Tuesday, May 14, 2019

Vuzix Reports First Quarter 2019 Results

Source:  Vuzix Corporation 5/9/19

Vuzix® Corporation (NASDAQ: VUZI) ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technologies and products, today reported its first quarter results for the period ended March 31, 2019.

First Quarter 2019 Highlights
  • Entered into a 3-year master reseller agreement with Verizon whereby they will resell Vuzix Smart Glasses products including Vuzix M300XL Smart Glasses and M-Series related accessories, Vuzix Blade Smart Glasses and Vuzix Remote Assistant
  • Introduced Qualcomm XR1-powered M400 enterprise smart glasses, designed to be best in class in enterprise with a larger memory profile, better noise cancelling, a multi-finger supported touchpad and built-in GPS
  • Commenced shipping the "Prosumer" version of Blade and expanded market access to 35 countries worldwide including Japan
  • Received a follow-on order from Dynabook Inc. (formerly "Toshiba") of approximately $1.0 million for M300C enterprise smart glasses with delivery expected in the second quarter of 2019
  • Received ISO 9001:2015 Certification for our West Henrietta manufacturing facility
Recent Developments
  • Entered into a Joint Development Agreement with global power management company Eaton to develop an ATEX intrinsically safe smart glasses solution based on the M-300XL; these smart glasses will be co-branded and both Eaton Crouse-Hinds and Vuzix will be selling this final solution
  • Announced partnerships with VSee Lab and SightCall, respectively, to deliver new solutions for Vuzix Smart Glasses
  • Boosted Blade production and expanded its functionality with the release of new apps and functionalities including Amazon Alexa, Google Assistant, Yelp, AccuWeather, sports and news
  • Increased our custom waveguide development and OEM program efforts, responding to multiple new RFQs across market areas from aviation to the automotive industries
  • Received a follow-on order from our current avionics partner for a customized waveguide-based HMD development program
  • Right sized operations to reduce costs to be in line with a work towards profitable operations
The following table compares condensed elements of the Company's summarized Consolidated Statements of Operations data for the quarters ended March 31, 2019 and 2018, respectively:



For 3 Months Ended March 31,



2019

2018
Sales: 





Sales of Products


$
1,373,371

$
1,363,379
Sales of Engineering Services



-


180,516








Total Sales



1,373,371


1,543,895








Total Cost of Sales



1,333,481


1,366,770








Gross Profit



39,890


177,125

Operating Expenses:







Research and Development



2,516,100


2,055,787
Selling and Marketing



1,417,966


1,534,097
General and Administrative



1,896,402


1,665,229
Depreciation and Amortization



559,089


273,622








Loss from Operations



(6,349,667)


(5,351,610)








Total Other Expense



(10,094)


(14,040)








Net Loss



(6,359,761)


(5,365,650)
Loss Attributable to Common Stockholders per Share


$
(0.25)

$
(0.22)

Management Commentary
"As indicated on our year end results call, first quarter revenue was soft.  This softness however in no way reflects the business opportunities before us. Our current pipeline, alongside the new agreements and partnerships we've struck thus far in 2019, will show, very shortly, the robust growth at hand here for Vuzix," said Paul Travers, President and CEO of Vuzix. "On the product development side, we announced our next generation Qualcomm XR1-based M400 and an ATEX-certified smart glasses solution co-developed with Eaton to be resold by their large team of sales people. On the marketing side, our 3-year reseller agreement with Verizon should take our company's visibility to the next level and open a host of doors at major industry players across numerous enterprise verticals. We also continue to announce partnerships with key providers, such as VSee Lab and SightCall, as Vuzix further expands its ecosystem and increasingly cements its position as an industry leader. The bottom line is that Vuzix is well positioned to bring the industry's strongest set of smart glasses solutions to market and has the marketing muscle and sales pipeline needed to achieve broad success."  

First Quarter 2019 Financial Results
For the three months ended March 31, 2019, product revenues increased slightly year over year, but due to earning no engineering services revenue in the quarter versus $0.2 million in the prior year's period, total revenues experienced a decrease of 11% over the comparable period in 2018. 

