Exhibit 99.1
Interlink Electronics Reports 2008 Third Quarter and
Nine Months Financial Results
CAMARILLO, CA (USA), November 12, 2008 — Interlink Electronics, Inc. (OTC: LINK.PK), a worldwide provider of intuitive interface components and solutions, today announced results for the quarter and nine-month period ended September 30, 2008.
The company reported total third quarter revenues of $7.2 million, up 55 percent from $4.7 million in the third quarter of 2007. Gross profit increased to $3.1 million from $1.0 million in the same quarter last year. The company’s operating loss was $27,000, down significantly from the $3.2 million operating loss in the third quarter of 2007. These results include charges for share-based compensation of $144,000 and $797,000 in the third quarters of 2008 and 2007, respectively. Excluding share-based compensation charges, Interlink had an operating profit of $117,000 in the 2008 third quarter. Interlink’s net income in the third quarter of 2008 was $121,000, with basic and diluted earnings per share (EPS) of $0.01, compared to net income of $1.6 million and EPS of $0.12 in the same quarter last year. The 2007 third quarter includes a $6.2 million gain from the sale of assets concluded in August 2007.
“We continued to experience impressive growth despite the tough economy,” said Kevin Wiley, Interlink Chief Executive Officer. “Revenues were up in both our eTransactions and Specialty Components business segments, gross margins improved our operating loss was significantly reduced compared to both last year and the prior quarter period, and our cash position improved from June 30. This momentum, along with the movement of substantially all of our manufacturing operations to China by the middle of next year, should keep us on the path towards increasing growth and profitability.”
Interlink reported total revenues for the first nine months of 2008 of $19.7 million, up 56 percent from $12.7 million in the same comparable period in 2007. Gross profit increased to $8.2 million for the first nine months of 2008 from $4.2 million for the first nine months of 2007. The company’s operating loss was $3.7 million for the first nine months of 2008 compared to $6.3 million in the first nine months of 2007. These results include charges for share-based compensation of $991,000 and $1,770,000 in the first nine months of 2008 and 2007, respectively. Interlink’s net loss in the first nine months of 2008 was $2.5 million, with a basic and diluted loss per share of (0.18), down from a net loss of $3.1 million and a loss per share of ($0.22) in the same nine month period last year. The 2007 nine-month period includes a $6.2 million gain from the sale of assets concluded in August 2007.
The company anticipates timely filing its Form 10-Q for the quarter ended September 30, 2008. A conference call to discuss its 2008 third quarter results will be held on Wednesday, November 12, 2008 at 1:00 p.m. EDT. To access the live conference call, dial 1-415-228-5018 (pass code is LINK); for international callers dial +1 888-606-5913 (pass code is LINK). For live web cast access, go to www.interlinkelectronics.com. A telephonic replay of the call will be available until 6:00 p.m. EDT on December 12, 2008 at 1-866-486-4647; international callers may dial +1 203-369-1637. A webcast replay will be available at www.interlinkelectronics.com.
