EXHIBIT 99.1
INTERLINK FILES FIRST AND SECOND QUARTER 2006 REPORTS
CAMARILLO, CALIFORNIA, NOVEMBER 16, 2006 - Interlink Electronics, Inc.
(OTC:LINK.PK) today announced the filing with the Securities and Exchange
Commission of its reports on Form 10-Q for the quarters ending March 31, and
June 30, 2006. "We continue to make progress with our filings, which were
delayed because of the need to restate results for prior periods, " said E.
Michael Thoben III, Interlink's Chairman and Chief Executive Officer . "We
completed the first step by filing our 2005 10-K on July 24, 2006. With today's
filings we complete another step toward a schedule of timely filings in the
future. We expect our 10-Q for the Quarter ended September 30, 2006 to be filed
next month and then the timely filing of our 2006 10K." The Company expects to
resume holding quarterly conference calls when it reports the results of the
third quarter of 2006.
Mr. Thoben continued, "Consistent with our previous guidance, revenue in the
first quarter was $8.5 million, down from $9.3 million in the first quarter of
2005 and consistent with the $8.5 million in the 2005 fourth quarter. Revenue in
the second quarter of 2006 was also $8.5 million, down from $10.3 million in the
comparable 2005 quarter and down slightly from the 2006 first quarter. The
declines in revenue reflect the results of the previously announced
restructuring of our OEM remote business and our de-emphasis of the less
profitable presentation projector remote control business. This shift towards
higher margin businesses resulted in a 27% decline on our OEM remote business
the first six months this year. However, as previously indicated, we expect to
see revenue from our other business segments remain strong and thus result in
revenue and earnings improvements beginning in Q3 of this year.
Gross profit for the quarter ended March 31 was $3.7 million and for the quarter
ended June 30, 2006 was $2.0 million. In comparison to first and second quarter
2005 results, these figures represent an increase of $0.4 million and $0.1
million, respectively. Both increases, achieved in the face of lower overall
revenues, reflect improvements in margins resulting from our restructuring
decisions. The decrease in gross profit between the first and second quarters of
2006 is primarily due to a lower gross profit margin in our Japanese subsidiary
and higher indirect manufacturing costs associated with new product
introductions in the second quarter of 2006. We expect consolidated gross
margins to continue to fluctuate from quarter to quarter, but not at rates
reflected by the first and second quarters of 2006."
Operating expenses in the first quarter of 2006 were $6.3 million, up $2.6
million from the first quarter of 2005 and $1.9M from the fourth quarter of
2005. For the second quarter of 2006, operating expenses were $5.7 million, up
$1.8 million from the comparable 2005 quarter but down $0.6 million from the
prior quarter. The increased level of operating expense in 2006 generally
reflects increases in administrative costs to support an enhanced financial and
accounting structure as well as increases in research and development and
selling costs to support growth in the Company's developing business segments. A
significant portion of the increased costs reflect allocation to these
categories of non-cash expense relating to stock options as required under
Statement on Financial Accounting Standard 123R (SFAS 123R).
This non-cash expense related to SFAS 123R totaled $2.1M for the six months
ended June 30, 2006, with approx $1.1M occurring in each of the first and second
quarters of 2006 respectively. This amount is allocated among the specific
expense line items in our consolidated operating statement with $404,000
allocated to cost of sales, $448,000 allocated to research and development and
$1,292,000 allocated to selling, general and administrative, in each case for
the six-month period.
The Company had a net loss of $2.6 million in the 2006 first quarter, $2.2
million more than the loss realized in the comparable 2005 period but $0.7
million less than the net loss in the fourth quarter of 2005. The second quarter
2006 net loss was $3.6 million, $1.7 million more than the comparable prior year
period and $1.0 million over the prior quarter.
Operations continued to use cash throughout the periods reported due to lower
revenues and higher than normal operating expenses. Cash, cash equivalents and
short-term investments declined from $13.9 million as of December 31, 2005 to
$8.3 million at June 30, 2006. The use of cash primarily reflects the cash
portion of the Company's losses for the periods as well as costs required to
fund actual and prospective growth in its growth segments.
"For the third quarter of 2006, we anticipate revenues to be in excess of $9
million" said Mr. Thoben. "With this improvement in revenue, we would also
expect a smaller loss and a reduction of our rate of cash consumption. In the
fourth quarter we look for an even stronger sequential revenue growth and marked
improvements in our overall financial results."
Mr. Thoben continued, "While expecting that our 2006 second half operating
results will reflect noteworthy and measurable improvements, we also expect to
use additional cash, at a diminishing rate, over the next few quarters. We will
therefore be exploring ways of reinforcing our cash position to sustain our
planned growth. Over time, cash should improve as we continue to build our
revenue streams with higher margin businesses and legal and
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accounting costs decline."
"The last several quarters have been difficult for all of us, yet I believe we
are taking the necessary steps that will produce growth in revenues and
profitability going forward," Mr. Thoben said. "In addition to improving our
operating performance, we are making investments in our corporate infrastructure
and seeing measurable progress in the markets we believe represent the greatest
opportunities for sustained and profitable growth. As evidence of this progress,
the current backlog in our e-Transactions business is at an all time high and
our product road map for this segment has never looked more promising. Our
Branded Products business continues its 2006 sequential quarterly growth, with
strong margins and a well managed channel inventory. In Specialty Products our
"MicroNav Technology" also continues to show great promise."