There was an overall gross profit of less than $0.1 million for the three months ended March 31, 2019 as compared to a gross profit of $0.2 million for the same period in 2018.  On a product cost of sales basis only, product direct costs were 52% of sales in the 2019 period as compared to 46% in the prior year's period, the increase resulting from slightly lower margins on Blade Smart Glasses, a price reduction on the original M300 over the M300XL products and increased manufacturing costs.

Research and Development (R&D) expense was $2.5 million for the three months ended March 31, 2019 compared to $2.1 million for the comparable 2018 period. The increase in R&D expense was primarily the result of development work on the M400 and an increase in consulting fees for software contractors related to the Vuzix Blade.

Selling and Marketing expense was $1.4 million for the three months ended March 31, 2019 compared to $1.5 million for the comparable 2018 period, a reduction of approximately $0.1 million during the time period the Company participates in its two largest tradeshows – CES and MWC.
General and Administrative expense for the three months ended March 31, 2019 was $1.9 million versus $1.7 million in the prior year's period, an increase of approximately $0.2 million driven by increased legal expenses and IT consulting services.

The net loss attributable to common stockholders after accrued preferred share dividends for the three months ended March 31, 2019 was $6.8 million or $0.25 cents per share versus a net loss of $5.8 million or $0.22 for the same period in 2018.

Net cash operating loss after adding back non-cash adjustments for the first quarter of 2019 was $5.3 million. As of March 31, 2019, the Company maintained cash and cash equivalents of $10.1 million and an overall working capital position of $16.1 million.

Management Outlook
"With further broadening interest in our current product family and our new M400 and ATEX certified smart glasses products on schedule to ship in the second half of the year, we remain well-positioned to achieve solid top line growth in 2019," said Paul Travers, President and CEO of Vuzix.  "Our products offer compelling and demonstrable ROIs and continue to be very well received by those using them. We see so many opportunities out there and feel it is just a matter of time before industry demand truly accelerates and our unit numbers and top line along with it. That said, we are off to a good start in 2Q with firm orders already ahead of 1Q's total. On the expense side, we have trimmed costs meaningfully over the past few months and expect to burn significantly less cash in 2Q versus 1Q as we continue to aim for cash flow breakeven by year-end."

About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 153 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK and Tokyo, Japan.





Vuzix Blade AR Smart Glasses to be Featured at American Airlines Hack Wars VI Hackathon

Source:  Vuzix Corporation 5/2/19

 Vuzix® Corporation (NASDAQ: VUZI), ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technology and products, is pleased to announce that the Vuzix Blade AR Smart Glasses will be featured at Hack Wars VI, an internal American Airlines hackathon taking place in Dallas, TX on May 3-4. 

American Airlines Hack Wars VI brings together approximately 1,000 American Airline developers for 24 hours to collaborate, build and innovate.  The Hack Wars VI challenge is focused on elevating the customer travel experience, boosting operational efficiencies and employee performance (baggage handling, gate agents, etc.), or enhancing American Airlines brand image with innovative hacks.

"The Hack Wars VI is a great event to support the American Airlines software development team to deliver new innovative customer experiences on the Vuzix Blade Smart Glasses.  AR content delivered through Vuzix Smart Glasses can have a profound impact in so many areas within the aviation industry including bag handling and customer service on the ground and in the air," said Paul Travers, President and Chief Executive Officer at Vuzix.

About Vuzix Corporation Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 153 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK, Barcelona, Spain and Tokyo, Japan.  For more information, visit Vuzix websiteTwitter and Facebook pages.

Vuzix Collaborates with Eaton to Develop Smart Glasses for Harsh and Hazardous Environments

Source:  Vuzix Corporation 4/26/19

Vuzix® Corporation (NASDAQ: VUZI), ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technology and products, announced it has entered into an Joint Development Agreement ("Agreement") with power management company Eaton to develop an ATEX intrinsically safe smart glasses solution. Vuzix is partnering with Eaton for this joint product development because of Eaton's innovation and expertise in intrinsically safe certifications and solutions for harsh and hazardous areas through its Crouse-Hinds series solutions.


