SEOUL, South Korea, April 16, 2019 /PRNewswire/ -- I-ON Communications Corp. ("I-ON" or the "Company") (OTCQB: IONI), www.i-on.net, a Seoul, South Korea based global enterprise software company focused on delivering leading digital experience, CMS, unstructured data management and digital marketing products and solutions to mid and large private and public sector enterprises, is pleased to announce supplemental financial results for the year ended December 31, 2018, which is in furtherance to the preliminary announcement issued via press release on March 21, 2019. Full details are now available in I-ON's Annual Report on Form 10-K filed with the SEC on April 16, 2019.
The Company posted total revenue of approximately $7.1 million (versus the $6.6 million pre-announced), which was comprised of higher licensing revenue contribution versus last year or roughly 24% of total revenue, while customized solutions and system integration made up a bulk of the remainder. Though all geographies and solution offerings contributed to the top-line, 2018 was a year during which I-ON´s focus on growth as a new and innovative public company was partially offset by revenue recognition and customer implementation delays experienced domestically throughout the year as cited in recent quarters. As a result, revenue fell approximately 22% year over year, yielding gross income of $1.8 million (versus the $1.7 million previously announced), GAAP net income of just under $0.1 million (a four-fold increase over last year) and operating cash flow of $0.2 million. This was despite an 11% year over year ramp in G&A and marketing, which totaled $1.9 million owing to international expansion and new solutions rollouts related to DXP and sports ICT, as well as public company related costs. R&D expenses declined to $0.3 million from $0.7 million, partially offsetting the higher marketing spend as was expected.
The Company notes that its backlog into 2019 remained healthy at well over $3 million, while its pipeline of engagements stood north of $6 million, comprising of a more diversified mix of DXP related PaaS, SaaS as well as sports and energy ICT potential associated with I-ON's newly forged alliances internationally. Key customer engagements added during the latter part of 2018 and into 2019 included a major cosmetics company, Samsung Life, DB Insurance, CJ Digital Music and the KLPGA. Korea Electric Power (KEPCO) was the largest contributor to revenue, while I-ON's top ten clients reflected approximately 60% of total revenue, which was more or less in-line with the year ago period of 55%. More recently, the Company announced Pacific Pro Football League as its first prospective US client related to the sports vertical, opening up a wide spectrum of sports software and digital marketing focused opportunities beyond South Korea.
I-ON's balance sheet as of the end of December remained in very good health, with cash and equivalents including short term instruments of over $4.1 million (versus $4 million a year ago), current assets of approximately $7.8 million, total assets of $9.8 million and shareholders' equity of over $7.4 million. The Company continues to have available lines of credit with financial institutions for up to $3.6 million, of which there were no outstanding balances as of the end of December. As previously announced, I-ON recently paid off the principal and interest related to a convertible note financing consummated during 3Q18. The Company will continue to opportunistically explore all growth financing alternatives suitable to fund long-term growth and goals and is in discussions with financial institutions and middle market investment banking firms to assist with our financing strategies.
Chairman and CEO Mr. James Oh commented, "As we stated a few weeks ago, lingering domestic macro-economic headwinds affected our top-line, but we were still able to remain operating cash flow positive for the year thanks to disciplined cost control measures as well as a stronger than expected back half, which buoyed our backlog and pipeline heading into 2019. We believe this will be reflected in our first half performance and will continue to remain focused on growing all facets of our business and invest accordingly over the near and intermediate-term. In our first year as a public company, we have achieved concrete milestones including establishing new distribution channels and clients in newly targeted markets such as South East Asia and the U.S. and initiating strategies to launch our next generation digital experience platform (DXP), which will significantly improve our existing clients' cloud capabilities by enabling them to keep up with new features, services and devices for their marketing audiences. Our announcements over the past few months also reflect significant progress having been made on the energy solutions and sport ICT front and we look forward to keeping the market and shareholders abreast of these exciting new opportunities. To support these growth initiatives, we will continue to pursue growth financing avenues as necessary, subject to the right market conditions, while looking out in the best interest of shareholders. Growth through R&D driven solutions and key acquisitions remain core tenets of attaining our previously stated revenue goal of $25 million by 2020."
I-ON's rolling twelve-month pro forma revenue guidance of $15 million remains unchanged, which assumes the consummation of at least one acquisition during 2019 and modest organic growth across its core solutions offerings. Management will continue its implementation of a multi-faceted strategy to attain a revenue run-rate goal of $25 million by 2020, which would likely reflect more international contribution and an improving revenue mix of PaaS and SaaS revenue, yielding higher y/y gross, and operating margins well above 45% and 15%, respectively.
The Company is expected to report quarterly results for the period ending March 31, 2019 on or before May 15.
About I-ON Communications Corp.
I-ON Communications Corp. (www.i-on.net/eng) is a Seoul, South Korea-based software and solutions developer as well as provider founded in 1999.After being awarded its first of six key patents by 2003, I-ON has sold to over 1,600 clients across numerous verticals in both the private and public sectors, primarily throughout South Korea, Japan and Southeast Asia. The Company's core offerings include DXP (Digital Experience Platform) and revolve around unstructured data management, sports software and energy ICT solutions.
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.
Bruce S. Lee
I-ON Communications Co., Ltd.
SOURCE I-ON Communications Corp.