Higher revenues in architectural and display offset by lower revenues in aircraft and automotive due to seasonality
Research Frontiers Inc. announced its financial results for its second quarter ended June 30, 2018. Management hosted a conference call to discuss its financial and operating results as well as recent developments.
Research Frontiers is the developer of patented SPD-Smart light-control film technology which allows users to instantly, precisely and uniformly control the shading of glass or plastic products, either manually or automatically. Research Frontiers has licensed its technology to over 40 companies that include well known chemical, material science and glass companies.
The company’s fee income from licensing activities for the three months ended June 30, 2018 was 324,853 USD as compared to 348,179 USD for the three months ended June 30, 2017 representing a 23,326 USD decrease between these two periods. The decrease in revenues was cited as a result of the adoption of ASC 606 revenue recognition standard beginning with the first quarter of 2018, the adoption of which changed the timing of when the company recognizes revenues for contracts with customers. The company would have reported 365,048 USD of fee income, representing a 16,869 USD increase in the reported fee income for the period ending June 30, 2018 had they continued to use the accounting guidance used prior to the adoption of ASC 606.
Fee income was down 108,416 USD in the second quarter of 2018 as compared to the prior first quarter of 2018 in all sectors other than the display and architectural sectors. Most of this sequential period decline was due to the recognition of all fee income associated with the Grant of Use performance obligation under license agreements in the first quarter of 2018.
The company’s fee income from licensing activities for the six months ended June 30, 2018 was 758,122 USD as compared to 741,295 USD for the six months ended June 30, 2017 representing a 16,827 USD increase in fee income between these two periods. The increase was the result of higher revenues in the architectural and display sectors partial offset by slightly lower revenues recorded in the aircraft and automotive sectors due to seasonality. The company would have reported 753,697 USD of fee income, representing a 4,423 USD decrease in the reported fee income for the period ending June 30, 2018 had they continued to use the accounting guidance used prior to the adoption of ASC 606.
Expenses declined by 61,154 USD, or 2.8 percent, for the 6-month period ending June 30, 2018 as compared to the same period in 2017. Expenses increased by 57,953 USD, or 6.9 percent, for the 3-month period ending June 30, 2018 as compared to the same period in 2017.
Cash and cash equivalents increased by 124,125 USD since the end of 2017 as a result of financing completed in February 2018.
The company also announced that a group of investors led by a licensee of the company’s SPD technology agreed to make a 2,000,000 USD equity investment in the company. With the addition of proceeds from this investment, the company expects as of this filing to have sufficient working capital for at least the next 24 months of operations.
Note: From time to time Research Frontiers may issue forward-looking statements which involve risks and uncertainties. This press release contains forward-looking statements. Actual results could differ and are not guaranteed. Any forward-looking statements should be considered accordingly. “SPD-Smart” and “SPD-SmartGlass” are trademarks of Research Frontiers Inc.