Interlink Electronics, Inc. Reports 2011 Second Quarter Financial Results

CAMARILLO, Calif.--(EON: Enhanced Online News)--Interlink Electronics, Inc. (OTC:LINK), a premier sensor technology company, today announced financial results for the three and six months ending June 30, 2011.

“As the company continues its restructuring efforts repositioning our business for our long-term vision, we continue to align expenses to revenues while maintaining a careful balance of needed capability to execute our short term strategies.”

Interlink Electronics (the “Company”) reported revenues from continuing operations for the quarters ended June 30, 2011 and 2010 of $1,560,000 and $2,223,000, respectively. Gross profit for the quarter ended June 30, 2011 was $718,000, or 46 percent of revenues, down from $1,351,000, or 61 percent of revenues in the comparable quarter of 2010. The Company’s operating loss was $155,000 for the quarter ended June 30, 2011, compared to an operating loss of $222,000, for the quarter ended June 30, 2010. The operating results for the quarter ended June 30, 2010, includes non-cash charges for share-based compensation of $25,000.

During the three months ended June 30, 2011 and June 30, 2010 the Company recognized other non-cash, income (expense) of ($59,000) and $29,000, respectively, and ($57,000) and $176,000 for the six months ended June 30, 2011 and 2010, respectively, for the change in value of the Warrants and embedded derivatives.

The Company reported revenues from continuing operations for the six months ended June 30, 2011 of $2,721,000, compared to revenues of $4,197,000, for the six months ended June 30, 2010. Gross profit for the six months ended June 30, 2011 was $1,171,000, or 43 percent of revenues, down from $2,396,000, or 57 percent of revenues in the six months ended June 30, 2010. The Company’s operating loss was $740,000 for the six months ended June 30, 2011, compared to an operating loss of $844,000, for the six months ended June 30, 2010. The operating results for the six months ended June 30, 2011 and 2010, includes non-cash charges for share-based compensation of $17,000 and $136,000, respectively.

Steven N. Bronson, the Company’s Chairman and President, stated that, “As the company continues its restructuring efforts repositioning our business for our long-term vision, we continue to align expenses to revenues while maintaining a careful balance of needed capability to execute our short term strategies.” Mr. Bronson continued that, “We are driven to improve results at these lower revenue levels and protect our cash position in order to be opportunistic in our market space. Interlink Electronics remains committed to providing exceptional execution on the projects we currently have and continue to build on our strong relationships with our customers and development partners.”

Since March 30, 2009, Interlink Electronics was no longer required to make filings in accordance with SEC regulations. The Company intends to continue to keep shareholders informed of financial results through press releases, postings on the OTC Markets disclosure system (www.otcmarkets.com) under the symbol LINK, and updates on our web site at www.interlinkelectronics.com.

INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
		June 30, 2011 (Unaudited)			December 31, 2010 (Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,697		$	3,684
Restricted cash		10			10
Accounts receivable, less allowance for doubtful accounts of $0 and $3 at June
30, 2011 and December 31, 2010, respectively		865			693
Inventories, net of reserves of $211 and $180 at June 30, 2011 and December
31, 2010, respectively		542			285
Prepaid expenses and other current assets		219			242
Total current assets		4,333			4,914
Property and equipment, net		202			176
Intangibles, net		91			103
Other assets		41			39
Total assets	$	4,667		$	5,232
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued payables	$	353		$	245
Accrued payroll and other accrued liabilities		302			378
Deferred revenues – current		85			53
Total current liabilities		740			676
Deferred revenues – non-current		276			302
Warrants and embedded derivatives		223			166
Total liabilities		1,239			1,144
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $5.00 par value (100 shares authorized, none issued and
outstanding at June 30, 2011 and December 31, 2010, respectively)		—			—
Common stock, $0.00001 par value (50,000 shares authorized, 14,524 and
14,135 shares issued and outstanding at June 30, 2011 and December 31,
2010, respectively)		60,096			59,974
Accumulated other comprehensive gain (loss)		26			(461	)
Accumulated deficit		(56,694	)		(55,425	)
Total stockholders’ equity		3,428			4,088
Total liabilities and stockholders’ equity	$	4,667		$	5,232

