INTERLINK ELECTRONICS INC 経営陣による財務状況および経営成績の説明と分析 (フォーム 10-Q)

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The words
"believe," "may," "will," "potentially," "estimate," "continue," "anticipate,"
"intend," "could," "would," "project," "plan," "expect" and similar expressions
that convey uncertainty of future events or outcomes are intended to identify
forward-looking statements. These forward-looking statements speak only as of
the date of this Form 10-Q and are subject to uncertainties, assumptions and
business and economic risks. As such, our actual results could differ materially
from those set forth in the forward-looking statements as a result of the
factors set forth below in Part II, Item 1A, "Risk Factors," and in our other
reports filed with the Securities and Exchange Commission. You should not rely
upon forward-looking statements as predictions of future events. Although we
believe that the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee that the future results, levels of activity,
performance or events and circumstances described in the forward-looking
statements will be achieved or occur. We undertake no obligation to update
publicly any forward-looking statements for any reason after the date of this
Form 10-Q to conform these statements to actual results or to changes in our
expectations, except as required by law.

以下の説明は、フォーム 10-Q のこの四半期報告書の別の場所に記載されている未監査の要約連結財務諸表および注記と併せて読む必要があります。ただし、実際の将来の結果、活動のレベル、業績、出来事、および状況が重大な影響を与える可能性があることを理解しておいてください。私たちが期待するものとは異なります。

概要


Interlink Electronics, Inc. ("we", "us", "our", "Interlink" or the "Company")
designs, develops, manufactures and sells a range of force-sensing technologies
that incorporate our proprietary materials technology, firmware and software
into a portfolio of standard products and custom solutions. These include sensor
components, subassemblies, modules and products that support effective,
efficient cursor control and novel three-dimensional user inputs. Our Human
Machine Interface ("HMI") technology platforms are deployed in a wide range of
markets including consumer electronics, automotive, industrial, and medical. The
application of our HMI technology platforms includes vehicle entry, vehicle
multi-media control interface, rugged touch controls, presence detection,
collision detection, speed and torque controls, pressure mapping, biological
monitoring and others.

Interlink has been a leader in the printed electronics industry for over 35
years with the commercialization of our patented Force-Sensing Resistor ("FSR®")
technology that has enabled rugged and reliable HMI solutions. Our solutions
have focused on handheld user input, menu navigation, cursor control, and other
intuitive interface technologies for the world's top electronics manufacturers.

We invented FSR® technology and pioneered commercialization of printed
electronics manufacturing, paving the way for industry-wide adoption of force
sensing technology. Our extensive knowledge and experience with this technology,
along with the firmware we incorporate in our HMI solutions, differentiates us
from other providers of HMI solutions. We, along with our customers, incorporate
our FSR® and force sensing sensors and modules into end user products. Our
sensors and modules are used in electronics devices and systems where user input
must be converted into useful output data. Our force sensing technology solution
platforms enabled industry-first implementations in gaming, smartphone, rugged
notebook, automotive cockpit and automotive entry applications. Consumer and
end-user demand for enhanced user experience is driving the need for innovative
multi-modal HMI technologies and applications. Force sensing input provides a
critical novel modality that drives a paradigm shift in HMI.

Market requirements for innovative solutions that enable smaller, thinner
devices, lower power consumption, highly refined designs, better navigation and
more intuitive usability in all environments, are also driving increased demand
for our products. Industry is moving towards the use of multi-modal HMI in the
home, industrial, medical and automotive spaces. Interlink delivers
cutting-edge, high-performance HMI solutions for customers who wish to replace
outdated switches and knobs in these environments.

                                       23

目次


Significant market opportunities are rapidly emerging for us to improve upon the
functionality of standard capacitive sensors which are widely available and
competitively priced. Inadvertent activation, where users unintentionally
activate a control, is a common problem with capacitive technology. In contrast,
force sensing solutions require a deliberate application of force to operate. We
have had recent success in using our force sensing solutions in combination with
capacitive technologies to minimize the latter's performance issues, enabling
force sensing solutions to complement competitive technologies and provide
hybrid solutions and open up new opportunities for growth. We continue to
simultaneously expand our standard product portfolio and develop new technology
platforms to grow existing markets and capture emerging markets. This portfolio
expansion will incorporate other complimentary sensing technologies. This
broader portfolio of technologies will allow us to use our expertise in
integrating multiple sensing technologies for applications in the rapidly
growing Internet-of-Things ("IoT").