The new ATEX smart glasses will be on display in Eaton's booth #4838 at the 2019 Offshore Technology Conference (OTC) from May 6 to 9 at NRG Park in Houston. Utilizing an interactive experience, visitors will learn about this unique, hands-free solution for efficient and accurate access to information, data collection, and communication.

Vuzix today is currently a leader in enterprise smart glasses and this expansion into a new market segment will further the Company's position as a leader in wearable enterprise solutions.  The ATEX intrinsically safe smart glasses market represents a significant new addressable market for Vuzix that is ripe for innovation and disruption.  Eaton is a leading provider of electrical and instrumentation products for harsh and hazardous environments. Eaton's Crouse-Hinds series solutions are designed to perform to the highest standard of safety and reliability, keep people safe and keep plants running.

Hazardous atmospheres in the workplace can be caused by flammable gases, mists or vapors or by combustible dusts. These new ATEX certified smart glasses are being designed to work in these challenging environments.  At the same time, they will be fully software and accessory compatible with all existing M-series products, which will make for easy deployment of standard M-Series products right alongside their ATEX certified versions within the corporate infrastructure from IT to HR to the worksite.

"Eaton's expertise in intrinsically safe certifications and solutions for harsh and hazardous locations bring immediate value to the table towards the creation and rapid development of a Vuzix ATEX certified smart glasses platform," said Paul Travers, President and Chief Executive Officer at Vuzix.   "The joint development between Vuzix and Eaton will leverage the expertise of both organizations to manufacture, market and sell industry leading ATEX certified smart glasses." 

Further details on the M-Series ATEX model should be available by mid-summer with shipments expected to commence in fall 2019.

For more information on Eaton, visit www.Eaton.com 
About Vuzix Corporation 

Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 153 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK, Barcelona, Spain and Tokyo, Japan.  For more information, visit Vuzix website,  Twitter and Facebook pages.


Vuzix Boosts Blade Production and Expands its Functionality

Source:  Vuzix Corporation 4/16/19

Blade Software Ecosystem Grows with the General Availability of Apps for Yelp, AccuWeather, News and Sports.

Vuzix® Corporation (NASDAQ: VUZI), ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technology and products, is pleased to announce several positive developments for its Vuzix Blade® AR Smart Glasses. Most importantly, production yields and rates have been increasing and the Company can now offer near immediate delivery on new orders on its website. 

Production yields for optical waveguides, an internally manufactured product in the company's Rochester-based headquarters and a key component in the Vuzix Blade, have continued to improve. As a result, the Company's manufacturing floor has been able to accelerate and expand production of Blade Smart Glasses, as evidenced by the recent decrease in shipping time from 3-4 weeks to "in stock" as indicated of the Company's website. Further plans remain in place to realize additional production increases and cost reductions over the balance of 2019.

Additionally, several popular apps for the Vuzix Blade are now available for consumer use at the Vuzix App Store. The Vuzix Blade Yelp app helps users look for a new pizzeria, a great coffee shop nearby or the best fine dining establishment in town.  With the Vuzix Blade AccuWeather Globe 3D app, live and accurate local weather reports can be accessed by users right before their eyes. The Vuzix Blade News app allows users to stay up to date on the latest headlines and news stories from CNN, NPR, Google News, and Reuters. For sports fans, whether it's the NFL, NHL, MLB, NBA, or all four, users can now follow every touchdown, goal, run, and point with the Vuzix Blade Sports app which pushes your desired game statistics to your AR glasses.

"We continue to make great progress with Vuzix Blade Smart Glasses, both in terms of our production capacity and device functionality, and we expect to achieve much more in both of these regards over the balance of this year," said Paul Travers, Vuzix President and Chief Executive Officer.  "We are truly at the point where a growing number of consumers can start leaving their phone in their pockets and experience new levels of convenience and functionality that others can only dream of providing at this point.  At the same time, the Blade Smart Glasses is gaining steady interest on the enterprise side for use as a B2B or B2C productivity tool. And we are just getting started."

About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 153 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK, Barcelona, Spain and Tokyo, Japan.

