Interlink Electronics (LINK) 8-K Interlink Electronics Reports Third Quarter and Year-to-Date (Nine Month) 2016 Results

Exhibit 99.1

Interlink Electronics Reports Third Quarter and Year-to-Date (Nine Month) 2016 Results

Income from Operations increased approximately 97% and 110% for the Third Quarter and Nine Months ended September 30, 2016

November 10, 2016 9:00 AM EST

WESTLAKE VILLAGE, CA – (Business Wire) – Interlink Electronics, Inc. (LINK), a global leader in human-machine interface (HMI) and sensor technologies, today announced its financial results for the three and nine months ended September 30, 2016.

Consolidated Financial Highlights

(Amounts in thousands except per share data and percentages)

	Three months ended September 30,								Nine months ended September 30,
Consolidated Financial Results	2016			2015			% ∆		2016			2015			% ∆
Net revenue	$	3,246		$	2,646		22.7	%	$	9,105		$	7,744		17.6	%
Gross profit	$	1,950		$	1,511		29.1	%	$	5,464		$	4,106		33.1	%
Gross margin		60.1	%		57.1	%				60.0	%		53.0	%
Income from Operations	$	937		$	476		96.8	%	$	2,469		$	1,178		109.6	%
Net income	$	614		$	458		34.1	%	$	1,969		$	1,213		62.3	%
Earnings per share (basic and diluted)	$	0.08		$	0.06				$	0.27		$	0.17
EBITDA¹	$	973		$	489		99.0	%	$	2,585		$	1,279		102.1	%
EBITDA margin2		30.0	%		18.5	%				28.4	%		16.5	%

¹ See attached schedules for reconciliation to GAAP numbers. 

² EBITDA margin is EBITDA divided by net revenue.

· Revenue in the Third quarter of 2016 increased 22.7% to $3.2 million from $2.6 million in the same year-ago period. For the first nine months, revenue increased 17.6% to $9.1 million from $7.7 million in the comparable period.

· Gross margin increased to 60.1% in the Third quarter of 2016 from 57.1% in the same year-ago period. For the first nine months, gross margin improved to 60.0% from 53.0% in the comparable period.

· In the Third quarter of 2016, net income totaled $614,000 or $0.08 per basic and diluted share, compared to net income of $458,000 or $0.06 per basic and diluted share in the same year-ago period. For the first nine months, net income was $2.0 million or $0.27 per basic and diluted share compared to net income of $1.2 million or $0.17 per basic and diluted share in the comparable period.

· At September 30, 2016, the company had $6.2 million in cash on hand, and no debt.

“We are extremely pleased with our financial performance for the quarter,” stated Steven N. Bronson, CEO of Interlink Electronics, Inc. “Investments we have made in our cost structure are beginning to emerge as we were able to keep our expenses in line in the presence of significantly more revenue.”

Mr. Bronson continued, “We remain committed to our strategy of earnings growth and disciplined investments towards organic growth and innovation, as well as strategic bolt-on acquisitions.”  

About Interlink Electronics, Inc.

Interlink Electronics is a world-leading trusted advisor and technology partner in the advancing world of human-machine interface and force-sensing technologies. Interlink Electronics has led the printed electronics industry in its commercialization of its patented Force-Sensing Resistor (FSR®) technology, which has enabled rugged and reliable human-machine interface (HMI) solutions. For over 30 years, Interlink Electronics' solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world's top electronics manufacturers. Interlink Electronics has a proven track record of supplying human-machine interface solutions for mission-critical applications in a wide range of markets, including, but not limited to, consumer electronics, automotive, industrial, and medical devices. Interlink Electronics serves a world-class customer-base from its our corporate headquarters in Westlake Village, California (greater Los Angeles area), our global research and development center in Singapore, our printed-electronics manufacturing facility in Shenzhen, China and our global distribution and logistics center in Hong Kong. We also maintain technical and sales offices in Japan and at various locations in the United States. For more information, please see our website at www.interlinkelectronics.com.  

Forward Looking Statements

This release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company’s views on future financial performance and innovation and its bolt-on acquisition strategy, 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. These and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recently filed Annual Report on Form 10-K, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 net 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 available in the accompanying

financial tables below. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.

Contact:

Interlink Electronics, Inc. 

IR@iefsr.com 

Steven N. Bronson, CEO

805-416-7004

APPENDIX

Consolidated Financial Information and Reconciliations: Third Quarter and First Nine Months of 2016

INTERLINK ELECTRONICS, INC.

Condensed Consolidated Balance Sheets

(unaudited)

	September30,		December 31,
	2016		2015
	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	6,162	$	4,435
Accounts receivable, net		1,769		1,599
Inventories		1,242		1,015
Prepaid expenses and other current assets		140		298
Total current assets		9,313		7,347
Property, plant and equipment, net		357		176
Intangibles, net		38		13
Other assets		58		26
Total assets	$	9,766	$	7,562
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	330	$	484
Accrued liabilities		322		304
Accrued income taxes		329		—
Deferred revenue, current		88		71
Total current liabilities		1,069		859
Deferred revenue, long term		—		40
Total liabilities		1,069		899
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 1,000 shares authorized, no shares issued or outstanding		—		—
Common stock, $0.001 par value: 30,000 shares authorized, 7,328 and 7,326 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		7		7
Additional paid-in-capital		60,341		60,251
Accumulated deficit		(51,651)		(53,595)
Total stockholders' equity		8,697		6,663
Total liabilities and stockholders' equity	$	9,766	$	7,562

INTERLINK ELECTRONICS, INC.

Condensed Consolidated Statements of Income

(unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
	(in thousands, except per share data)				(in thousands, except per share data)
Revenue, net	$	3,246	$	2,646	$	9,105	$	7,744
Cost of revenue		1,296		1,135		3,641		3,638
Gross profit		1,950		1,511		5,464		4,106
Operating expenses:
Engineering, research and development		183		219		498		637
Selling, general and administrative		830		816		2,497		2,291
Total operating expenses		1,013		1,035		2,995		2,928
Income from operations		937		476		2,469		1,178
Other income (expense):
Interest income		1		1		1		1
Income before income tax expense (benefit)		943		466		2,504		1,210
Income tax expense (benefit)		329		8		535		(3)
Net income		614		458		1,969		1,213
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(4)		(8)		(25)		(9)
Comprehensive income	$	610	$	450	$	1,944	$	1,204
Earnings per share: basic and diluted	$	0.08	$	0.06	$	0.27	$	0.17
Weighted average common shares outstanding - basic		7,327		7,325		7,327		7,324
Weighted average common shares outstanding - diluted		7,410		7,331		7,406		7,330

INTERLINK ELECTRONICS, INC.

Reconciliation of Consolidated Net Income to Consolidated EBITDA

(unaudited)

	Threemonths ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Net income	$	614	$	458	$	1,969	$	1,213
Adjustments to arrive at earnings before interest, income taxes, depreciation and amortization (EBITDA):
Interest expense (income), net		(1)		(1)		(1)		(1)
Income tax expense (benefit)		329		8		535		(3)
Depreciation and amortization expense		31		24		82		70
EBITDA	$	973	$	489	$	2,585	$	1,279