Interlink Electronics(LINK) - 2025 Q1 - Quarterly Results

Overview and Management Commentary Management positions Q1 2025 as a transitional low point, focusing on strategic execution for double-digit organic growth and profitability by 2026, driven by gas sensor traction, a major OEM design win, and production shifts - Management views Q1 as the start of a year focused on disciplined execution towards long-term goals, with recent customer wins and product introductions indicating the strategy is effective[4] - The company is experiencing encouraging traction in its gas sensor product line, particularly with advancements in odor and carbon monoxide detection for high-value environmental and safety markets[5] - To counter recent tariff fluctuations, some production activities will be shifted from the low-cost facility in China to the facility in Scotland, aiming to reduce cost structure impacts[6] - Secured a major integrated sensing solution design win with a division of a top 10 global company, with pre-production starting in Q3 2025 and expected revenue of almost $1 million in 2026[8] Financial Performance Interlink's Q1 2025 revenue declined 14.7% to $2.6 million, with gross margin at 35.6%, leading to an $805,000 net loss and $623,000 negative Adjusted EBITDA, while total assets remained $12.5 million Q1 2025 Financial Results Q1 2025 revenue decreased 14.7% to $2.6 million due to lower traditional sensor shipments, with gross margin falling to 35.6%, resulting in a $905,000 net loss or ($0.09) per share Q1 2025 vs Q1 2024 Consolidated Financial Results | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $2.66M | $3.12M | (14.7)% | | Gross Profit | $0.95M | $1.25M | (24.3)% | | Gross Margin | 35.6% | 40.1% | -4.5 p.p. | | Loss from Operations | ($0.85M) | ($0.75M) | (13.0)% | | Net Loss | ($0.81M) | ($0.74M) | (8.6)% | | Diluted EPS | ($0.09) | ($0.09) | 0.0% | - The year-over-year revenue decline was primarily caused by lower shipments of traditional force-sensor and gas-sensor products, though partially offset by sales from the Calman Technology and Conductive Transfers businesses[10] - The increase in net loss was driven by lower revenue and gross profit, which was partially mitigated by reduced operating expenses from lower headcount and compensation costs[11] Financial Position (Balance Sheet) As of March 31, 2025, total assets decreased to $12.47 million, with cash declining to $2.59 million, while total liabilities slightly increased to $2.71 million and stockholders' equity decreased to $9.77 million Condensed Consolidated Balance Sheet (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,585 | $2,950 | | Total current assets | $6,394 | $6,899 | | Total assets | $12,472 | $13,116 | | Total current liabilities | $1,592 | $1,390 | | Total liabilities | $2,707 | $2,623 | | Total stockholders' equity | $9,765 | $10,493 | Non-GAAP Measures (Adjusted EBITDA) Adjusted EBITDA, a non-GAAP metric, showed a loss of $623,000 in Q1 2025, compared to a $508,000 loss in Q1 2024, used by the company for internal performance evaluation Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) | $(805) | $(741) | | EBITDA | $(630) | $(508) | | Stock-based compensation | $7 | $— | | Adjusted EBITDA | $(623) | $(508) | - The company uses Adjusted EBITDA for financial and operational decision-making, to evaluate period-to-period comparisons, and to provide investors with greater transparency into key metrics used by management[19] Business Outlook and Strategy Interlink anticipates 2026 as a breakout year with profitability, double-digit organic revenue growth, and expanded gross margins, prioritizing organic execution while evaluating strategic M&A opportunities - The company is focused on executing its strategy to lay the foundation for a return to profitability and double-digit organic growth in 2026[2] - Management believes 2026 will be a breakout year, driven by profitability, margin expansion, and sustained revenue growth[9] - While organic growth is the top priority, Interlink continues to evaluate a growing pipeline of strategic acquisition opportunities and will act opportunistically[8][9] Supplementary Information This section provides corporate background, legal disclaimers, and contact details, describing Interlink as a global provider of sensors and printed electronic solutions, including standard forward-looking statements and contact information About Interlink Electronics, Inc. Interlink Electronics is a leading provider of sensors and printed electronic solutions with nearly 40 years of experience, serving diverse industrial, medical, consumer, and automotive markets globally - Interlink is a leading provider of sensors and printed electronic solutions, serving diverse markets including industrial, medical, consumer, and automotive[13] - The company operates globally with headquarters and a gas sensor facility in Fremont, CA; a product development center in Camarillo, CA; and manufacturing facilities in Shenzhen, China; Irvine, Scotland; and Barnsley, England[14] Forward-Looking Statements This section provides a standard safe harbor disclaimer, cautioning that forward-looking statements on future performance and strategy are subject to risks and uncertainties, with actual results potentially differing materially - Forward-looking statements in the release, including projections for 2025 and 2026 performance, are not guarantees of future results and are subject to significant uncertainties and risks[16] Contact Information Contact details are provided for company inquiries to CEO Steven N. Bronson and for investor relations inquiries to Gateway Group - Contact information is provided for both the company (CEO Steven N. Bronson) and its investor relations firm (Gateway Group)[21]