NEXT Biometrics Group Announces Interim 1st Quarter Results

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High-quality Low-cost fingerprint sensor leader, NEXT outlines 1st quarter advances

NEXT Biometrics, headquartered in Oslo, Norway, offers high quality area fingerprint sensors at a fraction of the prices of comparable competitors.

The NEXT Biometrics focus during the first quarter of 2015 has been to replace the first market generic product with six new module series designed to meet all requirements of the targeted mass markets.

NEXT Biometrics Group ASA (OAX: NEXT) today announced interim results for the 1st quarter, ended March 31, 2015. NEXT, the leader in high-quality low-cost fingerprint sensors, summarized highlights:

  • 52,000 fingerprint sensors shipped during first quarter
  • Initial order for 100,000 fingerprint sensor units received in SmartHome segment
  • First TIER 1 customer increases volume estimates by a minimum of 200,000 units
  • Organization expanded by 13 people, to a total of 52 employees
  • Significant growth in NEXT-Enabled markets. Several leads with 7-digit potential
  • Product portfolio expanded from 1 to 6 modules. Optimized competitiveness in all key mass markets

NEXT Biometrics CEO Tore Etholm-Idsøe commented, “The NEXT first quarter focus has been to replace the first market generic product with six new module series designed to meet all requirements of the targeted mass markets. Based on these new modules more than 160 customer leads have now been generated. To support these activities, NEXT has expanded its organization from 39 to 52 employees. Several key hires have been made, including VP of Operations and Asia Sales, Mr. Campbell Kan, the former ACER President PC Global Operations.”

He said, “The process of integrating NEXT fingerprint sensors in the devices of the first TIER 1 Design-Win is proceeding according to plan. Approximately 10,000 units have been delivered as part of the preparations process. The targeted first launch of product is late in the third quarter.”

Ehtolm-Idsoe added, “In a massive sized third party comparative test of NEXT active thermal principle fingerprint sensors versus 2 market-leading capacitive sensors, NEXT technology has been proven to perform in line with same size, significantly more expensive, competitors and also critically superior to competitors’ small sized, and still more expensive, alternatives.”

The company reported in its profit and loss statement that NEXT earned NOK 2.4 million (Norwegian Krone) in the first quarter of 2015, compared with NOK 4.4 million in the previous quarter. The revenue in the first quarter of 2015 all consisted of operating revenue and was generated by shipment of 52,000 fingerprint sensors.

NEXT said due to low production volumes and high manufacturing costs, the calculated gross margin is still negative. The Cost of goods sold for these initial delivered sensors is currently included in other operating expenses. Several of the initial cost elements related to production and delivery of these units are one-offs and do not give a clear and relevant cost of goods sold.

NEXT said payroll expenses amounted to NOK 8.4 million in the first quarter of 2015, compared with NOK 6.4 million in the previous quarter and NOK 3.9 million in the corresponding quarter of 2014. Research and development (R&D) costs included in payroll expenses is the major increase and amounted to NOK 5.5 million in the first quarter of 2015, compared with NOK 2.8 million in the previous quarter and NOK 2.3 million in the corresponding quarter of 2014. The quarterly increase of NOK 2.0 from the fourth quarter was mainly due to higher activity.

The company said other operating expenses amounted to NOK 15.9 million in the first quarter of 2015, compared with NOK 33.6 million in the previous quarter and NOK 10.8 million in the corresponding quarter of 2014. R&D cost included in other operating expenses amounted to NOK 6.8 million in the first quarter of 2015, compared with NOK 7.3 million in the previous quarter and NOK 8.3 million in the corresponding quarter of 2014. The quarterly decrease of NOK 17.7 from the previous quarter was mainly related to the fact that ramp-up cost, including cost of goods sold and write-down of inventories, amounting to NOK 23.5 million was included in the fourth quarter.

Total R&D expenses, included in both payroll and other operating expenses amounted to NOK 12.3 million in the first quarter of 2015, compared with NOK 10.1 million in the previous quarter and NOK 10.6 million in the corresponding quarter of 2014, it said.

NEXT noted that depreciation and amortization amounted to NOK 0.2 million in the first quarter of 2015, compared with NOK 0.3 million in the previous quarter. Investments amounted to NOK 1.4 million in the first quarter of 2015, compared with 1.2 million in the previous quarter.

According to the company, net financial items amounted to a net income of NOK 2.6 million in the first quarter of 2015, compared with a net income of NOK 2.6 million in the previous quarter.

NEXT said that net loss in the first quarter of 2015 was NOK 19.6 million, compared with a loss of NOK 33.4 million in the fourth quarter of 2014 and a loss of NOK 14.9 in the first quarter of 2014. The decreased loss from the previous quarter was due to the high level of ramp-up costs in the fourth quarter, including cost of goods sold. NEXT operated at a loss and did not incur deferred or payable income taxes in the first quarter of 2015 or in 2014.

The leading in low-cost fingerprint sensors said cash and cash equivalents amounted to NOK 98.7 million by the end of the first quarter of 2015 compared with NOK 129.3 million by the end of 2014. The operations consumed cash in an amount of NOK 29.1 million in the first quarter of 2015 compared with NOK 36.0 million in previous quarter. The cash consumed was mainly related to the loss of NOK 19.6 million in the first quarter and continuous inventory build-up of NOK 6.8 million.

Equity amounted to NOK 142.0 million at the end of the first quarter of 2015 compared with NOK 161.9 million at the end of 2014, the company said.

ABOUT NEXT Biometrics:
Enabled by its patented NEXT Active Thermal principle, NEXT Biometrics (http://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 Smartphones, Tablets, PC's, Doors, Time registration systems, Wearables, Payment terminals, Flashdrives, 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. Contacts for NEXT Biometrics: Tore Etholm-Idsøe, CEO, Tore.Idsoe (at) NEXTbiometrics.com and Knut Stalen, CFO, Knut.Stalen (at) NEXTbiometrics.com.

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