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Vuzix 4Q23 results -4

17:24 15-Apr-24

The Vuzix conference call has just concluded and management says 6 out of 10 Atomistic milestones have been reached.  Charges from that relationship were up to $10.5M and bad debt and obsolete product charges were both also up.  The company is down to $26.6M cash on the balance sheet, which is a somewhat greater cash burn of $11.5M than last quarter at $10.6M.  In response, Vuzix is offering equity to all salaried employees and management in exchange for salary reductions, which means further dilution.  Finally, the auditors have included a "going concern" warning in the 10-K as well, which means they doubt the company can remain solvent. 

Management does not share these concerns yet says, in response to the very first analyst question, that the cash balance will be further drained by Atomistic support payments.  It targets a $15-20M annual OpEx rate, once its cost cuts are complete.

As for its own waveguide technology, in response to questions from the second and last analyst, management refused to give quantities that it would need to get to breakeven or even improved margins.  It did say it hopes to improve quantities by the second half.  Military engagements were cited, but the calculations given max those out a half million in revenue, and more likely only a small fraction of that.

In conclusion, though some sort of rescue deal before bankruptcy or further dilution is always possible, I find it hard to disagree with the auditor opinion.  VUZI is only down 2 cents to $1.21 so far, but breaching the dollar mark and thus requiring an eventual reverse split remains a concern for me as well.

Vuzix has finally reported its fourth quarter results:

• a loss of 32 cents per share misses by 18 cents
• from $1.07M of revenue, which misses by $1.1M

Management blames the miss of even its own lowered expectations on "the timing of the AR enterprise industry adoption curve."  It says it expects backplanes from Atomistic to accelerate over the coming year, with designs being refined and samples being produced at a greater pace.  I do not find this encouraging.

I am listening to the conference call now, but it started with an operator introduction followed by a couple minutes of silence until the operator announced technical difficulties.  There are now comparisons to 300K of "smart" Rayban sales sold through Meta, but the only point is that is that these do NOT incorporate a display engine like Vuzix does.  I'll write again if there is anything worthwhile, which is doubtful.

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