8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported):  August 10, 2017

INTERLINK ELECTRONICS, INC.

(Exact Name of Registrant as Specified in Charter)

Nevada	001-37659	77-0056625
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

31248 Oak Crest Drive, Suite 110
Westlake Village, California	91361
(Address of Principal Executive Offices)	(Zip Code)

(805) 484-8855

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Item 2.02           Results of Operations and Financial Condition.

On August 10, 2017,  Interlink Electronics, Inc. announced its financial results for the three and six months ended June 30,  2017.  A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. 

The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01           Financial Statements and Exhibits.

(d)         Exhibits

99.1       Press Release issued by Interlink Electronics, Inc. dated August 10, 2017.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 10, 2017	INTERLINK ELECTRONICS, INC.
	By:	/s/ Steven N. Bronson
		Steven N. Bronson
		Chief Executive Officer

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release issued by Interlink Electronics, Inc. dated August 10, 2017.

4

EX-99.1

Exhibit 99.1

Interlink Electronics Reports Second Quarter 2017 Results

August 10, 2017 6:00 AM PST

WESTLAKE VILLAGE, CA – (Business Wire) – Interlink Electronics, Inc. (NASDAQ: LINK), a global leader in human-machine interface (HMI) and sensor technologies, today announced its financial results for the three and six months ended June 30, 2017.  

Consolidated Financial Highlights

(Amounts in thousands except per share data and percentages)

	Three months ended June 30,								Six months ended June 30,
Consolidated Financial Results	2017			2016			% ∆			2017			2016		% ∆
Net revenue	$	3,264		$	3,054		6.9	%	$	6,148		$	5,859		4.9	%
Gross profit	$	2,061		$	1,843		11.8	%	$	3,797		$	3,514		8.1	%
Gross margin		63.1	%		60.3	%				61.8	%		60.0	%
Income from Operations	$	839		$	914		(8.2)	%	$	1,370		$	1,532		(10.6)	%
Net income	$	549		$	749		(26.7)	%	$	913		$	1,355		(32.6)	%
Earnings per share (basic and diluted)	$	0.07		$	0.10				$	0.12		$	0.18
EBITDA¹	$	890		$	955		(6.8)	%
EBITDA margin2		27.3	%		31.3	%
TTM EBITDA¹	$	2,862		$	2,636		8.6	%

¹ See attached schedules for reconciliation to GAAP numbers. 

² EBITDA margin is EBITDA divided by net revenue.

· Revenue in the second quarter of 2017 increased almost 7% to $3.3 million from $3.1 million in the same year-ago period.  For the first six months, revenue increased almost 5% to $6.1 million from $5.9 million in the comparable period of 2016.

· Gross margin increased to 63.1% in the second quarter of 2017 from 60.3% in the same year-ago period.  For the first six months, gross margin improved to 61.8% from 60.0% in the comparable period of 2016.  Nearly all of the revenue increases contributed to gross margin.

· In the second quarter of 2017, net income totaled $549 thousand or $0.07 per basic and diluted share, compared to net income of$749 thousand or $0.10 per basic and diluted share in the same year-ago period.  For the first six months, net income was $913 thousand or $0.12 per basic and diluted share compared to net income of $1.4 million or$0.18 per basic and diluted share in the comparable period of 2016.

· The Company generated $890 thousand of EBITDA for the second quarter of 2017, compared with $955 thousand in the same period in 2016.  On a trailing twelve-month basis, EBITDA was $2.9 million, up from $2.16 million in the comparable period ending June 30, 2016

· At June 30, 2017, the company had $7.0 million in cash and cash equivalents,  and no debt.

“Our financial performance in the second quarter of 2017 reflects another period of stable revenue, gross profit, net income and EBITDA,” stated Steven N. Bronson, CEO of Interlink Electronics, Inc.  “We anticipate revenues for the remainder of the year to be lower compared to the second half of 2016.  This is due to a major customer making a design change to their product that eliminated the need for our solution.  We expect new and existing customers to replace this revenue stream in 2018.”

Mr. Bronson continued, “We are committed to making meaningful investments in our next generation technology platforms.  In addition, we are actively pursuing acquisitions that broaden our technology offerings and increase our revenues.”

About Interlink Electronics, Inc.

