MEMSIC Announces First-Quarter 2013 Results

MEMSIC Announces First-Quarter 2013 Results

ANDOVER, Mass.--(BUSINESS WIRE)-- MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the first quarter ended March 31, 2013.

  • Net sales totaled $11.4 million compared to $20.0 million in the 2012 quarter.
  • Gross margin was 36.4% compared to 37.1% in the 2012 quarter.
  • Operating expenses totaled $6.8 million compared to $6.2 million in the 2012 quarter.
  • GAAP net loss was $2.5 million, or $0.10 per diluted share, compared to net income of $1.2 million, or $0.05 per diluted share, in the 2012 quarter.
  • EBITDA was ($1.3) million compared to $2.5 million in the 2012 quarter.

MEMSIC Chairman, President and CEO Dr. Yang Zhao commented, "Our results for the quarter were within the guidance range we previously provided. During the period, we made additional progress with our strategy to capitalize on the large China mobile market. Our ongoing penetration of that market helped mitigate the impact of reduced shipments to a large mobile customer. Our sales to that customer peaked in the first quarter of 2012, affecting our quarter-over-quarter comparisons. In addition, we remain focused on using MEMSIC's cutting-edge technology to develop high-performance products for the industrial and automotive markets."

In light of MEMSIC's pending acquisition by IDG-Accel China Capital II, L.P. and its affiliates, announced on April 23, 22013, MEMSIC will not conduct a conference call to review its first-quarter 2013 financial results.

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.

   March 31,  December 31,
Current assets:
Cash and cash equivalents$34,008,973$27,306,202
Restricted cash2,775,6002,867,896
Short-term investments25,640,12434,640,188
Accounts receivable, net of allowance for doubtful accounts of $8,334 and $18,774,
respectively, as of March 31, 2013 and December 31, 20124,263,6014,821,867
Other current assets 2,568,587  2,285,923 
Total current assets77,714,13481,762,735
Property and equipment, net28,944,24729,002,825
Long-term investments2,500,0002,500,000
Intangible assets, net9,559,7809,918,305
Other assets 137,810  144,106 
Total assets$118,855,971 $123,327,971 
Current liabilities:
Accounts payable$2,748,492$3,778,672
Accrued expenses2,772,1483,934,975
Advance research funding2,775,6002,867,896
Current portion of note payable to bank 1,000,000  1,000,000 
Total current liabilities9,296,24011,581,543
Note payable to bank, net of current portion16,430,00016,430,000
Building liability8,160,3958,135,115
Other liabilities 72,222  86,420 
Total other liabilities24,662,61724,651,535
Stockholders' equity:
Common stock, $0.00001 par value; authorized, 45,000,000 shares; 24,246,886 and 24,219,685
shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively243242
Additional paid-in capital103,140,260102,813,203
Accumulated other comprehensive income4,553,1534,477,071
Accumulated deficit (23,359,991) (20,896,074)
MEMSIC, Inc. stockholders' equity84,333,66586,394,442
Non-controlling interest related to joint ventures 563,449  700,451 
Total stockholders' equity 84,897,114  87,094,893 
Total liabilities and stockholders' equity$118,855,971 $123,327,971 
   Three months ended March 31,
2013  2012
Net sales$11,428,283$20,017,053
Cost of goods sold 7,269,658  12,599,954 
Gross profit4,158,6257,417,099
Operating expenses:
Research and development1,945,3721,703,159
Sales and marketing1,142,0661,432,299
General and administrative2,943,3902,236,071
Amortization 450,944  396,123 

Total operating expenses

 6,807,942  6,206,593 
Operating (loss) income(2,649,317)1,210,506
Other income:
Interest and dividend income33,035107,774
Foreign exchange gain80,503(32,263)
Other, net 67,991  13,174 
Total other income181,52988,685
Loss before income taxes(2,467,788)1,299,191
Provision for income taxes 30,307  68,583 
Net (loss) income(2,498,095)1,230,608
Less: net (loss) income attributable to noncontrolling interests (34,178) 30,104 
Net (loss) income attributable to MEMSIC, Inc.$(2,463,917)$1,200,504 
Net (loss) income per common share attributable to MEMSIC, Inc.:
Weighted average shares outstanding used in calculating
net (loss) income per common share:
Basic 24,168,301  23,846,864 
Diluted 24,168,301  24,344,799 

Reconciliation of Net Income (Loss) to Earnings Before Interest, Taxes and
Depreciation and Amortization (EBITDA) (Unaudited)

   Three months ended March 31,
2013 2012
Net income (loss)$(2,463,917)$1,200,504
Interest (income) expense, net(33,035)(107,774)
Income tax expense30,30768,583
Depreciation and amortization 1,180,264  1,308,152 

Patricia Niu, 978-738-0900
Chief Financial Officer
Harriet Fried, 212-838-3777

KEYWORDS:   United States  North America  Massachusetts


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