Vuzix Partners with VSee Lab Inc. to Deliver a Telehealth and Telemedicine Smart Glasses Solution

Source:  Vuzix Corporation 4/9/19

Vuzix® Corporation (NASDAQ: VUZI), ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technology and products, is pleased to announce a strategic partnership with VSee Lab Inc. ("VSee"), a San Jose-based video telehealth company, to introduce a telehealth and telemedicine smart glasses solution for Vuzix' M300XL and Vuzix Blade Smart Glasses.

VSee provides a HIPAA-compliant video telehealth and telemedicine video conferencing solution that is used by more than 1,000 telemedicine companies operating all over the globe, including MDLIVE, Walgreens, McKesson, International SOS and DaVita, as well as numerous A-list healthcare systems such as Ascension, HealthPartners, Sutter, Trinity and Sentara. VSee was also selected by NASA to be the exclusive video conference solution on the International Space Station (ISS) because of its usability and its ability to adapt to poor network conditions.  It has been used by astronauts on board the ISS since 2014.

"The VSee telemedicine video conferencing platform is easy and simple to use.  We are excited to offer a telemedicine video conferencing smart glasses hardware option to our existing customers, first responders and to VSee's extensive telemedicine customer base," said Paul Travers, President and Chief Executive Officer at Vuzix. 

"While VSee previously worked with some early generation smart glasses solutions, the technology was not ready for telemedicine. We feel very privileged now to be partnering with Vuzix with its mature smart glasses offerings. Telemedicine video conferencing through smart glasses from Vuzix is a natural progression from tablets and computers for our customers.  We are excited to begin realizing telehealth smart glasses applications from remote training on imaging technology (CTs, ultrasounds) and inserting IVs to telesurgery to AR-enhanced video visits.  We look forward to continued collaboration between our two companies," said Milton Chen, Chief Executive Officer at VSee.

VSee will be showcasing the smart glasses telehealth and telemedicine solution on the Vuzix M300XL and Vuzix Blade at the American Telemedicine Association (ATA) 2019 annual conference and expo in New Orleans April 14-16th in VSee booth #727.  More information can be found at http://www.ata2019.org/

The VSee telehealth and telemedicine solution for the Vuzix M300XL and Vuzix Blade Smart Glasses is expected to be commercially available during the second quarter of 2019.

About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 153 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK, Barcelona, Spain and Tokyo, Japan.  For more information, visit Vuzix website Twitter and Facebook pages.

About VSeeVSee is the video telehealth company behind NASA Space Station, Trinity, Ascension, DaVita, MDLIVE and 1,200+ customers, and the parent of This American Doc medical group—an airbnb-like marketplace for physician staffing. VSee empowers health organizations and practitioners to achieve better patient care and improved efficiency through simple, scalable telehealth. Its modular platform provides powerful flexibility for fast customization to a wide range of workflows from ER diversion to e-ICU to on-call specialist consults to chronic care management. Learn more at vsee.com.

Vuzix Reports FY 2018 Revenue Increase of 46% over 2017

Source:  Vuzix Corporation 3/15/19

Vuzix® Corporation (NASDAQ: VUZI) ("Vuzix" or, the "Company"), a leading supplier of Smart Glasses and Augmented Reality (AR) technologies and products, today reported its fourth quarter and full year financial results for the period ended December 31, 2018.

