MEMSIC Announces Second-Quarter 2012 Results

MEMSIC, Inc. (NasdaqGM: MEMS), a leading MEMS sensing solution provider, today announced financial results for the second quarter ended June 30, 2012.
  • Net sales totaled $14.4 million compared to $15.4 million in the 2011 quarter.
  • Gross margin was 40.1% compared to 32.5% in the 2011 quarter.
  • Operating expenses totaled $6.2 million compared to $6.6 million in the 2011 quarter.
  • GAAP net loss was $0.5 million, or $0.02 per diluted share, compared to $1.1 million, or $0.05 per diluted share, in the 2011 quarter.
  • EBITDA was $0.8 million, compared to ($0.1) million in the 2011 quarter.

For the six months ended June 30, 2012, net sales totaled $34.4 million compared to $28.3 million in the first six months of 2011. Net income totaled $0.7 million, or $0.03 per diluted share, compared to a net loss of $2.4 million, or $0.10 per diluted share in the prior-year period. EBITDA totaled $3.2 million compared to ($0.3) million in the 2011 period.

“Although we experienced a revenue drop from one large mobile customer, we achieved gross margin improvement in the quarter,” commented MEMSIC Chairman, President and CEO Dr. Yang Zhao. “We understand that focusing on the right customer base is important to MEMSIC’s long-term growth and prosperity.

“We are pursuing margin improvement by taking steps to further diversify our sensor business into selected market segments, particularly the market for high-precision industrial and automotive applications. We are bringing even more engineering and marketing resources to bear on these markets so we can take full advantage of the opportunities they offer and the technology platform we have established. Leveraging our high-performance and broad product line of sensors and integrated sensor system products, we are targeting the customers that offer long-term opportunity and bottom-line advantages for MEMSIC.”

Recent Developments

  • MEMSIC’s mass flow sensor module was awarded a Best of Sensors Expo Honorable Mention by Sensors Magazine. The award was presented at the Sensors Expo & Conference in Rosemont, IL in June 2012. Winners were honored for exceptional innovation, integration and ease of use, among other factors.

Outlook
  • Revenue is expected to be between $14 million and $16 million for the third quarter of 2012.
  • GAAP net loss is expected to be in the range of $0.03 to $0.05 per share for the third quarter of 2012.
  • Average diluted share count for the 2012 third quarter is estimated to be approximately 24.5 million.

Conference Call

Management will hold a conference call and webcast at 5:00 p.m. EDT on Thursday, August 2, 2012 to review and discuss the Company's results.
What:     MEMSIC 2Q 2012 financial results conference call and webcast
When: Thursday, August 2, 2012
Time: 5:00 p.m. EDT
Live Call: (877) 291-1367, domestic
(914) 495-8534, international
Replay: (855) 859-2056, pass code 10446278, domestic
(404) 537-3406, pass code 10446278, 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
(Unaudited)
   
June 30, December 31,
2012 2011
 
ASSETS
Current assets:
Cash and cash equivalents $ 24,016,667 $ 51,914,128
Restricted cash 2,924,181 3,791,189
Short-term investments 34,888,943 6,814,728
Accounts receivable, net of allowance for doubtful accounts of $6,441 4,106,366 6,068,904
as of June 30, 2012 and December 31, 2011
Inventories 10,902,304 11,459,153
Other current assets   2,495,971     2,050,787  
Total current assets 79,334,432 82,098,889
 
Property and equipment, net 29,991,934 30,998,489
Long-term investments 2,600,000 2,600,000
Goodwill 570,979 606,976
Intangible assets, net 10,334,402 11,091,532
Other assets   138,974     136,633  
Total assets $ 122,970,721   $ 127,532,519  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,830,804 $ 8,439,605
Accrued expenses 2,936,261 2,630,966
Advance research funding 2,924,181 3,791,189
Current portion of note payable to bank   1,000,000     500,000  
Total current liabilities 10,691,246 15,361,760
 
