Attached files
| file | filename |
|---|---|
| 8-K - 8-K - INTERMOLECULAR INC | imi-8k_20170209.htm |
Exhibit 99.1
Intermolecular Announces Fourth Quarter 2016 and Full Year 2016 Financial Results
SAN JOSE, Calif., February 9, 2017 -- Intermolecular, Inc. (NASDAQ: IMI) today reported results for its fourth quarter and full year ended December 31, 2016.
Results Highlights:
|
|
• |
Fourth quarter total revenue of $10.5 million; 2016 fiscal year revenue of $47.3 million, with 2016 program revenue growing 17% year-over-year |
|
|
• |
Third quarter cost reductions contributed to lowering GAAP net loss from $(6.8) million in the third quarter to $(3.0) million in the fourth quarter of 2016. |
|
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• |
Significant progress in completing longer term, “anchor customer” agreements |
Fourth Quarter Fiscal 2016 Results
Revenue for the fourth quarter of 2016 was $10.5 million, relatively flat to third quarter 2016 revenue of $10.6M, but down by 19%, compared to $13 million in the same period a year ago. Program revenue was $8.8 million, equal to the $8.8 million recorded in the third quarter, but down 19% compared to $10.9 million in program revenue in the fourth quarter of 2015. Licensing and royalty revenue was $1.6 million, compared to $2.1 million in the fourth quarter of the prior year.
GAAP net loss for the fourth quarter was $(3.0) million, or $(0.06) per share, compared to a net loss of $(6.8) million in the third quarter of 2016, or $(0.14) per share. The GAAP net loss for the fourth quarter of 2015 was $(2.5) million, or $(0.05) per share.
Non-GAAP net loss for the fourth quarter was $(2.3) million, or $(0.05) per share compared to a non-GAAP net loss of $(5.9) million, or $(0.12) per share, in the prior quarter and $(1.7) million, or $(0.04) per share in the fourth quarter of 2015.
Full Year Fiscal 2016 Results
For the year ended December 31, 2016, revenue was $47.3 million compared to revenue of $45.3 million in 2015. Net loss for 2016 was $(15.4) million, or $(0.31) per share, compared with a net loss of $(21.0) million, or $(0.44) per share, for 2015.
Non-GAAP net loss for the year ended December 31, 2016 was $(11.8) million, or $(0.24) per share. This compared with non-GAAP net loss of $(15.3) million, or $(0.32) per share, for 2015.
“Our new sales and marketing team has done a very good job at expanding IMI’s prospective customers and identifying opportunities to expand business along the semiconductor supply chain and areas beyond semiconductors”, said Chris Kramer, President and CEO of Intermolecular. “We are now defining and scoping
programs with companies that never did business with IMI in the past as well as engaging with former customers who see great benefits in our new service model. These key industry players appreciate the value of our technology and experienced team and are interested in exploring services to advance their R&D initiatives.”
Intermolecular reports revenue, cost of revenue, gross margin, operating income (loss), net income (loss) and earnings (loss) per share in accordance with U.S. generally accepted accounting principles (GAAP) and additionally on a non-GAAP basis. A reconciliation of the non-GAAP financial measures with the most directly comparable GAAP measures, as well as a description of the items excluded from the non-GAAP measures, is included in the financial statements portion of this press release. Please refer to “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
Conference Call Today
Intermolecular will host a conference call and simultaneous audio-only webcast at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today with Chris Kramer, CEO and president, Bruce McWilliams, executive chairman and Rick Neely, senior vice president and chief financial officer, for Intermolecular.
The call can be accessed by dialing (877) 251-1860; international callers should dial (224) 357-2386. Please dial-in ten minutes prior to the scheduled conference call time. The conference ID is 98783707. A live and archived webcast (audio only) of the call will be available on Intermolecular’s Website at http://ir.intermolecular.com for up to 30 days after the call.
About Intermolecular, Inc.
Intermolecular® is the trusted partner for advanced materials innovation. Advanced materials are at the core of innovation in the 21st century for a wide range of industries including semiconductors, consumer electronics, automotive and aerospace. With its substantial materials expertise; accelerated learning and experimentation platform; and information and analytics infrastructure, Intermolecular has a ten-year track record helping leading companies accelerate and de-risk materials innovation.
“Intermolecular” and the Intermolecular logo are registered trademarks; all rights reserved. Learn more at www.intermolecular.com.
