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| 8-K - FORM 8-K - MEMSIC Inc | memsic_8k-022912.htm |
Exhibit 99.1
MEMSIC Reports Another Quarter of Record Revenues
ANDOVER, Mass., Feb. 29, 2012 – MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the fourth quarter ended December 31, 2011.
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Revenues rose to $21.5 million from $11.4 million in the 2010 quarter. Total shipments of our sensor products rose to 35.0 million units from 11.2 million units in prior-year period.
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Gross margin was 35.9% compared to 41.1% in the 2010 quarter.
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Operating expenses, including a $4.5 million non-cash goodwill impairment charge related to the system solution business acquired from Crossbow Technology, totaled $11.6 million compared to $6.3 million in the 2010 quarter.
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GAAP net loss was $3.3 million, or $0.14 per diluted share, compared to net loss of $1.1 million, or $0.05 per diluted share, in the 2010 quarter. Before giving effect to the goodwill impairment charge, MEMSIC realized net income of $1.2 million, or $0.05 per share for the fourth quarter of 2011.
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EBITDA was ($2.3) million, compared to ($0.1) million in the 2010 quarter. Before giving effect to the goodwill impairment charge, EBITDA for the 2011 fourth quarter was $2.2 million.
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Chairman, President and CEO Dr. Yang Zhao commented, “MEMSIC achieved record sales for the sixth consecutive quarter, again due primarily to the growing success of our magnetic sensor in the smartphone market. In fact, revenues almost doubled over last year’s period and we substantially exceeded the sales guidance we provided in early November. Our gross margin improved on a sequential basis, increasing to 35.9% from 32.5% and 33.8% in the second and third quarters of 2011, respectively. This improvement reflected the success of our initiatives to achieve margin improvement through technology innovation and manufacturing enhancements.
“The motion sensor and sensor fusion market has been growing at a rapid pace, especially in smartphones. In 2012, our goals are twofold. First, we are pursuing more design wins with global customers in the mobile phone and consumer market. Second, we are working to leverage MEMSIC’s proven MEMS sensor and sensing system technology to create more value-added products for the consumer, industrial and automotive markets. With our extensive capabilities to integrate MCU and software to create smart-sensing systems beyond sensor fusion, MEMSIC is an established leader in smart motion management.”
Dr. Zhao added, “Our fourth-quarter 2011 results include a $4.5 million non-cash charge related to the impairment of a portion of the goodwill associated with our Crossbow Technology acquisition in January 2010. The impairment reflects the fact that sales forecasted for the system solution product, particularly the avionics product, are lower than projected at the time of acquisition. We believe this impairment does not negate the tremendous value of the know-how and IPs in sensor integration technology we acquired from Crossbow. Our original vision and strategy of realizing more higher-margin and stable business by combining MEMSIC’s strong sensor component technologies with the system integration technologies we acquired from Crossbow remain unchanged.”
Recent Developments
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Electronic Products magazine honored MEMSIC’s MXC6226XC two-axis digital accelerometer with a Product of the Year award in January 2012. The MXC6226XC – the world’s smallest and the first wafer-level packaged CMOS monolithic accelerometer – was selected for its innovative design, significant advancement in technology, and achievement in price and performance.
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In November 2011, a subsidiary of MEMSIC entered into a joint venture with Wuxi New District Science and Technology Financial Investment Group Co. Ltd., a state-owned Chinese venture capital fund, to focus on the sensor and sensing network solution market by leveraging MEMSIC’s proven mesh wireless sensor network technology.
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Outlook
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Revenue is expected to be between $18 million and $19 million for the first quarter of 2012, an increase of approximately 39% - 46% from the prior-year period.
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GAAP net loss is expected to be in the range of $0.02 to $0.04 per share for the first quarter of 2012.
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Average diluted share count for the 2012 first quarter is estimated to be approximately 24 million.
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Conference Call
Management will hold a conference call and webcast at 5:00 p.m. EST on Wednesday, February 29, 2012 to review and discuss the Company's results.
