ROCHESTER, N.Y., May 9, 2019 /CNW/ -- Vuzix® Corporation
(NASDAQ: VUZI) ("Vuzix" or, the "Company"), a leading supplier of
Smart Glasses and Augmented Reality (AR) technologies and products,
today reported its first quarter results for the period ended
March 31, 2019.
First Quarter 2019 Highlights
- Entered into a 3-year master reseller agreement with Verizon
whereby they will resell Vuzix Smart Glasses products including
Vuzix M300XL Smart Glasses and M-Series related accessories, Vuzix
Blade Smart Glasses and Vuzix Remote Assistant
- Introduced Qualcomm XR1-powered M400 enterprise smart glasses,
designed to be best in class in enterprise with a larger memory
profile, better noise cancelling, a multi-finger supported touchpad
and built-in GPS
- Commenced shipping the "Prosumer" version of Blade and expanded
market access to 35 countries worldwide including Japan
- Received a follow-on order from Dynabook Inc. (formerly
"Toshiba") of approximately $1.0
million for M300C enterprise smart glasses with delivery
expected in the second quarter of 2019
- Received ISO 9001:2015 Certification for our West Henrietta manufacturing facility
Recent Developments
- Entered into a Joint Development Agreement with global power
management company Eaton to develop an ATEX intrinsically safe
smart glasses solution based on the M-300XL; these smart glasses
will be co-branded and both Eaton
Crouse-Hinds and Vuzix will be selling this final
solution
- Announced partnerships with VSee Lab and SightCall,
respectively, to deliver new solutions for Vuzix Smart Glasses
- Boosted Blade production and expanded its functionality with
the release of new apps and functionalities including Amazon Alexa,
Google Assistant, Yelp, AccuWeather, sports and news
- Increased our custom waveguide development and OEM program
efforts, responding to multiple new RFQs across market areas from
aviation to the automotive industries
- Received a follow-on order from our current avionics partner
for a customized waveguide-based HMD development program
- Right sized operations to reduce costs to be in line with a
work towards profitable operations
The following table compares condensed elements of the Company's
summarized Consolidated Statements of Operations data for the
quarters ended March 31, 2019 and
2018, respectively:
|
|
|
For 3
Months Ended March 31,
|
|
|
|
2019
|
|
2018
|
Sales:
|
|
|
|
|
|
Sales of
Products
|
|
|
$
|
1,373,371
|
|
$
|
1,363,379
|
Sales of Engineering
Services
|
|
|
|
-
|
|
|
180,516
|
|
|
|
|
|
|
|
|
Total
Sales
|
|
|
|
1,373,371
|
|
|
1,543,895
|
|
|
|
|
|
|
|
|
Total Cost of
Sales
|
|
|
|
1,333,481
|
|
|
1,366,770
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
39,890
|
|
|
177,125
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Research and
Development
|
|
|
|
2,516,100
|
|
|
2,055,787
|
Selling and
Marketing
|
|
|
|
1,417,966
|
|
|
1,534,097
|
General and
Administrative
|
|
|
|
1,896,402
|
|
|
1,665,229
|
Depreciation and
Amortization
|
|
|
|
559,089
|
|
|
273,622
|
|
|
|
|
|
|
|
|
Loss from
Operations
|
|
|
|
(6,349,667)
|
|
|
(5,351,610)
|
|
|
|
|
|
|
|
|
Total Other
Expense
|
|
|
|
(10,094)
|
|
|
(14,040)
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
(6,359,761)
|
|
|
(5,365,650)
|
Loss Attributable
to Common Stockholders per Share
|
|
|
$
|
(0.25)
|
|
$
|
(0.22)
|
Management Commentary
"As indicated on our year end results call, first quarter
revenue was soft. This softness however in no way reflects
the business opportunities before us. Our current pipeline,
alongside the new agreements and partnerships we've struck thus far
in 2019, will show, very shortly, the robust growth at hand here
for Vuzix," said Paul Travers,
President and CEO of Vuzix. "On the product development side, we
announced our next generation Qualcomm XR1-based M400 and an
ATEX-certified smart glasses solution co-developed with Eaton to be
resold by their large team of sales people. On the marketing side,
our 3-year reseller agreement with Verizon should take our
company's visibility to the next level and open a host of doors at
major industry players across numerous enterprise verticals. We
also continue to announce partnerships with key providers, such as
VSee Lab and SightCall, as Vuzix further expands its ecosystem and
increasingly cements its position as an industry leader. The bottom
line is that Vuzix is well positioned to bring the industry's
strongest set of smart glasses solutions to market and has the
marketing muscle and sales pipeline needed to achieve broad
success."
First Quarter 2019 Financial Results
For the three months ended March 31,
2019, product revenues increased slightly year over year,
but due to earning no engineering services revenue in the quarter
versus $0.2 million in the prior
year's period, total revenues experienced a decrease of 11% over
the comparable period in 2018.
