MVIS - Earnings call transcript Q1 2020

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Operator

Greetings. Welcome to MicroVision First Quarter 2020 Financial and Operating Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

the to turn Stibbard. now will conference Lindsey over I

You may begin.

Lindsey Stibbard

afternoon Good results to and MicroVision's you. conference First operating everyone and welcome Thank financial Quarter call. XXXX

and Sumit me Chief Joining call Chief are today's Executive Officer. on Officer, Steve Holt, Financial Sharma,

results; and call today's a launches; of regarding as benefits the benefits; sale forward-looking orders; April statements, product agreements contained Company, business customer value; merger strategic our of under future of and applications verticals expects, containing of our royalties; plans, market and shareholder or availability managing technology; of of products dated paths, opportunities development and product of Proxy would, availability The proposals exploration conference possibly, including in existing strategic future effect like completing will, of focus, components; transaction; demand; opportunity, license of information supply maximizing includes approvals financial other statements commercialization words our in or and key costs, alternatives, our could, funds; Statement likely, X, progress confident, statements and technology, future of goals, expressions. expected and potential, contracts operations resulting, as agreements; advantages of technology; intend, litigation; negotiation the projections customer execution; believe, similar and product XXXX; of sale and well future

which discuss MicroVision. the materially SEC and various statements. are performance. results not We investing differ our with to to results XXXX, from Form risk or future Proxy our you time including factors SEC March review documents, statements we on associated expressed in from These made guarantees future the encourage of on XX, implied Annual could Report filings, time filings other in forward-looking Actual XX-K filed in Statement

required are X-K except forward-looking of audio factors filed presented All as call, update in today. our information. to numbers call for of and the cause those release no website undertake statements date of at or website. law, differ this be results also we are Relations Relations by section available in the forward-looking from Investor from obligation to These in will as our section this and the implied today our statements. press financial risk could made call on The replay included This Both available www.microvision.com. Investor conference of the are MicroVision's in expressed the

And now call turn to I'd like to the Sumit Sumit? over Sharma.

Sumit Sharma

four in of Good consumer will an problems history. Lindsey. modules Thank afternoon inflection point industries. beam In scanning at enable important product you, our is everyone. to automotive our in verticals solve future, Laser and MicroVision the some hardest the the

North inflection tier, into to April it XXXX advanced contract. have top this volume. module capability demonstrated products device American our end our under is that point, in OEM the We shipping to a to We well as technology have currently customers commercialize as our

also could We possibly to launch interested automotive product in products solution in XXXX, module in LiDAR the enable get We in ready state allow an a their to an two and were developed LiDAR OEMs years. would display consumer XXXX. platform that to an market interactive next solid OEM

the launch However, of economy, and an strategic global of part we the shifted demand COVID-XX the alternatives focus given of in consumer exploring OEM delay pandemic Company. including to impact or the decreasing expected sale all the of have product on our XXXX, a

parties. certain verticals example. more with like an I entire Company to than product for or Acquiring interested appealing would acquiring be the more clarify one may

our provide also applications headset scanning transactions products. could value. laser enable in appealing for view reality financial cost-effective for have help Craig-Hallum provide and LiDAR the We and shareholder technology to We reach Company and a path with and mixed globally our believe retained field and advisors beam and solutions low to expand potential wider to as work state automotive module micro evaluate maximize and consumer power augmented near a display solid to to could the of future, is

goal financial In the our with runway reduce our us provide actions such several I actions an transactions. expenses a complete appropriate XX% to to with last our shared took workforce. reduction including of We to call,

We have and production Property. responsibility to our agreement completed component with Intellectual customer without an April production any for assets sell transfer selling XXXX to

Paycheck of executives Protection through payments for XX%. CARES board suspended We and the reduced Park Lincoln XXXX for funds or from base the cash the and also Facility, current been fees, past company-wide Act, has salary and all Program raised approximately payment received bonus Equity of the cycles by

We actions, and we continue Property cash. seek as these through cash ways sufficient look on strategic to QX at additional our expect manage issued pending transaction. reduce XXXX Based we Intellectual continue and XXX to includes have a to MicroVision's over to expenses patents.

