Intrinsyc (TSX: ITC and OTCQX: ISYRF) Reports First Quarter Results
Intrinsyc achieved Revenue of US$6.1 million (CDN$8.2 million) with EBITDA of US$155,559 (CDN$206,817)
Vancouver, BC – May 14, 2019 –– Intrinsyc Technologies Corporation (TSX: ITC and OTCQX: ISYRF) (“Intrinsyc” or the “Company”), a leading provider of edge computing solutions for the development of intelligent Internet of Things (“IoT”) products, today announced its financial results for the first quarter ended March 31, 2019. Intrinsyc achieved Revenue of US$6.1 million (CDN$8.2 million) with EBITDA of US$155,559 (CDN$206,817).
“We had delays, both in the expected launch of 2 new development platforms and production client orders due primarily to component shortages and client financing that negatively impacted Q1 revenue,” stated Tracy Rees, Chief Executive Officer, Intrinsyc Technologies Corporation. “We believe that these issues will be resolved during the second quarter through the introduction of the new development platforms which are expected to add over $2 million in revenue over the next 12 months and the production launch of 5 new client products that will use the Company’s edge computing modules. These developments should lead to revenue growth in the second half of 2019.”
“Intrinsyc is helping to take Internet of Things products to the next level – building artificial intelligence and advanced analytics directly into the devices and systems where insights are needed in real-time,” added Rees. “Known as “Edge Computing,” this trend is creating opportunities for businesses seeking to deliver enhanced levels of service across a wide range of industries; autonomous vehicles, intelligent cameras, smart home hubs, smart cities, robotics, and industry 4.0 applications, to name a few. Intrinsyc’s portfolio of computing modules with their high-performance multi-core processors and built-in artificial intelligence capabilities are ideal platforms for creating the next-generation of intelligent Internet of Things products.”
Quarterly Business Highlights
- In early January 2019, the Company announced orders from multiple clients that are in aggregate valued at $748,000. Orders were received from a combination of existing and new clients. The largest order was a product development services project for an outdoor surveillance camera valued at $375,000. In addition to the camera project, clients are utilizing Intrinsyc’s advanced-performance, Open-Q computing modules and expert product development services to build a variety of innovative Industrial and Consumer IoT devices.
- Announced the addition of the following platforms to our Edge Computing portfolio:
- Open-Q™ 835 µSOM (micro System on Module) and Development Kit.
- Open-Q™ 660 µSOM (micro System on Module) and Development Kit.
- The Company increased design wins of companies developing their products or shipping commercial devices using our computing modules, from 59 to 62. Clients in production remained constant at 24, as there were 3 new production clients, offset by 3 clients with discontinued products.
Three Month Comparative Results
The Company reported first quarter revenue of US$6.1 million (CDN$8.2 million), down 14% over the prior period of US$7.1 million (CDN$9.4 million) and up 1% over the same period in the prior year of US$6.1 million (CDN$7.7 million). The decrease in revenue over the prior period was due primarily to decreased revenue from the sale of hardware products and services.
Gross margin in the first quarter of fiscal 2019 was 32%, which was lower than the 35% gross margin in the prior quarter and 33% gross margin in the same period in the prior year. The decrease in gross margin over the prior quarter was due to a decrease in service revenue which has a higher gross margin. EBITDA was as follows.
The Company had net loss of US$171,855 (CDN$225,414), and loss per share of US$0.01 (CDN$0.01) compared to net loss of US$675,274 (CDN$898,139) or US$0.03 (CDN$0.04) loss per share in the prior quarter and net income of US$159,566 (CDN$198,467) or US$0,01 (CDN$0.01) earnings per share in the same period in the prior year.
Financial Position as at March 31, 2019
Working capital as of March 31, 2019 was US$10.1 million (CDN$13.0 million) inclusive of cash and short-term investments of US$4.2 million (CDN$5.4 million). This is compared to net working capital of US$10.3 million (CDN$14.1 million) as at December 31, 2018 inclusive of cash and short-term investments of US$6.0 million (CDN$8.1 million).
