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MEMSIC Announces Fourth-Quarter 2012 Results



  MEMSIC Announces Fourth-Quarter 2012 Results

Business Wire

ANDOVER, Mass. -- March 8, 2013

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
                 (877) 291-1367, domestic
Live Call:
                 (914) 495-8534, international
                 (855) 859-2056, pass code 15153653, domestic
Replay:
                 (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,          December 31,

                                         2012                  2011
                                                                
ASSETS
Current assets:
Cash and cash equivalents                $ 27,306,202          $ 51,914,128
Restricted cash                            2,867,896             3,791,189
Short-term investments                     34,640,188            6,814,728
Accounts receivable, net of
allowance for doubtful
accounts of $18,774 and
$6,441,                                    4,821,867             6,068,904

respectively, as of December
31, 2012 and December 31, 2011
Inventories                                9,840,659             11,459,153
Other current assets                       2,285,923             2,050,787    
Total current assets                       81,762,735            82,098,889
                                                                
Property and equipment, net                29,002,825            30,998,489
Long-term investments                      2,500,000             2,600,000
Goodwill                                   -                     606,976
Intangible assets, net                     9,918,305             11,091,532
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 expenses                           3,934,975             2,630,966
Advance research funding                   2,867,896             3,791,189
Current portion of note                    1,000,000             500,000      
payable to bank
Total current liabilities                  11,581,543            15,361,760
                                                                
Note payable to bank, net of               16,430,000            17,430,000
current portion
Building liability                         8,135,115             8,161,288
Other liabilities                          86,420                124,180      
Total other liabilities                    24,651,535            25,715,468
                                                                
Stockholders’ equity:
Common stock, $0.00001 par
value; authorized, 45,000,000
shares; 24,219,685 and
23,983,813
                                           242                   240
shares issued and outstanding
at December 31, 2012 and
December 31, 2011,
respectively
Additional paid-in capital                 102,813,203           101,266,272
Accumulated other                          4,477,071             4,363,930
comprehensive income
Accumulated deficit                        (20,896,074 )         (19,908,135 )
MEMSIC, Inc. stockholders'                 86,394,442            85,722,307
equity
Non-controlling interest                   700,451               732,984      
related to joint ventures
Total stockholders' equity                 87,094,893            86,455,291   
Total liabilities and                    $ 123,327,971         $ 127,532,519  
stockholders’ equity
                                                                

                                                                     
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               8,998,780            13,770,585               40,107,592           44,313,782  
sold
Gross profit                5,191,032            7,697,693                23,703,215           23,839,350
                                                                                              
Operating
expenses:
Research and                1,962,267            1,943,356                6,874,962            8,553,569
development
Sales and                   1,257,093            2,016,409                5,194,733            6,892,303
marketing
General and                 2,448,701            2,342,825                9,417,623            8,717,322
administrative
Depreciation                376,773              438,310                  1,552,345            1,637,476
Amortization                331,722              415,690                  1,480,609            1,627,692
Impairment
charge of                   646,602              4,492,000                646,602              4,492,000   
goodwill
Total operating             7,023,158            11,648,590               25,166,874           31,920,362  
expenses
                                                                                              
Operating loss              (1,832,126 )         (3,950,897 )             (1,463,659 )         (8,081,012 )
                                                                                              
Other income:
Interest and                21,104               102,572                  258,516              437,655
dividend income
Foreign                     207,309              305,708                  191,484              1,153,822
exchange gain
Other, net                  260,435              158,481                  318,660              564,489     
Total other                 488,848              566,761                  768,660              2,155,966
income
                                                                                              
Loss before                 (1,343,278 )         (3,384,136 )             (694,999   )         (5,925,046 )
income taxes
Provision for               71,944               (95,256    )             266,344              77,397      
income taxes
Net loss                    (1,415,222 )         (3,288,880 )             (961,343   )         (6,002,443 )
                                                                                              
Less: net
income
attributable to             (6,349     )         (9,558     )             26,596               82,127      
non-controlling
interests
Net loss
attributable to           $ (1,408,873 )       $ (3,279,322 )           $ (987,939   )       $ (6,084,570 )
MEMSIC, Inc.
                                                                                              
Net loss per
common share
attributable to
MEMSIC, Inc.:
Basic                     $ (0.06      )       $ (0.14      )           $ (0.04      )       $ (0.26      )
Diluted                   $ (0.06      )       $ (0.14      )           $ (0.04      )       $ (0.26      )
                                                
Weighted
average shares
outstanding
used in
calculating net
loss per common
share:
Basic                       24,030,058           23,825,134               24,027,523           23,827,937  
Diluted                     24,030,058           23,825,134               24,027,523           23,827,937  
                                                                                              

                                                                                      
MEMSIC, Inc.
                                                                  
Reconciliation of Net Loss to Earnings Before Interest, Taxes and Depreciation and Amortization
(EBITDA)

(Unaudited)
                                                                                        
                     Three months ended December 31,               Twelve months ended December 31,
                       2012                 2011                     2012                2011        
                                                                                        
Net loss             $ (1,408,873 )       $ (3,279,322 )           $ (987,939  )       $ (6,084,570 )
Interest
(income)               (21,104    )         (102,572   )             (258,516  )         (437,655   )
expense, net
Income tax             71,944               (95,256    )             266,344             77,397
expense
Depreciation
and                    900,764              1,208,787                4,692,124           4,742,190   
amortization
EBITDA               $ (457,269   )       $ (2,268,363 )           $ 3,712,013         $ (1,702,638 )
                                                                                                     

Contact:

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