which However, trade includes whole that proprietary and not of does tell the our story secrets property, of value intellectual know-how. the

automated LiDAR LiDAR we beam have interest state algorithms closed part key lot low-cost has automotive and which machine body high-volume, scanning phase property, laser in comprise as work, and who MEMS processes globally, laser fabrication, and solid to of displays, the the proprietary augmented patents to key are market, products. equipment capital scanning of in OEMs, of our to in intellectual is major library addition a beam In products believe designs consumer, in manufacturing hardware reality, software, MEMS a locked interactive controls, poised a controls, loop deepest which learning we deliver Laser from seen technology. of enable

be XXth, year of Shareholder pandemic. this COVID-XX Annual address the Let because Meeting me meeting May now will our online on a virtual which upcoming

discuss reverse like shareholder vital to to is value. to shareholder our one X would listed approve I to to believe proposal efforts a Company. strategic or remain enhance shareholders of on the provides is complete Proposal I stock key sale necessary, including of Approval that of to with if Company flexibility, transaction which Specifically, light the NASDAQ asks important split, Proposal the X efforts needed Global Market. merger in our a a

key are I like two proposal. support to would approval to this highlight of points There

tools First shares. less and limit provide and value investors their to foremost, maintain Proposal Delisting it pool more investors our shares. the would liquidity quote appealing for with institutional MicroVision difficult investors’ to necessary the X of obtain Company make and would sell the potential or which make our approval of will of investors, the to a

As we it important very maintain of to explore investors’ shares. potential transactions is our liquidity

our which Directors, am some or I of ability understands reluctant MicroVision’s may proposal. value. or to consider provides we’re of merger, opportunities offer possibly Secondly, facilitate maximize tender shareholders which event approve Proposal member, shareholder a to this a X exploring that flexibility among in a exchange shares the the are enhancing and of be Board of sale to

our for believe, shareholders proxy, mentioned is best we and interest as noted it others just I approve However, in in to this key our the reasons proposal.

and recommended two vote a Additionally, to that the FOR vote of MicroVision Lewis, as an increase stock ISS, number FOR to advisory common reverse approve both approve of Proposal authorized leading Services, shareholders Proposal split, independent Shareholder Glass firms, to X in Institutional proxy X stock. well as shares

are institutional widely not of advisory both States, familiar mutual their the independent United firms funds, are in firms, investment institutional recognized firm world. with hundreds leading and For major as and relied throughout ISS the and recommendations Glass analyses proxy and Lewis, by fiduciaries upon those

done strategic this to of a we QX body to economic of through with point. complete I On am proud state believe, and current more directors, of of we sufficient global Despite to employees transaction get over the board headwinds, continue prepared or behalf sale. MicroVision work XX of our a than merger years the inflection have cash including and

our CFO, financial I’ll the now side Steve? Steve, turn who to will over our the business. of call discuss

Steve Holt

you, afternoon, everyone. Thank Sumit. Good

coronavirus. was revenue, Production from a an of shortage were by revenue decreased associated revenue week rate manufacturer. contract lunar the to million, that then approximately lower quarter at due additional was revenue. the The personnel and the stopped our XXXX after was when in it note started, balance I’d with production with contract and at For million like of new for the first of quarter, impacted year production first revenue product February results from a April royalty $X.X to customer. $XXX,XXX $X.X was manufacturing the product

recognized the product royalty we in quarter $X.X of million million with and $X.X last in revenue. and about comparison, contract revenue balance In revenue,

million, First of $XXX,XXX was In profit cost $X.X of related items of gross $XX,XXX. to other in was and which included resulting our was materials gross profit write-offs QX. quarter revenue product. The $X.X comparison, display interactive million

going due. customer would a be At an stood The required repay million. end no forward completed production that shipped agreement of with $X.X prepayment customer. prepayment will MicroVision we receive MicroVision the our by March, to When due potential March million From over begin In components. cash QX, making XXXX will which payments royalties is each customer be the credited made exhausted, in at the portion the that customer. see of for any the the we the royalties are of will component prepayment. is customer $X.X against for royalty where MicroVision There by scenario to April took prepayment the the

liabilities filing. sheet the timing and recognition information when This requires be disclose in in that are estimate be the revenue $X.X ASC footnote recognized. balance we as the companies XX-Q a those million This the to will is liability. XXX, new will of that found on standard, contract expected be the revenue

