Achieves Positive Cash Flow From Operations
Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in
MRAM, today announced financial results for the third quarter ended
September 30, 2020.
Third Quarter Highlights
- Total revenue increased 10.3% year-over-year to $10.1
million
- Operating expenses declined 24% over the prior year period
- GAAP net loss per share remained flat at ($0.21) compared to
the third quarter of 2019
- Generated $0.7 million cash flow from operations
- Ended quarter with cash and equivalents of $13.9 million
“We are happy to report that in Q3 we achieved our goal of
generating cash flow from operations. We hit our target of reducing
annual operating expenses by $5 million over last year one quarter
ahead of plan, while maintaining our critical R&D programs and
key business initiatives,” stated Kevin Conley, Everspin’s
President and CEO. “Our emphasis on cash management, product cost,
and operational excellence have been fundamental to our continued
progress.
“During the quarter, we started production shipments of our
second STT-MRAM design win for a persistent memory card application
with an OEM customer that sells into the data center segment.
Combined with the expansion of our Toggle product line, we believe
that we are well positioned to drive revenue growth as the overall
demand for memory and storage increases and applications that
benefit from the performance and reliability of MRAM continue to
expand.”
Third Quarter 2020 Results
Total revenue for the third quarter of 2020 was $10.1 million,
compared to $11.8 million last quarter and $9.2 million in the
third quarter of 2019.
GAAP gross margin for the third quarter of 2020 was 23.0%,
compared to 43.9% in the prior quarter and 47.4% in the third
quarter of 2019. Third quarter gross margin included a $1.7 million
non-cash charge related to excess and obsolete inventory reserve ,
$0.4 million of accelerated depreciation and $0.1 million related
to a prior period cost adjustment.
GAAP operating expenses for the third quarter of 2020 decreased
to $6.0 million, compared to $6.3 million in the second quarter of
2020 and $7.9 million in the third quarter of 2019. GAAP operating
expenses in each of these periods included $0.9 million of
stock-based compensation.
GAAP net loss for the third quarter of 2020 was $3.9 million, or
($0.21) per share, based on 18.9 million weighted-average shares
outstanding. This compares to a GAAP net loss of $1.3 million, or
($0.07) per share, in the second quarter of 2020 and a GAAP net
loss of $3.7 million, or ($0.21) per share, in the third quarter of
2019.
Adjusted EBITDA for the third quarter of 2020 was a negative
($2.0) million, compared to a positive $0.2 million last quarter
and a negative ($2.2) million in the prior year period.
Cash and cash equivalents as of September 30, 2020 increased to
$13.9 million compared to $12.9 million at the end of the second
quarter of 2020.
Business Outlook
For the fourth quarter of 2020, Everspin expects total revenue
in a range between $10.1 million and $10.9 million, which at the
mid-point represents an 8.7% increase over total revenue of $9.7
million in the year-ago quarter. GAAP net loss per share is
expected to range between ($0.10) and ($0.04) per share, which
reflects expected stock-based compensation expense of approximately
$0.9 million.
Use of Non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under generally accepted accounting principles in the
United States of America (GAAP) with Adjusted EBIDTA, which is a
non-GAAP financial measure. We define Adjusted EBITDA as net income
(loss) adjusted for interest expense, taxes, depreciation and
amortization, stock-based compensation expense, and restructuring
costs if any.
Our management and board of directors use Adjusted EBIDTA to
understand and evaluate our operating performance and trends, to
prepare and approve our annual budget and to develop short-term and
long-term operating and financing plans. Accordingly, our
management believes that this non-GAAP measure provide useful
information for investors in understanding and evaluating our
operating results in the same manner as our management and our
board of directors, as well as facilitating comparisons of our
operating performance on a period-to-period basis.
Non-GAAP financial measures, including Adjusted EBIDTA, should
not be considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. Moreover,
other companies may define non-GAAP measures differently, which
limits the usefulness of these measures for comparisons with such
other companies. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure.
Conference Call
Everspin will host a conference call for analysts and investors
today at 5:00 p.m. Eastern Time. Interested participants can access
the call by dialing 1-844-889-7788 and providing passcode
1460575. International callers may join the call by dialing
+1-661-378-9932, using the
same code. The call will also be available as a live and archived
webcast in the Investor Relations section of the company’s website
at investor.everspin.com.
A telephone replay of the conference call will be available
approximately two hours after the call through November 12, 2020.
The replay can be accessed by dialing 1-855-859-2056 and using the
passcode 1460575. International callers should dial +1-404-537-3406
and enter the same passcode at the prompt.
