SEOUL, South Korea, June 19, 2018 /PRNewswire/ -- I-ON Communications, Ltd. ("I-ON") (OTCQB: IONI), www.i-on.net, a Seoul, South Korea based global enterprise software company focused on delivering leading web CMS and unstructured data management products and solutions to mid and large-scale enterprises, reported a new contract win, as well as financial results for the quarter ended March 31, 2018 reflected in I-ON's current report on Form 10-Q filed with the SEC on June 19, 2018.
Revenue during the March quarter came in at $1.3 million versus $2.3 million in the same period last year and was composed of royalties, licensing, customized solutions and services. The double-digit decline year-over-year (y/y) was anticipated partly due to seasonality and more so owing to a renewed focus and investments toward new product launches. Several new implementations were also delayed and carried over into the June 30, 2018 period, which the company believes was exacerbated by the geopolitical climate at that time. Key customers in the March quarter included Samsung SDS, KBS, POSCO ICT and AXA. Gross and operating margins came in at losses primarily due to timing of revenue recognition on projects commenced and services provided, which as previously noted, ultimately carried over into the current June 30, 2018 period. I-ON, during the first quarter, also ramped up marketing for new product launches while continuing to spend on R&D and professional services related to the Company's public listing.
The Company's balance sheet continues to remain healthy with total cash and equivalents of over $3.0 million, $5.6 million in working capital, total assets of $8.6 million, negligible long-term debt, and shareholders' equity of approximately $6.9 million. In addition, I-ON had available lines of credit with financial institutions for up to $3.7 million, of which there were no outstanding balances as of the end of the period.
I-ON is pleased to announce that it has recently forged a long-term agreement with South Korea's Ministry of Culture, Sports, and Tourism (www.mcst.go.kr) and the Korea Institute of Sports Science (www.sports.re.kr). I-ON was selected along with HanYang University, Cha University, and Catenoid (a leading digital video analysis provider) to partake in the "National Research Project to Support Commercialization of Sports Service", which aims to create and utilize mobile based sports IT platforms to provide a multitude of services across the baseball, basketball, golf, and tennis sectors. I-ON, as project lead, intends to usher in and implement its newly launched sports ICT solutions (TAMM and Voiceball) which will address needs to 1) improve and streamline sporting event planning and operations revolving around marketing and registration, ticketing and score management 2) compile data and better conduct individual and team performance analyses and 3) incentivize and measure overall audience participation. The value of the contract is $2 million over 24 months.
I-ON is also currently finalizing terms with, among others, a major retailer and e-commerce company to begin a multi-purpose customized implementation of I-ON's core ICS (PaaS) platform, which is expected to close within weeks.
I-ON remains optimistic about the health of its business prospects based on existing engagements and initiatives taking hold, as well as the intermediate to long-term secular growth trends reflected across the digital marketing ecosystem.
As a result, the Company is maintaining its 2018 revenue guidance of $15-17 million, which assumes, as part of its stated strategy, the consummation of one acquisition by the end of the September 2018 and modest double digit organic growth. The Company is also implementing a plan to attain a revenue target of $25-30 million by the end of 2019, which would reflect an improving revenue mix and higher y/y gross and operating margins, above 40% and 15%, respectively.
Jae Cheol ("James") Oh, Chief Executive Officer of I-ON commented, "Despite a down quarter, which was anticipated partially due to the geopolitical climate, we continue to remain laser focused on growing all facets of our business and will continue to invest accordingly. We will continue to engage with a broader addressable market and investor base while expanding our pipeline across existing and new product categories, as reflected by the new sports ICT initiatives. We continue to also see attractive acquisition and partnership opportunities in South Korea and Japan, as well as in key South East Asian and U.S. markets.
"The enterprise CMS, digital marketing and unstructured data management arenas are worth billions annually and growing at a double-digit growth rate, particularly across East Asia and other developed markets. We will continue to capitalize on these tailwinds by rolling out or acquiring proprietary solutions that meet the digital or mobile marketing needs of mid to large scale enterprises."
I-ON is a Seoul, South Korea-based enterprise software company founded in 1999. After being awarded its first of six patents by 2003, the Company has since evolved into an industry-leading and recognized developer of enterprise-class unstructured data management and digital marketing software solutions. I-ON has sold to over 1,000 mid to large clients across numerous verticals in both the private and public sectors, primarily throughout South Korea, Japan and Southeast Asia. The Company has 11 products at market that enable clients to create, measure, and optimize digital experiences for their audiences across marketing channels and devices. These encompass enterprise web content management (CMS), web experience and service delivery software, digital marketing, smart mobility and analytics tools and energy management systems. I-ON's large R&D team has designed and developed industry-leading technologies that are compliant with global standards including GS (Good Software) and NET (New Excellent Technology), while holding numerous domestic and global industry awards and recognition from the likes of Gartner and Red Herring.
Forward Looking Statements
Statements in this document contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as "Risk Factors" in our filings with the Securities and Exchange Commission ("SEC"). There may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from those projected in any forward-looking statement. The Company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by securities laws.
SM Lee/Byung Woo Yu
SOURCE I-ON Communications Co., Ltd.