the million recognized Our year. over of current will remainder $X.X estimate is million that the approximately of $X.X the be

were million the $X.X in $X in the million expenses Operating quarter. to compared fourth quarter, first

non-recurring we and the forecast in the operating $X.X workforce $XXX,XXX some were We non-recurring quarter to the quarter to expenses for two related Because to in million in February. to forecast last credits range First expenses for $X announced quarters quarter. of that included expenses think be operating share reduction operating second million. useful the have in our quarter. expenses it our also and had charges There other the expenses in second credits, approximately is we

the net million was per share. the a $X.X This $X.X fourth loss quarter, $X.XX to or compares For million, per quarter. or first $X.XX in share of loss our

cash which was with ended cash and first quarter, cash equivalents the $X.X $X.X in million. compares quarter total to the million, quarter million. of used For operations fourth cash $X.X first of We the in used

from During raised XXXX. Lincoln $X.X million Park the December we Capital of the quarter, we that established in facility

the improved. Since our quarter, has the balance of cash end

we in under mentioned, million of Payroll the April, Sumit Plan. $X.X Protection As funding secured

$X.X another our our today raise Capital $X.X million, equity with balance so Park We also used to is cash of million. as approximately that Lincoln facility

through Given fourth fund expense this quarter. believe balance our rate, cash the current will we operations

Now, I’d NASDAQ compliance. turn to to like

to bid was relief the from for announced exemption On the COVID-XX request Company X the compliance. through regain market the the NASDAQ to requirements had temporary pandemic, with listing to Company’s April of June XX, continued bid XXXX. price XXXX. action period August requirement to six-month response NASDAQ value the The price requirement listing extends XX, June bid XX, Our and in effect $X listing a minimum and for time until price the granted the compliance

must Company’s price In order the to for consecutive Proxy Company address change the bid with the proposals it least not at listing evidence share Sumit XXXX. timing for the XX, nature bid does the does of NASDAQ’S of requirement, to compliance XX a Nor closing extension Note, of Meeting, May price of Shareholder requirements scheduled evidence a $X minimum the days. the time change per business the Annual discussed.

approved gives before Company’s the split the meet price stockholders. reverse is time such the Company split to a listing if simply affecting minimum It more bid requirement by

to the a board compliance pass, price. the based stock if were split on then a were would Company effect stock for split the the and current proposal to reverse So, discretion to regain have stock reverse

X, less regain Company the notice million, of value XXXX $XX for which X, April formal value listing NASDAQ. is on than Company’s minimum business listed XX that had The on to the days XXX until requirement. received days, market compliance the October or common NASDAQ consecutive The was with Company from stock market calendar required continued also the for XXXX,

the However, XXth also action April for to November the XXXX. value period compliance NASDAQ the on time XX, Company’s market extends with listing requirement

a value can minimum the of regain stock market business listed ten the period, if of consecutive million Company’s least common for at days. $XX Company this is the compliance During

opportunities to said. Let other re-iterating our to ongoing We conclude support as shareholder believe of approval continue strategic our on we listing what maximize proposals me NASDAQ Sumit important value discuss needed to Global to the Proxy are are companies. efforts Market by maintain with the and

over Sumit I back before the few will call to comments to turn now open for we the call a questions.

Sumit Sharma

you, Steve. Thank

call our the during for be many remiss open hard thank would if continuing to Before COVID-XX employees we questions, didn’t working partners and the work, I for cases I pandemic. in remotely

that alternatives commitment our and like implement believe value. we to re-iterate urgency Finally, sense to I of will would strategic shareholder maximize

open questions. you will call the Thank the we now for

Operator

back closing for to Sumit I Sharma will any over call remarks. now the turn

Sumit Sharma

you, partners, our want progress encourage and the once vote giving their employees, you Thank again I Proxy to thank for our to our you. operator. to In discussed we stockholders on support I look on the in Thank forward proposals closing, update future. you the and call. continued business an for

Operator

Thank your you. conference participation. may at today’s for this your and you This disconnect Thank time. concludes you lines

MicroVision (MVIS) 7 May 202020 Q1 Earnings call transcript