Interlink serves our world-wide customer base from our corporate headquarters in
Irvine, California (Orange County area) and from our facility in Camarillo,
California (Ventura County), where we have established a Global Product
Development and Materials Science Center. This facility has a state-of-the-art
printed electronics development laboratory as well as materials science lab. Our
engineering team is based in this center where we work with our U.S. and global
customers on developing, engineering, prototyping and implementing our advanced
HMI and sensing solutions. We also maintain a small embedded software and IoT
application development center in Singapore, and we expect to launch an
engineering, research and development center in the United Kingdom. We
manufacture all our products in our printed electronics manufacturing facility
in Shenzhen, China, which has been in operation since 2006. In addition, we
maintain a global distribution and logistics center in Hong Kong, a technical
sales office in Japan, and several manufacturer representatives and distributors
in strategic locations in our key markets, all of which allows us to support our
global customer base. We sell our products in a wide range of markets, including
consumer electronics, automotive, industrial and medical. Our customers are some
of the world's largest companies and most recognizable brands.

重要な会計方針と見積もり


We prepare our consolidated financial statements in accordance with generally
accepted accounting principles in the United States ("GAAP"). The preparation of
consolidated financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue, costs and
expenses, and related disclosures. We evaluate our estimates and assumptions on
an ongoing basis. We base our estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances.
Actual results could differ significantly from the estimates made by our
management. To the extent that there are differences between our estimates and
actual results, our future financial statements presentation, financial
condition, results of operations, and cash flows will be affected.

A description of our critical accounting policies that represent the more
significant judgments and estimates used in the preparation of our financial
statements was provided in the Management's Discussion and Analysis of Financial
Condition and Results of Operations section in our Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 29, 2022. There have
been no changes to our critical accounting policies and estimates described in
the Form 10-K that have had a material impact on our condensed consolidated
financial statements and related notes.

最近発行および採用された会計上の通知

最近発行されたすべての会計報告書を検討し、それらはすべて、当社の財務諸表に適用可能であるか、重要であるとは予想されていないと結論付けました。


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  Table of Contents

Results of Operations

次の表は、示された期間の特定の未監査の要約連結損益計算書データを示しています。 表のパーセンテージは、純収益に基づいています。

                                             Three months ended September 30,             Nine months ended September 30,
                                                 2022                   2021                 2022                  2021
                                             $            %          $         %          $           %         $         %

                                                                  (in thousands, except percentages)
Revenue, net                             $   1,851       100.0 %  $ 2,223    100.0 %  $   5,882     100.0 %  $ 5,855    100.0 %
Cost of revenue                                979        52.9 %      931     41.9 %      2,817      47.9 %    2,562     43.8 %
Gross profit                                   872        47.1 %    1,292  

58.1 % 3,065 52.1 % 3,293 56.2% 営業費用: エンジニアリング、研究開発費 319 17.2% 105

4.7 % 912 15.5 % 554 9.5% 販売、一般管理

            743        40.1 %      928   

41.7 % 2,476 42.1 % 2,407 41.1 % 営業費用合計

                     1,062       557.4 %    1,033   

46.5 % 3,388 57.6 % 2,961 50.6 % 営業利益(損失)

                (190)      (10.3) %      259   

11.7% (323) (5.5) % 332 5.7% その他の収入 (費用): その他の収入 (費用)、純額

                    207        11.2 %      (6)   

(0.3) % 704 12.0% (25) (0.4) % 税引前利益(損失)

               17         0.9 %      253   

11.4 % 381 6.5 % 307 5.2% 所得税費用(給付)

                    11         0.6 %       30      1.3 %        121       2.1 %       64      1.1 %
Net income (loss)                        $       6         0.3 %  $   223     10.0 %  $     260       4.4 %  $   243      4.2 %