Recent Highlights:
- - OCTOBER 10, 2006 - INTERLINK ELECTRONICS NAMED ONE OF DELOITTE'S
TECHNOLOGY FAST 50 - Marking its fifth year in the last ten, Interlink
Electronics was named as one of Delotitte's Technology Fastest growing
companies in Southern California.
- - SEPTEMBER 14, 2006 - INTERLINK ELECTRONICS' NEW E-SIGNATURE CAPTURE
DEVICE, EPAD LS - Designed for businesses that need to provide highly
interactive and secure signature processes, ePad LS offers exceptional
data security that is designed to meet or exceed compliance
requirements with respect to internal business processes as well as
state and federal legislation. In addition, ePad LS's versatile design
features offer bidirectional color display, support for rich text
formats and brilliant color screens allowing additional marketing
messages.
- - SEPTEMBER 16, 2006 - INTERLINK ELECTRONICS INTRODUCES WORLD'S FIRST
BLUETOOTH MEDIA REMOTE CONTROL FOR NOTEBOOK COMPUTERS WITH EXPRESSCARd
- Combining the wireless freedom of Bluetooth with the convenience of a
rechargeable battery, Interlink Electronics' new Express Card Media
Remote for Bluetooth allows the user to control entertainment software
within a wireless range of up to 30 feet. The remote conveniently fits
into the ExpressCard slot which is featured in many new generation
notebooks such as Microsoft Windows XP Media Center and Dell's Media
Experience.
- - AUGUST 9, 2006 - INTERLINK ELECTRONICS' MICRONAV TECHNOLOGY CREATES
INNOVATIVE USER TOUCHPAD FOR NEW BENQ-SIEMENS SL91 MOBILE PHONE -
BenQ-Siemens has selected Interlink Electronics' transparent MicroNav
sensor to enable a unique backlit user keypad to be integrated into its
new SL91 mobile phone.
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- - JUNE 7, 2006 - INTERLINK ELECTRONICS UNVEILS REVOLUTIONARY NEW
PRESENTATION REMOTE CONTROLS AND OEM TECHNOLOGY AT INFOCOMM - A new
version of RemotePoint Navigator, Interlink's best-selling presentation
remote control, featuring a fresh contemporary styling and the new
version of Presentation PilotPro, was unveiled at Infocomm in Orlando
Florida.
- - MAY 3, 2006 - INTERLINK ELECTRONICS CREATES MUSIC CONTROL INTERFACE FOR
LG'S NEW LG550 MOBILE PHONE - Interlink Electronics created a custom
MicroNav Ring user interface to provide media content control for LG's
new LG550 mobile phone. The integration of the MicroNav Ring into the
LG design delivers quick menu search and one-touch item selection that
consumers need to get instant access to stored digital music.
- - APRIL 4, 2006 - INTERLINK ELECTRONICS ANNOUNCED MICRONAV DESIGN WIN TO
SUPPLY INTERFACE FOR PANTECH'S NEW G-3600V MOBILE PHONE - The Pantech
Group, now the top mobile phone handset vendor in the South Korean
market, selected Interlink's MicroNav Ring technology to supply the
user interface for it's new G-3600V mobile "music" phone. This patented
MicroNav lighted scroll ring interface enables rapid menu scrolling and
one-touch item selection maximizing the mobile phone's usability as a
digital music player.
- - MARCH 9, 2006 - INTERLINK ELECTRONICS INTRODUCES EPAD-INK PRO - Created
to capture handwritten electronic signatures for high volume
applications, Interlink announced the availability of ePad-ink Pro.
ePad-ink Pro provides enhanced signature data encryption, increased pad
surface durability and has a bidirectional pressure-sensitive screen
that can display marketing messages to customers while capturing
signatures. Interlink has partnered with NCR Corporation to utilize
their patented data encryption process in its ePad electronic signature
products, a feature that is fast becoming a requirement in the
financial services industry.
- - MARCH 6, 2006 - ELECTRONIC DESIGN NEWS (EDN) NAMES INTERLINK
ELECTRONICS' MICRONAV(TM) RING TO ITS HOT 100 PRODUCTS OF THE YEAR -
Interlink Electronics' MicroNav Ring is a proprietary interface product
that provides intuitive menu scrolling to enhance the usability of
handheld electronic devices. The MicroNav Ring circular scrolling
interface solution offers unique advantages to consumers and design
engineers.
MicroNav is also cost-effective, very low power and versatile,
supports direct integration with the device host processor and allows
the use of metallic actuators, EL and LED lighting.
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
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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: THE
SUFFICIENCY OF CASH, CREDIT LINES AND OTHER SOURCES TO FINANCE OUR OPERATIONS,
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:
Investor Relations Contact:
Michelle Lockard
mlockard@interlinkelectronics.com
805-484-8855 ext. 114
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