Vuzix(US:VUZI)2022-11-10 01:41Financial Data and Key Metrics Changes - Total revenues for Q3 2022 were $3.4 million, an increase of 14% compared to $3 million in Q3 2021 [33] - Gross profit for Q3 2022 was $0.9 million, representing a gross margin of 25%, up from a gross profit of $0.4 million and a margin of 13% in the prior year [36] - Net loss for Q3 2022 was $9.5 million or $0.15 per share, compared to a net loss of $10.5 million or $0.17 per share in Q3 2021 [38] Business Line Data and Key Metrics Changes - Sales of waveguides and display engines reached approximately $0.25 million, a new quarterly record [34] - Revenues from engineering services were also a record at $0.9 million, compared to none in the prior year's period [34] - Decreases in glass revenues were noted due to higher sales discounts for larger volume orders and negative foreign exchange impacts [35] Market Data and Key Metrics Changes - The outlook for warehousing and logistics remains strong, with a Fortune 100 customer placing multiple orders for Smart Glasses [14] - Vuzix Smart Glasses have been deployed in distribution centers of several large retail customers, with expectations for further expansion [15] - In healthcare, major independent software vendors continue to expand the global availability of Vuzix-powered surgical solutions [16] Company Strategy and Development Direction - The company is expanding its waveguide manufacturing capabilities and has entered into a lease for new manufacturing space [11] - Vuzix completed the acquisition of Moviynt, a revenue-generating SaaS solution provider, to broaden its go-to-market strategy [12] - The company is focused on becoming a high-volume, cost-competitive provider of waveguides and display engines for consumer electronics [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, anticipating significant deployments across various sectors [45] - The company expects to see sequential revenue growth in Smart Glasses products and solutions in Q4 2022 [17] - Management noted that while the OEM business may be lumpy, there are numerous programs expected to come online in 2023 [53] Other Important Information - The company has no current or long-term debt obligations outstanding, maintaining a strong cash position of $90.4 million as of September 30, 2022 [38] - Vuzix plans to unveil new products at the Consumer Electronics Show in Las Vegas, indicating ongoing innovation [41] Q&A Session Summary Question: Thoughts on distribution and warehousing channel amid macro headwinds - Management believes Vuzix products enhance efficiency in distribution channels, making them valuable despite labor challenges [45] Question: Mix of OEM business versus Smart Glasses sales in the long term - Management indicated that OEM business could represent significant revenue, with potential for millions of units sold [48] Question: Clarification on OEM revenue and growth expectations - Management acknowledged that OEM revenue can be lumpy but expects consistent growth in 2023 with multiple programs coming online [53] Question: Timing of waveguide opportunities - Management expects some revenue from waveguides in 2023, with broader market growth anticipated in 2024 [56] Question: Timeline for OEM opportunities from early conversations to sale - The timeline varies, with some projects taking 12 to 18 months to reach production, while others may take longer [62]