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 firstname.lastname@example.org
MEMSIC Announces Fourth-Quarter 2012 Results
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