INTERLINK ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
| | | | | | | | | | | | | | | | |
| | | Three Month Period
Ended September 30, | | | Nine Month Period
Ended September 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Revenues, net | | $ | 7,219 | | | $ | 4,660 | | | $ | 19,701 | | | $ | 12,665 | |
Cost of revenues (includes stock-based compensation of $20 and $133 for the three months ended September 30, 2008 and 2007, respectively, and $97 and $444 for the nine months ended September 30, 2008 and 2007, respectively) | | | 4,082 | | | | 3,610 | | | | 11,528 | | | | 8,497 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 3,137 | | | | 1,050 | | | | 8,173 | | | | 4,168 | |
Operating expenses: | | | | | | | | | | | | | | | | |
Product development and research (includes stock-based compensation of $45 and $131 for the three months ended September 30, 2008 and 2007, respectively, and $169 and $380 for the nine months ended September 30, 2008 and 2007, respectively) | | | 983 | | | | 730 | | | | 3,322 | | | | 2,236 | |
Selling, general and administrative (includes stock-based compensation of $79 and $365 for the three months ended September 30, 2008 and 2007, respectively, and $725 and $946 for the nine months ended September 30, 2008 and 2007, respectively) | | | 2,181 | | | | 3,504 | | | | 8,558 | | | | 8,246 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 3,164 | | | | 4,234 | | | | 11,880 | | | | 10,482 | |
| | | | | | | | | | | | | | | | |
Operating loss | | | (27 | ) | | | (3,184 | ) | | | (3,707 | ) | | | (6,314 | ) |
| | | | | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | | | | |
Interest income | | | 49 | | | | 74 | | | | 243 | | | | 115 | |
Interest expense | | | (245 | ) | | | (312 | ) | | | (719 | ) | | | (357 | ) |
| | | | | | | | | | | | | | | | |
Total net interest expense | | | (196 | ) | | | (238 | ) | | | (476 | ) | | | (242 | ) |
| | | | | | | | | | | | | | | | |
Other income | | | 373 | | | | 8 | | | | 1,862 | | | | 59 | |
Other expense | | | (29 | ) | | | (697 | ) | | | (188 | ) | | | (764 | ) |
| | | | | | | | | | | | | | | | |
Total net other income (expense) | | | 344 | | | | (689 | ) | | | 1,674 | | | | (705 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before provision for income taxes | | | 121 | | | | (4,111 | ) | | | (2,509 | ) | | | (7,261 | ) |
Provision for income taxes | | | — | | | | — | | | | — | | | | 52 | |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations, net of tax | | | 121 | | | | (4,111 | ) | | | (2,509 | ) | | | (7,313 | ) |
Loss from discontinued operations, net of tax | | | — | | | | (461 | ) | | | — | | | | (1,957 | ) |
Gain on sale of assets, net of tax | | | — | | | | 6,210 | | | | — | | | | 6,210 | |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 121 | | | $ | 1,638 | | | $ | (2,509 | ) | | $ | (3,060 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) per share from continuing operations, net of tax: | | | | | | | | | | | | | | | | |
Basic and diluted | | $ | 0.01 | | | $ | (0.30 | ) | | $ | (0.18 | ) | | $ | (0.53 | ) |
| | | | | | | | | | | | | | | | |
Loss per share on discontinued operations, net of tax: | | | | | | | | | | | | | | | | |
Basic and diluted | | $ | — | | | $ | (0.03 | ) | | $ | — | | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | |
Gain per share on sale of assets, net of tax: | | | | | | | | | | | | | | | | |
Basic | | $ | — | | | $ | 0.45 | | | $ | — | | | $ | 0.45 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | — | | | $ | 0.44 | | | $ | — | | | $ | 0.43 | |
| | | | | | | | | | | | | | | | |
Net income (loss) per share: | | | | | | | | | | | | | | | | |
Basic and diluted | | $ | 0.01 | | | $ | 0.12 | | | $ | (0.18 | ) | | $ | (0.22 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares used for income (loss) from continuing operations, net of tax: | | | | | | | | | | | | | | | | |
Basic and diluted | | | 13,777 | | | | 13,749 | | | | 13,762 | | | | 13,749 | |
| | | | | | | | | | | | | | | | |
Weighted average shares used for loss on discontinued operations, net of tax: | | | | | | | | | | | | | | | | |
Basic and diluted | | | — | | | | 13,749 | | | | — | | | | 13,749 | |
| | | | | | | | | | | | | | | | |
Weighted average shares used for gain on sale of assets, net of tax: | | | | | | | | | | | | | | | | |
Basic | | | — | | | | 13,749 | | | | — | | | | 13,749 | |
| | | | | | | | | | | | | | | | |
Diluted | | | — | | | | 14,099 | | | | — | | | | 14,343 | |