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What:
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MEMSIC 4Q 2011 financial results conference call and webcast
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When:
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Wednesday, February 29, 2012
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Time:
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5:00 p.m. EST
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Live Call:
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(877) 291-1367, domestic
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(914) 495-8534, international
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Replay:
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(855) 859-2056, pass code 46805814, domestic
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(404) 537-3406, pass code 46805814, international
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Webcast:
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http://investor.memsic.com (live and replay)
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About Non-GAAP Financial Information
EBITDA is a measure used by management to evaluate the Company’s ongoing operations and as a general indicator of its operating cash flow (in conjunction with a cash flow statement that also includes, among other items, changes in working capital and the effect of non-cash charges). The Company defines EBITDA as net income, plus interest expense, net of interest income, provision for income taxes, and depreciation and amortization. Management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the comparative evaluation of companies. Because not all companies use identical calculations, the company's presentation of EBITDA and EBITDA per share may not be comparable to similarly titled measures of other companies. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use as it does not reflect certain cash requirements such as interest payments, tax payments and debt service requirements.
Pursuant to the requirements of Regulation G, we have provided a reconciliation of EBITDA to GAAP net income as an exhibit to this release.
About MEMSIC, Inc.
MEMSIC, Inc., headquartered in Andover, Massachusetts, provides advanced semiconductor sensors and multi-sensor system solutions based on micro-electromechanical systems (MEMS) technology and sophisticated integration technologies in both the IC level and module level. MEMSIC's unique and proprietary approach combines leading-edge sensor technologies, such as magnetic sensors and accelerometers, with mixed signal processing circuitry to produce reliable, high quality, cost-effective solutions for the mobile phone, automotive, consumer, industrial, and general aviation markets. The company’s shares are listed on the NASDAQ Stock Exchange (NASDAQ GM: MEMS).
Safe Harbor Statement
Statements included in this press release that are not historical in nature are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements for reasons identified under the heading "Risk Factors" in the company's most recent annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof, and the company does not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise.
Source: MEMSIC, Inc.
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Company Contact:
Patricia Niu
MEMSIC, Inc.
Chief Financial Officer
978-738-0900
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Investor Contact:
Harriet Fried / Jody Burfening
LHA
(212) 838-3777
ir@memsic.com
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MEMSIC, Inc.
CONSOLIDATED BALANCE SHEETS
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December 31,
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December 31,
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2011
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2010
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 51,914,128 | $ | 55,694,205 | ||||
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Restricted cash
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3,791,189 | 2,928,933 | ||||||
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Short-term investments
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6,814,728 | - | ||||||
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Accounts receivable, net of allowance for doubtful accounts of $6,441 as of December 31, 2011 and December 31, 2010
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6,068,904 | 3,664,444 | ||||||
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Inventories
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11,459,153 | 8,923,127 | ||||||
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Other assets
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2,050,787 | 2,537,445 | ||||||
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Total current assets
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82,098,889 | 73,748,154 | ||||||
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Property and equipment, net
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30,998,489 | 22,015,502 | ||||||
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Long-term investments
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2,600,000 | 5,020,000 | ||||||
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Goodwill
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606,976 | 4,919,513 | ||||||
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Intangible assets, net
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11,091,532 | 11,894,328 | ||||||
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Other assets
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136,633 | 67,599 | ||||||
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Total assets
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$ | 127,532,519 | $ | 117,665,096 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 8,439,605 | $ | 4,563,420 | ||||
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Accrued expenses
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2,630,966 | 2,969,839 | ||||||
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Advance research funding
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3,791,189 | 2,928,933 | ||||||
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Current portion of long-term debt
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500,000 | - | ||||||
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Total current liabilities
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15,361,760 | 10,462,192 | ||||||
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Note payable to bank, net of current portion
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17,430,000 | 17,930,000 | ||||||
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Building liability
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8,161,288 | - | ||||||
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Other liabilities
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124,180 | 90,036 | ||||||
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Total other liabilities
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25,715,468 | 18,020,036 | ||||||
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Stockholders’ equity:
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Common stock, $0.00001 par value; authorized, 45,000,000 shares; 23,983,813 and 23,810,613 shares issued and outstanding at December 31, 2011 and December 31, 2010, respectively
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240 | 238 | ||||||
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Additional paid-in capital
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101,266,272 | 99,615,378 | ||||||
