Interlink Electronics Reports Q2 2022 Financial Results with Mixed Revenue Trends

Interlink Electronics, Inc. reported its financial results for the second quarter of 2022, revealing a net revenue of $2.04 million, a slight decrease of 1.2% compared to $2.06 million in the same period of 2021. For the first half of 2022, the company achieved a total revenue of $4.03 million, marking an increase of 11% from $3.63 million in the first half of 2021. The gross profit for the second quarter was $952,000, down 15.5% from $1.13 million year-over-year, while the gross margin percentage fell to 46.7% from 54.6%. The company reported a net income of $112,000 for the quarter, compared to $63,000 in the prior year, and a total net income of $254,000 for the first half, significantly up from $20,000 in the same period last year.

The financial performance reflects a mixed landscape, with notable increases in revenue from the industrial and medical markets, attributed to heightened purchasing volumes and the easing of COVID-19 restrictions. However, the consumer market saw a significant decline, primarily due to design changes by a major customer. The automotive sector contributed modestly, with sales resuming for the first time since 2018. Operating expenses for the second quarter rose to $1.1 million, up from $994,000 in the previous year, driven by increased research and development costs, which rose by 42.2% to $330,000, reflecting a higher headcount and expanded product development activities.

Interlink's balance sheet as of June 30, 2022, showed total assets of $13.67 million, a slight decrease from $13.78 million at the end of 2021. Current assets remained stable at approximately $13 million, while cash and cash equivalents decreased to $4.4 million from $10.78 million at the end of 2021. The company reported a working capital of $12 million and no long-term debt, indicating a solid liquidity position. However, the company also noted a decrease in accounts receivable, which fell to $719,000, reflecting improved collections.

Strategically, Interlink continues to focus on expanding its product portfolio and enhancing its technology platforms to capture emerging markets, particularly in the Internet of Things (IoT) sector. The company is also planning to launch an engineering and research center in the United Kingdom to bolster its global presence. Despite the challenges faced in the consumer market, Interlink remains optimistic about its growth trajectory, particularly in industrial and medical applications, and anticipates continued demand for its innovative human-machine interface solutions.

Looking ahead, Interlink Electronics expects to maintain its operational momentum, supported by its existing cash reserves and ongoing customer engagements. The company acknowledges potential risks, including market fluctuations and supply chain disruptions, but remains committed to leveraging its technological expertise to drive future growth. The management believes that the current financial position will be sufficient to support operations and strategic initiatives, although they may seek additional capital if necessary.