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MicroVision 3Q19 results ?4
MicroVision has reported its third quarter results:
- a loss of 5 cents per share beats by a penny
- from $1.2M in revenue, which misses by $100K
The company has completed its April 2017 development contract
and $1M of this quarter's revenue was from that. The $10M royalty
prepayment will now be applied to shipments and a new order
received in the past month brings the backlog to just over that
amount. Management expects $800K to $1M of royalty prepayment to
be applied by the end of 1Q20. The end product has been gradually
recognized as MicroSoft's Hololens 2, and management did confirm
its logo in this presentation.
As a result, management expects production to ramp in the fourth
quarter for sales of $2.4-4.4M.
The company also expects to announce an interactive display order
this year, after completing due diligence with a new customer, who
should ship product in the second half of next year. However, it
was unconvincing when asked why it expects that time frame. LiDAR
is still in the works as well, with engineering sample predicted
to ship a year from now.
All of that sounds exciting, and would represent a complete turnaround from the current state of affairs. $174K for this quarter was product revenue, with the remainder being licensing and royalties. However, the product volume was so low that MicroVision has negative gross margin! It also wrote off $1.3M of MEMs that were incompatible with new class 1 laser solution.
MicroVision has $6.6M in cash on the books, which is enough for
about 1 quarter, or less assuming OpEx ramps to support
production. There is $2.7M left on ATM with Lincoln Park and the
share count has inflated to 119M as the company has sold $8.3M
worth under the facility
The takeaway is that MicroVision is at a pivotal moment. The
Hololens 2 was supposed to have gone on sale in September, but no
new release date is available. Since every AR device to date has
been a flop, it's likely that the actual ramp will be gradual,
which is just as well since MicroVision doesn't have the finances
to support immediate high-volume production. Regardless of how
the market reacts, MicroVision's historical disregard for
shareholder value makes me unwilling to take a chance on the stock
now. However, I can't rule out a change in fortunes and will
begin monitoring and reporting on the progress of the Hololens 2.