OSLO, NORWAY--(Marketwired - Feb 28, 2017) - NEXT Biometrics Group ASA (Oslo Bors: NEXT) today announced interim results for the fourth quarter and year ended December 30, 2016. NEXT, the leader in high-quality low-cost fingerprint sensors based in Oslo, Norway, summarized highlights:
- Sales in 2016 rose to 92.1 million Norwegian Krone, or $11 million USD, from MNOK 4.6 MNOK in 2015 (conversion rate 8.38 NOK to $1 USD);
- Fourth Quarter sales were 31.8 MNOK vs 28.4 MNOK in the third quarter of 2016;
- First 1.5 million fingerprint sensors shipped (high yield effects from December)
- Improvements of several key supplier agreements
- Generation 2 ASIC project on track, reducing Q3 module COGS by more than $2.50.
- 2 new Smart Card design wins (400 k units);
- New NEXT Biometrics CEO Ritu Favre, appointed February, 2017, was former SVP and GM of Synaptics;
- Private Placement gross proceeds of 156 MNOK, or $18.7 MUSD (February).
In discussing results, the Company said the high yield from implementation of the new generation low power sensor contributed to reductions of Cost of Goods Sold (COGS) from September onwards and that significantly higher yields were realized form December.
NEXT said first tests of the second generation ASIC have been performed and that further tests of updated version is in progress. The volume module deliveries are targeted to start from Q3-2017, with expected cost down in excel of $2.50 per module compared with existing levels.
In NEXT's presentation now online, the Company noted it continues in close collaboration with its strategic partner INNOLUX, to make advancements in developing the flexible fingerprint sensor process and to ready mass production capacity. In parallel working with Smart Card partners, the Company targets the first volume deliveries of the world's first fully 1SO-compliant flexible sensor Smart Cards in the second half of 2017.
As NEXT announced earlier this month, the Board of Directors appointed Ritu Favre, 48, as new CEO of NEXT Biometrics as CEO Tore Etholm-Idsøe, 57, will continue to work full time in his new role Chairman of the Board to be confirmed at the upcoming General Assembly of NEXT.
NEXT Biometrics detailed its outlook for the 3-to-9-month period ahead for 2017, noting it expects:
• Q1 Sales are expected to be level with the previous quarters;
• Strong focus on flexible sensor project development;
• Continued progress with major players in the Smart Card industry;
• Increased focus on next generation ASICs;
• Implementation of second generation ASIC, reducing COGS by more than $2.50; and
• Capitalize on ACIC2 rigid modules in Notebooks and NEXT-Enabled markets.
In discussing results, NEXT Biometrics noted that at Trustech 2016 in Cannes, France, as previously announced, it had demonstrated the world's first flexible fingerprint sensor that meets all ISO standard requirements. It said meeting all the specifications is considered to be mandatory in high volume governmental and financial markets. The Company added that first customers have already signed three volume orders from deliver from H2-2017. NEXT said, the total volumes of the first orders are well above 1 million sensors.
As the market demand for fingerprint sensors in notebooks and tablets is growing, NEXT expects penetration will increase in the near future. Most of NEXT revenue in 2016 came from this segment. It is expected that revenue from notebooks and tablets will further increase in 2017, the Company said.
NEXT noted that it focuses its resources on quality dependent market segments that require high and uncompromised levels of security and convenience, coupled with the ability to serve close to 100% of a given population. In addition to the Smart Card markets, NEXT strategically targets other segments in need of large sized, high performance sensors at competitive pricing. Significant volumes are targeted within these segments enabled by the NEXT technology, the Company said.
In outlining financial results, NEXT CFO Knut Stalen explained, operating revenue in the fourth quarter of 2016 was MNOK 31.8, compared to MNOK 28.4 in the previous quarter and MNOK 1.7 in the fourth quarter of 2015.
In 2016 revenue amounted to MNOK 92.1 compared to MNOK 4.6 in 2015, NEXT said. In 2016 several of the initial cost elements related to production and delivery were still one-offs or temporary and did not provide a clear and relevant indication of cost of goods sold. The company expects the operation mode to normalize from the first quarter of 2017. Due to this, cost of goods sold will be reported in the financial statement from the first quarter of 2017.