終了した 3 か月間の比較 2022 年 9 月 30 日 そして2021年

私たちがサービスを提供する市場ごとの純収益は次のとおりです。

                    Three months ended September 30,
                       2022                   2021
                             % of                  % of
                 Amount     Revenue    Amount     Revenue     $ Change     % Change

                                (in thousands, except percentages)
Industrial      $    485       26.2 %  $   557       25.1 %  $     (72)      (12.9) %
Medical              372       20.1 %      333       15.0 %          39        11.7 %
Consumer             216       11.7 %      374       16.8 %       (158)      (42.2) %
Automotive            10        0.5 %        -          - %          10       100.0 %
Standard             768       41.5 %      959       43.1 %       (191)      (19.9) %
Revenue, net    $  1,851      100.0 %  $ 2,223      100.0 %  $    (372)      (16.7) %


We sell our custom products into the industrial, medical, consumer and
automotive markets. We sell our standard products through various distribution
networks. The ultimate customer for standard products may come from different
markets which are often unknown to us at the time of sale. Each market has
different product design cycles. Products with longer design cycles often have
much longer product life-cycles. Industrial and medical products generally have
longer design and life-cycles than consumer products. We currently have products
with life-cycles that have exceeded twenty years and are ongoing.

                                       25

目次


Revenues were up in the three months ended September 30, 2022 compared to the
three months ended September 30, 2021 in the medical market, and were down in
the industrial and consumer markets and for our standard products. The increase
in revenue from our medical market customers is due to a continued increase in
orders from and shipments to our largest medical customer, whose purchasing
volume has increased based on increases in installations at their hospital and
medical center customer locations. The decrease in revenue from our industrial
market customers was due to decreased purchasing volume by these customers for
use in their ongoing product lines resulting from changes in demand by their
customers. The decrease in revenue from our consumer market customers is
primarily due to a design change by one of our largest consumer products
customers, offset by shipments of our custom sensors to a new customer in this
market. In all markets, the timing of orders from our customers is not always
predictable and can be concentrated in varying periods during the year to
coincide with their project and building plans.

                    Three months ended September 30,
                       2022                  2021
                            % of                  % of
                Amount     Revenue    Amount     Revenue    $ Change     % Change

                               (in thousands, except percentages)
Gross profit    $   872       47.1 %  $ 1,292       58.1 %  $   (420)      (32.5) %


Our gross profit and gross margin percentage are impacted by various factors
including product mix, customer mix, sales volume, and fluctuations in our cost
of revenues, which are comprised of material costs, direct and indirect
production labor costs, warehousing and logistics costs, facilities costs, and
other costs related to production activities. Gross profit and gross margin
percentage during the three months ended September 30, 2022 were down compared
to the three months ended September 30, 2021 due primarily to higher materials
and components costs on certain orders, and unfavorable changes in product and
customer mix.

                                               Three months ended September 30,
                                                 2022                    2021
                                                        % of                   % of
                                          Amount      Revenue      Amount     Revenue    $ Change     % Change

                                                          (in thousands, except percentages)
Engineering, research and development    $    319         17.2 %  $    105 

4.7% $214 203.8%

Engineering and R&D expenses consist primarily of compensation expenses for
employees engaged in research, design and product development activities, and
the cost of those employees' indirect supplies and allocation of facilities
expenses. Our R&D team focuses both on internal design development in order to
develop our HMI solutions, as well as design development aimed at addressing our
customers' unique design challenges. Engineering and R&D costs for the three
months ended September 30, 2022 were up compared to the three months ended
September 30, 2021 due to increased engineering employee headcount and increased
prototyping and product-development activities, and also due to inclusion in the
2021 period of receipt of a $129 thousand research incentive grant from the
Singapore government that reduced expenses in the prior year period.

                                             Three months ended September 30,
                                               2022                    2021
                                                      % of                   % of
                                        Amount      Revenue      Amount     Revenue     $ Change     % Change

                                                         (in thousands, except percentages)
Selling, general and administrative    $    743         40.1 %  $    928   

41.7% $ (185) (19.9)%



Selling, general and administrative expenses consist primarily of compensation
expenses, legal and other professional fees, facilities expenses and
communication expenses. Selling, general and administrative costs for the three
months ended September 30, 2022 were down compared to the three months ended
September 30, 2021 due to lower sales and marketing employee headcount, and
lower legal and other professional fees.

