STOCKHOLM, Sweden, Nov. 09, 2015 (GLOBE NEWSWIRE) — Neonode Inc. (NASDAQ:NEON), the optical interactive sensing technology company, today reported financial results for the three and nine months ended September 30, 2015.

Recent Highlights:

  • Revenues increased 176% compared to Q3 2014
  • Signed license agreement with leading Japanese printer OEM
  • Received royalties from five tier 1 automotive suppliers, up from three last quarter
  • Exceeded 200,000 total infotainment systems using zForce technology as of Q3 2015
  • Increased to 19  car models launched using zForce technology for the in-car infotainment system, up from 17 as of last quarter
  • Strengthened balance sheet through a $6.1 million underwritten public offering in October 2015

“The Company saw increased customer traction across all our markets throughout the nine months of 2015,” said Neonode’s CEO Thomas Eriksson.

“Our automotive division continues its impressive growth performance with development of new technologies, such as our zForce DRIVE steering wheel currently undergoing road testing and our entry systems which is also in the testing phase with auto OEMs. Our customers continue to add to the number of models of production ready cars using our zForce Core for the in-car infotainment systems. We’re also pleased to report that our zForce technology is in the number one selling car in China, the Buick Excelle GT, and the number one and two best-selling SUVs in China, the Haval H6 and the Baojun 560, based upon sales figures in the China auto WEB September issue,” added Mr. Eriksson.

“Our five global printer customers continue to be on plan with their development and production release of new printer models worldwide and our PC customers are on plan to release products with our technology in 2016,” concluded Mr. Eriksson.

Financial Results for the three and nine months ended September 30, 2015

Net revenues for the three and nine months ended September 30, 2015 were $3.1 million and $8.2 million, respectively, compared to net revenues for the three and nine months ended September 30, 2014 of $1.1 million and $3.0 million, respectively.  Net revenues for the three and nine months ended September 30, 2015 included $2.0 million and $5.4 million, respectively, from technology license fees and $1.1 million and $2.8 million, respectively, in non-recurring engineering services (“NRE”) related to touch solutions for customers.  Net revenues for the three and nine months ended September 30, 2014 included $0.6 million and $1.9 million, respectively, from technology license fees and $0.5 million and $1.1 million, respectively, in NRE services.

The increase of 176% in net revenues for the three months ended September 30, 2015 compared the same period in 2014 and an increase of 171% for the nine months ended September 30, 2015 compared to same period in 2014 is primarily due to an increase in license fees from e-reader, printer and automotive customers, plus NRE revenues.

The license fee revenue distribution per market for the third quarter 2015 is 32% for printers, 16% for automotive and 52% for e-readers compared to 54% for printers and 46% for e-readers in the third quarter 2014.

Gross margin was $2.2 million and $6.2 million for the three and nine months ended September 30, 2015, respectively, compared to $0.7 million and $2.0 million for the same periods in 2014, respectively. Total operating expenses were $3.6 million and $11.3 million for the three and nine months ended September 30, 2015, respectively, compared to $3.9 million and $13.1 million for the same periods in 2014, respectively.

Net loss was $1.4 million and $5.2 million for the three and nine months ended September 30, 2015, respectively, compared to a net loss of $3.2 million and $11.1 million, respectively, in the comparable periods in 2014.

Net cash used by operating activities was $2.1 million and $4.9 million for the three and nine months ended September 30, 2015, respectively, compared to $3.0 million and $9.1 million, respectively, for the same periods in 2014. Cash and accounts receivable totaled $1.4 million at September 30, 2015 compared to $7.2 million at December 31, 2014.  Subsequent to the quarter end, Neonode completed a $6.1 million underwritten public offering on October 13, 2015.

Conference Call Information

The Company will host a conference call Monday November 9, 2015 at 10AM Eastern Standard Time (EST) 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: #61045701. Please make sure to call at least five minutes before the scheduled start time.

To register for the call, and listen online, please click:
http://event.on24.com/r.htm?e=1074483&s=1&k=86998E99FA3E51F63AAE1CCDFD72697E

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 – 11/9/2015 (13:00PM EST) to 12/9/2015 (23:59PM EST). To access the recording, please use one of these Dial-In Numbers (800) 585-8367 or (404) 537-3406, and the Conference ID #61045701.

About Neonode

Neonode Inc. (NASDAQ:NEON) develops and licenses optical interactive sensing technologies. Neonode’s patented optical interactive sensing technology is developed for a wide range of devices like automotive systems, printers and office equipment, PC devices, monitors, mobile phones, tablets and e-readers, toys and gaming devices. NEONODE, the NEONODE Logo, ZFORCE and MULTISENSING are trademarks of Neonode Inc. registered in the United States and other countries. ZFORCE CORE, ZFORCE PLUS and ZFORCE DRIVE are trademarks of Neonode Inc. All other trademarks are the property of their respective owners. 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.

Copyright Neonode Inc. 2015. All rights reserved. Neonode is a registered trademark of Neonode Inc.

