Market Overview

Interlink Electronics Reports First Quarter 2019 Results

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Interlink Electronics, Inc. (OTC:LINK), a world-leading trusted advisor
and technology partner in the advancing world of human-machine interface
(HMI) and force-sensing technologies, today announced its financial
results for the first quarter 2019. GAAP net loss for the quarter was
($314) thousand or ($0.05) per share, both reflecting a significant
decrease from the prior year's results.

Consolidated Financial Highlights

(Amounts in thousands except per share data and percentages)

       
Three months ended March 31,
Consolidated Financial Results 2019     2018     $ ∆ % ∆  
 
Net revenue $ 1,450 $ 2,573 $ (1.123 ) (43.6 ) %
Gross profit $ 700 $ 1,411 $ (711 ) (50.4 ) %
Gross margin 48.3 % 54.8 %
 
Income (loss) from Operations $ (343 ) $ 219 $ (562 ) N/A
 
Net income (loss) $ (314 ) $ 118 $ (432 ) N/A
Earnings (loss) per share (basic and diluted) $ (0.05 ) $ 0.02
 
EBITDA $ (309 ) $ 259 $ (568 ) N/A
EBITDA margin1 (21.3 ) % 10.1 %

1 EBITDA margin is EBITDA divided by net revenue.

  • Revenue in the first quarter of 2019 decreased approximately 44% to
    $1.5 million from $2.6 million in the same year-ago period, primarily
    due to market challenges existing in many of the industries we serve.
  • Gross margin declined to 48% from 55% due to decrease in revenues, as
    less revenue was available to cover fixed costs and production
    overhead costs.
  • Net income deteriorated in the first quarter versus the prior-year
    period, driven primarily by unfavorable volume and timing-related mix,
    partially offset by lower SG&A costs.
  • EBITDA was negative ($309) for the quarter, representing the first
    quarter in five years for which the Company did not generate positive
    EBITDA. On a trailing-twelve basis, EBITDA was still positive at $442
    thousand.
  • The company ended the period with $5.9 million in cash and cash
    equivalents. Coupled with no debt, its balance sheet remains robust.

"We had a very solid quarter in our Medical market, with sturdy sales
and pipeline that remains robust and will continue to be a source for
growth, although at a slower pace. These flat but encouraging results
were more than offset by the anticipated year-over-year declines in
Automotive and Industrial markets related to a sharp drop-off in
shipments to some of our largest customers. Given the weaker than
expected demand across all markets, we have implemented a variety of
countermeasures to adjust our cost structure and limit the impact of the
softness going forward," said Steven N. Bronson, CEO of Interlink
Electronics, Inc.

Investment in R&D has increased by more than 12% in the first quarter
versus the prior-year period. "Our strategic investments include
recruitment of scientific and engineering talents, development of
technology platforms, growing our patent portfolio and expansion of
advanced pilot manufacturing facilities. These initiatives will position
Interlink for future growth and profitability. We plan to release new
and patent-pending product platforms in the second half of this year
that will include force sensing devices with significantly improved
sensing range, enhanced rugged touchpad surfaces, and advanced matrix
array sensing solutions," Mr. Bronson stated.

Interlink makes available its annual financial statements, quarterly
financial statements, and other significant reports and amendments to
such reports, free of charge, on its website as soon as reasonably
practicable after such reports are prepared. Please visit www.interlinkelectronics.com
to view the Company's financial results in more detail.

About Interlink Electronics, Inc.

Interlink Electronics is a world-leading trusted advisor and technology
partner in the advancing world of human-machine interface (HMI) and
force-sensing technologies. Interlink Electronics has led the printed
electronics industry in its commercialization of its patented
Force-Sensing Resistor (FSR®) technology, which has enabled rugged and
reliable HMI solutions. For over 30 years, Interlink Electronics'
solutions have focused on handheld user input, menu navigation, cursor
control, and other intuitive interface technologies for the world's top
electronics manufacturers. Interlink Electronics has a proven track
record of supplying HMI solutions for mission-critical applications in a
wide range of markets, including, but not limited to, consumer
electronics, automotive, industrial, and medical devices. Interlink
Electronics serves a world-class customer-base from its our corporate
headquarters in Westlake Village, California (greater Los Angeles area),
our global research and development center in Singapore, our
printed-electronics manufacturing facility in Shenzhen, China and our
global distribution and logistics center in Hong Kong. We also maintain
technical and sales offices in Japan and at various locations in the
United States. For more information, please see our website at www.interlinkelectronics.com.

Forward Looking Statements

This release contains forward-looking statements. Forward-looking
statements include, but are not limited to, the Company's views on
future financial performance and are generally identified by phrases
such as "thinks," "anticipates," "believes," "estimates," "expects,"
"intends," "plans," and similar words. Forward-looking statements are
not guarantees of future performance and are inherently subject to
uncertainties and other factors which could cause actual results to
differ materially from the forward-looking statement. These statements
are based upon, among other things, assumptions made by, and information
currently available to, management, including management's own knowledge
and assessment of the Company's industry, R&D initiatives, competition
and capital requirements. Other factors and uncertainties that could
affect the Company's forward-looking statements include, among other
things, the following: our success in predicting new markets and the
acceptance of our new products; efficient management of our
infrastructure; the pace of technological developments and industry
standards evolution and their effect on our target product and market
choices; the effect of outsourcing technology development; changes in
the ordering patterns of our customers; a decrease in the quality and/or
reliability of our products; protection of our proprietary intellectual
property; competition by alternative sophisticated as well as generic
products; continued availability of raw materials for our products at
competitive prices; disruptions in our manufacturing facilities; risks
of international sales and operations including fluctuations in exchange
rates; compliance with regulatory requirements applicable to our
manufacturing operations; and customer concentrations The Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

Non-GAAP Financial Information

A non-GAAP financial measure is a numerical measure of a company's
performance, financial position, or cash flows that either excludes or
includes amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance with
generally accepted accounting principles, or GAAP. Non-GAAP measures are
not in accordance with, nor are they a substitute for, GAAP measures.
Other companies may use different non-GAAP measures and presentation of
results.

In addition to financial results presented in accordance with GAAP,
this press release presents EBITDA and EBITDA margin, each of which is a
non-GAAP measure. EBITDA is determined by taking net income and adding
interest, income taxes, depreciation and amortization, and EBITDA margin
is determined by dividing EBITDA by net revenue.
Interlink
believes that these non-GAAP measure, viewed in addition to and not in
lieu of net income and gross margin, provide useful information to
investors by providing more focused measures of operating results. These
metrics are an integral part of Interlink's internal reporting to
evaluate its operations and the performance of senior management.

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