Thin Film Electronics (ThinFilm) has announced their first quarter financial report for 2016. Thinfilm’s revenue and other income in the first quarter of 2016.
Sales revenue amounted to US$ 150,000 in Q1 2016, compared to US$ 253,000 in Q1 2015, and was largely related to product development projects, delivery of prototypes and products to strategic customers and partners, technology transfer revenue as well as product deliveries.
The decrease in sales revenue year-on-year is primarily a result of lower product revenue as no EAS deliveries were made during the quarter. Revenue related to government grants and other funded projects amounted to US$ 557,000 in the first quarter of 2016 (Q1 2015: US$ 380,000).
The 47% increase is largely explained by new funded projects and higher activity in existing projects in early 2016 as compared to Q1 2015. Other income amounted to US$ 104,000 in the first quarter of 2016 (Q1 2015: US$65,000) and was almost entirely related to sublease income from the San Jose site.
Operating costs (excluding depreciation and amortization charges) amounted to US$ 9,229,000 in the first three months of 2016, including the cost of share-based compensation of US$ 186,000. The corresponding figure in Q1 2015 was US$ 7,142,000.
The cash balance on 31 March 2015 amounted to US$ 23,542,000, while cash net of receivables and payables amounted to US$ 21,047,000.
Financials
| Thin Film Electronics reports financial results for Q1 2016 (USD ,000) now reporting in USD |
2016 Q1 |
2015 Q1 |
2015 FY |
|---|---|---|---|
| Revenues - Sales | 150 | 253 | 2,214 |
| Revenues - Other operating | 557 | 380 | 1,791 |
| Revenues - Other incomes | 104 | 65 | 408 |
| Revenues - Total | 811 | 698 | 4,413 |
| Operating Costs | (9,229) | (7,142) | (34,664) |
| Operating Profit(loss) | (8,970) | (6,788) | (31,788) |
| Net (loss) Income | (10,236) | (6,728) | (29,382) |
| Net per share - basic(NOK) | (0.02) | (0.01) | (0.05) |
Outlook
Going forward, Thinfilm foresees two important revenue sources:
- Sales of its own manufactured products
- Licensing/royalty revenue, where partners and customers pay for using the Company’s intellectual property rights (IPR). Thinfilm’s ability to earn revenue partly depends on continued successful technology and product development as well as the Company’s ability to legally protect its IPR. This is, in turn, depends on the Company’s ability to attract and retain competent staff and the adequacy of Thinfilm’s patenting and other IP-protection activities. Thinfilm is exposed to certain financial risks related to fluctuation of exchange rates and interest level.
The going concern assumption has been applied when preparing this interim financial report. The Board has formed a judgment that as of the date of approving the financial statements, the Company has adequate resources to fund operations for the rest of 2016 and into 2017.
On 31 March 2016, the equity amounted to USD 56,713 thousand, representing 89% of the gross balance sheet and 470% of the share capital.
Thinfilm plans to continue to increase production capacity, which currently allows seven-figure monthly production of NFC labels and multi-million monthly production of EAS tags, to reach an overall 40-million annual unit production capacity, based on NFC label equivalents, in Q2 2016. This is expected to support the market introduction of NFC label products in categories such as wines and specialty foods, and field trials in liquors, while also providing capacity for the expected demand from new EAS orders, currently under negotiation.
The process of migrating transistor manufacturing from sheet-based to roll-based PDPS production has progressed. Initial engineering design for manufacturing equipment is now completed, and site selection for investment in production expansion is pending completion of factory site due diligence. By accelerating the transition to roll-to-roll printed electronics manufacturing through capex investment, Thinfilm expects to be prepared to support up to a billion-unit annual production volume in 2018. In parallel, the Company will look to partner with scale-up qualified, industrial companies to maintain its low-capex business model, as exemplified by its Thinfilm Memory partnership with Xerox. Thinfilm expects to maintain a significant investment in new product development, focusing on new sensor labels, with launch dates later this year for temperature sensors.
Source: Interim-Report-2016-Q1.pdf