Interlink Electronics Reports Fourth Quarter and Fiscal Year 2023 Results
- Revenue surged by 120% to $3.5 million in Q4 2023, and by 86% to $13.9 million for the year.
- Gross profit increased by 84% to $1.5 million in Q4, and by 70% to $6.6 million for the year.
- EBITDA improved from negative $290,000 to positive $15,000 in Q4, and from negative $421,000 to positive $424,000 for the year.
- The company ended the year with $4.3 million in cash and cash equivalents.
- A 50% common stock dividend was declared by the Board of Directors, expected to increase outstanding shares from 6,573,570 to around 9,860,355.
- None.
Insights
The substantial 120% revenue increase reported by Interlink Electronics indicates a significant expansion in the company's operations, primarily fueled by strategic acquisitions and organic growth. This level of growth, especially in a technology sector involving sensors and human-machine interface solutions, is indicative of a robust demand for such products, which aligns with the broader industry trend towards automation and IoT integration.
However, the reported decrease in gross margin percentage from 49% to 41% in the quarter and from 52% to 47% for the year, raises some concerns about cost management and pricing strategies. Investors should monitor whether these are temporary fluctuations due to integration costs of the new acquisitions or a sign of longer-term pricing pressures in the industry. The increase in operating expenses is typical following acquisitions but should be carefully managed to ensure long-term profitability.
Interlink Electronics' positive shift in EBITDA from negative $421,000 in 2022 to positive $424,000 in 2023 is a noteworthy turnaround, suggesting effective cost control and operational efficiency improvements. This EBITDA improvement, despite higher materials and components costs, is a positive sign for investors looking for companies with the ability to enhance profitability amidst challenging cost environments.
The declaration of a 50% common stock dividend is an interesting move, potentially designed to reward shareholders and signal confidence in the company's financial health. However, the dilution of shares could have implications for earnings per share (EPS) metrics in the future. Investors will need to weigh the immediate benefits of the dividend against the potential for diluted shareholder value.
The strategic acquisitions made by Interlink Electronics, such as the SPEC Sensors/KWJ Engineering and Calman Technology Limited, appear to be key drivers behind the reported revenue surge. These acquisitions not only expand the company's product offerings but also its market reach. For long-term investors, the company's focus on engineering, product development and sales and marketing resources could be seen as laying the groundwork for sustainable growth.
However, the decline in net income and the loss from operations reported, despite the revenue growth, may raise flags about the company's current profitability trajectory. It is important for stakeholders to consider whether this is a temporary setback as the company integrates its acquisitions, or indicative of deeper issues that could affect future performance.
Revenue increased
EBITDA for the year increased
Revenue for the quarter was
The following table sets forth the consolidated financial highlights.
Consolidated Financial Highlights
(Amounts in thousands except per share data and percentages)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||
Consolidated Financial Results | 2023 | 2022 | $ ∆ | % ∆ | 2023 | 2022 | $ ∆ | % ∆ | ||||||||||||||||||||
Revenue | $ | 3,538 | $ | 1,611 | $ | 1,927 | 119.6 | % | $ | 13,940 | $ | 7,493 | $ | 6,447 | 86.0 | % | ||||||||||||
Gross profit | $ | 1,452 | $ | 796 | $ | 656 | 82.4 | % | $ | 6,559 | $ | 3,861 | $ | 2,698 | 69.9 | % | ||||||||||||
Gross margin | 41.0 | % | 49.4 | % | 47.1 | % | 51.5 | % | ||||||||||||||||||||
Loss from operations | $ | (580) | $ | (345) | $ | (235) | (68.1) | % | $ | (439) | $ | (668) | $ | 229 | 34.3 | % | ||||||||||||
Net income (loss) | $ | (448) | $ | 1,412 | $ | (1,860) | (131.7) | % | $ | (383) | $ | 1,672 | $ | (2,055) | (122.9) | % | ||||||||||||
Net income (loss) applicable to | $ | (548) | $ | 1,312 | $ | (1,860) | (141.8) | % | $ | (783) | $ | 1,272 | $ | (2,055) | (161.6) | % | ||||||||||||
Earnings (loss) per common | $ | (0.06) | $ | 0.13 | $ | (0.19) | (146.2) | % | $ | (0.08) | $ | 0.13 | $ | (0.21) | (161.5) | % | ||||||||||||
