EXHIBIT 99.1
INTERLINK COMPLETES 2005 SEC FILINGS
CAMARILLO, CALIFORNIA, JULY 24, 2006 - Interlink Electronics, Inc. (OTC:
LINK.PK) today announced the filing with the Securities and Exchange Commission
of its Quarterly Report on Form 10-Q for the three months ended September 30,
2005 and its Annual Report on Form 10-K for the year ended December 31, 2005.
These filings were delayed while the company investigated various financial
matters that required a restatement of previously published financial statements
and reconsidered its financial results for 2005. This investigation and
reconsideration were concluded and the results incorporated in Interlink's
balance sheets as of December 31, 2004 and 2005 and its statements of operations
and cash flows for the three years ended December 31, 2003, 2004 and 2005
included in the Form 10-K.
"The filing of these reports shows the significant progress we have made in
strengthening our internal financial reporting systems and at the same time it
brings us closer to being compliant with all the applicable financial reporting
requirements," said E. Michael Thoben III, Interlink's Chairman and Chief
Executive Officer. "We have substantially upgraded our accounting staff and
systems and implemented procedures designed to ensure continuing integrity of
our financial reporting processes. I am gratified to reach a point where we can
shift from financial crisis management to focusing on the very attractive
business opportunities in front of us."
"Consistent with my open letters to stakeholders dated May 16th and May 23rd, we
remain very optimistic about the prospects for our future. We have identified
the markets that we believe will offer us the greatest opportunities for
continued growth and improved profitability and we are well on the way of
achieving those goals. I will look forward to sharing our expectations and
successes during our upcoming second quarter conference call. We currently
anticipate this conference call will take place later this quarter concurrently
with the filing of our first and second quarter 2006 results."
Interlink has not filed its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006 but expects to do so in the third quarter of 2006. Management
also expects to file its Quarterly Report on Form 10-Q for the three months
ended June 30, 2006 during the third quarter.
Interlink's 2005 financial information is presented in detail in the financial
statement and notes sections of the Form 10-K, with related commentary in
Management's Discussion and Analysis of Financial Condition and Results of
Operations. This and other information in the reports should be carefully
reviewed, the primary points of which are as follows:
o Revenues for 2005 grew 8% from 2004 to $38.2 million. Revenues
from our E-Transactions business grew 56%, while revenues from
our Business Communications Branded and Specialty business
segments grew 8% and 5%, respectively. As anticipated,
revenues from our OEM Remote business segment declined 5%.
o A net loss of $8.3 million was incurred in 2005, compared to a
net loss of $3.8 million in 2004. For 2005, items contributing
to this loss were:
o An additional reserve and tooling cost adjustments of
approximately $2.5 million in the third quarter of
2005 related to the slowdown of the OEM Remote
business.
o Approximately $200,000 of costs associated with
internal investigation matters
o Approximately $400,000 of costs related to compliance
with the Sarbanes-Oxley Act of 2002.
o Financial results for the year ended December 31, 2004 were
restated to reflect an increase in cost of sales and operating
expenses. The increase in cost of sales of $1.3 million, from
$23.5 million to $24.8 million, was due to an overstatement of
certain inventories in transit to one of our subsidiaries and
certain uncollectible accounts receivable and unrecorded
liabilities related to a vendor in China. The increase in
operating expenses of $221,000 was due to the variable cost of
certain stock options that had previously not been recognized
and expensed. This increase in cost of sales and operating
expenses of $1.5 million resulted in a change from the
previously reported net loss of $2.3 million to a net loss of
$3.8 million
o Financial results for the year ended December 31, 2003 were
restated to reflect an increase in cost of sales of $1.3
million, from $18.4 million to $19.7 million due to certain
uncollectible accounts receivable and unrecorded liabilities
related to a vendor in China. This increase in cost of sales
resulted in a change from the previously reported net income
of $1.1 million to a net loss of $248,000.
ABOUT INTERLINK ELECTRONICS, INC.
Interlink Electronics, Inc. (OTC: LINK.PK), is a global leader in the design,
development and manufacture of intuitive human interface products and
technologies. Setting tomorrow's standards for electronic signature and
e-notarization products, advanced remote controls and consumer electronics
interface solutions, Interlink has established itself as one of the world's
leading innovators of intuitive interface design. With more than 80 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, Taiwan, Hong Kong and China. For more
information, see http://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: business
conditions and growth in the electronics industry and general economies, both
domestic and international; lower than expected customer orders; delays in
receipt of orders or cancellation of orders; competitive factors, including
increased competition, new product offerings by competitors and price pressures;
the availability of third party parts and supplies at reasonable prices; changes
in product mix; significant quarterly performance fluctuations due to the
receipt of a significant portion of customer orders and product shipments in the
last month of each quarter; and product shipment interruptions due to
manufacturing problems. The forward-looking statements contained in this
document regarding Interlink's financial results, industry and revenue trends,
the filing of reports with the Securities and Exchange Commission and future
business activities should be considered in light of these factors.
CONTACTS:
Interlink Electronics Media Contact:
KEITH M. ROBERTS
DIRECTOR, CORPORATE COMMUNICATIONS
mailto:kroberts@interlinkelectronics.com
(805) 484-8855, EXT. 130
Investor Relations Contact:
MICHELLE LOCKARD
mlockard@interlinkelectronics.com
(805) 484-8855, EXT. 114
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