Forward-Looking Statements
Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, our ability to productize our workflows with existing and future customers; expectations regarding our future revenue, cash flow and GAAP and non-GAAP net income or loss; financial condition; the ability of our new business model to generate profits and long-term shareholder returns; the extent to which technology developed in collaboration with our customers will continue to remain on the critical path and have significant value for such customers and us as well as the industry as a whole; and anticipated growth in our current markets through expansion of existing customer programs and the entry into other engagements with new customers. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: our ability to execute on our strategy, prove our business model and remain technologically competitive in rapidly evolving industry conditions; commercial acceptance of our HPC platform and methodology as effective R&D tools; our ability to achieve and sustain profitability; the ability of our customers to achieve their announced product roadmaps in a timely manner; the extent to which we are able to
successfully extend and expand relationships with existing customers; our ability to manage the growth of our business; the rapid technology changes and volatility of the customers and industries we serve; our potential need for future capital to finance our operations; and other risks described in our most recent annual report on Form 10-K as updated by our quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission available at www.sec.gov, particularly in the sections titled "Risk Factors." All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.
Non-GAAP Financial Measures
To supplement the financial data presented on a GAAP basis, we also disclose certain non-GAAP financial measures, which exclude the effect of stock-based compensation expense. These non-GAAP financial measures are not prepared in accordance with GAAP, do not serve as an alternative to GAAP and may be calculated differently than non-GAAP financial information disclosed by other companies. These results should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. We believe that our non-GAAP financial information provides useful information to management and investors regarding financial and business trends relating to our financial condition and results of operations because the non-GAAP measures exclude charges that management considers to be outside of Intermolecular's core operating results. We believe that the non-GAAP measures of revenue, cost of net revenue, gross profit, gross margin, operating (loss) income, net (loss) income, earnings per share and net (loss) income per share, viewed in combination with our financial results calculated in accordance with GAAP, provide investors with additional perspective and a more meaningful understanding of our ongoing operating performance. In addition, management uses these non-GAAP measures to review and assess financial performance, to determine executive officer incentive compensation and to plan and forecast performance in future periods.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
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Three Months Ended |
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Twelve Months Ended December 31, |
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|
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December 31, 2016 |
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September 30, 2016 |
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December 31, 2015 |
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2016 |
|
|
2015 |
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|||||
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Program revenue |
|
$ |
8,833 |
|
|
$ |
8,844 |
|
|
$ |
10,897 |
|
|
$ |
39,690 |
|
|
$ |
33,930 |
|
|
Licensing and royalty revenue |
|
|
1,644 |
|
|
|
1,730 |
|
|
|
2,058 |
|
|
|
7,608 |
|
|
|
11,392 |
|
|
Total revenue |
|
|
10,477 |
|
|
|
10,574 |
|
|
|
12,955 |
|
|
|
47,298 |
|
|
|
45,322 |
|
|
Cost of revenue |
|
|
3,446 |
|
|
|
3,456 |
|
|
|
4,149 |
|
|
|
15,830 |
|
|
|
19,304 |
|
|
Gross profit |
|
|
7,031 |
|
|