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Accumulated other comprehensive income
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4,363,930 | 3,029,372 | ||||||
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Accumulated deficit
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(19,908,135 | ) | (13,823,565 | ) | ||||
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MEMSIC, Inc. stockholders' equity
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85,722,307 | 88,821,423 | ||||||
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Non-controlling interest related to joint ventures
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732,984 | 361,445 | ||||||
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Total stockholders' equity
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86,455,291 | 89,182,868 | ||||||
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Total liabilities and stockholders’ equity
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$ | 127,532,519 | $ | 117,665,096 | ||||
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended December 31,
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Year Ended December 31,
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2011
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2010
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2011
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2010
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Net sales
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$ | 21,468,278 | $ | 11,439,239 | $ | 68,153,132 | $ | 38,651,577 | ||||||||
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Cost of goods sold
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13,770,585 | 6,741,931 | 44,313,782 | 23,326,823 | ||||||||||||
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Gross profit
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7,697,693 | 4,697,308 | 23,839,350 | 15,324,754 | ||||||||||||
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Operating expenses:
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Research and development
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1,943,356 | 2,311,587 | 8,553,569 | 8,697,981 | ||||||||||||
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Sales and marketing
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2,016,409 | 1,535,130 | 6,892,303 | 5,092,353 | ||||||||||||
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General and administrative
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2,781,135 | 2,015,663 | 10,354,798 | 8,546,722 | ||||||||||||
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Amortization expense
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415,690 | 408,109 | 1,627,692 | 1,549,377 | ||||||||||||
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Goodwill impairment charge
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4,492,000 | - | 4,492,000 | - | ||||||||||||
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Total operating expenses
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11,648,590 | 6,270,489 | 31,920,361 | 23,886,433 | ||||||||||||
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Operating loss
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(3,950,897 | ) | (1,573,181 | ) | (8,081,011 | ) | (8,561,679 | ) | ||||||||
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Other income:
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Interest and dividend income
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102,572 | 122,365 | 437,655 | 442,167 | ||||||||||||
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Foreign exchange gain
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305,708 | 322,480 | 1,153,822 | 682,290 | ||||||||||||
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Other, net
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158,481 | 62,439 | 564,489 | 132,992 | ||||||||||||
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Total other income
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566,761 | 507,284 | 2,155,965 | 1,257,449 | ||||||||||||
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Earnings (loss) before income taxes
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(3,384,136 | ) | (1,065,897 | ) | (5,925,046 | ) | (7,304,230 | ) | ||||||||
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Provision for (benefit from) income taxes
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(95,256 | ) | 73,474 | 77,397 | (5,628 | ) | ||||||||||
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Net income (loss)
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(3,288,880 | ) | (1,139,371 | ) | (6,002,443 | ) | (7,298,602 | ) | ||||||||
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Less: net income attributable to noncontrolling interest
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(9,558 | ) | (1,982 | ) | 82,127 | 64,111 | ||||||||||
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Net income (loss) attributable to MEMSIC, Inc.
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$ | (3,279,322 | ) | $ | (1,137,389 | ) | $ | (6,084,570 | ) | $ | (7,362,713 | ) | ||||
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Net income (loss) per common share to MEMSIC, Inc.:
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Basic
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$ | (0.14 | ) | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.31 | ) | ||||
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Diluted
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$ | (0.14 | ) | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.31 | ) | ||||
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Weighted average shares outstanding used in calculating net income (loss) per common share:
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Basic
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23,825,134 | 23,806,564 | 23,827,937 | 23,803,414 | ||||||||||||
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Diluted
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23,825,134 | 23,806,564 | 23,827,937 | 23,803,414 | ||||||||||||
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MEMSIC, Inc.
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Reconciliation of Net Loss to Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) (Unaudited)
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Three months ended December 31,
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Year ended December 31,
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2011
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2010
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2011
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2010
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Net loss
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$ | (3,279,322 | ) | $ | (1,137,389 | ) | $ | (6,084,570 | ) | $ | (7,362,713 | ) | ||||
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Interest (income) expense, net
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(102,572 | ) | (122,365 | ) | (437,655 | ) | (442,167 | ) | ||||||||
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Income tax expense (benefit)
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(95,256 | ) | 73,474 | 77,397 | (5,628 | ) | ||||||||||
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Depreciation and amortization
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1,208,787 | 1,039,749 | 4,742,190 | 3,862,416 | ||||||||||||
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EBITDA
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$ | (2,268,363 | ) | $ | (146,531 | ) | $ | (1,702,638 | ) | $ | (3,948,092 | ) | ||||