Vuzix(US:VUZI)2020-03-16 19:07Financial Data and Key Metrics Changes - For the full year ended December 31, 2019, total revenues were $6.7 million, a decrease of 18% from $8.1 million in the prior year [44] - The net loss for 2019 was $28.4 million, or $0.94 per share, compared to a loss of $23.7 million, or $0.87 per share in 2018 [55] - Cash position as of December 31, 2019, was $10.6 million, with net working capital of $16.4 million [56] Business Line Data and Key Metrics Changes - Total sales of M Series Smart Glasses decreased by 44% year-over-year, while Vuzix Blade revenues increased by 244% in 2019 compared to 2018 [44] - Sales of engineering services increased by 67% to $0.7 million from $0.4 million in 2018 [44] - In Q4 2019, sales of M Series Smart Glasses rose by 16% quarter-over-quarter, and Vuzix Blade sales increased by 54% compared to Q4 2018 [46] Market Data and Key Metrics Changes - The coronavirus outbreak has led to a surge in demand for smart glasses for remote support, business continuity, and education, with initial growth in Japan and the Asia Pacific region, followed by Europe and the U.S. [23] - Vuzix has multiple partners offering remote support through their applications, and has released connectors for Zoom and Skype for business [24] Company Strategy and Development Direction - The company aims to grow sales and deployment sizes for existing M Series Smart Glasses and plans to commence shipment of M4000 Smart Glasses in volume during the second half of 2020 [40] - Vuzix is focusing on expanding its OEM program engagements, which typically come with upfront cash payments and higher gross margins [41] - The strategy includes leveraging existing platforms to reduce new product development costs, particularly for the M4000, which is based on the M400 Smart Glasses [55] Management Comments on Operating Environment and Future Outlook - Management expects solid year-over-year revenue growth in 2020, driven by enterprise applications in remote support, logistics, telemedicine, and manufacturing [12] - The company is optimistic about the performance of the M400 Smart Glasses, which has been well received in the market [13] - Management acknowledges uncertainty due to the COVID-19 pandemic but notes that demand for remote support applications is accelerating [75] Other Important Information - Vuzix achieved ISO 9001:2015 certification for its West Henrietta facility, which is crucial for supplying larger OEM partners [8] - The company has over 150 patents and patents pending, positioning it as a leader in near-eye display technology [32] Q&A Session Summary Question: Revenue magnitude expectations for the second half of the year - Management indicated that the base business is expected to grow, with significant potential from engineering programs that could yield millions in revenue [69] Question: Impact of COVID-19 on customer purchasing decisions - Management noted that while some purchasing decisions are delayed, there is an acceleration in demand for remote support applications due to business continuity issues [75] Question: Expectations for operating expenses moving forward - Management suggested that Q4 2019 expenses could serve as a good baseline, with hopes to reduce them slightly [80] Question: Status of the M300C project - Management clarified that while there have been no follow-on orders, the project is still ongoing, but orders have not been received recently [83] Question: Revenue trajectory throughout the year - Management confirmed that revenues are expected to build throughout the year, with the second half likely to be stronger than the first half [92][95]