Interlink Electronics Reports 16.7% Revenue Decline in Q3 2022

Interlink Electronics, Inc. reported a net revenue of $1.85 million for the third quarter of 2022, a decrease of 16.7% compared to $2.22 million in the same period of 2021. For the nine months ending September 30, 2022, the company achieved a slight increase in revenue to $5.88 million, up from $5.85 million year-over-year. The gross profit for the third quarter was $872,000, representing a gross margin of 47.1%, down from 58.1% in the prior year. The decline in profitability was attributed to higher material costs and unfavorable changes in product and customer mix.

Operating expenses for the third quarter increased to $1.06 million, compared to $1.03 million in the same quarter of 2021. This rise was primarily driven by a significant increase in engineering, research, and development costs, which surged to $319,000 from $105,000, reflecting higher employee headcount and increased prototyping activities. Selling, general, and administrative expenses decreased to $743,000 from $928,000, attributed to lower employee headcount and reduced legal fees. The company reported a net income of $6,000 for the quarter, a decline from $223,000 in the previous year, resulting in a loss applicable to common stockholders of $94,000.

Interlink's balance sheet as of September 30, 2022, showed total assets of $13.46 million, a decrease from $13.78 million at the end of 2021. Cash and cash equivalents fell to $3.89 million from $10.78 million, while accounts receivable decreased to $958,000 from $1.08 million, indicating improved collections. The company’s inventory increased to $1.06 million, reflecting fluctuations in material purchases and product shipments. Total liabilities decreased to $1.01 million from $1.07 million, with current liabilities also down to $949,000 from $1.04 million.

In terms of strategic developments, Interlink continues to focus on expanding its product portfolio and enhancing its force-sensing technology solutions. The company is also planning to launch an engineering and research center in the United Kingdom to support its global customer base. Despite the challenges faced in the consumer and industrial markets, the medical sector showed growth, driven by increased orders from a major customer. Looking ahead, Interlink anticipates that its existing cash reserves will be sufficient to support operations, although it may seek additional capital if circumstances change. The company remains committed to leveraging its expertise in force-sensing technology to capture emerging market opportunities.