NEONODE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
       
  September 30, 2015   December 31, 2014
ASSETS   (Unaudited)       (Audited)  
Current assets:              
Cash $ 950     $ 6,129  
Accounts receivable, net   489       1,106  
Projects in process   1,044       200  
Prepaid expenses and other current assets   715       513  
Total current assets   3,198       7,948  
               
Property and equipment, net   582       654  
Total assets $ 3,780     $ 8,602  
       
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY       
Current liabilities:      
Accounts payable $ 1,121     $ 566  
Accrued expenses   1,510       935  
Deferred revenues   1,873       3,403  
Current portion of capital lease obligation   57       61  
               
Total current liabilities   4,561       4,965  
               
Capital lease obligation, net of current portion   297       367  
Total liabilities   4,858       5,332  
       
Commitments and contingencies      
       
Stockholders’ (deficit) equity:      
Series B Preferred stock, 54,425 shares authorized with par value $0.001 per share;  83 shares issued and outstanding at September 30, 2015 and December 31, 2014. (In the event of dissolution, each share of Series B Preferred stock has a liquidation preference equal to par value of  $0.001 per share over the shares of common stock)          
Common stock, 70,000,000 shares authorized with par value $0.001 per share; 40,524,984 and 40,455,352 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively   40       40  
Additional paid-in capital   169,958       169,010  
Accumulated other comprehensive income   82       149  
Accumulated deficit   (171,161 )     (165,929 )
Total Neonode Inc. stockholders’ (deficit) equity   (1,081 )     3,270  
Noncontrolling interests   3        
Total stockholders’ (deficit) equity   (1,078 )     3,270  
Total liabilities and stockholders’ (deficit) equity $ 3,780     $ 8,602  

  

NEONODE INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
(Unaudited)  
   
    Three months ended 
September 30,
    Nine months ended 
September 30,
 
    2015     2014     2015     2014  
                         
Net revenues    $   3,113       $   1,126       $   8,152       $   3,005    
Cost of revenues        909           422           1,984           1,040    
Gross margin        2,204           704           6,168           1,965    
                                 
Operating expenses:                                
Product research and development        1,555           1,767           4,763           5,293    
Sales and marketing        845           725           2,648           2,523    
General and administrative        1,152           1,457           3,908           5,275    
                                 
Total operating expenses       3,552           3,949           11,319           13,091    
Operating loss       (1,348 )         (3,245 )         (5,151 )         (11,126 )  
                                 
Other expense:                                
Interest expense       4                     12              
Other expense, net                           28              
Total other expense       4                     40              
                                 
Loss before provision for income taxes       (1,352 )         (3,245 )         (5,191 )         (11,126 )  
                                 
Provision for income taxes       16                     41           1    
Net loss including noncontrolling interests       (1,368 )         (3,245 )         (5,232 )         (11,127 )  
Less: Net loss attributable to noncontrolling interests                                        
Net loss attributable to Neonode Inc.   $   (1,368 )     $   (3,245 )     $   (5,232 )     $   (11,127 )  
                                 
Loss per common share:                                
Basic and diluted loss per share   $   (0.03 )     $   (0.08 )     $   (0.13 )     $   (0.28 )  
Basic and diluted – weighted average number of common shares outstanding        40,525           40,455             40,493           39,219    

NEONODE INC.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS  
(In thousands)  
(Unaudited)  
   
  Three months ended 
September 30,
  Nine months ended 
September 30,
 
  2015   2014   2015   2014  
                 
Net loss   $   (1,368 )     $   (3,245 )     $   (5,232 )     $   (11,127 )  
Other comprehensive income (loss):                                
Foreign currency translation adjustments        (20 )         (82 )           (67 )         (17 )  
Comprehensive loss       (1,388 )         (3,327 )         (5,299 )         (11,144 )  
Less: Comprehensive income (loss) attributable to noncontrolling interests                                        
Comprehensive loss attributable to Neonode Inc.   $   (1,388 )     $   (3,327 )     $   (5,299 )     $   (11,144 )  


 

NEONODE INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands)
(Unaudited)
  Nine months ended
  September 30,
   2015      2014  
Cash flows from operating activities:  
Net loss (including noncontrolling interests) $ (5,232 )   $ (11,127 )
Adjustments to reconcile net loss to net cash used in operating activities:  
Stock-based compensation expense   948       1,594  
Bad debt expense         18  
Loss on disposal of property and equipment   28        
Depreciation and amortization   138       145  
Changes in operating assets and liabilities:  
Accounts receivable   617       393  
Projects in process   (847 )     229  
Prepaid expenses and other current assets   (231 )     (176 )
Accounts payable and accrued expenses   1,221       252  
Deferred revenues   (1,528 )     (381 )
Net cash used in operating activities   (4,886 )     (9,053 )
Cash flows from investing activities:  
Purchase of property and equipment   (137 )     (98 )
Net cash used in investing activities   (137 )     (98 )
Cash flows from financing activities:  
Proceeds from sales of common stock, net of offering costs         9,253  
Contributions from noncontrolling interests   3        
Proceeds from exercise of stock warrants         36  
Principal payments on capital lease obligation   (43 )     (18 )
Net cash (used in) provided by financing activities   (40 )     9,271  
               
Effect of exchange rate changes on cash   (116 )     (91 )
               
Net increase (decrease) in cash   (5,179 )     29  
Cash at beginning of period   6,129       8,815  
Cash at end of period $ 950     $ 8,844  
             
Supplemental disclosure of cash flow information:             
Cash paid for income taxes $ 41     $ 1  
Cash paid for interest $ 12     $ 8  
             
Supplemental disclosure of non-cash investing and financing activities             
Purchase of equipment with capital lease obligations $     $ 530  

 

CONTACT: For more information, please contact:

Investor Relations:
David Brunton
Email: [email protected]

CFO
Lars Lindqvist
E-mail: [email protected]