Resonant Reports Third Quarter 2017 Financial Results and Provides Business Update

GOLETA, Calif. – November 8, 2017 – Resonant Inc. (NASDAQ: RESN), a designer of filters for radio frequency, or RF, front-ends that specializes in delivering designs for difficult bands and complex requirements, today announced financial results for the third quarter ended September 30, 2017 and provided a business update.

Management Commentary

“We continued our momentum in the third quarter of 2017 as we’ve demonstrated seven straight quarters of execution and continued to retire risk,” said George B. Holmes, CEO of Resonant. “We’ve transformed from a purely development stage company to one focused on customer engagement, execution, and now, commercialization.

“Our customers clearly understand the value proposition our team, tools and technology bring to the marketplace, which is evidenced by our continued engagement and expansion of development agreements with both new and existing customers.” said Holmes. “We had a great quarter, with several key milestones, including our first fabless filter company sampling of a tier one OEM’s SAW/SAW quadplexer with competitive industry performance to established players. Most recently, we announced that one of our customers has qualified a full Band 41 filter we designed, which is being delivered on SAW.  Both of these are industry firsts and are currently being sampled to OEMs.”

“To support our ambitious ramp of customers and designs under contract, we continue to invest in our core infrastructure. We recently added a new office in South Korea to support our growing list of customers in the Chinese and Korean markets, while appointing Jangwon Jung as the Country Sales Manager, Korea.  A few other notable additions to our team were Vice President of Product Development Engineering, Sohrab Samadian, Vice President of Engineering Operations, Andrew Kay, and new independent board member, Jean Rankin. We believe these investments in infrastructure and personnel will help us support our organization as we grow towards predictable, recurring royalty revenues.”

Financial Results for the Third Quarter 2017

For the quarter ended September 30, 2017, Resonant recognized $106,000 of revenue primarily related to upfront payments from contracts with customers.  This compares to $220,000 of revenue for the second quarter of 2017.

Research and development expenses totaled $2.3 million, compared with $2.4 million for the second quarter of 2017. The decrease was primarily the result of reduced hiring expenses.

General and administrative expenses totaled $2.0 million, compared to $2.1 million for the second quarter of 2017. The decrease was primarily related to headcount changes 

Net loss in the third quarter of 2017 totaled $4.2 million, or $(0.28) per fully diluted share, compared with a net loss of $4.3 million, or $(0.29) per fully diluted share, for the second quarter of 2017.  The decrease was primarily due to the reduction in operating expenses.

On a non-GAAP basis, adjusted EBITDA for the third quarter of 2017, which excludes non-cash charges for stock-based compensation and depreciation and amortization, was $(3.4) million, or $(0.23) per fully diluted share. This compares with non-GAAP adjusted EBITDA for the second quarter of 2017 of $(3.4) million, or $(0.24) per fully diluted share 

Cash and cash equivalents at September 30, 2017 were $13.5 million.  This compares with $9.1 million of cash and cash equivalents at June 30, 2017.  During the quarter, the Company closed the first tranche of our $9.3 million capital raise which resulted in net proceeds of $7.5 million.  Excluding the capital raise in the quarter, Resonant used $3.1 million in cash during the third quarter.  This compares to $3.9 million used in the second quarter of 2017.  The reduced cash use was primarily due to lower operating expenses and the timing of working capital changes.

Conference Call

Management will host an investor conference call today at 2:00 p.m. PST (5:00 p.m. EST) to discuss Resonant’s third quarter 2017 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Date: Wednesday, November 8, 2017

Time: 2:00 p.m. Pacific time (5:00 p.m. Eastern time)

U.S. Dial-in: 1-877-407-3982

International Dial-in: 1-201-493-6780

Conference ID: 13672581

Webcast: http://public.viavid.com/index.php?id=12690 

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

A playback of the call will be available through December 8, 2017. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin number 13672581. A webcast will also be available for 30 days on the IR section of the Resonant website or by clicking here: RESN Q3 2017 Webcast.

