InvenSense Inc. (NYSE: INVN), a leading provider of MEMS sensor
platform solutions, today announced results for its second quarter
of fiscal year 2017, ended October 2, 2016.
Net revenue for the second quarter of fiscal 2017 was $79.8
million, up 32 percent from $60.6 million for the first quarter of
fiscal 2017 and down 29 percent from $112.5 million for the second
quarter of fiscal 2016.
Gross margin determined in accordance with U.S. generally
accepted accounting principles (GAAP) was 42 percent for the second
quarter of fiscal 2017, up from 41 percent for the first quarter of
fiscal 2017. GAAP gross margin for the second quarter of fiscal
2017 included stock-based compensation expense and related payroll
taxes and amortization of acquisition-related intangibles.
Excluding these items, non-GAAP gross margin was 46 percent for the
second quarter of fiscal 2017, consistent with the non-GAAP gross
margin for the first quarter of fiscal 2017.
GAAP net loss for the second quarter of fiscal 2017 was $12.5
million, or $.13 per share. By comparison, GAAP net loss was $20.2
million, or $.22 per share, for the first quarter of fiscal 2017.
GAAP net loss for the second quarter of fiscal 2017 included
stock-based compensation expense and related payroll taxes,
accreting interest expense on convertible notes, amortization of
acquisition-related intangibles, business acquisition costs and
litigation-related expenses. Excluding these items and the income
tax effect of the excluded items as well as other discrete tax
items, non-GAAP net income for the second quarter of fiscal 2017
was $1.7 million, or $.02 per diluted share (based on the weighted
average shares outstanding of 94.6 million) compared with non-GAAP
net loss of $4.9 million, or $.05 per share, for the first quarter
of fiscal 2017.
The reconciliation between GAAP and non-GAAP financial results
for all referenced periods is provided in a table immediately
following the Unaudited Condensed Consolidated Statements of
Operations below.
Management Qualitative Comments
“The InvenSense team delivered solid results in the second
fiscal quarter. We are encouraged that our R&D investments are
beginning to pay off with new design wins which we anticipate will
allow us to penetrate new markets,” said Behrooz Abdi, president
and CEO. “While the consumer and mobile markets were and remain
soft, we believe this design win activity will position us for
strong top line growth in fiscal 2018 as we strive to diversify our
business.”
Second Quarter of Fiscal Year 2017 Earnings Conference
Call
A conference call will be held today at 1:30 p.m. Pacific Time
to discuss the quarter’s results and management’s current business
outlook.
To listen to the conference call, please dial (844) 413-0862 ten
minutes prior to the start of the call, using the passcode
97991032. International callers, please dial (216) 562-0454. A
taped replay will be made available approximately two hours after
the conclusion of the call and will remain available for seven
days. To access the replay, please dial (855) 859-2056 and enter
passcode 97991032. International callers please dial (404)
537-3406. The conference call will be available via a live webcast
on the investor relations section of InvenSense’s web site at
www.invensense.com/ir. An archived webcast replay will be available
on the web site for two months.
Note Regarding Use of Non-GAAP Financial Measures
As discussed above, in addition to the company’s condensed
consolidated financial statements, which are presented according to
GAAP, the company provides certain non-GAAP financial information
that excludes stock-based compensation expense and related payroll
taxes, accreting interest expense on the company’s 1.75%
convertible senior notes, amortization of acquisition-related
intangible assets, business acquisition costs and
litigation-related expenses. The company uses these non-GAAP
measures in its own financial and operational decision-making
processes. Further, the company believes that these non-GAAP
measures offer an important analytical tool to help investors
understand the company’s core operating results and trends and
facilitate comparability with the operating results of other
companies that provide similar non-GAAP measures. These non-GAAP
measures have certain limitations as analytical tools and are not
meant to be considered in isolation or as a substitute for GAAP
financial information. For example, stock-based compensation is an
important component of the company’s compensation mix and will
continue to result in significant expenses in the company’s GAAP
results for the foreseeable future, but it is not reflected in the
company’s non-GAAP measures. Also, other companies, including other
companies in the company’s industry, may calculate non-GAAP
financial measures differently, limiting their usefulness as
comparative measures.