                                            Three months ended September 30,
                                              2022                    2021
                                                     % of                   % of
                                       Amount      Revenue      Amount     Revenue    $ Change     % Change

                                                       (in thousands, except percentages)
Other income (expense), net           $    207         11.2 %  $    (6)    
 (0.3) %  $     213          nm %


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  Table of Contents
Other income (expense), net consists of non-operating income and expenses, such
as gains and losses on marketable securities, foreign currency transaction gains
and losses, interest income and expense, and other non-operating income and
expenses. Other income (expense), net for the three months ended September 30,
2022 was comprised of $181 thousand of gains on marketable securities, $24
thousand of foreign currency transaction gains, and $2 thousand of other
non-operating income, while other income (expense), net for the three months
ended September 30, 2021 was comprised of $6 thousand of foreign currency
transaction losses.

                                             Three months ended September 30,
                                               2022                      2021
                                                                                                       Change
                                                      % of                     % of                    in % of
                                                     Pre-tax                  Pre-tax                  Pre-tax
                                       Amount        Income        Amount     Income      $ Change     Income

                                                         (in thousands, except percentages)
Income tax expense (benefit)          $      11          64.7 %   $     30 

11.9% $ (19) 52.8%



Income tax expense (benefit) reflects statutory tax rates in the jurisdictions
in which we operate, adjusted for permanent book/tax differences. Our effective
tax rate is directly affected by the relative proportions of earnings and losses
in the jurisdictions in which we operate, including our current limitation on
realizing tax benefits on domestic losses due to the valuation allowance on our
domestic net operating loss carryforward. Based on the expected mix of domestic
and foreign earnings and losses, we anticipate our effective tax rate to remain
higher than the U.S. statutory rate of 21% primarily due to a significant
portion of our consolidating earnings being recorded in the jurisdictions of
China (25%), Singapore (17%), and Hong Kong (16.5%), while our domestic losses
do not benefit the rate due to the valuation allowance. State income taxes also
have an impact in the U.S.

Discrete tax events may cause our effective rate to fluctuate on a quarterly
basis. Certain events, including, for example, acquisitions and other business
changes, which are difficult to predict, may also cause our effective tax rate
to fluctuate. We are subject to changing tax laws, regulations, and
interpretations in multiple jurisdictions. Corporate tax reform continues to be
a priority in the U.S. and other jurisdictions. Additional changes to the tax
system in the U.S. could have significant effects, positive and negative, on our
effective tax rate, and on our deferred tax assets and liabilities.

9ヶ月間の比較 2022 年 9 月 30 日 そして2021年

私たちがサービスを提供する市場ごとの純収益は次のとおりです。

                    Nine months ended September 30,
                       2022                  2021
                            % of                  % of
                Amount     Revenue    Amount     Revenue    $ Change     % Change

                               (in thousands, except percentages)
Industrial      $ 1,797       30.6 %  $ 1,529       26.1 %  $     268        17.5 %
Medical           1,569       26.7 %      662       11.3 %        907       137.0 %
Consumer            265        4.5 %    1,271       21.7 %    (1,006)      (79.2) %
Automotive           24        0.4 %        -          - %         24       100.0 %
Standard          2,227       37.9 %    2,393       40.9 %      (166)       (6.9) %
Revenue, net    $ 5,882      100.0 %  $ 5,855      100.0 %  $      27         0.5 %


Revenues were up in the nine months ended September 30, 2022 compared to the
nine months ended September 30, 2021 in the industrial and medical markets, and
were down in the consumer markets and for our standard products. The increase in
revenue from our industrial market customers was due to increased purchasing
volume by and shipments to these customers. The increase in revenue from our
medical market customers is due to a continued increase in shipments to our
largest medical customer, whose purchasing volume has increased as COVID-19
restrictions have begun to subside. The decrease in revenue from our consumer
market customers is primarily due to a design change by one of our largest
consumer products customers, offset by shipments of our custom sensors to a new
customer in this market. During 2022, we also sold products in the automotive
market for the first time since 2018, as we are again pursuing a program with an
automotive manufacturer. In all markets, the timing of orders from our customers
is not always predictable and can be concentrated in varying periods during the
year to coincide with their project and building plans.