Note about Non-GAAP Financial Measures

A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.

In addition to financial results presented in accordance with GAAP, this press release presents adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is determined by taking net loss and adding interest, taxes, depreciation, amortization, and stock-based compensation. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of net loss, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.

About Resonant Inc.

Resonant is creating innovative filter designs for the RF front-end, or RFFE, for the mobile device industry. The RFFE is the circuitry in a mobile device responsible for the radio frequency signal processing and is located between the device’s antenna and its digital baseband. Filters are a critical component of the RFFE that selects the desired radio frequency signals and rejects unwanted signals and noise.

About Resonant’s ISN® Technology

Resonant can create designs for difficult bands and complex requirements that we believe have the potential to be manufactured for half the cost and developed in half the time of traditional approaches. The Company’s large suite of proprietary mathematical methods, software design tools and network synthesis techniques enable it to explore a much bigger set of possible solutions and quickly derive the better ones. These improved filters still use existing manufacturing methods (i.e. SAW) and can perform as well as those using higher cost methods (i.e. BAW). While most of the industry designs surface acoustic wave filters using a coupling-of-modes model, Resonant uses circuit models and physical models. Circuit models are computationally much faster, and physical models are highly accurate models based entirely on fundamental material properties and dimensions. Resonant’s method delivers excellent predictability, enabling achievement of the desired product performance in roughly half as many turns through the fab. In addition, because Resonant’s models are fundamental, integration with its foundry and fab customers is eased because its models speak the “fab language” of basic material properties and dimensions.

Safe Harbor / Forward-Looking Statements

This press release contains forward-looking statements, which include the following subjects, among others:  the capabilities of our filter designs and the contributions of our investments in infrastructure and personnel to growth in revenues.  Forward-looking statements are made as of the date of this document and are inherently subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following:  our limited operating history; our ability to complete designs that meet customer specifications; the ability of our customers (or their manufacturers) to fabricate our designs in commercial quantities; changes in our expenditures and other uses of cash; the ability of our designs to significantly lower costs compared to other designs and solutions; the risk that the intense competition and rapid technological change in our industry renders our designs less useful or obsolete; our ability to find, recruit and retain the highly skilled personnel required for our design process in sufficient numbers to support our growth; our ability to manage growth; and general market, economic and business conditions.  Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report (Form 10-K) or Quarterly Report (Form 10-Q) filed with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements.

Investor Relations Contact:
Greg Falesnik
MZ North America
1-949-385-644
Greg.Falesnik@mzgroup.us

 Resonant Inc.

Condensed Consolidated Balance Sheets

 

 

September 30, 2017

 

December 31, 2016

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

Cash and cash equivalents

$

13,530,000

 

 

$

5,084,000

 

Investments held-to-maturity

 

 

4,747,000

Other Assets

373,000

 

 

216,000

TOTAL CURRENT ASSETS

13,903,000

 

10,047,000

PROPERTY AND EQUIPMENT, NET

866,000

 

994,000

TOTAL NONCURRENT ASSETS

2,293,000

 

2,158,000

TOTAL ASSETS

$

17,062,000

 

 

$

13,199,000

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Accounts payable and accrued expenses

$

2,000,000

 

 

$

2,705,000

 

Other current liabilities

261,000

 

 

299,000

 

TOTAL CURRENT LIABILITIES

$

2,261,000

 

 

$

3,004,000

 

TOTAL LONG-TERM LIABILITIES

8,000

 

62,000

STOCKHOLDERS’ EQUITY

 

 

 

Common stock

16,000

 

12,000

Additional paid-in capital

74,282,000

 

56,331,000

Accumulated other comprehensive income loss

(5,000)

 

(51,000)

Accumulated deficit

(59,500,000)

 

(46,159,000)

TOTAL STOCKHOLDERS’ EQUITY

14,793,000

 

10,133,000

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

17,062,000

 

 

