Neonode Reports Year Ended December 31, 2021 Financial Results
STOCKHOLM, SWEDEN, March 10, 2022 — Neonode Inc. (NASDAQ: NEON), today reported financial results for the fiscal year ended December 31, 2021.
FINANCIAL SUMMARY FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021:
- Revenue of $5.8 million, a decrease of 2.5% compared to prior year.
- Operating expenses of $12.0 million, an increase of 8.0% compared to prior year.
- Net loss of $6.5 million, or $0.54 per share, compared to $5.6 million, or $0.56 per share, for prior year.
- Cash used by operations of $7.7 million compared to $5.8 million for prior year.
- Cash and accounts receivable of $18.7 million as of December 31, 2021 compared to $12.2 million for the prior year-end.
THE CEO’S COMMENTS
“2021 was another challenging year where pandemic-driven lock-downs negatively impacted our financial performance. The impact of these lock-downs was exacerbated by global supply chain constraints affecting several of our customers due to lack of semiconductor and other key components. These unprecedented events resulted in a temporary slowdown in the progress we experienced in the first half of the year where we saw increasing traction with elevator and kiosk customers using our Touch Sensor Modules (“TSMs”) and stable license revenues. During this time of uncertainty, we refined and improved our product lines, increased marketing and business development activities, solidified our cash position and as a result added many new partners and customers. Customers have accelerated the adoption TSM-powered retrofit solutions for contactless touch in self-service kiosks in some large fast-food restaurants, airports and convenience stores, and in elevators, in Asia and Europe. We have also seen increased interest from kiosk and elevator OEMs to develop and start to sell their own contactless touch solutions, for retrofit and new equipment. We expect these activities to continue to increase over the next few years, with Asian customers leading the way,” said Dr. Urban Forssell, Neonode’s CEO.
“We are more confident than ever that we are in the right place at the right time with our contactless touch technology and our TSM products. We and our partners are all experiencing growing demand for intuitive, easy to use and safe contactless touch solutions. We also see a growing wave of interest in our solutions for driver and in-cabin monitoring, gesture sensing and object detection from automotive customers and continue to see opportunities to license our well-proven, high-performance touch technology to customers in the automotive, military and avionics, medical and industrial automation segments. We believe that we are well capitalized to navigate the current headwinds and continue to grow the company and increase shareholder value,” concluded Dr. Forssell.
FINANCIAL OVERVIEW FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021
Net revenues for fiscal 2021 were $5.8 million, a 2.5% decrease, compared to 2020. For 2021, license revenues were $4.8 million, an increase of 3.7% compared to 2020. License revenues in the first half of 2020 were depressed by the general COVID-19 driven economic slow-down. During the second half of 2020 our license revenues started to recover, and this trend continued during the first half of 2021. For the third quarter of 2021, revenues decreased primarily due to overall global supply-chain constraints and more specifically semiconductor component shortages within the printer and automotive markets combined with renewed pandemic-driven lock-downs in our key markets. For the fourth quarter of 2021, license revenues increased by 59.9% over the third quarter due to a more balanced supply/demand situation in the semiconductor markets, which allowed for increased product shipments by our printer and automotive customers.
Revenues from product sales were $1.0 million, the same as for 2020. In the first half of 2021 we saw an increase in product sales. In the second half of 2021, product sales were negatively impacted when COVID-19 driven lock-downs were implemented in our key markets. Our elevator and kiosks customers in Asia have been first adopters for our contactless touch technology and as expected, most of our initial TSM sales are related to retrofit solutions. New customer equipment launches have much longer product development and production cycles that can take 6 to 18 months, or even longer.
Our total gross margin was 83.6% in 2021 compared to 82.0% in 2020. Gross margin related to products was 3.5% in 2021 compared to 15.6% in 2020. Products gross margin was impacted by one-time adjustments related to AirBar inventory write-downs in 2021 and 2020. In the fourth quarter of 2021, products gross margin was also impacted by costs and lost revenues caused by a quality issue related to our TSM production and TSM stock write-down. Adjusting for these one-time effects and also excluding AirBar revenues and costs, the products gross margin was 38.0% in 2021 compared to 32.4% in 2020. Our operating expenses increased 8.0% in 2021 compared to 2020, primarily due to adding headcount in all departments in 2021 to position the company for future growth.
Net loss attributable to Neonode for fiscal 2021 was $6.5 million, or $0.54 per share, compared to a net loss of $5.6 million, or $0.56 per share, in fiscal 2020. Cash used by operations was $7.7 million fiscal 2021 compared to $5.8 million fiscal 2020. The increase is primarily the result of a higher net loss and increased inventory to secure our future product deliveries.
Cash and accounts receivable totaled $18.7 million and working capital was $19.1 million as of December 31, 2021 compared to $12.2 million and $10.4 million as of December 31, 2020, respectively.
A reconciliation of adjusted gross profit to gross margin for the years ended December 31, 2021 and 2020, is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures.”
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