Interlink Electronics is a world-leading trusted advisor and technology partner in the advancing world of human-machine interface (HMI) and force-sensing technologies. Interlink Electronics has led the printed electronics industry in its commercialization of its patented Force-Sensing Resistor (FSR®) technology, which has enabled rugged and reliable HMI solutions. For over 30 years, Interlink Electronics' solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world's top electronics manufacturers. Interlink Electronics has a proven track record of supplying HMI solutions for mission-critical applications in a wide range of markets, including, but not limited to, consumer electronics, automotive, industrial, and medical devices. Interlink Electronics serves a world-class customer-base from its our corporate headquarters in Westlake Village, California (greater Los Angeles area), our global research and development center in Singapore, our printed-electronics manufacturing facility in Shenzhen, China and our global distribution and logistics center in Hong Kong. We also maintain technical and sales offices in Japan and at various locations in the United States. For more information, please see our website at www.interlinkelectronics.com.  

Forward Looking Statements

This release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company’s views on future financial performance and are generally identified by phrases such as “thinks,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management’s own knowledge and assessment of the Company’s industry, R&D initiatives, competition and capital requirements. Other factors and uncertainties that could affect the Company’s forward-looking statements include, among other things, the following: 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; continued availability of raw materials for our products at competitive prices; 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. These and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

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 EBITDA and EBITDA margin, each of which is a non-GAAP measure. EBITDA is determined by taking net income and adding interest, income taxes, depreciation and amortization, and EBITDA margin is determined by dividing EBITDA by net revenue.  Interlink believes that these non-GAAP measure, viewed in addition to and not in lieu of net income and gross margin, provide useful information to investors by providing more focused measures of operating results. These metrics are an integral part of Interlink’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation of EBITDA to net income, the most comparable GAAP measure, is available in the accompanying

financial tables below. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies.

Contact:

Interlink Electronics, Inc. 

IR@iefsr.com 

Steven N. Bronson, CEO

805-416-7004

APPENDIX

Consolidated Financial Information and Reconciliations:  Second Quarter and Six Months of 2017

INTERLINK ELECTRONICS, INC.

Condensed Consolidated Balance Sheets

(unaudited)

	June 30,		December 31,
	2017		2016
	(in thousands, except par value)
ASSETS
Current assets
Cash and cash equivalents	$	6,968	$	6,009
Restricted Cash		5		5
Accounts receivable, net		1,958		1,726
Inventories		1,361		1,268
Prepaid expenses and other current assets		214		377
Total current assets		10,506		9,385
Property, plant and equipment, net		272		310
Intangibles, net		56		44
Deferred income taxes		622		675
Other assets		58		57
Total assets	$	11,514	$	10,471
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	335	$	324
Accrued liabilities		303		334
Accrued income taxes		201		104
Deferred revenue, current		44		111
Total current liabilities		883		873
Total liabilities		883		873
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 1,000 shares authorized, no shares issued or outstanding		—		—
Common stock, $0.001 par value: 30,000 shares authorized, 7,335 and 7,326 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively		7		7
Additional paid-in-capital		60,454		60,370
Accumulated other comprehensive (loss) income		(35)		(71)
Accumulated deficit		(49,795)		(50,708)
Total stockholders' equity		10,631		9,598
Total liabilities and stockholders' equity	$	11,514	$	10,471

INTERLINK ELECTRONICS, INC.

Condensed Consolidated Statements of Income

(unaudited)

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
	(in thousands, except per share data)				(in thousands, except per share data)
Revenue, net	$	3,264	$	3,054	$	6,148	$	5,859
Cost of revenue		1,203		1,211		2,351		2,345
Gross profit		2,061		1,843		3,797		3,514
Operating expenses:
Engineering, research and development		157		174		335		315
Selling, general and administrative		1,065		755		2,092		1,667
Total operating expenses		1,222		929		2,427		1,982
Income from operations		839		914		1,370		1,532
Other income (expense):
Other income (expense), net		(2)		15		17		29
Income from continuing operations before income tax expense		837		929		1,387		1,561
Income tax expense		288		180		474		206
Net income	$	549	$	749	$	913	$	1,355
Earnings per share: basic and diluted	$	0.07	$	0.10	$	0.12	$	0.18
Weighted average common shares outstanding - basic		7,333		7,326		7,331		7,326
Weighted average common shares outstanding - diluted		7,420		7,406		7,416		7,400

INTERLINK ELECTRONICS, INC.

Reconciliation of Consolidated Net Income to Consolidated EBITDA

(unaudited)

	Three months ended June 30,				Trailing twelve months ended June 30,
	2017		2016		2017		2016
	(in thousands)				(in thousands)
Net income	$	549	$	749	$	2,451	$	2,331
Adjustments to arrive at earnings before interest, income taxes, depreciation and amortization (EBITDA):
Interest expense (income), net		—		—		(1)		(1)
Income tax expense (benefit)		288		180		262		206
Depreciation and amortization expense		53		26		150		100
EBITDA	$	890	$	955	$	2,862	$	2,636