4Q2018 Highlights and Developments
  • Total revenue for the fourth quarter ending December 31, 2018 increased 24% year-over-year.
  • Smart Glasses revenue for Q4-18, including Toshiba Smart Glasses, increased 33% year-over-year.
  • Gross profit of $0.3 million versus a prior period loss of $0.3 million
  • M300XL enterprise smart glasses announced and commenced shipping across key accounts.
  • Non-Compete agreement amended with Six15 Technologies, allowing the Company to make sales directly to the first responder, security organization, third-party defense supplier and military markets.
  • M300 follow-on order received from SATS to rollout and outfit ramp handling operations with smart glasses at Changi Airport.
  • Partnered with AccuWeather and Yelp, among others, to bring popular apps to Blade.
  • Delivered a commercial avionics waveguide-based head-mounted display (HMD) system to a global Tier-1 aerospace firm; currently negotiating a follow-on development project with this customer with an expected commencement in 2019.
Recent Developments
  • Entered into a 3-year master reseller agreement with Verizon; Verizon to resell Vuzix Smart Glasses products including Vuzix M300XL Smart Glasses and M-Series related accessories, Vuzix Blade Smart Glasses and Vuzix Basics Video; the Company expects to start receiving purchase orders under the master reseller agreement with Verizon as early as the second quarter of 2019.
  • Qualcomm XR1-powered M400 enterprise smart glasses introduced at MWC in late February; Running Android 8.1, offering USB-C connectivity and having a host of hardware improvements covering nearly every major feature, the M400 will be the most innovative and powerful set of enterprise smart glasses on the market.
  • "Prosumer" version of Blade launched and commenced shipping; regulatory market access expanded to 35 countries worldwide including Japan.
  • Toshiba Client Solutions placed follow-on OEM order of approximately $1.0 million for M300C enterprise smart glasses; product delivery is anticipated to occur in the second quarter of 2019.
The following table compares condensed elements of the Company's summarized Consolidated Statements of Operations data for the quarters and years ended December 31, 2018 and 2017, respectively:


Three Months Ended
 December 31,


Twelve Months Ended
 December 31,



2018


2017


2018


2017














Sales:












Sales of Products

$
1,838,640


$
1,545,946


$
7,692,102


$
4,548,689

Sales of Engineering Services


140,850



50,783



402,266



989,064


















Total Sales


1,979,490



1,596,729



8,094,368



5,537,753


















Total Cost of Sales


1,679,426



1,900,599



6,326,086



6,214,351


















Gross Profit (Loss)


300,064



(303,870)



1,768,282



(676,598)


















Operating Expenses:
















Research and Development


3,290,369



2,332,487



10,378,728



6,706,690

Selling and Marketing


777,087



954,788



4,822,639



3,694,913

General and Administrative


1,321,261



1,970,376



6,973,238



6,126,335

Depreciation and Amortization


523,330



264,000



1,469,664



998,528

Impairment of Software Development Costs


-



-



196,223



-

Gain (Loss) on Inventory Revaluation and
      Product Discontinuance


-



-



(211,416)



1,151,482


















Loss from Operations


(5,611,983)



(5,825,521)



(21,860,794)



(19,354,546)


















Total Other Income (Expense)


48,124



(53,475)



(14,919)



(278,956)


















Net Loss

$
(5,563,859)


$
(5,878,996)


$
(21,875,713)


$
(19,633,502)

Loss per Share after accrued Preferred
      Dividends

$
(0.22)


$
(0.29)


$
(0.87)


$
(1.02)


















Management Commentary
"2018 was a year of continued product development and customer engagement for Vuzix," said Paul Travers, President and CEO of Vuzix. "On the product side, we introduced an improved version of our M300 Smart Glasses with the M300XL in November and advanced the development and production of our Blade Smart Glasses and ecosystem to meet emerging enterprise and consumer demand. As for customer engagements, we experienced continuing growth over the past year and issued our first quotations in the ten million plus dollar range. The long-anticipated industry ramp of AR glasses finally seems to be at hand and Vuzix is as well-positioned as any in the industry to capitalize on it. Operationally, we continued to steadily grow our top-line in our fourth quarter of 2018, achieving Q4 year-over-year revenue growth of 24% on increased sales of our AR smart glasses, and continued our ongoing evaluation of operating expenses to ensure the most rapid path to profitability possible."

Fourth Quarter 2018 Financial Results
For the three months ended December 31, 2018, total revenues were $2.0 million, an increase of 24% over the comparable period in 2017, primarily the result of strong Smart Glasses sales, including Toshiba Smart Glasses, which increased 33% over the comparative period. 

There was an overall gross profit of $0.3 million for the three months ended December 31, 2018 as compared to a gross loss of $0.3 million for the same period in 2017.  The product gross profit improvement for the 2018 period over the 2017 period reflects an improved average selling price of our Smart Glasses, lower inventory write-offs, and higher total overall revenues on which to absorb the generally fixed manufacturing overhead costs.

Research and Development (R&D) expense was $3.3 million for the three months ended December 31, 2018 compared to $2.3 million for the comparable 2017 period. The increase in R&D expense was primarily driven by additional R&D staff hiring, development costs for the M400 Smart Glasses and an increase in external software development costs for the Blade.