Financial Statements and Management Discussion & Analysis
Please see the audited consolidated financial statements and related Management’s Discussion & Analysis (“MD&A”) for more details. The audited consolidated financial statements for the three ended March 31, 2019 and related MD&A have been reviewed and approved by Intrinsyc’s Audit Committee and Board of Directors. Intrinsyc recognizes that the majority of its investors are now accessing Intrinsyc’s corporate and financial information either through pushed news services, directly from www.intrinsyc.com or SEDAR. Thus, Intrinsyc has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com and also posted at www.intrinsyc.com.
The Company will hold a conference call to discuss its fiscal first quarter 2019 financial results at 9:00 a.m. Eastern Time (6:00 a.m. Pacific Time) today. On the call, Tracy Rees, Chief Executive Officer and George Reznik, Chief Financial Officer, will discuss the financial results announced. This conference call may be accessed, toll-free, by dialing 1-800-319-4610, and internationally by dialing 1-604-638-5340 approximately 10 minutes prior to the start of the call. This conference line is operator assisted and an access PIN is not required. The conference call will also be broadcast live over the Internet and available for replay on the Company’s Investor Relations Conference Calls web page (https://www.intrinsyc.com/company/investors/). Analysts and investors are invited to participate on the call. Questions may be submitted to firstname.lastname@example.org prior to the call.
Financial information is reported in United States dollars and in accordance with International Financial Reporting Standards (“IFRS”).
The following and preceding discussion of financial results includes reference to Gross Margin, EBITDA and Working Capital, which are all non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluating the operating performance of the Company. EBITDA is defined as operating income (loss) less other operating expenses. The measure is provided as a proxy for the cash earnings from the operations of the business as operating loss for the Company includes non-cash amortization and depreciation expense and share-based compensation which are classified as other operating expenses. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company’s future plans, objectives, performance, revenues, growth, profits, operating expenses or the company’s underlying assumptions. The words “may”, “would”, “could”, “will”, “likely”, “expect,” “anticipate,” “intend”, “plan”, “forecast”, “project”, “estimate” and “believe” or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company’s actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the need to develop, integrate and deploy software solutions to meet the Company’s customer’s requirements; the possibility of development or deployment difficulties or delays; a customer’s decision to cancel or fail to proceed with a commitment to purchase units of the Company’s products contained in an executed purchase order; the dependence on the Company’s customer’s satisfaction; the timing of entering into significant contracts; customers’ continued commitment to the deployment of the Company’s solutions; reliance on products manufactured by other companies for resale or distribution and reliance on third-party suppliers; the performance of the global economy and growth in software industry sales; market acceptance of the Company’s products and services; the success of certain business combinations engaged in by the Company or by its competitors; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to international expansion; concentration of sales; international operations and sales; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and other factors described in the Company’s reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2018. This list is not exhaustive of the factors that may affect the Company’s forward-looking information.
These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
About Intrinsyc Technologies Corporation
Intrinsyc provides comprehensive product development services, as well as the industry’s highest-performance edge computing modules, to enable rapid commercialization of intelligent Internet of Things (“IoT”) products. Intrinsyc has successfully delivered over 1,400 client projects including sophisticated consumer and industrial IoT products like: robotics, connected cameras, smart displays, augmented reality, smart buildings, wearables, in-vehicle infotainment, and many others. Intrinsyc’s Open-Q™ System on Modules incorporate the industry’s most advanced processor technology, and help OEMs to rapidly bring industry leading products, with rich functionality and high performance, to market. Intrinsyc is publicly traded (TSX: ITC and OTCQX: ISYRF) and is headquartered in Vancouver, BC, Canada; with additional product development centers in Taipei, Taiwan, and Bangalore, India.
For more information, please contact:
George W. Reznik, CPA-CA, CBV, CFE
Chief Financial Officer
Intrinsyc Technologies Corporation
 Gross Margin is a non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced herein relates to revenues less cost of sales.
 These numbers have been restated to account for the impact of IFRS 16. Additional details on IFRS 16 are discussed in the Critical Accounting Policies and Estimates section of the MD&A and Note 3 to the Interim Condensed Consolidated Financial Statements.
 Working Capital is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. Working capital is defined as current assets less current liabilities.