INTERLINK ELECTRONICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Revenues, net	$	1,560		$	2,223		$	2,721		$	4,197
Cost of revenues (includes stock-based compensation of $0 and $5
for the three months ended June 30, 2011 and 2010, respectively
and $4 and $28 for the six months ended June 30, 2011 and
2010, respectively)		842			872			1,550			1,801
Gross profit		718			1,351			1,171			2,396
Operating expenses:
Product development and research (includes stock-based
compensation of $0 and $5 for the three months ended
June 30, 2011 and 2010, respectively and $3 and $25 for
the six months ended June 30, 2011 and 2010,
respectively.)		356			352			686			790
Selling, general and administrative (includes stock-based
compensation of $0 and $15 for the three months ended
June 30, 2011 and 2010, respectively and $10 and $83 for
the six months ended June 30, 2011 and 2010,
respectively.)		517			1,221			1,225			2,450
Total operating expenses		873			1,573			1,911			3,240
Operating loss		(155	)		(222	)		(740	)		(844	)
Other income (expense):
Interest income		2			1			4			2
Interest expense		—			(2	)		—			(3	)
Interest income (expense), net		2			(1	)		4			(1	)
Other income		5			31			4			179
Other expense		(69	)		(13	)		(68	)		(23	)
Loss on dissolution of subsidiary		—			—			(487	)		—
Other income (expense), net		(64	)		18			(551	)		156
Total other income (expense)		(62	)		17			(547	)		155
Loss from continuing operations before provision for income taxes		(217	)		(205	)		(1,287	)		(689	)
Provision for income taxes		—			—			—			—
Loss from continuing operations, net of tax		(217	)		(205	)		(1,287	)		(689	)
Income from discontinued operations, net of tax		9			58			18			106
Net loss	$	(208	)	$	(147	)	$	(1,269	)	$	(583	)
Loss per share from continuing operations, net of tax:
Basic and diluted	$	(0.02	)	$	(0.01	)	$	(0.09	)	$	(0.05	)
Earnings per share on discontinued operations, net of tax:
Basic and diluted	$	0.00		$	0.00		$	0.00		$	0.01
Net loss per share: basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.09	)	$	(0.04	)
Weighted average shares used to calculate each of the per share
amounts above: basic and diluted		14,454			13,778			14,357			13,778

About Interlink Electronics, Inc.

Interlink Electronics, Inc. (OTC Markets: LINK.PK) is a sensor technology company and one of the world’s leading innovators of intuitive interface design. With more than 30 patents issued and pending around the world protecting its technologies and products, Interlink Electronics serves a world-class customer-base from its corporate headquarters in Camarillo, California and offices in Japan, Hong Kong and China. For more information, see http://www.interlinkelectronics.com

This release contains forward-looking statements that involve a number of risks and uncertainties. The following are among the factors that could cause actual results to differ materially from the forward-looking statements: historical losses and negative cash flow, the success of business divestitures and acquisitions, the ownership of the majority of our stock by a small group of investors, our success in predicting new markets and the acceptance of our new products, efficient management of our infrastructure, the pace of technological developments and industry standards evolution and their effect on our target product and market choices, the effect of outsourcing technology development, changes in the ordering patterns of our customers, a decrease in the quality and/or reliability of our products, protection of our proprietary intellectual property, competition by alternative sophisticated as well as generic products, pending litigation against Interlink, historical weaknesses in internal controls over financial accounting, the continued availability at competitive prices of raw materials for our products, disruptions in our manufacturing facilities, risks of international sales and operations including fluctuations in exchange rates, compliance with regulatory requirements applicable to our manufacturing operations, and customer concentrations. The forward-looking statements contained in this release should be considered in light of these risk factors.