Interlink Electronics (LINK) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $2.9 million, down 28% year-over-year, driven by lower shipments of traditional force-sensor and gas-sensor products, partially offset by higher sales at Calman Technology.

• Net loss for Q2 2024 was $307,000, compared to net income of $381,000 in Q2 2023, primarily due to lower gross profit and increased amortization expenses from recent acquisitions.

• Six-month revenue was $6.0 million, a 17.8% decrease from the prior year, with a net loss of $1.0 million versus net income of $0.2 million in the same period last year.

• Cost reduction initiatives have been implemented, expected to yield annual savings exceeding $500,000.

• Lower demand from major force-sensor customers in medical, industrial, and consumer markets drove the revenue decline.

Financial highlights

• Gross margin for Q2 2024 was 45.0%, down from 50.9% in Q2 2023, but up 490 basis points sequentially from Q1 2024; six-month gross margin was 42.5%, down from 49.8%.

• Operating expenses for Q2 2024 were $1.6 million, flat year-over-year, with R&D down 21.5% and SG&A up 10.2%.

• Cash and cash equivalents at June 30, 2024 were $4.0 million, with working capital of $6.9 million and no debt.

• Preferred stock dividends of $200,000 were paid in the first half of 2024.

• Adjusted EBITDA for Q2 2024 was ($80,000), compared to $579,000 in Q2 2023.

Outlook and guidance

• Management expects to continue paying monthly preferred stock dividends and believes current cash is sufficient for ongoing operations.

• A robust pipeline of prospective customers and orders, including large force-sensor and gas-sensor opportunities, is expected to drive organic revenue growth in 2025.

• Expansion of product offerings, especially in air quality solutions and gas sensors, is underway.

• No formal revenue or earnings guidance was provided.