MEMSIC Announces Second-Quarter 2011 Sales Of $15.4 Million

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the second quarter ended June 30, 2011.
  • Revenues rose to $15.4 million from $9.1 million in the second quarter of 2010.
  • Gross margin was 32.5% compared to 40.6% in the 2010 quarter.
  • Operating expenses, including R&D expense of $2.1 million, totaled $6.6 million compared to $5.9 million in the 2010 quarter.
  • GAAP net loss in the 2011 second quarter was $1.1 million, or $0.05 per diluted share, compared to net loss of $2.0 million, or $0.08 per diluted share, in the prior-year period. This includes stock-based compensation of $0.4 million in 2011 and $0.3 million in 2010.
  • EBITDA in the 2011 second quarter was ($0.1) million, compared to ($1.1) million in the 2010 period.

“MEMSIC’s continued strong sales growth in the mobile phone and automotive markets demonstrates the success of our company’s ongoing focus on R&D,” commented Chairman, President and CEO Dr. Yang Zhao. “The high technical performance of our magnetic sensor has helped us win market share in the smartphone market. Although the pricing pressure that is typical in the mobile phone market has impacted our gross margin, we are striving for continuous cost improvement through continued innovation. We believe MEMSIC is well positioned to gain more customers and market share in this fast-growing market.”

Outlook
  • Revenue is expected to be between $15 million and $16 million for the third quarter of 2011.
  • GAAP net loss, including stock-based compensation of $0.4 million, is expected to be in the range of $0.04 to $0.06 per share for the third quarter of 2011.
  • Average diluted share count for the 2011 third quarter is estimated to be approximately 24 million.

Conference Call

Management will hold a conference call and webcast at 5:00 p.m. EDT on Thursday, August 4, 2011 to review and discuss the Company's results.

What:
 

MEMSIC 2Q 2011 financial results conference call and webcast
 

When:

Thursday, August 4, 2011
 

Time:

5:00 p.m. EDT
 

Live Call:

(877) 291-1367, domestic
 

 

(914) 495-8534, international
 

Replay:

(800) 642-1687, pass code 85651862 domestic
 

 

(706) 645-9291, pass code 85651862, 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 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,
2011 2010
 
ASSETS
Current assets:
Cash and cash equivalents $ 50,475,499 $ 55,694,205
Restricted cash 2,394,110 2,928,933
Short-term investments 1,353,672 -

Accounts receivable, net of allowance for doubtful accounts of $6,441 as of June 30, 2011and December 31, 2010
6,423,290 3,664,444
Inventories 9,689,542 8,923,127
Other assets   2,919,670     2,537,445  
Total current assets 73,255,783 73,748,154
 
Property and equipment, net 27,809,748 22,015,502
Long-term investments 4,820,000 5,020,000
Goodwill 4,997,441 4,919,513
Intangible assets, net 11,480,353 11,894,328
Other assets   28,789     67,599  
Total assets $ 122,392,114   $ 117,665,096  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,174,793 $ 4,563,420
Accrued expenses 2,059,372 2,969,839
Advance research funding 2,394,110 2,928,933
Current portion of long-term debt   500,000     -  
Total current liabilities 11,128,275 10,462,192
 
 
Note payable to bank 17,430,000 17,930,000
Building liability 5,625,000 -
Deferred rent   139,330     90,036  
Total other liabilities 23,194,330 18,020,036
 
Stockholders’ equity:
 

 

Common stock, $0.00001 par value; authorized, 45,000,000 shares; 23,968,813 and 23,810,613shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively
240 238
 
Additional paid-in capital 100,450,269 99,615,378
Accumulated other comprehensive income 3,577,226 3,029,372
Accumulated deficit   (16,260,047 )   (13,823,565 )
MEMSIC, Inc. stockholders' equity 87,767,688 88,821,423
 
Non-controlling interest related to joint venture in Japan   301,821     361,445  
Total stockholders' equity   88,069,509     89,182,868  
 
Total liabilities and stockholders’ equity $ 122,392,114   $ 117,665,096  
 

 
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
  Three Months Ended June 30,   Six Months Ended June 30,
2011  

2010
2011   2010
 
Net sales $ 15,372,634 $ 9,095,626 $ 28,327,554 $ 16,367,619
Cost of goods sold   10,374,465     5,407,199     18,387,664     9,833,698  
Gross profit 4,998,169 3,688,427 9,939,890 6,533,921
 
Operating expenses:
Research and development 2,112,136 2,035,088 4,409,973 4,008,745
Sales and marketing 1,529,907 1,108,852 2,994,653 2,180,330
General and administrative 2,519,970 2,328,037 4,774,230 4,313,086
Amortization expense   402,231     401,522     808,166     740,282  
Total operating expenses   6,564,244     5,873,499     12,987,022     11,242,443  
 
Operating loss (1,566,075 ) (2,185,072 ) (3,047,132 ) (4,708,522 )
 
Other income:
Interest and dividend income 98,366 104,112 181,855 220,777
Foreign exchange gain 328,799 50,056 519,475 54,077
Other, net   13,844     37,702     82,420     51,210  
Total other income   441,009     191,870     783,750     326,064  
 
Earnings (loss) before income taxes (1,125,066 ) (1,993,202 ) (2,263,382 ) (4,382,458 )
Provision for (benefit from) income taxes   (3,084 )   941     114,310     (115,494 )
Net loss (1,121,982 ) (1,994,143 ) (2,377,692 ) (4,266,964 )
 
Less: net income (loss) attributable to noncontrolling interest   (13,681 )   (20,052 )   58,790     27,089  
Net loss attributable to MEMSIC, Inc. $ (1,108,301 ) $ (1,974,091 ) $ (2,436,482 ) $ (4,294,053 )
 
Net loss per common share to MEMSIC, Inc.:
Basic $ (0.05 ) $ (0.08 ) $ (0.10 ) $ (0.18 )
Diluted $ (0.05 ) $ (0.08 ) $ (0.10 ) $ (0.18 )
 
Weighted average shares outstanding used in calculating
net loss per common share:
Basic   23,823,321     23,804,863     23,818,467     23,800,936  
Diluted   23,823,321     23,804,863     23,818,467     23,800,936  
 

 
           
MEMSIC, Inc.
Reconciliation of Net Loss to Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) (Unaudited)
 
 
Three months ended June 30, Six months ended June 30,
2011 2010 2011 2010
 
Net income (loss) $ (1,108,301 ) $ (1,974,091 ) $ (2,436,482 ) $ (4,294,053 )
Interest (income) expense, net (98,366 ) (104,112 ) (181,855 ) (220,777 )
Income tax expense (benefit) (3,084 ) 941 114,310 (115,494 )
Depreciation and amortization   1,085,682     940,820     2,155,002     1,820,051  
EBITDA $ (124,069 ) $ (1,136,442 ) $ (349,025 ) $ (2,810,273 )

Copyright Business Wire 2010

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