|
7,118 |
|
|
|
8,806 |
|
|
|
31,468 |
|
|
|
26,018 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
5,847 |
|
|
|
8,451 |
|
|
|
7,494 |
|
|
|
28,126 |
|
|
|
28,576 |
|
|
Sales and marketing |
|
|
1,518 |
|
|
|
1,792 |
|
|
|
1,346 |
|
|
|
7,383 |
|
|
|
5,881 |
|
|
General and administrative |
|
|
2,777 |
|
|
|
2,667 |
|
|
|
2,520 |
|
|
|
10,713 |
|
|
|
12,287 |
|
|
Restructuring charges |
|
|
(6 |
) |
|
|
1,120 |
|
|
|
— |
|
|
|
1,114 |
|
|
|
— |
|
|
Total operating expenses |
|
|
10,136 |
|
|
|
14,030 |
|
|
|
11,360 |
|
|
|
47,336 |
|
|
|
46,744 |
|
|
Operating loss |
|
|
(3,105 |
) |
|
|
(6,912 |
) |
|
|
(2,554 |
) |
|
|
(15,868 |
) |
|
|
(20,726 |
) |
|
Interest income (expense), net |
|
|
50 |
|
|
|
51 |
|
|
|
40 |
|
|
|
173 |
|
|
|
(267 |
) |
|
Other income (expense), net |
|
|
63 |
|
|
|
89 |
|
|
|
(1 |
) |
|
|
265 |
|
|
|
(12 |
) |
|
Loss before provision for income taxes |
|
|
(2,992 |
) |
|
|
(6,772 |
) |
|
|
(2,515 |
) |
|
|
(15,430 |
) |
|
|
(21,005 |
) |
|
Income tax provision |
|
|
- |
|
|
|
3 |
|
|
|
1 |
|
|
|
7 |
|
|
|
8 |
|
|
Net loss |
|
$ |
(2,992 |
) |
|
$ |
(6,775 |
) |
|
$ |
(2,516 |
) |
|
$ |
(15,437 |
) |
|
$ |
(21,013 |
) |
|
Basic and diluted net loss per share |
|
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.44 |
) |
|
Shares used in basic and diluted net loss per share |
|
|
49,486 |
|
|
|
49,466 |
|
|
|
48,681 |
|
|
|
49,396 |
|
|
|
48,158 |
|
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
|
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|
As of December 31, 2016 |
|
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As of December 31, 2015 |
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ASSETS |
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|
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|
|
|
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|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,759 |
|
|
$ |
11,676 |
|
|
Short-term marketable securities |
|
|
20,035 |
|
|
|
23,656 |
|
|
Total cash, cash equivalents and short-term marketable securities |
|
|
25,794 |
|
|
|
35,332 |
|
|
Accounts receivable, net |
|
|
5,063 |
|
|
|
6,114 |
|
|
Prepaid expenses and other current assets |
|
|
1,397 |
|
|
|
1,608 |
|
|
Total current assets |
|
|
32,254 |
|
|
|
43,054 |
|
|
Long-term marketable securities |
|
|
1,995 |
|
|
|
— |
|
|
Materials inventory |
|
|
3,357 |
|
|
|
4,413 |
|
|
Property and equipment, net |
|
|
10,964 |
|
|
|
15,735 |
|
|
Intangible assets, net |
|
|
4,001 |
|
|
|
5,969 |
|
|
Other assets |
|
|
597 |
|
|
|
506 |
|
|
Total assets |
|
$ |
53,168 |
|
|
$ |
69,677 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
309 |
|
|
$ |
848 |
|
|
Accrued compensation and employee benefits |
|
|
1,663 |
|
|
|
4,416 |
|
|
Deferred revenue |
|
|
1,533 |
|
|
|
2,595 |
|
|
Accrued liabilities |
|
|
1,451 |
|
|
|
2,385 |
|
|
Total current liabilities |
|
|
4,956 |
|
|
|
10,244 |
|
|
Other long-term liabilities |
|
|
3,216 |
|
|
|
3,334 |
|
|
Total liabilities |
|
|
8,172 |
|
|
|
13,578 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
50 |
|
|
|
49 |
|
|
Additional paid-in capital |
|
|
213,313 |
|
|
|
208,972 |
|
|
Accumulated other comprehensive loss |
|
|
(33 |
) |
|
|
(24 |
) |
|
Accumulated deficit |
|
|
(168,334 |
) |
|
|
(152,898 |
) |
|
Total stockholders’ equity |
|
|
44,996 |
|
|
|
56,099 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
53,168 |
|
|
$ |
69,677 |
|
Condensed Consolidated Statements of Cash Flows
(In thousands, Unaudited)
|
|
|
Twelve Months Ended December 31, |
|
|||||
|
|
|
2016 |
|
|
2015 |
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(15,437 |
) |
|
$ |
(21,013 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion |
|
|
9,537 |
|
|
|
10,728 |
|
|
Stock-based compensation |
|
|
3,627 |
|
|
|
5,673 |
|
|
(Gain) loss on disposal of property and equipment |
|
|
(12 |
) |
|
|
18 |
|
|
Realized loss from investments |
|
|
— |
|
|
|
8 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
122 |
|
|
|
(42 |
) |
|
Materials inventory |
|
|
333 |
|
|
|
(319 |
) |
|
Accounts receivable |
|
|
1,051 |
|
|
|
(793 |
) |
|
Accounts payable |
|
|
(493 |
) |
|
|
(24 |
) |
|
Accrued and other liabilities |
|
|
(3,069 |
) |
|
|
2,985 |
|
|
Deferred revenue |
|
|
(1,063 |
) |
|
|
(2,048 |
) |
|