                                       27

  Table of Contents

                     Nine months ended September 30
                       2022                  2021
                            % of                  % of
                Amount     Revenue    Amount     Revenue     $ Change     % Change

                                (in thousands, except percentages)
Gross profit    $ 3,065       52.1 %  $ 3,293       56.2 %  $    (228)       (6.9) %


Gross profit and gross margin percentage during the nine months ended September
30, 2022 were down compared to the nine months ended September 30, 2021 due
primarily to higher materials and components costs on certain orders, higher
freight and tariff costs on certain transactions, unfavorable changes in product
and customer mix, and changes in production efficiencies in our manufacturing
operations.

                                               Nine months ended September 30,
                                                 2022                    2021
                                                        % of                   % of
                                          Amount      Revenue      Amount     Revenue    $ Change     % Change

                                                          (in thousands, except percentages)
Engineering, research and development    $    912         15.5 %  $    554 

9.4% $358 64.6%

Engineering and R&D costs for the nine months ended September 30, 2022 were up
compared to the nine months ended September 30, 2021 due to increased
engineering employee headcount and increased costs on prototyping and
development activities, and also due to inclusion in the 2021 period of receipt
of a $129 thousand research incentive grant from the Singapore government that
reduced expenses in the prior year.

                                           Nine months ended September 30,
                                              2022                  2021
                                                   % of                  % of
                                       Amount     Revenue    Amount     Revenue     $ Change     % Change

                                                       (in thousands,

パーセンテージを除く) 販売、一般および管理 $2,476 42.9% 2,407ドル 41.1% $69 2.9%



Selling, general and administrative costs for the nine months ended September
30, 2022 were up slightly compared to the nine months ended September 30, 2021.
The prior year period included a $186 thousand benefit from forgiveness of the
PPP loan. When comparing selling, general and administrative costs for the
periods exclusive of that benefit, costs for the nine month period in the
current year were lower than in the prior year due to lower sales and marketing
employee headcount, and lower legal and other professional fees.

                                           Nine months ended September 30,
                                             2022                   2021
                                                   % of                   % of
                                       Amount     Revenue     Amount     Revenue    $ Change     % Change

                                                      (in thousands, except percentages)
Other income (expense), net           $    704       12.0 %  $   (25)     

(0.4) % $729 nm%

Other income (expense), net consists of non-operating income and expenses, such
as gains and losses on marketable securities, foreign currency transaction gains
and losses, interest income and expense, and other non-operating income and
expenses. Other income (expense), net for the nine months ended September 30,
2022 was comprised of $562 thousand of gains on marketable securities, $139
thousand of foreign currency transaction gains, and $3 thousand of other
non-operating income, while other income (expense), net for

                                       28

目次


the nine months ended September 30, 2021 was comprised of $15 thousand of
foreign currency transaction losses, and $10 thousand of other non-operating
expenses.

                                            Nine months ended September 30,
                                              2022                   2021
                                                                                                   Change
                                                    % of                   % of                    in % of
                                                   Pre-tax                Pre-tax                  Pre-tax
                                         Amount    Income      Amount     Income      $ Change     Income

                                                       (in thousands, except percentages)
Income tax expense (benefit)          $     121       31.8 %  $     64     

20.8% 57ドル 89.1%



Income tax expense (benefit) reflects statutory tax rates in the jurisdictions
in which we operate adjusted for permanent book/tax differences. Our effective
tax rate is directly affected by the relative proportions of earnings and losses
in the jurisdictions in which we operate.

流動性と資金源


Cash requirements for working capital and capital expenditures have been funded
from cash balances on hand, cash generated from operations, and sales of equity
securities. As of September 30, 2022, we had cash and cash equivalents of $3.9
million, working capital of $12.0 million and no indebtedness. Cash and cash
equivalents consist of cash and money market funds. Of the $3.9 million of cash
balances on hand, $0.9 million was held by foreign subsidiaries. If these funds
are needed for our operations in the U.S., we have several methods to repatriate
without significant tax effects, including repayment of intercompany loans or
distributions of previously taxed income. Other distributions may require us to
incur U.S. or foreign taxes to repatriate these funds.

