MEMSIC Announces Third-Quarter 2012 Results

  MEMSIC Announces Third-Quarter 2012 Results

Business Wire

ANDOVER, Mass. -- November 05, 2012

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today
announced financial results for the third quarter ended September 30, 2012.

  *Net sales totaled $15.2 million compared to $18.4 million in the 2011
    quarter.
  *Gross margin was 35.0% compared to 33.8% in the 2011 quarter.
  *Operating expenses totaled $5.7 million compared to $7.3 million in the
    2011 quarter.
  *GAAP net loss was $0.3 million, or $0.01 per diluted share, compared to
    $0.4 million, or $0.02 per diluted share, in the 2011 quarter.
  *EBITDA was $952,000 compared to $915,000 in the 2011 quarter.

For the nine months ended September 30, 2012, net sales totaled $49.6 million
compared to $46.7 million in the first nine months of 2011. Net income totaled
$0.4 million, or $0.02 per diluted share, compared to a net loss of $2.8
million, or $0.12 per diluted share in the prior-year period. EBITDA totaled
$4.2 million compared to $0.6 million in the 2011 period.

MEMSIC Chairman, President and CEO Dr. Yang Zhao commented, “We continued to
grow sales in the consumer market from high-end digital camera applications
and from new consumer applications such as tablet computers. We also benefited
from design wins at multiple mobile customers in fast-growing smart phone
applications in the China market. The increased sales in these areas helped
ameliorate the impact of reduced shipments to a large mobile customer stemming
from recent changes in MEMSIC’s strategy and business focus.

“In the coming months, building on our superior magnetic sensor product, our
large presence in the China market and the strong, local technical support we
offer, we expect to continue to leverage the growth in the China mobile
market. We are also moving forward with our launch of the gas flow sensor
module, aimed at the residential and industrial meter markets, that we
introduced in June 2012. In addition, we are developing high-performance
sensor products for the industrial and automotive markets, as well as
high-performance but cost-effective IMU product for industrial applications.
Although expanding into new automotive and industrial applications will take
time, we are optimistic that our advanced technology will lead the market and,
in the long term, enhance the stability and profitability of our Company.”

Outlook

  *Revenue is expected to be between $14 million and $16 million for the
    fourth quarter of 2012.
  *GAAP net loss is expected to be in the range of $0.02 to $0.04 per share
    for the fourth quarter of 2012.
  *Average diluted share count for the 2012 fourth quarter is estimated to be
    approximately 24.5 million.

Conference Call

Management will hold a conference call and webcast at 5:00 p.m. EST on Monday,
November 5, 2012 to review and discuss the Company's results.

What:       MEMSIC 3Q 2012 financial results conference call and webcast
             
When:        Monday, November 5, 2012
             
Time:        5:00 p.m. EST
            
Live Call:   (877) 291-1367, domestic
            (914) 495-8534, international
             
Replay:      (855) 859-2056, pass code 46225789, domestic
             (404) 537-3406, pass code 46225789, 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
(Unaudited)
                                            September 30,    December 31,
                                              2012            2011        
                                                               
ASSETS
Current assets:
Cash and cash equivalents                    $ 25,347,187      $ 51,914,128
Restricted cash                                2,706,830         3,791,189
Short-term investments                         33,640,012        6,814,728
Accounts receivable, net of allowance for
doubtful accounts of $41,815 and $6,441,
respectively, as of September 30, 2012 and     6,833,143         6,068,904
December 31, 2011
Inventories                                    9,775,070         11,459,153
Other current assets                          2,751,586       2,050,787   
Total current assets                           81,053,828        82,098,889
                                                               
Property and equipment, net                    29,488,751        30,998,489
Long-term investments                          2,600,000         2,600,000
Goodwill                                       612,578           606,976
Intangible assets, net                         10,133,406        11,091,532
Other assets                                  141,610         136,633     
Total assets                                 $ 124,030,173    $ 127,532,519 
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                             $ 4,332,101       $ 8,439,605
Accrued expenses                               3,199,371         2,630,966
Advance research funding                       2,706,830         3,791,189
Current portion of note payable to bank       1,000,000       500,000     
Total current liabilities                      11,238,302        15,361,760
                                                               