Net cash used in operating activities |
|
|
(5,404 |
) |
|
|
(4,827 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Purchase of investments |
|
|
(23,486 |
) |
|
|
(32,577 |
) |
|
Redemption of investments |
|
|
24,676 |
|
|
|
51,410 |
|
|
Purchase of property and equipment |
|
|
(2,381 |
) |
|
|
(1,452 |
) |
|
Proceeds from sale of equipment |
|
|
22 |
|
|
|
— |
|
|
Capitalized intangible assets |
|
|
(45 |
) |
|
|
(803 |
) |
|
Net cash (used in) provided by investing activities |
|
|
(1,214 |
) |
|
|
16,578 |
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Payment of debt |
|
|
— |
|
|
|
(23,000 |
) |
|
Payment of capital leases |
|
|
(13 |
) |
|
|
— |
|
|
Proceeds from exercise of common stock options |
|
|
714 |
|
|
|
1,160 |
|
|
Net cash (used in) provided by financing activities |
|
|
701 |
|
|
|
(21,840 |
) |
|
Net decrease in cash and cash equivalents |
|
|
(5,917 |
) |
|
|
(10,089 |
) |
|
Cash and cash equivalents at beginning of period |
|
|
11,676 |
|
|
|
21,765 |
|
|
Cash and cash equivalents at end of period |
|
$ |
5,759 |
|
|
$ |
11,676 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts and percentages, Unaudited)
|
|
|
Three Months Ended |
|
|
Twelve Months Ended December 31, |
|
||||||||||||||
|
|
|
December 31, 2016 |
|
|
September 30, 2016 |
|
|
December 31, 2015 |
|
|
2016 |
|
|
2015 |
|
|||||
|
GAAP cost of net revenue |
|
$ |
3,446 |
|
|
$ |
3,456 |
|
|
$ |
4,149 |
|
|
$ |
15,830 |
|
|
$ |
19,304 |
|
|
Stock-based compensation expense (a) |
|
|
(102 |
) |
|
|
(101 |
) |
|
|
(152 |
) |
|
|
(510 |
) |
|
|
(1,114 |
) |
|
Non-GAAP cost of net revenue |
|
$ |
3,344 |
|
|
$ |
3,355 |
|
|
$ |
3,997 |
|
|
$ |
15,320 |
|
|
$ |
18,190 |
|
|
GAAP gross profit |
|
$ |
7,031 |
|
|
$ |
7,118 |
|
|
$ |
8,806 |
|
|
$ |
31,468 |
|
|
$ |
26,018 |
|
|
Stock-based compensation expense (a) |
|
|
102 |
|
|
|
101 |
|
|
|
152 |
|
|
|
510 |
|
|
|
1,114 |
|
|
Non-GAAP gross profit |
|
$ |
7,133 |
|
|
$ |
7,219 |
|
|
$ |
8,958 |
|
|
$ |
31,978 |
|
|
$ |
27,132 |
|
|
As a percentage of net revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
|
67.1 |
% |
|
|
67.3 |
% |
|
|
68.0 |
% |
|
|
66.5 |
% |
|
|
57.4 |
% |
|
Non-GAAP gross margin |
|
|
68.1 |
% |
|
|
68.3 |
% |
|
|
69.1 |
% |
|
|
67.6 |
% |
|
|
59.9 |
% |
|
GAAP operating loss |
|
$ |
(3,105 |
) |
|
$ |
(6,912 |
) |
|
$ |
(2,554 |
) |
|
$ |
(15,868 |
) |
|
$ |
(20,726 |
) |
|
Stock-based compensation expense (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Cost of net revenue |
|
|
102 |
|
|
|
101 |
|
|
|
152 |
|
|
|
510 |
|
|
|
1,114 |
|
|
- Research and development |
|
|
189 |
|
|
|
223 |
|
|
|
276 |
|
|
|
949 |
|
|
|
1,668 |
|
|
- Sales and marketing |
|
|
(40 |
) |
|
|
178 |
|
|
|
(26 |
) |
|
|
527 |
|
|
|
651 |
|
|
- General and administrative |
|
|
440 |
|
|
|
384 |
|
|
|
367 |
|
|
|
1,641 |
|
|
|
2,240 |
|
|
Non-GAAP operating loss |
|
$ |
(2,414 |
) |
|
$ |
(6,026 |
) |
|
$ |
(1,785 |
) |
|
$ |
(12,241 |
) |
|
$ |
(15,053 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(2,992 |
) |
|
$ |
(6,775 |
) |
|
$ |
(2,516 |
) |
|
$ |
(15,437 |
) |
|
$ |
(21,013 |
) |
|
Stock-based compensation expense (a) |
|
|
691 |
|
|
|
886 |
|
|
|
769 |
|
|
|
3,627 |
|
|
|
5,673 |
|
|
Non-GAAP net loss |
|
$ |
(2,301 |
) |
|
$ |
(5,889 |
) |
|
$ |
(1,747 |
) |
|
$ |
(11,810 |
) |
|
$ |
(15,340 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing GAAP basic and diluted earnings per share |
|
|
49,486 |
|
|
|
49,466 |
|
|
|
48,681 |
|
|
|
49,396 |
|
|
|
48,158 |
|
|
GAAP earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.44 |
) |
|
Shares used in computing Non-GAAP basic and diluted earnings per share |
|
|
49,486 |
|
|
|
49,466 |
|
|
|
48,681 |
|
|
|
49,396 |
|
|
|
48,158 |
|
|
Non-GAAP earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
|
$ |
(0.05 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.32 |
) |
|
|
(a) |
Stock-based compensation reflects expense recorded relating to stock-based awards. The Company excludes this item when it evaluates the continuing operational performance of the Company, as management believes this provides it a meaningful understanding of its core operating performance. |
Rick Neely
Intermolecular, Inc.
Sr. Vice President and Chief Financial Officer
rick.neely@intermolecular.com
+1.408.582.5430