Interim Management Statement


 

TIDMNTX 
 
RNS Number : 4607S 
NXT PLC 
19 May 2009 
 

19 May 2009 
NXT plc 
 
 
Interim Management Statement 
 
 
NXT plc, a provider of unique sound solutions, best known for its flat panel 
loudspeaker technology, is today issuing its Interim Management Statement for 
the period 1 January 2009 to 18 May 2009 in accordance with the requirements of 
the Disclosure and Transparency Rules of the UK Listing Authority. 
 
 
As highlighted in our Interim results, the global recession has created 
challenges for NXT, with customers reluctant to commit to projects and large 
volume orders.  While sales to date are below management expectations, largely 
due to licensing and consulting revenues, the Board anticipates that this 
position will largely reverse by the financial year end.  During the period 
positive interest in NXT's haptic feedback, audio technology portfolio and 
design capability has continued and encourages the belief that NXT's bending 
wave haptic technology could become a major contributor to NXT's profits in the 
future. 
 
 
The December 2008 announcement of the licence with Nissha in the field of touch 
screen haptic feedback for small-size touch screens has resulted in a 
significant number of enquiries being received in respect of the possible 
applications for the technology. NXT's inherent advantage in haptic feedback 
from touch screens comes from its heritage in understanding bending wave physics 
in panels. NXT scientists first identified haptic functionality as long ago as 
2000, recognising it could be used as a feature of a distributed mode 
loudspeaker. Today, the growth of the touch screen and touch panel markets is 
driving demand for haptic feedback and NXT is well positioned to license its 
technology in multiple sizes, formats and sectors. Demonstrators have been built 
for larger screens and further units are in development for non-display touch 
solutions. These non-display applications involve creating a touch pad from a 
capacitive film laminated on a lightweight substrate that can also produce audio 
and haptic feedback using NXT's patented technology. NXT envisages this 
application being built into control panels for multiple home and portable 
appliances, creating an additional market to display applications. 
 
 
In addition to these new opportunities NXT has continued to focus resources on 
three main growth sectors: 
 
 
  *  Flat TVs - although under considerable pressure, the US flat TV market returned 
  a credible 20% growth in Q1 2009 (vs. Q1 2008), largely driven by the sale of 
  surplus inventory and the success of lower priced brands, such as VIZIO.  NXT 
  has seen an increase in orders and shipments of the Balanced Mode Radiator (BMR) 
  drive units utilised in the previously announced TV models. In addition to the 
  VIZIO, Viewsonic, and ROAX TVs, another brand will soon launch a BR-equipped TV 
  and discussions continue with further brands and integrators regarding use of 
  the technology. 
 
 
 
  *  Small-size touch screens - the use of small-size touch screens in mobile phones 
  continues to grow with forecast growth of 19% in 2009 and 24% in 2010.  A 
  further indicator of growth is our licensee, Nissha's recently announced plans 
  to construct additional touch screen capacity for mobile phones, PCs and others 
  to meet increased demand. During the period the focus of our engineering team 
  has been to work actively with Nissha on setting up the component supply chain. 
 
 
 
  *  Portable speakers - growth in this market has been fuelled by consumers' 
  propensity to take their entertainment with them wherever they go.  Since 
  January, seven new NXT portable speaker models have shipped and further products 
  are scheduled for release before 30 June. The second half of the calendar year 
  will see more new portable speaker products - including next generation 
  SoundBags - introduced by existing and new customers. 
 
 
 
As indicated, the current international economic turbulence is inevitably 
affecting some areas of our business.  Companies have cut back on discretionary 
spending as they seek to preserve cash, resulting in a slowdown in customers 
committing to licences and new consulting projects. In addition we have seen 
potential customers either close divisions or halt the funding needed for 
development.  Income from the automotive sector, which we had anticipated would 
increase as a result of new model introductions in our financial year 2008/9, 
has stayed flat.  However, with a significant proportion of NXT's income 
denominated in US Dollars, the current trend in the Dollar rate against 
Sterling, if maintained, will benefit NXT's sales revenues post-conversion, for 
the balance of the financial year. 
 
