MEMSIC Reports Another Quarter Of Record Revenues

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the fourth quarter ended December 31, 2011.
  • Revenues rose to $21.5 million from $11.4 million in the 2010 quarter. Total shipments of our sensor products rose to 35.0 million units from 11.2 million units in prior-year period.
  • Gross margin was 35.9% compared to 41.1% in the 2010 quarter.
  • Operating expenses, including a $4.5 million non-cash goodwill impairment charge related to the system solution business acquired from Crossbow Technology, totaled $11.6 million compared to $6.3 million in the 2010 quarter.
  • GAAP net loss was $3.3 million, or $0.14 per diluted share, compared to net loss of $1.1 million, or $0.05 per diluted share, in the 2010 quarter. Before giving effect to the goodwill impairment charge, MEMSIC realized net income of $1.2 million, or $0.05 per share for the fourth quarter of 2011.
  • EBITDA was ($2.3) million, compared to ($0.1) million in the 2010 quarter. Before giving effect to the goodwill impairment charge, EBITDA for the 2011 fourth quarter was $2.2 million.

Chairman, President and CEO Dr. Yang Zhao commented, “MEMSIC achieved record sales for the sixth consecutive quarter, again due primarily to the growing success of our magnetic sensor in the smartphone market. In fact, revenues almost doubled over last year’s period and we substantially exceeded the sales guidance we provided in early November. Our gross margin improved on a sequential basis, increasing to 35.9% from 32.5% and 33.8% in the second and third quarters of 2011, respectively. This improvement reflected the success of our initiatives to achieve margin improvement through technology innovation and manufacturing enhancements.

“The motion sensor and sensor fusion market has been growing at a rapid pace, especially in smartphones. In 2012, our goals are twofold. First, we are pursuing more design wins with global customers in the mobile phone and consumer market. Second, we are working to leverage MEMSIC’s proven MEMS sensor and sensor system integration technology to create more value-added products for the consumer, industrial and automotive markets. With our extensive capabilities to integrate MCU and software to create smart-sensing systems beyond sensor fusion, MEMSIC is an established leader in smart motion management.”

Dr. Zhao added, “Our fourth-quarter 2011 results include a $4.5 million non-cash charge related to the impairment of a portion of the goodwill associated with our Crossbow Technology acquisition in January 2010. The impairment reflects the fact that sales forecasted for the system solution products, particularly the avionics products, are lower than projected at the time of acquisition. We believe this impairment does not negate the tremendous value of the know-how and IPs in sensor integration technology we acquired from Crossbow. Our original vision and strategy of realizing more higher-margin and stable business by combining MEMSIC’s strong sensor component technologies with the system integration technologies we acquired from Crossbow remain unchanged.”

Recent Developments
  • Electronic Products magazine honored MEMSIC’s MXC6226XC two-axis digital accelerometer with a Product of the Year award in January 2012. The MXC6226XC – the world’s smallest and the first wafer-level packaged CMOS monolithic accelerometer – was selected for its innovative design, significant advancement in technology, and achievement in price and performance.
  • In November 2011, a subsidiary of MEMSIC entered into a joint venture with Wuxi New District Science and Technology Financial Investment Group Co. Ltd., a state-owned Chinese venture capital fund, to focus on the sensor and sensing network solution market by leveraging MEMSIC’s proven mesh wireless sensor network technology.

  • Revenue is expected to be between $18 million and $19 million for the first quarter of 2012, an increase of approximately 39% - 46% from the prior-year period.
  • GAAP net loss is expected to be in the range of $0.02 to $0.04 per share for the first quarter of 2012.
  • Average diluted share count for the 2012 first quarter is estimated to be approximately 24 million.

Conference Call

Management will hold a conference call and webcast at 5:00 p.m. EST on Wednesday, February 29, 2012 to review and discuss the Company's results.


MEMSIC 4Q 2011 financial results conference call and webcast


Wednesday, February 29, 2012


5:00 p.m. EST

Live Call:

(877) 291-1367, domestic


(914) 495-8534, international


(855) 859-2056, pass code 46805814, domestic


(404) 537-3406, pass code 46805814, international

Webcast: (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.
December 31, December 31,
  2011     2010  
Current assets:
Cash and cash equivalents $ 51,914,128 $ 55,694,205
Restricted cash 3,791,189 2,928,933
Short-term investments 6,814,728 -

Accounts receivable, net of allowance for doubtful accounts of$6,441 as of December 31, 2011 and December 31, 2010
6,068,904 3,664,444