$

13,199,000

 

 

 

Resonant Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

September 30, 2017

Three Months Ended

June 30, 2017

Three Months Ended

March 31, 2017

 

Nine Months Ended September 30, 2017

Nine Months Ended September 30, 2016

REVENUE

$

106,000

 

$

220,000

 

$

156,000

 

 

$

482,000

 

$

115,000

 

OPERATING EXPENSES

 

 

 

 

 

 

Research and development

2,336,000

 

2,380,000

 

2,240,000

 

 

6,956,000

 

4,299,000

 

General and administrative

1,978,000

 

2,117,000

 

2,844,000

 

 

6,939,000

 

5,866,000

 

TOTAL OPERATING EXPENSES

4,314,000

 

4,497,000

 

5,084,000

 

 

13,895,000

 

10,165,000

 

OPERATING LOSS

(4,208,000

)

(4,277,000

)

(4,928,000

)

 

(13,413,000

)

(10,050,000

)

OTHER INCOME, NET

 

 

 

 

 

 

Interest and investment income

14,000

 

16,000

 

9,000

 

 

39,000

 

10,000

 

Other expense

(6,000

)

(1,000

)

 

 

(7,000

)

 

TOTAL OTHER INCOME, NET

8,000

 

15,000

 

9,000

 

 

32,000

 

10,000

 

 

LOSS BEFORE INCOME TAXES

(4,200,000

)

(4,262,000

)

(4,919,000

)

 

(13,381,000

)

(10,040,000

)

Provision for (benefit from) income taxes

(16,000

)

1,000

 

(25,000

)

 

(40,000

)

1,000

 

NET LOSS

$

(4,184,000

)

$

(4,263,000

)

$

(4,894,000

)

 

$

(13,341,000

)

$

(10,041,000

)

NET LOSS PER SHARE – BASIC AND DILUTED

$

(0.28

)

$

(0.29

)

$

(0.37

)

 

$

(0.94

)

$

(1.14

)

Weighted average shares outstanding —basic and diluted

14,757,688

 

14,535,451

 

13,393,190

 

 

14,233,774

 

8,772,582

 

 

Resonant Inc.

Reconciliation of Non-GAAP Information

(Unaudited)

 

 

 

Three Months Ended

September 30, 2017

Three Months Ended

June 30, 2017

Three Months Ended

March 31, 2017

 

Nine Months Ended

September 30, 2017

Nine Months Ended

September 30, 2016

 

 

 

 

 

 

 

Net loss (GAAP)

$

(4,184,000

)

$

(4,263,000

)

$

(4,894,000

)

 

$

(13,341,000

)

$

(10,041,000

)

Add (subtract) the following items:

 

 

 

 

 

 

Interest income

(14,000

)

(16,000

)

(9,000

)

 

(39,000

)

(10,000

)

Stock compensation R&D

324,000

 

324,000

 

252,000

 

 

900,000

 

515,000

 

Stock compensation G&A

342,000

 

341,000

 

441,000

 

 

1,124,000

 

835,000

 

Depreciation and amortization R&D

135,000

 

135,000

 

130,000

 

 

400,000

 

321,000

 

Depreciation and amortization G&A

37,000

 

59,000

 

58,000

 

 

154,000

 

181,000

 

Provision for (benefit from) income taxes

(16,000

)

1,000

 

(25,000

)

 

(40,000

)

1,000

 

Adjusted EBITDA (non-GAAP)

$

(3,376,000

)

$

(3,419,000

)

$

(4,047,000

)

 

$

(10,842,000

)

$

(8,198,000

)

NET EBITDA PER SHARE – BASIC AND DILUTED (non-GAAP)

$

(0.23

)

$

(0.24

)

$

(0.30

)

 

$

(0.76

)

$

(0.93

)

Weighted average shares outstanding —basic and diluted

14,757,688

 

14,535,451

 

13,393,190

 

 

14,233,774

 

8,772,582

 

 

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