We have outstanding 200,000 shares of our 8.0% Series A Convertible Preferred
Stock that has an aggregate liquidation preference of $5.0 million, for which we
pay, when, as and if declared by our board of directors, monthly cumulative cash
dividends at an annual rate of 8.0%, which is equivalent to $0.16667 per month
and $2.00 per annum per share, based on a per share liquidation preference of
$25.00. Dividends on the Series A Convertible Preferred Stock are payable
monthly in arrears on the 15th day of each calendar month. Our board of
directors commenced paying dividends on our Series A Convertible Preferred Stock
in November 2021, and we expect that our board of directors will continue to
declare and pay monthly cash dividends on our Series A Convertible Preferred
Stock, subject to the limitations to do so under Nevada law.

We believe that our existing cash and cash equivalents balance will be
sufficient to maintain our current operations considering our current financial
condition, obligations, and other expected cash flows. If our circumstances
change, however, we may require additional cash. If we require additional cash,
we may attempt to raise additional capital through equity, equity-linked or debt
financing arrangements. If we raise additional funds by issuing equity or
equity-linked securities, the ownership of our existing stockholders will be
diluted. If we raise additional financing by the incurrence of indebtedness, we
could be subject to fixed payment obligations and could also be subject to
restrictive covenants, such as limitations on our ability to incur additional
debt, and other operating restrictions that could adversely impact our ability
to conduct our business. If we are unable to raise additional needed funds, we
may also take measures to reduce expenses to offset any shortfall.

キャッシュフロー分析


Our cash flows from operating, investing and financing activities are summarized
as follows:

                                                         Nine Months Ended
                                                           September 30,
                                                          2022        2021

                                                          (in thousands)

営業活動による純キャッシュ・フロー $ (385) $639
投資活動に使われた純現金

                   (6,021)      

(142)

Net cash (used in) financing activities                     (300)         
-


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  Table of Contents

営業活動によって得られた(使用された)正味キャッシュ


For the nine months ended September 30, 2022, the $385 thousand of cash used in
operating activities was attributable to net income of $260 thousand, adjusted
for non-cash charges of $201 thousand, unrealized and realized gains on
marketable securities of $562 thousand, and cash used in changes in operating
assets and liabilities of $284 thousand.

Accounts receivable decreased from $1.1 million at December 31, 2021 to $958
thousand at September 30, 2022 due to improved collections and
days-sales-outstanding for the third quarter of 2022 compared to the fourth
quarter of 2021. Many of our customers pay promptly and accounts receivable is
generally related to the most recent shipments. Inventories increased from $814
thousand at December 31, 2021 to $1.1 million at September 30, 2022. Inventory
balances fluctuate depending on the timing of materials purchases and product
shipments. Prepaid expenses and other current assets increased from $391
thousand at December 31, 2021 to $453 thousand at September 30, 2022. The
balance of our prepaid expenses and other assets fluctuates with the timing of
payments of insurance premiums, advances, and estimated income taxes. Accounts
payable and accrued liabilities decreased from $845 thousand at December 31,
2021 to $692 thousand at September 30, 2022, primarily due to the timing of
payment for purchases of materials, compensation accruals, and other outside
services.

For the nine months ended September 30, 2021, the $639 thousand of cash provided
by operating activities was attributable to net income of $243 thousand,
adjusted for non-cash charges of $229 thousand, non-cash gain on forgiveness of
PPP loan of $186 thousand, and cash provided by changes in operating assets and
liabilities of $353 thousand.

使用した純現金 投資活動において


Net cash used in investing activities of $6.0 million for the nine months ended
September 30, 2022 consisted of purchases of $6.0 million of marketable
securities (net of sales) and $9 thousand of property, plant, and equipment. Net
cash used in investing activities of $142 thousand for the nine months ended
September 30, 2021 consisted of purchases of property, plant, and equipment.

正味使用量 資金調達活動において

Net cash used in financing activities of $300 thousand for the nine months ended
September 30, 2022 consisted of payment of dividends on our Series A Convertible
Preferred Stock. There was no cash provided by or used in financing activities
during the nine months ended September 30, 2021.

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