MEMSIC Announces Second-Quarter 2013 Results

  MEMSIC Announces Second-Quarter 2013 Results

Business Wire

ANDOVER, Mass. -- August 8, 2013

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today
announced financial results for the second quarter ended June 30, 2013.

  *Net sales totaled $13.2 million compared to $14.4 million in the 2012
    quarter.
  *Gross margin was 37.6% compared to 40.1% in the 2012 quarter.
  *Operating expenses, including $1.7 million legal and other expenses
    related to MEMSIC’s pending acquisition, totaled $7.5 million compared to
    $6.2 million in the 2012 quarter.
  *GAAP net loss was $2.3 million, or $0.09 per diluted share, compared to a
    net loss of $0.5 million, or $0.02 per diluted share, in the 2012 quarter.
  *EBITDA was ($1.2) million compared to $0.7 million in the 2012 quarter.

MEMSIC Chairman, President and CEO Dr. Yang Zhao commented, “In this year’s
second quarter, growing revenue from shipments to the China mobile market
helped alleviate the impact of reduced sales to a large mobile customer. We
are pleased with the progress we are making in penetrating the China mobile
market. The number of units shipped that related to mobile applications
increased more than 80% during the period.

“In June 2013 we unveiled our MMC246xMT Two-Axis Magnetic Sensor, which offers
top performance at the lowest power consumption for a two-axis magnetic
sensor. The MMC246xMT is well suited for consumer, industrial and automotive
applications.”

On April 23, 2013, MEMSIC announced it had agreed to be acquired by IDG-Accel
China Capital II, L.P. and its affiliates. The company continues to expect
that transaction to close in the third quarter of 2013.

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)
                                             June 30,          December 31,
                                             2013              2012
                                                               
ASSETS
Current assets:
Cash and cash equivalents                    $ 38,583,630      $ 27,306,202
Restricted cash                                2,743,062         2,867,896
Short-term investments                         20,000,000        34,640,188
Accounts receivable, net of allowance
for doubtful accounts of $8,356 and
$18,774,
respectively, as of June 30, 2013 and          4,472,242         4,821,867
December 31, 2012
Inventories                                    8,619,887         9,840,659
Other current assets                          2,078,356       2,285,923   
Total current assets                           76,497,177        81,762,735
                                                               
Property and equipment, net                    30,980,960        29,002,825
Long-term investments                          2,500,000         2,500,000
Intangible assets, net                         9,413,499         9,918,305
Other assets                                  137,182         144,106     
Total assets                                 $ 119,528,818    $ 123,327,971 
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                             $ 5,754,949       $ 3,778,672
Accrued expenses                               2,913,365         3,934,975
Advance research funding                       2,743,062         2,867,896
Current portion of note payable to            2,500,000       1,000,000   
bank
Total current liabilities                      13,911,376        11,581,543
                                                               
                                                               
Note payable to bank, net of current           13,930,000        16,430,000
portion
Building liability                             8,257,988         8,135,115
Other liabilities                             100,237         86,420      
Total other liabilities                        22,288,225        24,651,535
                                                               
Stockholders’ equity:
                                                               
Common stock, $0.00001 par value;
authorized, 45,000,000 shares;
24,312,704 and 24,219,685
shares issued and outstanding at June
30, 2013 and December 31, 2012,                243               242
respectively
                                                               
Additional paid-in capital                     103,537,903       102,813,203
Accumulated other comprehensive income         4,898,004         4,477,071
Accumulated deficit                           (25,636,990 )    (20,896,074 )
MEMSIC, Inc. stockholders' equity              82,799,160        86,394,442
                                                               
Non-controlling interest related to           530,057         700,451     
joint ventures
Total stockholders' equity                    83,329,217      87,094,893  
                                                               
Total liabilities and stockholders’          $ 119,528,818    $ 123,327,971 
equity
                                                                             

                                                                  
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                          
                     Three months ended June 30,         Six months ended June 30,
                      2013           2012             2013           2012       
                                                                          
Net sales            $ 13,179,094     $ 14,415,237       $ 24,607,377     $ 34,432,290
Cost of goods         8,225,181      8,630,850        15,494,839     21,230,804 
sold
Gross profit           4,953,913        5,784,387          9,112,538        13,201,486
                                                                          
Operating
expenses:
Research and           1,917,807        1,769,201          3,863,179        3,472,360
development
Sales and              872,237          1,228,408          2,014,303        2,660,707
marketing
General and            4,075,952        2,399,923          7,019,341        4,635,995
administrative
Depreciation           342,644          378,354            668,815          817,295
Amortization          307,079        413,886          758,023        810,008    
Total
operating             7,515,719      6,189,772        14,323,661     12,396,365 
expenses
                                                                          
Operating              (2,561,806 )     (405,385   )       (5,211,123 )     805,121
(loss) income
                                                                          
Other income:
Interest and
dividend               7,580            125,259            40,615           233,034
income
Foreign                237,559          (193,190   )       318,062          (225,453   )
exchange gain
Other, net            12,374         25,468           80,365         38,641     
Total other            257,513          (42,463    )       439,042          46,222
income
                                                                          
Loss before            (2,304,293 )     (447,848   )       (4,772,081 )     851,343
income taxes
Provision for         6,098          29,355           36,405         97,938     
income taxes
Net (loss)             (2,310,391 )     (477,203   )       (4,808,486 )     753,405
income
                                                                          
Less: net
(loss) income
attributable          (33,393    )    (15,789    )      (67,570    )    14,315     
to
noncontrolling
interests
Net (loss)
income
attributable         $ (2,276,998 )   $ (461,414   )     $ (4,740,916 )   $ 739,090    
to MEMSIC,
Inc.
                                                                          
Net (loss)
income per
common share
attributable
to MEMSIC,
Inc.:
Basic                $ (0.09      )   $ (0.02      )     $ (0.20      )   $ 0.03       
Diluted              $ (0.09      )   $ (0.02      )     $ (0.20      )   $ 0.03       
                                                                          
Weighted
average shares
outstanding
used in
calculating
net (loss)
income per
common share:
Basic                 24,236,445     23,986,332       24,215,415     23,919,650 
Diluted               24,236,445     23,986,332       24,215,415     24,404,777 
                                                                                       

                                                              
MEMSIC, Inc.

Reconciliation of Net (Loss) Income to Earnings Before Interest, Taxes and
Depreciation and Amortization (EBITDA) (Unaudited)
                                                                     
                                                                     
                   Three months ended June 30,      Six months ended June 30,
                    2013           2012          2013           2012      
                                                                     
Net (loss)         $ (2,276,998 )   $ (461,414  )   $ (4,740,916 )   $ 739,090
income
Interest
(income)             (7,580     )     (125,259  )     (40,615    )     (233,034  )
expense, net
Income tax           6,098            29,355          36,405           97,938
expense
Depreciation
and                 1,044,933      1,305,595     2,225,197      2,613,747 
amortization
EBITDA             $ (1,233,547 )   $ 748,277      $ (2,519,929 )   $ 3,217,741 

Contact:

Company:
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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