The Company said, other operating expenses amounted to MNOK 220.8 in 2016 compared to MNOK 70.5 in 2015. The increase of MNOK 150.3 was mainly related to increased cost of goods sold related to increased revenue and increased R&D costs.
Total R&D expenses, included in both payroll and other operating systems, amounted to MNOK 97.6 in 2016, compared to MNOK 52.6 in 2015.
Depreciation and amortization amounted to MNOK 0.9 in the fourth quarter of 2016 compared to MNOK 1.1 in previous quarter and MNOK 0.7 in the corresponding quarter of 2015. In 2016 depreciation and amortization amounted to MNOK 3.8 compared to MNOK 1.9 in 2015.
Investments amounted to MNOK 0.4 in the fourth quarter of 2016 compared to MNOK 0.7 in the fourth quarter of 2015. Investments in 2016 amounted to MNOK 0.8 compared to MNOK 18.5 in 2015. The main investment in 2015 was the MNOK 15.5 investment in coating technology completed in the second quarter of 2015.
NEXT said net financial items amounted to a net income of MNOK 0.2 in the fourth quarter of 2016, compared with a net cost of MNOK 1.0 in the previous quarter and a net cost of MNOK 2.0 in the corresponding quarter of 2015. In 2016, net financial items amounted to a net cost of MNOK 1.4 compared to a net income of MNOK 0.3 in 2015. The decrease was mainly related to foreign exchange gains and losses, the company said.
Net loss in the fourth quarter of 2016 was MNOK 47.2, compared to a loss of MNOK 44.5 in the previous quarter and a loss of MNOK 45.6 in the corresponding quarter of 2015. The increased loss was mainly due to higher stock option cost related to share-based remuneration. This was partly offset by a reduction in the production cost due to continued improved yield after introduction of the new sensor, NEXT said.
Net loss in 2016 amounted to MNOK 192.6 compared to a net loss of MNOK 121.5 for the year 2015, except for insignificant amounts in the fourth quarter of 2016 and 2015 related to payable taxes in foreign subsidiaries.
NEXT said that cash and cash equivalents amounted to MNOK 106.3 by the end of 2016, compared with MNOK 130.2 at the end of 2015.
The operations, including investments, consumed cash in the amount of MNOK 50.4 in the fourth quarter of 2016 compared to MNOK 54.7 in the previous quarter and MNOK 44.2 in the fourth quarter of 2015. Total amount for the year 2016, including investments, amounted to MNOK 213.1 compared to MNOK 128.1 for the year 2015.
The company said net cash flow from financing activities was positive with MNOK 189.4 in 2016, compared with MNOK 129.1 in 2015.
NEXT said that at the end of 2016, the Company's share capital was NOK 15,158,980, divided into 15,158,980 shares with a par value of NOK 1 per share.
The Company said equity amounted to MNOK 177.2 at the end of 2016 compared with MNOK 172.7 at the end of 2015. It said this was mainly due to net proceeds of MNOK 160.0 in the second quarter and net proceeds of MNOK 29.1 in the third quarter and the loss of MNOK 192.6 in 2016.
ABOUT NEXT BIOMETRICS: Enabled by its patented NEXT Active Thermal principle, NEXT Biometrics (www.NextBiometrics.com) offers high quality area fingerprint sensors at a fraction of the prices of comparable competitors. A wide range of product formats including smartcards, smartphones, tablets, PC's, access control, time registration systems, wearables, payment terminals, flash drives, USB tokens, key fobs and many more are targeted. NEXT Biometrics Group ASA is a publicly listed company headquartered in Oslo, Norway and with sales, support and development subsidiaries in Seattle, Silicon Valley, Taipei, Prague and Shanghai. MEDIA AND INVESTOR CONTACTS FOR NEXT BIOMETRICS: Tore Etholm-Idsøe, Tore.Idsoe@NEXTbiometrics.com; Knut Stalen, CFO Knut.Stalen@NEXTbiometrics.com.