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MEMSIC Reports Record Sales Of $18.4 Million; Reaches EBITDA Positive In 3Q 2011

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the third quarter ended September 30, 2011.
  • Revenues rose to $18.4 million from $10.8 million in the third quarter of 2010.
  • Gross margin was 33.8% compared to 37.8% in the 2010 quarter.
  • Operating expenses, including R&D expense of $2.2 million, totaled $7.3 million compared to $6.4 million in the 2010 period.
  • GAAP net loss was $0.4 million, or $0.02 per diluted share, compared to net loss of $1.9 million, or $0.08 per diluted share, in the 2010 quarter. This includes stock-based compensation of $0.5 million in the 2011 period and $0.4 million in the 2010 period.
  • EBITDA was $0.9 million, compared to ($1.0) million in the 2010 quarter.

“MEMSIC delivered the highest sales in our company’s history,” said Chairman, President and CEO Dr. Yang Zhao. “The 69% quarter-over-quarter increase reflects the continued success of our magnetic sensor in the smartphone market and strong sales in the automotive market, which increased by 29% over last year’s period.

“On a sequential basis, our gross margin improved from last quarter’s level of 32.5%, reflecting our focused effort on margin improvement through technology innovation and manufacturing cost reduction. We are especially pleased to have reached EBITDA positive this quarter.

"While we are continuing our drive to secure more design wins with global customers in the growing mobile phone market, we continue to focus on margin improvement and market diversification by leveraging MEMSIC's established MEMS component and integrated system technology infrastructure. I believe that MEMSIC will improve gross margin through continuous product development aimed at industrial and other markets.”

Recent Highlights
  • MEMSIC introduced our MXC6226XC two-axis digital accelerometer, the world’s smallest and the first wafer level packaged CMOS monolithic accelerometer. It is the most robust MEMS accelerometer that enables enhanced functionality for cost-sensitive motion sensing applications.
  • MEMSIC transferred its system solution product manufacturing to its newly completed building in Wuxi in August 2011. With a total space of 14,500 square meters, the new building will facilitate the production and research and development of our wireless network and inertial products.

Outlook
  • Revenue is expected to be between $17 million and $19 million for the fourth quarter of 2011.
  • GAAP net loss, including stock-based compensation of $0.5 million, is expected to be in the range of $0.02 to $0.04 per share for the fourth quarter of 2011.
  • Average diluted share count for the 2011 fourth quarter is estimated to be approximately 24 million.

Conference Call

Management will hold a conference call and webcast at 8:30 a.m. EST on Tuesday, November 8, 2011 to review and discuss the Company's results.
What:         MEMSIC 3Q 2011 financial results conference call and webcast
When: Tuesday, November 8, 2011
Time: 8:30 a.m. EST
Live Call: (877) 291-1367, domestic
(914) 495-8534, international
Replay: (855) 859-2056, pass code 19319526, domestic
(404) 537-3406, pass code 19319526, 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.

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