MEMSIC Announces Fourth-Quarter 2012 Results

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MEMSIC Announces Fourth-Quarter 2012 Results

ANDOVER, Mass.--(BUSINESS WIRE)-- MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the fourth quarter ended December 31, 2012.

  • Net sales totaled $14.2 million compared to $21.5 million in the 2011 quarter.
  • Gross margin was 36.6% compared to 35.9% in the 2011 quarter.
  • Operating expenses totaled $7.0 million compared to $11.6 million in the 2011 quarter.
  • GAAP net loss was $1.4 million, or $0.06 per diluted share, compared to $3.3 million, or $0.14 per diluted share, in the 2011 quarter.
  • Before giving effect to a goodwill impairment charge of $0.6 million in the 2012 quarter and $4.5 million in the 2011 quarter, MEMSIC realized a net loss of $0.8 million, or $0.03 for the 2012 quarter and net income of $1.2 million, or $0.05 per share, for the 2011 quarter.
  • EBITDA was ($0.5) million compared to ($2.3) million in the 2011 quarter. Before giving effect to the goodwill impairment charge in each quarter, EBITDA was $0.2 million and $2.2 million, respectively.

MEMSIC Chairman, President and CEO Dr. Yang Zhao commented, "Growth in our consumer sales continued in the fourth quarter, reflecting strong demand for our accelerometer product in high-end digital camera applications and the selection of our magnetic product in new consumer applications such as tablet computers. This demand helped mitigate the impact of reduced shipments to a large mobile customer.


"We continue to pursue opportunities to benefit from the large China mobile market by leveraging MEMSIC's competitive product, significant presence in China and the strong, local technical support we provide. Our launch of the gas flow sensor module we introduced last year is proceeding, and we are in the testing phase with several potential customers. In addition, we are moving forward with our initiatives to use MEMSIC's cutting-edge technology to develop high-performance products for the industrial and automotive markets. Diversifying into new applications takes time, but we believe that focusing on these stable, high-margin markets will enhance MEMSIC's business."

For the year ended December 31, 2012, net sales totaled $63.8 million compared to $68.2 million for 2011. Net loss totaled $1.0 million, or $0.04 per diluted share, compared to a net loss of $6.1 million, or $0.26 per diluted share in the prior year. MEMSIC's 2012 and 2011 results included non-cash charges related to the impairment of the goodwill associated with the company's Crossbow Technology acquisition in January 2010. Before giving effect to a goodwill impairment charge of $0.6 million in 2012 and $4.5 million in 2011, MEMSIC's net loss was $0.3 million, or $0.01 per share, for 2012 compared to net loss of $1.6 million, or $0.07 per share, for 2011. EBITDA for the year ended December 31, 2012 totaled $3.7 million compared to ($1.7) million for 2011. Before giving effect to the impairment charges in 2012 and 2011, EBITDA was $4.4 million and $2.8 million, respectively.

Strategic Alternatives Review Process

The Special Committee appointed by MEMSIC's Board of Directors is continuing to evaluate the company's strategic alternatives in light of the November 20, 2012 proposal from IDG-Accel China Growth Fund II LP. No assurance can be given as to whether this process, which is ongoing, will result in a proposed transaction, whether any transaction that may be proposed as a result of such process would be acceptable to the Company, the Special Committee and the Board, or whether any such proposed transaction will be announced or consummated.

Recent Developments

  • In January 2013 MEMSIC won Electronic Products magazine's prestigious "Product of the Year Award" for the second consecutive year. This year's POY was awarded to MEMSIC's three-axis magnetic sensor, the MMC3316xMT. Last year's POY was awarded to MEMSIC's MXC6226xC, an ultra-small, two-axis accelerometer.

Outlook

  • Revenue is expected to be between $11 million and $12 million for the first quarter of 2013.
  • GAAP net loss is expected to be in the range of $0.09 to $0.11 per share for the first quarter of 2013.
  • Average diluted share count for the 2013 first quarter is estimated to be approximately 24.5 million.