EBITDA | $ | 15 | $ | (290) | $ | 305 | 105.2 | % | $ | 424 | $ | (421) | $ | 845 | 200.7 | % | ||||||||||||
- Revenue increased
120% to$3.5 million 86% to$13.9 million - Gross profit for the quarter increased
82% to$1.5 million 49% to41% . For the year ended December 31, 2023, gross profit was$6.6 million 70% from the prior year due to higher revenues, offset in part by a decline in gross margin percentage from52% to47% . The declines in gross margin percentage for the quarter and for the year were due to changes in product and customer mix from new products and customers (primarily from the acquired businesses) and also to higher materials and components costs on certain orders. - EBITDA for the fourth quarter improved from negative
$290,000 $15,000 $421,000 $424,000 - The Company ended the year with
$4.3 million - On March 1, 2024, the Board of Directors declared a
50% common stock dividend with a record date of March 11, 2024, payable March 22, 2024. Settlement of fractional share interests will be made by issuing one full share of common stock in lieu of a fractional share. Although the exact effect on common stock outstanding will depend on the number of fractional share settlements, the stock dividend is expected to increase the number of issued and outstanding shares of common stock from 6,573,570 to approximately 9,860,355. For all periods presented, all share and per share data have been retroactively adjusted for the effect of the50% common stock dividend.
"We believe our 2023 activities and results demonstrate our commitment to growth through acquisitions and organic opportunities," said Steven N. Bronson, Chairman, President, and CEO of Interlink Electronics. "We plan to continue to invest in engineering, product development, and sales and marketing resources as we execute on our strategic longer-term growth initiatives."
About Interlink Electronics, Inc.
Interlink Electronics is a world-leading provider of sensors and printed electronic solutions that support a wide range of applications, including Human-Machine Interface ("HMI") devices and Internet-of-Things ("IoT") solutions, utilizing our expertise in materials science, manufacturing, firmware and software to produce in-house system solutions for custom specifications. We have a proven track record of supplying mission-critical technological solutions in diverse markets including medical devices, automotive, gas detection and environmental quality monitoring, oil and gas and general industrial, and consumer electronics, providing standard and custom-designed sensors that provide the flexibility and functionality needed for today's sophisticated applications.
The Company's products and solutions currently focus on three main fields:
- For nearly 40 years, the Company has led the printed electronics industry in commercializing its patented Force Sensing Resistor® technology, which offers pressure and position sensing and rugged capabilities in a very wide range of temperatures. Our piezoelectric film sensors offer strain, bend and vibration sensing and can be used on curved surfaces, while our advanced matrix sensor solutions offer multiple touch capabilities. We supply some of the world's top electronics manufacturers with intuitive sensor and interface technologies for use in advanced applications such as medical robotics and vehicle collision detection.
- Our Gas and Environmental Sensors division has over 25 years of experience in cutting-edge design and manufacture of electrochemical gas-sensing technology for industry, community, health and home. We provide advanced sensor solutions, precision sensing instruments, and custom engineering services for detecting gases such as carbon monoxide, ozone, hydrogen, NOX gases and ammonia, for transdermal alcohol detection and for air quality monitoring. Our innovative printed sensor design enables high-sensitivity, low-power and cost-effective solutions for broad adoption in the rapidly growing IoT market.
- Our Calman Technology subsidiary brings over 25 years of experience in the design and manufacture of membrane keypads, graphic overlays, printed electronics and industrial label products. We offer IP-rated digital and hybrid printed devices featuring integrated backlighting and shielding and printed electronics with advanced materials ink printing. Calman has customers in fields such as medical devices and defense technologies and gives the Company a base in
Europe .
We serve our international customer base from our corporate headquarters in
For more information, please visit InterlinkElectronics.com.