 
Note payable to bank, net of current portion 16,430,000 17,430,000
Building liability 7,977,739 8,161,288
Other liabilities   106,343     124,180  
Total other liabilities 24,514,082 25,715,468
 
Stockholders’ equity:
 
Common stock, $0.00001 par value; authorized, 45,000,000 shares; 24,128,614 and 23,983,813
shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively 241 240
 
Additional paid-in capital 102,210,810 101,266,272
Accumulated other comprehensive income 4,035,217 4,363,930
Accumulated deficit   (19,169,045 )   (19,908,135 )
MEMSIC, Inc. stockholders' equity 87,077,223 85,722,307
 
Non-controlling interest related to joint ventures   688,170     732,984  
Total stockholders' equity   87,765,393     86,455,291  
 
Total liabilities and stockholders’ equity $ 122,970,721   $ 127,532,519  
 
 
 
MEMSIC, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
         
Three months ended June 30, Six months ended June 30,
2012   2011 2012   2011
 
Net sales $ 14,415,237 $ 15,372,634 $ 34,432,290 $ 28,327,554
Cost of goods sold   8,630,850     10,374,465     21,230,804     18,387,664  
Gross profit 5,784,387 4,998,169 13,201,486 9,939,890
 
Operating expenses:
Research and development 1,769,201 2,112,136 3,472,360 4,409,973
Sales and marketing 1,228,408 1,529,907 2,660,707 2,994,653
General and administrative 2,399,923 2,096,988 4,635,995 3,976,879
Depreciation 378,354 422,982 817,295 797,351
Amortization   413,886     402,231     810,008     808,166  
Total operating expenses   6,189,772     6,564,244     12,396,365     12,987,022  
 
Operating income (loss) (405,385 ) (1,566,075 ) 805,121 (3,047,132 )
 
Other income:
Interest and dividend income 125,259 98,366 233,034 181,855
Foreign exchange (loss) gain (193,190 ) 328,799 (225,453 ) 519,475
Other, net   25,468     13,844     38,641     82,420  
Total other income (expense) (42,463 ) 441,009 46,222 783,750
 
Profit (loss) before income taxes (447,848 ) (1,125,066 ) 851,343 (2,263,382 )
Provision (benefit) for income taxes   29,355     (3,084 )   97,938     114,310  
Net income (loss) (477,203 ) (1,121,982 ) 753,405 (2,377,692 )
 
Less: net income (loss) attributable to non-controlling interests   (15,789 )   (13,681 )   14,315     58,790  
Net income (loss) attributable to MEMSIC, Inc. $ (461,414 ) $ (1,108,301 ) $ 739,090   $ (2,436,482 )
 
Net income (loss) per common share attributable to MEMSIC, Inc.:
Basic $ (0.02 ) $ (0.05 ) $ 0.03   $ (0.10 )
Diluted $ (0.02 ) $ (0.05 ) $ 0.03   $ (0.10 )
 
Weighted average shares outstanding used in calculating
net income (loss) per common share:
Basic   23,986,332     23,823,321     23,919,650     23,818,467  
Diluted   23,986,332     23,823,321     24,404,777     23,818,467  
 
 
 
MEMSIC, Inc.

Reconciliation of Net Income (Loss) to Earnings Before Interest, Taxes and Depreciation and Amortization(EBITDA) (Unaudited)
           
 
Three months ended June 30, Six months ended June 30,
2012 2011 2012 2011
 
Net income (loss) $ (461,414 ) $ (1,108,301 ) $ 739,090 $ (2,436,482 )
Interest (income) expense, net (125,259 ) (98,366 ) (233,034 ) (181,855 )
Income tax expense 29,355 (3,084 ) 97,938 114,310
Depreciation and amortization   1,305,595     1,085,682     2,613,747     2,155,002  
EBITDA $ 748,277   $ (124,069 ) $ 3,217,741   $ (349,025 )
 

Copyright Business Wire 2010

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