Forward-Looking Statements
Statements in this press release that are not historical are
“forward-looking statements” as the term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are generally written in the future tense and/or
preceded by words such as “will,” “expects,” “anticipates,” or
other words that imply or predict a future state. Forward-looking
statements include our expectations with respect to the success of
our R&D investments, design win activity, new market
penetration, top line growth, consumer and mobile market conditions
or diversification of our business discussed in this press release,
as well as the expected benefits of leveraging our investments in
our sensor platform and our beliefs regarding potential growth
opportunities. Investors are cautioned that all forward-looking
statements in this press release involve risks and uncertainty that
can cause actual results to differ materially from those currently
anticipated due to a number of factors, including without
limitation, intense competition in our industry; our dependence on
a limited number of customers for a substantial portion of our
revenues; the receipt, reduction, cancellation or delay of
significant orders by our customers; advances and trends in new
technologies and industry standards; the continued adoption of
motion tracking and motion sensing as an interface in consumer
electronics products; decreases in average selling prices for our
products; market acceptance and changes in end-user demand for our
customers’ products; our ability to continue to develop and
introduce new and enhanced products on a timely basis; and new
product announcements and introductions by our competitors, as well
as the other risk factors discussed in InvenSense’s Annual Report
on Form 10-K for the year ended April 3, 2016 and other documents
filed by us with the Securities and Exchange Commission (SEC) from
time to time. Copies of InvenSense’s SEC filings are posted on the
company’s website and are available from the company without
charge. Forward-looking statements are made as of the date of this
release, and, except as required by law, the company does not
undertake an obligation to update its forward-looking statements to
reflect future events or circumstances.
About InvenSense
InvenSense, Inc. (NYSE: INVN) is the world’s leading provider of
MEMS sensor platforms. InvenSense’s vision of Sensing Everything™
targets the consumer electronics and industrial markets with
integrated Motion and Sound solutions. Our solutions combine MEMS
(micro electrical mechanical systems) sensors, such as
accelerometers, gyroscopes, compasses, and microphones with
proprietary algorithms and firmware that intelligently process,
synthesize, and calibrate the output of sensors, maximizing
performance and accuracy. InvenSense’s motion tracking, audio and
location platforms, and services can be found in Mobile, Wearables,
Smart Home, Industrial, Automotive, and IoT products. InvenSense is
headquartered in San Jose, California and has offices worldwide.
For more information, go to www.invensense.com and
http://www.coursaretail.com.
©2016 InvenSense, Inc. All rights reserved. InvenSense, Sensing
Everything, FireFly, SensorStudio, TrustedSensor, Coursa,
UltraPrint, MotionTracking, MotionProcessing, MotionProcessor,
MotionFusion, MotionApps, InvenSenseTV, DMP, AAR, and the
InvenSense logo are trademarks of InvenSense, Inc. Other company
and product names may be trademarks of the respective companies
with which they are associated.
INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three
Months Ended October 2, July 3, September
27, 2016 2016
2015 Net revenue $ 79,831 $ 60,636 $ 112,545 Costs of
revenue 46,299 35,891 65,974
Gross profit 33,532 24,745 46,571 Operating expenses:
Research and development 28,144 26,541 24,991 Selling, general and
administrative 14,869 13,862
15,186 Total operating expenses 43,013
40,403 40,177 Income (loss) from operations
(9,481 ) (15,658 ) 6,394 Interest expense (2,925 ) (2,881 ) (2,765
) Other income (expense), net 138 226
104 Income (loss) before income taxes (12,268 )
(18,313 ) 3,733 Income tax provision (benefit) 242
1,872 (1,960 ) Net income (loss) $ (12,510 ) $
(20,185 ) $ 5,693 Net income (loss) per share: Basic
$ (0.13 ) $ (0.22 ) $ 0.06 Diluted $ (0.13 ) $ (0.22 ) $
0.06
Weighted average shares outstanding used
in computing net income (loss) per share:
Basic 93,657 93,236 91,574
Diluted 93,657 93,236
92,569
INVENSENSE, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share
amounts)
(Unaudited)
Three
Months Ended October 2, July 3,
September 27, 2016 2016
2015 GAAP net income (loss) $