Forward Looking Statements
This release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements in this press release include statements about our projected revenues and earnings, and our acquisition program and the effects of recent acquisitions, including contributions to our products, manufacturing operations and the markets we serve. 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. | ||||||
December 31, | December 31, | |||||
2023 | 2022 | |||||
(in thousands) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 4,304 | $ | 10,091 | ||
Accounts receivable, net | 2,167 | 1,178 | ||||
Inventories | 2,476 | 2,112 | ||||
Prepaid expenses and other current assets | 381 | 321 | ||||
Total current assets | 9,328 | 13,702 | ||||
Property, plant and equipment, net | 313 | 184 | ||||
Intangible assets, net | 2,654 | 76 | ||||
Goodwill | 2,461 | 650 | ||||
Right-of-use assets | 143 | 172 | ||||
Deferred tax assets | 83 | 134 | ||||
Other assets | 80 | 65 | ||||
Total assets | $ | 15,062 | $ | 14,983 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable | $ | 464 | $ | 273 | ||
Accrued liabilities | 492 | 568 | ||||
Lease liabilities, current | 126 | 131 | ||||
Accrued income taxes | 293 | 117 | ||||
Total current liabilities | 1,375 | 1,089 | ||||
Long-term liabilities | ||||||
Lease liabilities, long term | 33 | 46 | ||||
Deferred tax liabilities | 626 | — | ||||
Total long-term liabilities | 659 | 46 | ||||
Total liabilities | 2,034 | 1,135 | ||||
Stockholders' equity | ||||||
Preferred stock | 2 | 2 | ||||
Common stock | 10 | 10 | ||||
Additional paid-in-capital | 62,279 | 62,614 | ||||
Accumulated other comprehensive income (loss) | 200 | (98) | ||||
Accumulated deficit | (49,463) | (48,680) | ||||
Total stockholders' equity | 13,028 | 13,848 | ||||
Total liabilities and stockholders' equity | $ | 15,062 | $ | 14,983 | ||
INTERLINK ELECTRONICS, INC. | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
(in thousands, except per share data) | ||||||||||||
Revenue, net | $ | 3,538 | $ | 1,611 | $ | 13,940 | $ | 7,493 | ||||
Cost of revenue | 2,086 | 815 | 7,381 | 3,632 | ||||||||
Gross profit | 1,452 | 796 | 6,559 | 3,861 | ||||||||
Operating expenses: | ||||||||||||
Engineering, research and development | 561 | 308 | 2,326 | 1,220 | ||||||||
Selling, general and administrative | 1,471 | 833 | 4,672 | 3,309 | ||||||||
Total operating expenses | 2,032 | 1,141 | 6,998 | 4,529 | ||||||||
Income (loss) from operations | (580) | (345) | (439) | (668) | ||||||||
Other income (expense): | ||||||||||||
Other income (expense), net | 10 | 1,907 | 164 | 2,611 | ||||||||
Income (loss) before income taxes | (570) | 1,562 | (275) | 1,943 | ||||||||
Income tax expense (benefit) | (122) | 150 | 108 | 271 | ||||||||
Net income (loss) | $ | (448) | $ | 1,412 | $ | (383) | $ | 1,672 | ||||
Net income (loss) applicable to common stockholders | $ | (548) | $ | 1,312 | $ | (783) | $ | 1,272 | ||||
Earnings (loss) per common share – basic and diluted | $ | (0.06) | $ | 0.13 | $ | (0.08) | $ | 0.13 | ||||
Weighted average common shares outstanding – basic and diluted | 9,860 | 9,911 | 9,896 | 9,905 | ||||||||
INTERLINK ELECTRONICS, INC. | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
(in thousands) | ||||||||||||
Net income (loss) | $ | (448) | $ | 1,412 | $ | (383) | $ | 1,672 | ||||
Adjustments to arrive at earnings before interest, other | ||||||||||||
Interest and other (income) expense, net | (10) | (1,907) | (164) | (2,611) | ||||||||
Income tax expense (benefit) | (122) | 150 | 108 | 271 | ||||||||
Depreciation expense | 73 | 43 | 198 | 193 | ||||||||
Amortization expense | 522 | 12 | 665 | 54 | ||||||||
EBITDA | $ | 15 | $ | (290) | $ | 424 | $ | (421) | ||||
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SOURCE Interlink Electronics
FAQ
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