 
The interest in NXT's technologies has resulted in companies considering using 
NXT to help differentiate their products. NXT is currently negotiating 
manufacturing licences and evaluation licences with a significant number of 
potential customers, some of which we anticipate will be signed by 30 June 2009. 
 Based on the current level of interest, we believe that licensing income is 
likely to be a major contributor to NXT for the remainder of the financial year 
to 30 June 2009. 
 
 
A number of high profile products with promising sales potential have reached 
markets during the period. NXT's development team has delivered a range of 
excellent designs to new and existing customers that went on sale in the first 
half of calendar year 2009, including brands such as Medion (Europe) and 
retailers such as Best Buy (North America) and Dick Smith (Australasia). Further 
customers will ship portable speaker products before 30 June to major markets 
around the world. Long term customers including TEAC, Maxell and Brookstone are 
readying plans for further NXT product introductions, while we expect to extend 
our presence in the retail world through an increased number of products for 
retailers' private label and exclusive brands. Six manufacturing licensees 
presented multiple new products at the recent Hong Kong Electronics Fair, with 
an emphasis on portable and iPod-related speakers alongside numerous new designs 
unveiled on the NXT exhibition booth.  Toyota extended its range of NXT-equipped 
vehicles to eight with the launch of the Wish minivan in Japan, while Parrot has 
attracted multiple awards for its Philippe Starck-designed Zikmu wireless 
speaker system, introduced at January's Consumer Electronics Show. 
 
 
NXT has been negotiating the surrender of a property guarantee relating to a 
former subsidiary undertaking, Premier Percussion.  The final form of 
documentation for the release has been agreed, and formal completion is expected 
imminently. 
 
 
Ongoing licence negotiations indicate positive conclusions by the end of June, 
but commitments remain difficult to predict - especially in these turbulent 
times - and the Company has contingency plans should agreements fail to 
materialise. Notwithstanding this, the Board remains confident of the prospects 
for NXT. 
 
Other than those mentioned above, there have been no significant changes in the 
financial position of the Company since the publication of the Interim results 
for the 6-month period ended 31 December 2008. 
 
ENDS 
 
 
For further information, please contact: 
 
 
NXT plc: 
+------------------------------------+------------------------------------+ 
| Ian Buckley, Chairman              | +44 (0) 1223 597 840               | 
+------------------------------------+------------------------------------+ 
| Peter Thoms, Chief Executive       | +44 (0) 1223 597 840               | 
+------------------------------------+------------------------------------+ 
 
 
Media enquiries: 
+------------------------------------+------------------------------------+ 
| Allerton Communications            | +44 (0) 20 3137 2500               | 
+------------------------------------+------------------------------------+ 
| Peter Curtain                      |                                    | 
+------------------------------------+------------------------------------+ 
 
 
Singer Capital Markets: 
+------------------------------------+------------------------------------+ 
| Claes Spång                        | +44 (0) 20 3205 7638               | 
+------------------------------------+------------------------------------+ 
 
 
 
 
The Interim Management Statement may contain forward looking statements which: 
 
 
  *  have been made by the directors in good faith based on the information available 
  to them up to the time of their approval of this statement; 
 
 
 
  *  should be treated with caution due to the inherent uncertainties, which are 
  beyond NXT plc's ability to control or estimate precisely and include both 
  economic and business risk factors, underlying such forward-looking information. 
 
 
 
NXT undertakes no obligation to update any forward-looking statements it may 
make. 
 
 
 
 
 
 
About NXT 
NXT's commitment to inventiveness in sound and touch has enabled it to deliver 
new technologies already deployed in audio systems, TVs, PCs and laptops, mobile 
phones, PA systems, cars, aircraft and in public buildings and facilities around 
the world. With its unique portfolio of patented technologies and unparalleled 
expertise in the field of bending wave physics, NXT helps its partners invent, 
create and market innovative sound solutions that offer sustainable 
differentiation. 
 
 
NXT is fully listed on the London Stock Exchange (symbol NTX) and has operations 
in Hong Kong, Japan and the USA as well as the UK. Further information is 
available from www.nxtsound.com. 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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