• First-quarter revenue of $12.2 million, compared with $14.8 million in Q1 2023.
• Gross margin of 44%, level with Q1 2023
• Q1 EBITDA adjusted of ($37) thousand compared with $2.8 million in Q1 2023
• SimSports revenue of $2.2 million, up 69% from Q1 2023
• In April, new OEM partner TRYX introduced a line of all-in-one CPU coolers, featuring unique new features including a custom display
• Full-year 2024 outlook maintained - expected revenue in the range of -5% to 5% compared with 2023, with adjusted EBITDA projected to be between 12% and 17% of revenue

Asetek reported first-quarter revenue of $12.2 million, compared with $14.8 million in the same period of 2023. The change from last year reflects fewer shipments of liquid cooling products, partly offset by an increase in shipments of SimSports products. Gross margin was 44% for the first quarter, level with the same period of 2023.

"As expected, the year started on a soft note due to generally higher than normal inventories among our customers. We expect demand and revenue to increase into the second half of the year based on customer communications, normalized inventories and new Liquid Cooling and SimSports products to start shipping in the second half of the year," said André Sloth Eriksen the CEO of Asetek. "We maintain our full-year expectations."

Adjusted EBITDA was negative $37 thousand and operating loss was $1.4 million in the quarter, both compared with adjusted EBITDA of $2.8 million and operating income of $1.1 million in the first quarter of 2023.

Operating expense in the quarter was $6.7 million, consistent with the quarterly run rate over recent quarters. Operating expense increased from $5.4 million in the first quarter of 2023, principally related to supply chain development and marketing for the SimSports business. Due to headcount reductions in 2022, the comparative expense figure in Q1 2023 was the lowest since Q2 2020. Depreciation and amortization was $1.3 million and share based compensation amounted to $36 thousand.

In the first quarter, the Company invested $2.5 million in property, plant and equipment, including construction of a new development center and headquarters facility, and $0.4 million in capitalized costs for the development of new products. The Company drew $2.9 million on construction credit lines during the quarter.

During the first quarter, the U.S. dollar strengthened by 2% against the Danish krone, resulting in foreign exchange gain of $0.7 million (in Q1 2023, USD weakened 2%, resulting in a $0.4 million foreign exchange loss).

At March 31, 2024, total assets were $98.9 million ($102.7 million at December 31, 2023) and total equity was $65.0 million ($66.1 million).

Working capital was negative $7.5 million (negative $3.2 million at December 31, 2023) including $6.2 million of cash and cash equivalents ($9.1 million). Included in current liabilities at quarter-end was $19.1 million of debt related to the facilities construction, which is due and payable January 1, 2025. At that time, the Company expects to have converted the loan into long termed financing, such as mortgage loans.

OPERATIONS

In the first quarter, the Company shipped 172 thousand sealed loop coolers compared with 223 thousand in the first quarter of 2023. Ten new products began shipping in the first quarter, all liquid coolers, six of which feature the new 8th generation cooling technology. In the second quarter of 2024, two new liquid cooling products are expected to begin shipping, as well as various new SimSports accessories. The pipelines of new liquid cooling and SimSports products are healthy, supporting an increased number of product launches in the second half of 2024.

In April 2024, the Company announced that the new OEM partner TRYX has introduced its PANORAMA all-in-one CPU coolers featuring a unique new curved 6.5-inch immersive display on the pump. The new coolers will include Asetek's most sophisticated new Gen8 liquid cooling technology, including a performance-engineered pump with a 3-phase motor for higher flow and quieter operation.

During the quarter, Asetek continued to progress plans to deploy products tailored for the lower end of the premium segment to broaden the addressable market without compromising the quality that the Asetek brand represents.

OUTLOOK

The macro-economic environment in the beginning of 2024 is showing signs of improvement, although with regional differences. Geo-political tension continues to create uncertainty and affect discretionary consumer spending. Future revenue visibility remains low. Higher inventory levels heading into the year have, as expected, impacted demand and revenue. However, indications from customers and industry players are pointing to more normalized inventory levels and increased demand in the second half of 2024.

Considering the above factors, the Company maintains its outlook for 2024: Revenue in 2024 is expected to be in the range of -5% to 5% compared with 2023, comprised of expected revenue development in the Liquid Cooling segment in the range of -10% to 0%, and SimSports segment revenue growth in the range of 40% to 60% compared with 2023. Adjusted EBITDA margin in 2024 for the Group is expected to be in the range of 12% to 17% of revenue.

Conference call and webcast

CEO André Sloth Eriksen and CFO Peter Dam Madsen will present and comment on the Company's first quarter results at 14:00 CEST and invite 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 results webcast via the following link: https://events.q4inc.com/attendee/131208487

Conference call - audio only

Please dial in 5-10 minutes prior using the phone numbers:

Denmark +45 32 74 07 10
USA +1 646 307 1963
Germany +49 6958 996 4217
Norway +47 57 98 94 30
UK +44 20 3481 4247

Conference ID: 9093800

The first quarter 2024 earnings release and presentation will be made available online at www.asetek.com, 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.

Q&A:

The conference call lines will be opened for participants to ask questions 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 (ASTK), a global leader in mechatronic innovation, is a Danish garage-to-stock-exchange success story. Founded in 2000, Asetek established its innovative position as the leading OEM developer and producer of the all-in-one liquid cooler for all major PC & Enthusiast gaming brands. In 2021, Asetek introduced its line of products for next level immersive SimSports gaming experiences. Asetek is headquartered in Denmark and has operations in China, Taiwan and the United States.