(12,510 ) $ (20,185 ) $ 5,693 Adjustments: Stock based compensation
expense and related payroll taxes 9,080 8,273 9,249 Convertible
note accretion interest expense 2,158 2,113 1,999 Amortization of
acquisition-related intangible assets 2,415 2,284 2,254 Business
acquisition costs 264 - - Litigation-related expenses 263 60 144
Income tax effect of pretax non-GAAP
adjustments and other discrete tax items
(6 ) 2,597 (4,476 )
Non-GAAP net
income (loss) $ 1,664 $ (4,858 ) $ 14,863
GAAP net income (loss) per share of common stock $ (0.13 ) $
(0.22 ) $ 0.06
Non-GAAP net income (loss) per share of
common stock, diluted $ 0.02 $ (0.05 ) $ 0.16
GAAP Gross profit $ 33,532 $ 24,745 $ 46,571
Adjustments: Stock based compensation expense and related payroll
taxes 572 619 587 Amortization of acquisition-related intangible
assets 2,359 2,228 2,198
Non-GAAP Gross profit $ 36,463 $ 27,592 $
49,356
GAAP Operating Expenses $ 43,013 $
40,403 $ 40,177 Adjustments: Stock based compensation expense and
related payroll taxes 8,508 7,654 8,662 Amortization of
acquisition-related intangible assets 56 56 56 Business acquisition
costs 264 - - Litigation-related expenses 263
60 144
Non-GAAP Operating Expenses $
33,922 $ 32,633 $ 31,315
INVENSENSE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
October 2,
April 3, 2016 2016
Assets Current assets: Cash and cash equivalents $ 37,047 $
41,105 Short-term investments 239,121 243,755 Accounts receivable
36,599 41,447 Inventories 46,101 62,297 Prepaid expenses and other
current assets 9,187 9,250 Total
current assets 368,055 397,854 Property and equipment, net 33,140
36,271 Intangible assets, net 43,988 43,169 Goodwill 143,320
139,175 Other assets 5,778 5,992 Total
assets $ 594,281 $ 622,461
Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
16,507 $ 35,200 Accrued liabilities 31,123
30,248 Total current liabilities 47,630 65,448 Long-term
debt 155,310 151,038 Other long-term liabilities 26,703
27,230 Total liabilities 229,643
243,716 Stockholders' equity: Preferred stock:
Preferred stock, $0.001 par value — 20,000
shares authorized, no shares issued and outstanding at October 2,
2016 and April 3, 2016
- - Common stock:
Common stock, $0.001 par value — 750,000
shares authorized, 93,855 shares issued and outstanding at October
2, 2016, 93,010 shares issued and outstanding at April 3, 2016
321,956 303,153 Accumulated other comprehensive (loss) (241 ) (26 )
Retained earnings 42,923 75,618 Total
stockholders' equity 364,638 378,745
Total liabilities and stockholders' equity $ 594,281 $
622,461
INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended October 2, July
3, September 27, 2016
2016 2015 Cash flows from
operating activities: Net income (loss) $ (12,510 ) $ (20,185 )
$ 5,693 Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: Depreciation 3,471
3,310 3,195 Amortization of intangible assets 2,507 2,375 2,361 Non
cash interest expense 2,158 2,113 2,000 Loss on other investments -
325 - Stock-based compensation expense 9,045 8,176 9,048 Deferred
income tax assets (5 ) 80 (1,674 ) Tax effect of employee benefit
plans - - (457 ) Changes in operating assets and liabilities:
Accounts receivable 1,345 3,502 (47 ) Inventories 5,526 10,670
2,807 Prepaid expenses and other current assets (827 ) 833 1,154
Other assets 191 207 (1,715 ) Accounts payable 3,659 (22,282 )
8,253 Accrued liabilities 3,885 (3,379 )
2,897 Net cash provided by (used in) operating
activities 18,445 (14,255 ) 33,515
Cash flows from investing activities: Purchase
of property and equipment (1,892 ) (1,892 ) (1,611 ) Sale and
maturities of available-for-sale investments 86,563 56,448 56,478
Purchase of available-for-sale investments (78,676 ) (60,055 )
(91,305 ) Other non-marketable investments (300 ) - - Operating
lease deposit (207 ) - - Acquisition, net of cash acquired
(9,845 ) - - Net cash used in investing
activities (4,357 ) (5,499 ) (36,438 )
Cash flows from financing activities: Proceeds from exercise
of common stock - 1,703 226 Payments of loan (95 ) -
- Net cash provided by (used in) financing
activities (95 ) 1,703 226
Net increase (decrease) in cash and cash equivalents 13,993
(18,051 ) (2,697 ) Cash and cash equivalents: Beginning of period
23,054 41,105 72,859 End
of period $ 37,047 $ 23,054 $ 70,162
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version on businesswire.com: http://www.businesswire.com/news/home/20161103006615/en/
For Investor Inquiries, Contact:Darrow AssociatesDave
Allen, 408-427-4463dallen@darrowir.comir@invensense.comorFor
Media Inquiries, Contact:InvenSense, Inc.David Almoslino,
408-501-2278Senior DirectorCorporate Marketingpr@invensense.com
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