred stock offering of its 8.0% Series A Convertible Preferred Stock in which it sold 200,000 shares at an offering price of $25.00 per share, for gross proceeds of $5.0 million. Interlink anticipates using the proceeds from the offering for working capital and other general corporate purposes, and to fund potential acquisitions.

"We continue to see momentum in our commercial activity related to our custom sensor solutions in multiple verticals," said Steven N. Bronson, Chairman, President, and CEO of Interlink Electronics. "We are actively seeking additional experienced engineering and sales talent to support our growth plans."

"We also continue to pursue acquisitions and strategic investments that are complementary to our organic growth objectives," added Mr. Bronson.

About Interlink Electronics, Inc.

Interlink Electronics is a world-leading trusted provider of HMI, sensor, and IoT solutions. In addition to standard product offerings, Interlink utilizes its expertise in materials science, manufacturing, firmware, and software to produce in-house system solutions for custom applications. For 35 years, Interlink has led the printed electronics industry in the commercialization of its patented Force Sensing Resistor® technology and has supplied some of the world's top electronics manufacturers with intuitive sensor and interface technologies like the VersaPad and the new VersaPad Plus, which boasts the largest active surface area of any resistive touchpad. It also has a proven track record of supplying technological solutions for mission-critical applications in a diverse range of markets—including medical, automotive, consumer electronics, telecommunications, and industrial control—providing standard and custom-designed sensors that give engineers the flexibility and functionally they seek in today's sophisticated electronic devices. Interlink serves an international customer base from its headquarters in Irvine, California, and world-class materials science lab and R&D center in Camarillo, California. They are supported by strategic global locations covering manufacturing, distribution, and sales support. For more information, please visit InterlinkElectronics.com.

Non-GAAP Financial Information

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 EBITDA and EBITDA margin, each of which is a non-GAAP measure. EBITDA is determined by taking net income and adding interest, income taxes, depreciation and amortization, and EBITDA margin is determined by dividing EBITDA by revenue. Interlink believes that these non-GAAP measure, viewed in addition to and not in lieu of net income and gross margin, provide useful information to investors by providing more focused measures of operating results. These metrics are an integral part of Interlink's internal reporting to evaluate its operations and the performance of senior management. A reconciliation of EBITDA to net income, the most comparable GAAP measure, is presented in the attached schedules. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.

Forward Looking Statements

This release contains forward-looking statements. Forward-looking statements include, but are not limited to, the company's views on future financial performance, the company's expectations with respect to its product pipeline and acquisition opportunities, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the company's industry, R&D initiatives, competition and capital requirements. Other factors and uncertainties that could affect the company's forward-looking statements include, among other things, the following: our success in predicting new markets and the acceptance of our new products; efficient management of our infrastructure; the pace of technological developments and industry standards evolution and their effect on our target product and market choices; the effect of outsourcing technology development; changes in the ordering patterns of our customers; a decrease in the quality and/or reliability of our products; protection of our proprietary intellectual property; competition by alternative sophisticated as well as generic products; continued availability of raw materials for our products at competitive prices; disruptions in our manufacturing facilities; risks of international sales and operations including fluctuations in exchange rates; compliance with regulatory requirements applicable to our manufacturing operations; and customer concentrations. 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 to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Interlink Electronics, Inc.
IR@iefsr.com
Steven N. Bronson, CEO
805-623-4184


INTERLINK ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS



December 31, 


December 31, 


2021


2020


(in thousands)

ASSETS






Current assets






Cash and cash equivalents

$

10,777


$

6,120

Restricted cash


5



5

Accounts receivable, net


1,080



1,113

Inventories


814



866

Prepaid expenses and other current assets


391



392

Total current assets


13,067



8,496

Property, plant and equipment, net


338



407

Intangible assets, net


131



195

Right-of-use assets


163



334

Deferred tax assets


8



527

Other assets


72



63

Total assets

$

13,779


$

10,022







LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities






Accounts payable

$

338


$

235

Accrued liabilities


507



343

Lease liabilities, current


138



219

PPP loan payable




186

Accrued income taxes


54



59

Total current liabilities


1,037



1,042







Long-term liabilities






Lease liabilities, long term


37



140

Total long-term liabilities


37



140

Total liabilities


1,074



1,182







Stockholders' equity






Preferred stock


2



Common stock


7



7

Additional paid-in-capital


62,552



57,966

Accumulated other comprehensive income


96



37

Accumulated deficit


(49,952)



(49,170)

Total stockholders' equity


12,705



8,840

Total liabilities and stockholders' equity

$

13,779


$

10,022




INTERLINK ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS














Three months ended

December 31, 


Twelve months ended

December 31, 


2021


2020


2021


2020


(in thousands, except share data)

Revenue, net

$

1,623


$

1,947


$

7,478


$

6,888

Cost of revenue


858



813



3,420



2,986

Gross profit


765



1,134



4,058



3,902

Operating expenses:












Engineering, research and development


339



132



893



918

Selling, general and administrative


837



782



3,244



2,874

Total operating expenses


1,176



914



4,137



3,792

Income (loss) from operations


(411)



220



(79)



110

Other income (expense):












Other income (expense), net


(25)



(49)



(50)



(92)

Income (loss) before income taxes


(436)



171



(129)



18

Income tax expense (benefit)


541



118



605



(95)

Net income (loss)

$

(977)


$

53


$

(734)


$

113













Net income (loss) applicable to common stockholders

$

(1,025)


$

53


$

(782)


$

113

Earnings (loss) per common share, basic and diluted

$

(0.16)


$

0.01


$

(0.12)


$

0.02













Weighted average common shares outstanding - basic


6,602



6,601



6,601



6,586

Weighted average common shares outstanding - diluted


6,602



6,601



6,601



6,599




INTERLINK ELECTRONICS, INC.

RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO CONSOLIDATED EBITDA














Three months ended

December 31, 


Twelve months ended

December 31, 


2021


2020


2021


2020


(in thousands)

Net income (loss)

$

(977)


$

53


$

(734)


$

113

Adjustments to arrive at earnings before interest, income taxes, depreciation, and amortization (EBITDA):












Interest expense (income), net




(1)





(14)

Income tax expense (benefit)


541



118



605



(95)

Depreciation and amortization expense


67



77



281



293

EBITDA

$

(369)


$

247


$

152


$

297

 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/interlink-electronics-reports-fourth-quarter-and-fiscal-year-2021-results-301512495.html

SOURCE Interlink Electronics

FAQ

What were the financial results of Interlink Electronics for 2021?

Interlink Electronics reported a 9% increase in revenue to $7.5 million for 2021, with a net loss of $734,000.

How much did Interlink Electronics raise in their recent stock offering?

Interlink Electronics raised $5 million from a preferred stock offering during the fourth quarter.

What is the forecast for Interlink Electronics' revenue in Q1 2022?

Interlink Electronics forecasts Q1 2022 revenue to exceed $2 million.

What caused the decline in gross margin for Interlink Electronics?

The decline in gross margin was due to changes in product mix, labor cost increases, and provisions for excess inventories.

What were the earnings per share for Interlink Electronics in Q4 2021?

Interlink Electronics reported a loss per share of $0.16 in Q4 2021.

Interlink Electronics, Inc.

NASDAQ:LINK

LINK Rankings

LINK Latest News

LINK Stock Data

54.84M
1.64M
83.4%
0.94%
0.42%
Electronic Components
Computer Peripheral Equipment, Nec
Link
United States of America
IRVINE