Conference Call

Management will hold a conference call and webcast at 9:00 a.m. EST on Friday, March 8, 2013 to review and discuss the Company's results.

   

What:

MEMSIC 4Q 2012 financial results conference call and webcast

When:

Friday, March 8, 2013

Time:

9:00 a.m. EST

Live Call:

(877) 291-1367, domestic

(914) 495-8534, international

Replay:

(855) 859-2056, pass code 15153653, domestic

(404) 537-3406, pass code 15153653, international

Webcast:

http://investor.memsic.com (live and replay)

 

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.

        
MEMSIC, Inc.
CONSOLIDATED BALANCE SHEETS
 

December 31,

2012

December 31,

2011

 

 

ASSETS
Current assets:
Cash and cash equivalents$27,306,202$51,914,128
Restricted cash2,867,8963,791,189
Short-term investments34,640,1886,814,728

Accounts receivable, net of allowance for doubtful accounts of $18,774 and $6,441,

respectively, as of December 31, 2012 and December 31, 2011

4,821,867

6,068,904

Inventories9,840,65911,459,153
Other current assets 2,285,923  2,050,787 
Total current assets81,762,73582,098,889
 
Property and equipment, net29,002,82530,998,489
Long-term investments2,500,0002,600,000
Goodwill-606,976
Intangible assets, net9,918,30511,091,532
Other assets 144,106  136,633 
Total assets$123,327,971 $127,532,519 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$3,778,672$8,439,605
Accrued expenses3,934,9752,630,966
Advance research funding2,867,8963,791,189
Current portion of note payable to bank 1,000,000  500,000 
Total current liabilities11,581,54315,361,760
 
Note payable to bank, net of current portion16,430,00017,430,000
Building liability8,135,1158,161,288
Other liabilities 86,420  124,180 
Total other liabilities24,651,53525,715,468
 
Stockholders' equity:

Common stock, $0.00001 par value; authorized, 45,000,000 shares; 24,219,685 and 23,983,813

shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively

242240
Additional paid-in capital102,813,203101,266,272
Accumulated other comprehensive income4,477,0714,363,930
Accumulated deficit (20,896,074) (19,908,135)
MEMSIC, Inc. stockholders' equity86,394,44285,722,307
Non-controlling interest related to joint ventures 700,451  732,984 
Total stockholders' equity 87,094,893  86,455,291 
Total liabilities and stockholders' equity$123,327,971 $127,532,519 
 
    
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
            
Three months ended December 31,Twelve months ended December 31,
 2012  2011  2012  2011 
 
Net sales$14,189,812$21,468,278$63,810,807$68,153,132
Cost of goods sold 8,998,780  13,770,585  40,107,592  44,313,782 
Gross profit5,191,0327,697,69323,703,21523,839,350
 
Operating expenses:
Research and development1,962,2671,943,3566,874,9628,553,569
Sales and marketing1,257,0932,016,4095,194,7336,892,303
General and administrative2,448,7012,342,8259,417,6238,717,322
Depreciation376,773438,3101,552,3451,637,476
Amortization331,722415,6901,480,6091,627,692
Impairment charge of goodwill 646,602  4,492,000  646,602  4,492,000 
Total operating expenses 7,023,158  11,648,590  25,166,874  31,920,362 
 
Operating loss(1,832,126)(3,950,897)(1,463,659)(8,081,012)
 
Other income:
Interest and dividend income21,104102,572258,516437,655
Foreign exchange gain207,309305,708191,4841,153,822
Other, net 260,435  158,481  318,660  564,489 
Total other income488,848566,761768,6602,155,966
 
Loss before income taxes(1,343,278)(3,384,136)(694,999)(5,925,046)
Provision for income taxes 71,944  (95,256) 266,344  77,397 
Net loss(1,415,222)(3,288,880)(961,343)(6,002,443)
 
Less: net income attributable to non-controlling interests (6,349) (9,558) 26,596  82,127 
Net loss attributable to MEMSIC, Inc.$(1,408,873)$(3,279,322)$(987,939)$(6,084,570)
 
Net loss per common share attributable to MEMSIC, Inc.:
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