Inventories 11,459,153 8,923,127
Other assets   2,050,787     2,537,445  
Total current assets 82,098,889 73,748,154
Property and equipment, net 30,998,489 22,015,502
Long-term investments 2,600,000 5,020,000
Goodwill 606,976 4,919,513
Intangible assets, net 11,091,532 11,894,328
Other assets   136,633     67,599  
Total assets $ 127,532,519   $ 117,665,096  
Current liabilities:
Accounts payable $ 8,439,605 $ 4,563,420
Accrued expenses 2,630,966 2,969,839
Advance research funding 3,791,189 2,928,933
Current portion of long-term debt   500,000     -  
Total current liabilities 15,361,760 10,462,192
Note payable to bank, net of current portion 17,430,000 17,930,000
Building liability 8,161,288 -
Other liabilities   124,180     90,036  
Total other liabilities 25,715,468 18,020,036
Stockholders’ equity:

Common stock, $0.00001 par value; authorized, 45,000,000 shares;23,983,813 and 23,810,613 shares issued and outstanding at

December 31, 2011 and December 31, 2010, respectively
240 238
Additional paid-in capital 101,266,272 99,615,378
Accumulated other comprehensive income 4,363,930 3,029,372
Accumulated deficit   (19,908,135 )   (13,823,565 )
MEMSIC, Inc. stockholders' equity 85,722,307 88,821,423
Non-controlling interest related to joint ventures   732,984     361,445  
Total stockholders' equity   86,455,291     89,182,868  
Total liabilities and stockholders’ equity $ 127,532,519   $ 117,665,096  
  Three Months Ended December 31,

Year Ended December 31,
  2011       2010     2011       2010  
Net sales $ 21,468,278 $ 11,439,239 $ 68,153,132 $ 38,651,577
Cost of goods sold   13,770,585     6,741,931     44,313,782     23,326,823  
Gross profit 7,697,693 4,697,308 23,839,350 15,324,754
Operating expenses:
Research and development 1,943,356 2,311,587 8,553,569 8,697,981
Sales and marketing 2,016,409 1,535,130 6,892,303 5,092,353
General and administrative 2,781,135 2,015,663 10,354,798 8,546,722
Amortization expense 415,690 408,109 1,627,692 1,549,377
Goodwill impairment charge   4,492,000     -     4,492,000     -  
Total operating expenses   11,648,590     6,270,489     31,920,361     23,886,433  
Operating loss (3,950,897 ) (1,573,181 ) (8,081,011 ) (8,561,679 )
Other income:
Interest and dividend income 102,572 122,365 437,655 442,167
Foreign exchange gain 305,708 322,480 1,153,822 682,290
Other, net   158,481     62,439     564,489     132,992  
Total other income   566,761     507,284     2,155,965     1,257,449  
Earnings (loss) before income taxes (3,384,136 ) (1,065,897 ) (5,925,046 ) (7,304,230 )
Provision for (benefit from) income taxes   (95,256 )   73,474     77,397     (5,628 )
Net income (loss) (3,288,880 ) (1,139,371 ) (6,002,443 ) (7,298,602 )

Less: net income attributable tononcontrolling interest
  (9,558 )   (1,982 )   82,127     64,111  

Net income (loss) attributable toMEMSIC, Inc.
$ (3,279,322 ) $ (1,137,389 ) $ (6,084,570 ) $ (7,362,713 )

Net income (loss) per common shareto MEMSIC, Inc.:
Basic $ (0.14 ) $ (0.05 ) $ (0.26 ) $ (0.31 )
Diluted $ (0.14 ) $ (0.05 ) $ (0.26 ) $ (0.31 )

Weighted average shares outstandingused in calculating net income (loss)

per common share:
Basic   23,825,134     23,806,564     23,827,937     23,803,414  
Diluted   23,825,134     23,806,564     23,827,937     23,803,414  

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

  Three months ended December 31,   Year ended December 31,
  2011       2010     2011       2010  
Net loss $ (3,279,322 ) $ (1,137,389 ) $ (6,084,570 ) $ (7,362,713 )
Interest (income) expense, net (102,572 ) (122,365 ) (437,655 ) (442,167 )
Income tax expense (benefit) (95,256 ) 73,474 77,397 (5,628 )
Depreciation and amortization   1,208,787     1,039,749     4,742,190     3,862,416  
EBITDA $ (2,268,363 ) $ (146,531 ) $ (1,702,638 ) $ (3,948,092 )

Copyright Business Wire 2010

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