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Sunday, 19 Nov 2017

Thin Film Electronics reports interim financial results for Q2 2015

Sales revenue was largely related to product deliveries, technology access fees, product development projects, and delivery of prototypes and products to strategic customers and partners

13 Aug 2015 | Editor

Thinfilm’s revenue and other income in the first six months of 2015 amounted to US$ 1,775,000. Sales revenue was largely related to product deliveries, technology access fees, product development projects, and delivery of prototypes and products to strategic customers and partners. Revenue related to government grants and other funded projects amounted to US$ 872,000 in the first six months of 2015 (H1 2014: US$ 745,000). The increase is largely explained by higher activity in existing projects as well as net new projects being progressed.

Operating costs (excluding depreciation and amortization charges) amounted to US$ 14,880,000 in the first half of 2015, including the cost of share-based compensation of US$ 393,000. Excluding share-based compensation, depreciation and amortization, the underlying cost increase in H1 2015 was US$ 984,000, or 7% higher than H1 2014. This increase is caused mainly by:

  • USD 877 thousand higher payroll costs, as the number of full-time employees increased from 77 end of H1 2014 to 105 end of H1 2015 - this increase is a result of a strengthening of the organisation globally, but primarily in the US, as the focus is shifted from development to production.
  • Employer´s tax payable on exercise of Employee Subscription Rights in the period inflated payroll costs by US$ 888,000 (which was partially mitigated by a US$ 790,000 cash inflow from financing as a consequence of the exercises)
  • US$ 608,000 higher costs for Premises and supplies mainly since the costs for manufacturing supplies were higher as production activities increased in the first half of 2015
  • In addition, the cost for sales and marketing and other expenses increased by US$ 397,000 and 316,000 respectively
  • The above-mentioned increases were partially offset by US$ 1,214,000 lower costs for services, mainly since the activity level in external development projects was lower than in the same period in 2014

Investments in fixed and intangible assets amounted to US$ 2,238,000 in the first half of 2015, a 68% decrease compared to the same period in 2014 (H1 2014: US$ 6,973,000), and were mainly related to equipment and tools for the Printed Dopant PolySilicon (PDPS) line as well as improvements to the San Jose site, and also the licensing of technology.

The cash balance on 30 June 2015 amounted to US$ 36,291,000, while cash net of receivables and payables amounted to US$ 33,684,000 (including share-based liability of US$ 861,000, i.e., provisions for employer´s tax associated with future exercise of subscription rights).

Thin Film Electronics reports financial results
for Q2 2015 (US$ ,000)
2015
Q2
2014
Q2
2015
H1
2014
H1
Revenues - Sales 478 407 731 757
Revenues - Others 599 452 1,044 1,235
Revenues - Total 1,077 860 1,775 2,010
Operating Costs (7,738) (7,429) (14,880) (13,306)
Operating Profit(loss) (6,969) (6,924) (13,757) (11,872)
Net (loss) for the period (6,916) (6,695) (13,643) (11,462)

Outlook

Thinfilm concentrates its efforts around commercialising and scaling printed memory and logic, in the form of:

  • single function products such as printed memory and EAS
  • integrated systems including RF communications, sensing and/or display
  • licensing its technology platform to scale up partners. In December 2014, the Company entered into an agreement with Xerox regarding licensing of Thinfilm Memory IPR, furthering the Company’s strategy to provide a licensable platform for the manufacture of printed electronic products
  • Thinfilm expects that the technology transfer to Xerox will be completed according to plan in 2015

The company is investing additionally in the development and scaling of sheet based and roll-to-roll production of logic, displays and batteries as well as roll-to-roll assembly. The combination of a licensing based business model, low CAPEX requirements for production relative to other electronics manufacturing techniques and a focus on leveraging ecosystem partnerships reduces the company dependence on CAPEX for growth.

In addition, Thinfilm will work toward commercialisation of integrated systems such as Thinfilm sensor labels for consumable goods, health care, packaging, and more. Thinfilm has established partnerships for display, sensor, and battery technology, as well as software and distribution. First generation integrated systems and demonstrator deliveries have been made to customers, and production capacity in significant volumes is expected by end 2015.

Thinfilm has shipped 6.5 million EAS tags to date, and expects to deliver the balance of the 13 million unit order in the second half of 2015. The commercialization of PDPS based near field communication (NFC) labels offers significant growth opportunities. Applications for mass markets will likely include brand authentication, supply chain track and trace, digital marketing and consumer engagement. In support of this position, Thinfilm’s successful demonstration of prototypes and products has attracted significant interest from prospective customers and partners.

Since the launch of NFC OpenSense in late February 2015, Thinfilm has experienced significant interest in the technology and has received orders for its products. Both the Board of Directors and management are optimistic that Thinfilm will be able to enter new commercial agreements for printed integrated systems and NFC sensor labels during 2015.

www.thinfilm.no   

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