                                                               
Note payable to bank, net of current           16,430,000        17,430,000
portion
Building liability                             8,064,310         8,161,288
Other liabilities                             97,105          124,180     
Total other liabilities                        24,591,415        25,715,468
                                                               
Stockholders’ equity:
                                                               
Common stock, $0.00001 par value;
authorized, 45,000,000 shares; 24,199,585
and 23,983,813
shares issued and outstanding at September
30, 2012 and December 31, 2011,                242               240
respectively
                                                               
Additional paid-in capital                     102,556,701       101,266,272
Accumulated other comprehensive income         4,423,913         4,363,930
Accumulated deficit                           (19,487,200 )    (19,908,135 )
MEMSIC, Inc. stockholders' equity              87,493,656        85,722,307
                                                               
Non-controlling interest related to joint     706,800         732,984     
ventures
Total stockholders' equity                    88,200,456      86,455,291  
                                                               
Total liabilities and stockholders’ equity   $ 124,030,173    $ 127,532,519 

                                                                  
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                    Three months ended September        Nine months ended September 30,
                    30,
                     2012           2011             2012           2011       
                                                                         
Net sales           $ 15,188,705     $ 18,357,300       $ 49,620,995     $ 46,684,854
Cost of goods        9,878,008      12,155,533       31,108,812     30,543,197 
sold
Gross profit          5,310,697        6,201,767          18,512,183       16,141,657
                                                                         
Operating
expenses:
Research and          1,440,336        2,200,240          4,912,696        6,610,213
development
Sales and             1,276,933        1,881,240          3,937,640        4,875,893
marketing
General and           2,332,925        2,397,618          6,968,920        6,374,497
administrative
Depreciation          358,277          401,815            1,175,572        1,199,166
Amortization         338,879        403,835          1,148,887      1,212,001  
Total operating      5,747,350      7,284,748        18,143,715     20,271,770 
expenses
                                                                         
Operating             (436,653   )     (1,082,981 )       368,468          (4,130,113 )
(loss) income
                                                                         
Other income:
Interest and          4,378            153,227            237,412          335,082
dividend income
Foreign
exchange gain         209,628          328,639            (15,825    )     848,114
(loss)
Other, net           19,583         323,587          58,225         406,007    
Total other           233,589          805,453            279,812          1,589,203
income
                                                                         
(Loss) profit
before income         (203,064   )     (277,528   )       648,280          (2,540,910 )
taxes
Provision for        96,462         58,343           194,400        172,653    
income taxes
Net (loss)            (299,526   )     (335,871   )       453,880          (2,713,563 )
income
                                                                         
Less: net
income
attributable to      18,629         32,895           32,945         91,685     
non-controlling
interests
Net (loss)
income              $ (318,155   )   $ (368,766   )     $ 420,935       $ (2,805,248 )
attributable to
MEMSIC, Inc.
                                                                         
Net (loss)
income per
common share
attributable to
MEMSIC, Inc.:
Basic               $ (0.01      )   $ (0.02      )     $ 0.02          $ (0.12      )
Diluted             $ (0.01      )   $ (0.02      )     $ 0.02          $ (0.12      )
                                                                         
Weighted
average shares
outstanding
used in
calculating
net (loss)
income per
common share:
Basic                24,024,725     23,825,134       23,985,453     23,822,587 
Diluted              24,024,725     23,825,134       24,414,565     23,822,587 

                                                           
MEMSIC, Inc.
Reconciliation of Net (Loss) Income to Earnings Before Interest, Taxes and
Depreciation and Amortization (EBITDA)
(Unaudited)
                                                                
                Three months ended September    Nine months ended September
                30,                             30,
                 2012          2011          2012          2011       
                                                                
Net (loss)      $ (318,155  )   $ (368,766  )   $ 420,935       $ (2,805,248 )
income
Interest
(income)          (4,378    )     (153,227  )     (237,412  )     (335,082   )
expense, net
Income tax        96,462          58,343          194,400         172,653
expense
Depreciation
and              1,177,613     1,378,401     3,791,360     3,533,403  
amortization
EBITDA          $ 951,542      $ 914,751      $ 4,169,283    $ 565,726    

Contact:

Company:
MEMSIC, Inc.
Patricia Niu, 978-738-0900
Chief Financial Officer
or
Investors:
LHA
Harriet Fried / Jody Burfening
212-838-3777
ir@memsic.com
 
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