Selling and Marketing expense was $0.8 million for the three months ended December 31, 2018 compared to $1.0 million for the comparable 2017 period, a reduction of approximately $0.2 million.
General and administrative expense for the three months ended December 31, 2018 was $1.3 million versus $2.0 million in the prior year's period, a reduction of approximately $0.7 million

The net loss attributable to common stockholders after accrued preferred share dividends for the three months ending December 31, 2018 was $6.0 million or $0.22 cents per share versus a net loss of $6.3 million or $0.29 for the same period in 2017.

Net cash operating loss after adding back non-cash adjustments for the fourth quarter of 2018 was $4.5 million, generally consistent with the average quarterly losses for the first three quarters of 2018. As of December 31, 2018, the Company maintained cash and cash equivalents of $17.3 million and an overall net working capital position of $22.7 million.

Full Year 2018 Financial Results
For the full year ended December 31, 2018 total revenues were $8.1 million, an increase of 46% over the comparable period in 2017. The increase in revenues for the year was primarily the result of higher M-Series and Blade Smart Glasses sales, which increased 55% over the comparative period, and secondarily to sales of OEM Smart Glasses products, which added $1.0 million versus none in the prior year.

There was an overall gross profit of $1.8 million for the full year ended December 31, 2018 as compared to a gross loss of $0.7 million for the same period in 2017.  The $2.5 million improvement in product gross profit for 2018 over 2017 reflects an improved average selling price of Smart Glasses, elimination of the iWear product line, lower inventory write-offs and higher total overall revenues on which to absorb the generally fixed manufacturing overhead costs. 

Research and Development (R&D) expense was $10.4 million for the full year ended December 31, 2018 compared to $6.7 million for the comparable 2017 period.  The increase in R&D expense was primarily driven by additional R&D staff hiring, primarily for internal software development, M400 and Blade product development costs and increased external software development costs for the Blade Smart Glasses.

Selling and Marketing expense was $4.8 million for the full year ended December 31, 2018 compared to $3.7 million for the comparable 2017 period.

General and administrative expense for the full year ended December 31, 2018 was $7.0 million versus $6.1 million in the prior year's period. 

The net loss attributable to common stockholders after accrued preferred share dividends for the full year ending December 31, 2018 was $23.7 million or $0.87 cents per share versus a net loss of $21.3 million or $1.02 for the same period in 2017.

Net cash operating loss after adding back non-cash adjustments for the full year of 2018 was $18.0 million as compared to the prior year's total of $15.3 million.

Management Outlook
"We are well-positioned to achieve significant top line growth in 2019, and, with planned operating expense reductions that are being put in place, we expect to see a substantive reduction in our cash burn for the year," said Paul Travers, President and CEO of Vuzix. "While our quarterly results will always be somewhat dependent on the timing of certain customer orders, we are confident that the nature and magnitude of our business is poised to change significantly. Clearly, overall industry momentum is building in reality rather than theory as potential customers recognize the payback of AR glasses and increasingly gravitate toward the most wearable and functional products.  In this regard, we expect strong growth for enterprise sales of our M-series Smart Glasses in 2019, with the potential to close and deliver against a number of much larger deployment orders that have been in the works for quite some time. Additionally, we expect to continue to ramp production of the Blade, grow the application and partner ecosystem and sell significantly more units in 2019 than we did in 2018. And lastly, we expect to expand both new and existing OEM relationships as the year progresses, ultimately leading to new and growing sources of revenue." 

About Vuzix Corporation
Vuzix is a leading supplier of Smart-Glasses and Augmented Reality (AR) technologies and products for the consumer and enterprise markets. The Company's products include personal display and wearable computing devices that offer users a portable high-quality viewing experience, provide solutions for mobility, wearable displays and augmented reality. Vuzix holds 144 patents and patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2019 and several wireless technology innovation awards among others. Founded in 1997, Vuzix is a public company (NASDAQ: VUZI) with offices in Rochester, NY, Oxford, UK, Barcelona, Spain and Tokyo, Japan.