· Nine-month revenue of $61.7 million (+37%) and EBITDA adjusted of $6.5 million
· Q3 revenue of $13.5 million compared with $21.6 million in Q3 2020; Q3 gross
margin of 39% compared with 47% in prior year
· Q3 EBITDA adjusted of negative $1.4 million, compared with $5.4 million in
Q3 2020
· Results are consistent with update provided on September 22
· One-time charge of $1.7 million in operating expense for exit of the HPC
data center niche
· Opening of orders for SimSports products in Q4, with R&D investment of $0.8
million in Q3
· Asetek technology incorporated in first AIO liquid cooling solutions from
global gaming leader Razer
· Expectation for 2021 Group revenue growth of 10 - 20% maintained, current
revenue outlook trending toward the lower end of the range
Asetek reported third-quarter revenue of $13.5 million, compared with $21.6
million in the same period of 2020. Revenue in the first nine months was $61.7
million, representing growth of 37% compared with the same period of 2020. The
changes from prior year mainly reflect fluctuation in the volume of shipments of
Gaming and Enthusiast products, impacted by several factors: A global shortage
of chips, particularly GPUs, has suppressed demand for Asetek's coolers.
Disruption in global shipping and logistics has delayed customer shipments.
Manufacturing schedules and component deliveries from suppliers have been
hindered by a global component shortage, power outages and COVID-related factory
shutdowns in the Tongan District in China.
In order to maximize the future profitability of its Data center business, the
Company announced that it is exiting the High-Performance Computing (HPC)
niche. Asetek plans to prioritize the general data center market and support
legislation increasing adoption of its sustainable solutions, capitalizing on
its liquid cooling technology and long-term investments in the segment. Asetek
recorded a one-time charge of $1.7 million to operating expense in Q3 2021
following this strategic change.
Gross margin was 39% for the third quarter and 42% in the first nine months,
compared with 47% and 49% in the respective periods of 2020. The margin decline
reflects increases in certain component costs due to the ongoing global
component shortage, higher shipping costs, a change in the mix of product
shipments and a weaker U.S. dollar.
"We are set to deliver record revenue in 2021 as gamers invest more in hardware
and immersive experiences enabled by Asetek liquid cooling technology. Our long
-term revenue ambition of 15% average annual growth through 2025 remain firm
despite current shut-downs, component shortages and shipping bottle-necks
affecting global supply chains and our short-term growth and cost base," said
André Sloth Eriksen, CEO and founder of Asetek. "Our strategy of profitable
growth is led by continuous innovation within the Gaming and Enthusiast segment,
our new SimSports product line and a refocused Data center business positioned
for significant value-creation by providing sustainable solutions for an
emerging general data center market."
Operating loss was $4.1 million and adjusted EBITDA was negative $1.4 million in
the third quarter of 2021, compared with operating income of $4.3 million and
adjusted EBITDA of $5.4 million in the third quarter of 2020. Operating income
in the first nine months was $1.3 million and adjusted EBITDA was $6.5 million,
compared with operating income of $5.3 million and adjusted EBITDA of $8.7
million in the same period of 2020.
Operating expense included R&D in the new SimSports line of business of $0.8
million and $2.0 million in the third quarter and first nine months of 2021,
respectively, compared with zero in the same periods of 2020.
During the third quarter, the Company repurchased 113 thousand common shares for
a total of $1.25 million to complete the share repurchases under the April 2021
program. At September 30, 2021, Asetek had working capital of $22.9 million
including $25.4 million of cash and cash equivalents, and long-term debt totaled
$1.9 million.
In September, Asetek announced the first of its sim racing products - Invicta
Sim Racing Pedals - which include a throttle, brake pedal and add-on clutch
pedal, along with its RaceHub software for quick and easy adjustments and
calibration. This initial offering will be available for purchase in Q4 2021,
with delivery to customers early next year.
In the third quarter, fifteen new Gaming & Enthusiast products began shipping,
including one to a new customer. The Company also announced new all-in-one (AIO)
coolers offered by its partners - Phanteks introduced the extreme performance
Glacier One 240T30 AIO CPU cooler and MSI introduced its MEG CORELIQUID S Series
premium AIO CPU coolers.
In October, the Company announced that Asetek technology is incorporated in the
first AIO liquid cooling solutions from global gaming leader Razer.
Asetek's short-term outlook is affected by several factors. Manufacturing
schedules and component deliveries from suppliers are hindered by power outages
and COVID-related factory shutdowns in the Tongan District in China, which may
continue. Significant increases in shipping and logistics costs are reducing
gross margins. A global shortage of chips, particularly GPUs, is negatively
impacting the market for Asetek's coolers.
In recognition of the above factors, Asetek on September 22 updated its 2021
revenue expectation to an increase of 10% to 20% from 2020 (previously 20% to
30%). Operating income expectation was updated to between $0 and $2 million in
2021 (previously $8 to $12 million), reflecting the effect of reduced revenue
due to the shortage of GPUs, increased shipping and component costs,
uncertainties regarding operations in China, and non-recurring costs associated
with the exit of the HPC data center niche. Asetek's most recent revenue outlook
is trending toward the lower end of the above noted range.
Conference call and webcast today Thursday, 28 October at 8:00 CEST:
CEO André Sloth Eriksen and CFO Peter Dam Madsen will present the Company's
results at 8:00 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 third 2021 results
webcast via the following link:
https://streams.eventcdn.net/asetek/2021q3
Conference call - audio only: Please dial in 5-10 minutes prior using the phone
numbers and confirmation code below:
Copenhagen, Denmark +45 7872 3250
Oslo, Norway +47 2396 3938
Frankfurt, Germany +49 69222 2391 66
London, United Kingdom +44 (0) 3333 00 9262
New York, United States of America +1 631 913 1422 (US only PIN: 80618629#)
Material:
The third quarter report and presentation are available online at www.asetek.com
(https://ir.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
(https://ir.asetek.com/) approximately two hours after the presentation has
concluded.
Q&A:
The conference call lines will be opened for participants to ask question at the
end of the presentation. Questions can also be submitted through the online
webcast during the presentation.
For questions or further information, please contact:
CEO and Founder André S. Eriksen, +45 2125 7076, email: ceo@asetek.com
CFO Peter Dam Madsen, +45 2080 7200, email: investor.relations@asetek.com
About Asetek:
Asetek, the creator of the all-in-one liquid cooler, is the global leader for
liquid cooling solutions for high performance gaming and enthusiast PCs, and
environmentally aware data centers. Founded in 2000, Asetek is headquartered in
Denmark and has operations in China, Taiwan and the United States. Asetek is
listed on the Oslo Stock Exchange (ASTK.OL).
www.asetek.com
This information is subject to the disclosure requirements pursuant to Section 5
-12 of the Norwegian Securities Trading Act.