There was an overall gross profit of less than $0.1 million for the three months ended
March 31, 2019 as compared to a gross
profit of $0.2 million for the same
period in 2018. On a product cost of sales basis only,
product direct costs were 52% of sales in the 2019 period as
compared to 46% in the prior year's period, the increase resulting
from slightly lower margins on Blade Smart Glasses, a price
reduction on the original M300 over the M300XL products and
increased manufacturing costs.
Research and Development (R&D) expense was $2.5 million for the three months ended
March 31, 2019 compared to
$2.1 million for the comparable 2018
period. The increase in R&D expense was primarily the result of
development work on the M400 and an increase in consulting fees for
software contractors related to the Vuzix Blade.
Selling and Marketing expense was $1.4
million for the three months ended March 31, 2019 compared to $1.5 million for the comparable 2018 period, a
reduction of approximately $0.1
million during the time period the Company participates in
its two largest tradeshows – CES and MWC.
General and Administrative expense for the three months ended
March 31, 2019 was $1.9 million versus $1.7
million in the prior year's period, an increase of
approximately $0.2 million driven by
increased legal expenses and IT consulting services.
The net loss attributable to common stockholders after accrued
preferred share dividends for the three months ended March 31, 2019 was $6.8
million or $0.25 cents per
share versus a net loss of $5.8
million or $0.22 for the same
period in 2018.
Net cash operating loss after adding back non-cash adjustments
for the first quarter of 2019 was $5.3
million. As of March 31, 2019,
the Company maintained cash and cash equivalents of $10.1 million and an overall working capital
position of $16.1 million.
Management Outlook
"With further broadening interest in our current product family
and our new M400 and ATEX certified smart glasses products on
schedule to ship in the second half of the year, we remain
well-positioned to achieve solid top line growth in 2019," said
Paul Travers, President and CEO of
Vuzix. "Our products offer compelling and demonstrable ROIs
and continue to be very well received by those using them. We see
so many opportunities out there and feel it is just a matter of
time before industry demand truly accelerates and our unit numbers
and top line along with it. That said, we are off to a good start
in 2Q with firm orders already ahead of 1Q's total. On the expense
side, we have trimmed costs meaningfully over the past few months
and expect to burn significantly less cash in 2Q versus 1Q as we
continue to aim for cash flow breakeven by year-end."
Conference Call Information
Date: Thursday, May 9, 2019
Time: 4:30 p.m. Eastern Time (ET)
Dial-in Number for U.S. & Canadian Callers:
877-709-8150
Dial-in Number for International Callers (Outside of the U.S. &
Canada): 201-689-8354
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
first quarter ended March 31,
2019.
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 May 9, 2019, 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 13690605.
About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented
Reality (AR) technologies and products for the consumer and
enterprise markets. The Company's products include personal display
and wearable computing devices that offer users a portable
high-quality viewing experience, provide solutions for mobility,
wearable displays and augmented reality. Vuzix holds 153 patents
and patents pending and numerous IP licenses in the Video Eyewear
field. The Company has won Consumer Electronics Show (or CES)
awards for innovation for the years 2005 to 2019 and several
wireless technology innovation awards among others. Founded in
1997, Vuzix is a public company (NASDAQ: VUZI) with offices in
Rochester, NY, Oxford, UK and Tokyo, Japan.
Forward-Looking Statements Disclaimer
Certain statements contained in this news release are
"forward-looking statements" within the meaning of the Securities
Litigation Reform Act of 1995 and applicable Canadian securities
laws. Forward-looking statements contained in this release relate
to, among other things, the timing of new product releases, R&D
project successes, smart glass pilot to roll-out conversion rates,
future operating results, and the Company's leadership in the Smart
Glasses and AR display industry. They are generally identified by
words such as "believes," "may," "expects," "anticipates," "should"
and similar expressions. Readers should not place undue reliance on
such forward-looking statements, which are based upon the Company's
beliefs and assumptions as of the date of this release. The
Company's actual results could differ materially due to risk
factors and other items described in more detail in the Company's
Annual Reports and other filings with the United States Securities
and Exchange Commission and applicable Canadian securities
regulators (copies of which may be obtained at www.sedar.com or
www.sec.gov). Subsequent events and developments may cause these
forward-looking statements to change. The Company specifically
disclaims any obligation or intention to update or revise these
forward-looking statements as a result of changed events or
circumstances that occur after the date of this release, except as
required by applicable law.
Investor Relations Contact
Ed McGregor, Director of Investor
Relations, Vuzix Corporation ed_mcgregor@vuzix.com Tel: (585)
359-5985
Vuzix Corporation, 25 Hendrix Road, Suite A, West Henrietta, NY 14586 USA,
Investor Information – IR@vuzix.com www.vuzix.com
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SOURCE Vuzix Corporation