· Q3 revenue of $10.4 million compared with $17.4 million in Q3 2018
· Gross margin of 42% in Q3 and YTD, level with Q3 2018 and improved from 38%
in the first nine months of 2018
· Q3 EBITDA adjusted of $32,000, compared with $3.0 million in Q3 2018
· First nine months revenue of $38.7 million and EBITDA adjusted of $3.6
million compared with $50.8 million and $6.8 million respectively in 2018
· Cash increased $7.6 million year-to-date, compared with $0.4 million in same
period of 2018
· Q4 Gaming and Enthusiast revenue is expected to increase compared with Q3
2019 while decreasing vs. Q4 2018
· Q4 Gaming and Enthusiast gross margins expected to decline 2-3 %-points due
to an inventory cleanout and a one-time final sell-out of an end-of-life product
· Group revenue expectation for 2019 maintained at decrease of approximately
20% compared with 2018, due to macroeconomic and industry headwinds reducing
customer volumes in the second half of 2019
Asetek reported third quarter revenue of $10.4 million compared with $17.4
million in the third quarter of 2018. Revenue in the first nine months amounted
to $38.7 million compared with $50.8 million in the same period of 2018. The
change from the prior year reflects fewer shipments in the Gaming and Enthusiast
segment, as expected in a softer market for PC's and components.
Gross margin for the third quarter and first nine months was 42%, level with the
third quarter of 2018 and up from 38% in the first nine months of 2018. The
current year gross margins reflect higher ASPs on Gaming and Enthusiast products
and a stronger U.S. dollar
"We have a clear set of strategic priorities. We invest more in new and
innovative Gaming and Enthusiast solutions which will underline that Asetek is
the standard in liquid cooling and our branding program is gaining traction with
both our OEM partners and end-users," said André Sloth Eriksen, CEO and founder
of Asetek. "While economic and industry headwinds continue temporary buffet our
industry, we focus on building the products and customer relationships which
will drive long-term growth and value creation."
Operating loss was $1.2 million and adjusted EBITDA was positive $32,000 in the
third quarter of 2019, compared with operating income of $2.0 million and
adjusted EBITDA of positive $3.0 million in the third quarter of 2018.
Operating loss in the first nine months was $0.1 million and adjusted EBITDA was
positive $3.6 million, compared with operating income of $3.2 million and
adjusted EBITDA of positive $6.8 million in the same periods of 2018. Cash and
cash equivalents increased by $7.6 million in the first nine months of 2019
compared with $0.4 million in the prior year period. Year-to-date operating
expenses for 2019 included a positive effect of $0.8 million related to a
favorable patent litigation settlement. Adjusted EBITDA in the third quarter and
first nine months of 2019 was favorably impacted by an accounting change to IFRS
16 Leases (see Note 2 to the Financial Statements).
Asetek's sixth generation (Gen6) high performance liquid coolers are powering an
expanding range of premium gaming gear, including GIGABYTE's new AORUS CPU
coolers and the ASUS Republic of Gamers (ROG) Strix LC RGB series. The 680LS all
-in-one CPU cooler debuted in the new Talon gaming PC's built by custom hardware
specialist Falcon Northwest. Asetek's Gen6 reliability, superior thermal
performance, quiet operation and overclocking potential provide for the optimal
gaming experience.
In August, Asetek launched coolnation.com, a community forum for gamers, as well
as technology enthusiasts and DIY PC builders. The site serves as an online
platform for educating and engaging with others in the gaming community. In
September, the Company kicked off its first gaming tournament for the Danish
eSports community, "CoolNation Master Counter Strike: Global Offensive".
Gaming and Enthusiast revenue was $9.6 million in the third quarter, compared
with $16.1 million in the same period of 2018. Revenue in the first nine months
was $36.6 million, compared with $47.6 million in the same period of 2018.
Adjusted EBITDA was $2.1 million for the quarter and $10.1 million for the first
nine months, compared with $5.4 million and $15.3 million in 2018, respectively,
reflecting increased investment in the Gaming and Enthusiast segment in 2019,
consistent with plans communicated at Asetek's capital markets update in March
2019.
Data center revenue was $0.8 million in the third quarter, compared with $1.3
million in the third quarter of 2018. Revenue in the first nine months was $2.1
million, compared with $3.2 million in the same period of the prior year.
Adjusted EBITDA was negative $0.9 million in the third quarter and negative $3.5
million in the first nine months of 2019, both of which are an improvement from
2018 and reflect the Company's planned reduction of segment operating expenses
in 2019.
Consistent with the prior quarter, the Group revenue expectation for the full
year 2019 is a decrease of approximately 20% compared with 2018. Customer
volumes in the second half of 2019 reflect reduced demand in the DIY market
segment as a result of macroeconomic and industry headwinds. Based on current
revenue and cost outlook, Asetek expects to report a pre-tax profit for 2019.
Conference call and webcast today Wednesday, 23 October at 8:00 AM CEST:
CEO André Sloth Eriksen and CFO Peter Dam Madsen will present the Company's
results at 8:00 AM CEST and invites investors, analysts and media to join the
presentation. The presentation is expected to last up to one hour, including
Q&A, and can be followed via live webcast or conference call.
Webcast - audio and slide presentation: Please join the Q3 2019 results webcast
via the following link: https://edge.media-server.com/mmc/p/zqkn354h
Conference call - audio only: Please dial in 5-10 minutes prior using the phone
numbers and confirmation code below:
Copenhagen, Denmark: +45 3272 8042
Oslo, Norway +47 2396 0264
London, United Kingdom: +44 (0) 8445 7188 92
Paris, France: +33 (0) 1767 00794
New York, United States of America +1 631 5107 495
Confirmation code: 1265775
Material:
The third quarter report and presentation will also be made available online at
www.asetek.com and www.newsweb.no, as well as through news agencies.
A recorded version of the presentation will be made available at www.asetek.com
approximately two hours after the presentation has concluded.
For questions or further information, please contact:
CEO and Founder André S. Eriksen, +45 2125 7076, email: ceo@astek.com
CFO Peter Dam Madsen, +45 2080 7200, email: investor.relations@asetek.com
About Asetek:
Asetek is the global leader in liquid cooling solutions for gaming and
enthusiast PCs, data centers and servers. Founded in 2000, Asetek is
headquartered in Denmark and has operations in California, Texas, China and
Taiwan. Asetek is listed on the Oslo Stock Exchange (ASETEK.OL).
For more information, visit: www.asetek.com