| | | | | | | | | | | | | | | | |
Weighted average shares used for net income (loss): | | | | | | | | | | | | | | | | |
Basic | | | 13,777 | | | | 13,749 | | | | 13,762 | | | | 13,749 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 13,777 | | | | 14,099 | | | | 13,762 | | | | 13,749 | |
| | | | | | | | | | | | | | | | |
INTERLINK ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT PAR VALUE)
| | | | | | | | |
| | | September 30,
2008 | | | December 31,
2007 | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 9,092 | | | $ | 12,659 | |
Restricted cash | | | 368 | | | | 2,937 | |
Accounts receivable, less allowance for doubtful accounts of $66 and $199 at September 30, 2008 and December 31, 2007, respectively | | | 4,316 | | | | 3,918 | |
Inventories, net of reserves of $612 and $394 at September 30, 2008 and December 31, 2007, respectively | | | 5,590 | | | | 5,151 | |
Prepaid expenses and other current assets | | | 543 | | | | 1,754 | |
Assets held for sale | | | — | | | | 437 | |
| | | | | | | | |
Total current assets | | | 19,909 | | | | 26,856 | |
Property and equipment, net | | | 982 | | | | 999 | |
Intangibles, net | | | 425 | | | | 113 | |
Other assets | | | 237 | | | | 364 | |
| | | | | | | | |
Total assets | | $ | 21,553 | | | $ | 28,332 | |
| | | | | | | | |
| | |
Liabilities And Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 1,900 | | | $ | 1,600 | |
Accrued payroll and other expenses | | | 1,698 | | | | 5,836 | |
Deferred revenue | | | 537 | | | | 646 | |
Liabilities related to assets held for sale | | | — | | | | 86 | |
| | | | | | | | |
Total current liabilities | | | 4,135 | | | | 8,168 | |
Convertible note, net of discounts of $1,004 and $1,415 at September 30, 2008 and December 31, 2007, respectively | | | 3,839 | | | | 3,413 | |
Warrants and embedded derivatives | | | 379 | | | | 1,974 | |
| | | | | | | | |
Total liabilities | | | 8,353 | | | | 13,555 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Preferred stock, $5.00 par value (100 shares authorized, none issued and outstanding) | | | — | | | | — | |
Common stock, $0.00001 par value (50,000 shares authorized, 13,778 and 13,749 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively) | | | 59,478 | | | | 58,463 | |
Accumulated other comprehensive loss | | | (523 | ) | | | (440 | ) |
Accumulated deficit | | | (45,755 | ) | | | (43,246 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 13,200 | | | | 14,777 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 21,553 | | | $ | 28,332 | |
| | | | | | | | |
About Interlink Electronics, Inc.
Interlink Electronics, Inc. (OTC: LINK.PK) is a worldwide provider of intuitive interface components and solutions. Setting tomorrow’s standards for electronic signature, e-notarization products and interface components for consumer electronics, Interlink has established itself as one of the world’s leading innovators of intuitive interface design. With more than 41 patents around the world protecting its technologies and products, Interlink Electronics serves a world-class customer-base from its corporate headquarters in Camarillo, California and offices in Japan, Hong Kong and China. For more information, seehttp://www.interlinkelectronics.com.
This release contains forward-looking statements that involve a number of risks and uncertainties. The following are among the factors that could cause actual results to differ materially from the forward-looking statements: historical losses and negative cash flow, the appointment of a new Chief Executive Officer, the success of business divestitures and acquisitions, the expense of being a public company, the ownership of the majority of our stock by a small group of investors, 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, pending litigation against Interlink, historical weaknesses in internal controls over financial accounting, the continued availability at competitive prices of raw materials for our products, 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. These risks are discussed in greater detail under the caption “Risk Factors” in our quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission on November 12. 2008. The forward-looking statements contained in this release should be considered in light of these risk factors.
Contact:
Investor Relations Contact: Charles Best
cbest@interlinkelectronics.com 805-484-8855 ext. 151
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