About Everspin Technologies
Everspin Technologies, Inc. is the world’s leading provider of
Magnetoresistive RAM (MRAM). Everspin MRAM delivers the industry’s
most robust, highest performance non-volatile memory for Industrial
IoT, Data Center, and other mission-critical applications where
data persistence is paramount. Headquartered in Chandler, Arizona,
Everspin provides commercially available MRAM solutions to a large
and diverse customer base. For more information, visit
www.everspin.com. NASDAQ: MRAM.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements regarding
future results that involve risks and uncertainties that could
cause actual results or events to differ materially from the
expectations disclosed in the forward-looking statements,
including, but not limited to the statements made under the caption
“Business Outlook.” Forward-looking statements are identified by
words such as “believe”, “will”, “may”, “estimate”, “continue”,
“anticipate”, “intend”, “should”, “plan”, “expect”, “predict”,
“could”, “potentially" or the negative of these terms or similar
expressions. These include, but are not limited to our future
plans, strategies, objectives, expectations, intentions and
financial performance and the assumptions that underlie these
statements. Actual results could differ materially from these
forward-looking statements as a result of certain risks and
uncertainties, including, without limitation, the risks set forth
in Everspin’s Quarterly Reports on Form 10-Q filed with the
Securities and Exchange Commission (the “SEC”) on August 6, 2020
and November 5, 2020 under the caption “Risk Factors” as well as in
our other filings with the SEC. Any forward-looking statements made
by Everspin in this press release speak only as of the date on
which they are made and subsequent events may cause these
expectations to change. Everspin disclaims any obligations to
update or alter these forward-looking statements in the future,
whether as a result of new information, future events or
otherwise.
EVERSPIN TECHNOLOGIES,
INC.
Condensed Balance
Sheets
(In thousands, except share
and per share amounts)
(Unaudited)
September 30,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
13,927
$
14,487
Accounts receivable, net
8,167
5,799
Inventory
6,173
7,863
Prepaid expenses and other current
assets
99
539
Total current assets
28,366
28,688
Property and equipment, net
2,126
3,479
Right-of-use assets
2,652
3,132
Other assets
73
73
Total assets
$
33,217
$
35,372
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
2,806
$
2,873
Accrued liabilities
1,708
2,727
Current portion of long-term debt
3,614
670
Operating lease liabilities
1,531
1,582
Other liabilities
38
42
Total current liabilities
9,697
7,894
Long-term debt, net of current portion
4,283
7,149
Operating lease liabilities, net of
current portion
1,279
1,840
Total liabilities
15,259
16,883
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value per
share; 5,000,000 shares authorized; no shares issued and
outstanding as of September 30, 2020 and December 31, 2019
—
—
Common stock, $0.0001 par value per share;
100,000,000 shares authorized; 18,970,791 and 18,081,753 shares
issued and outstanding as of September 30, 2020 and December 31,
2019
2
2
Additional paid-in capital
173,539
167,149
Accumulated deficit
(155,583)
(148,662)
Total stockholders’ equity
17,958
18,489
Total liabilities and stockholders’
equity
$
33,217
$
35,372
EVERSPIN TECHNOLOGIES, INC.
Condensed Statements of
Operations and Comprehensive Loss
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Product sales
$
9,577
$
8,370
$
30,139
$
25,396
Licensing, royalty, and other revenue
543
808
1,915
2,454
Total revenue
10,120
9,178
32,054
27,850
Cost of sales
7,791
4,824
19,183
14,692
Gross profit
2,329
4,354
12,871
13,158
Operating expenses:1
Research and development
2,579
3,395
8,383
10,912
General and administrative
2,549
3,050
7,797
9,501
Sales and marketing
912
1,491
3,071
4,094
Total operating expenses
6,040
7,936
19,251
24,507
Loss from operations
(3,711)
(3,582)
(6,380)
(11,349)
Interest expense
(157)
(170)
(501)
(567)
Other (expense) income, net
(27)
89
(40)
327
Net loss and comprehensive loss
$
(3,895)
$
(3,663)
$
(6,921)
$
(11,589)
Net loss per common share, basic and
diluted
$
(0.21)
$
(0.21)
$
(0.37)
$
(0.67)
Weighted-average shares used to compute
net loss per common share, basic and diluted
18,942,163
17,312,226
18,705,149
17,183,306
1Operating expenses include stock-based
compensation as follows:
Research and development
$
182
$
176
$
538
$
484
General and administrative
657
627
1,888
1,692
Sales and marketing
71
92
207
221
Total stock-based compensation
$
910
$
895
$
2,633
$
2,397
EVERSPIN TECHNOLOGIES, INC.
Reconciliation of Adjusted
EBITDA
(In thousands)
(Unaudited)
Three Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
Adjusted EBITDA reconciliation:
Net loss
$
(3,895)
$
(1,294)
$
(3,663)
Depreciation and amortization
799
404
421
Stock-based compensation expense
910
918
895
Interest expense
157
172
170
Adjusted EBITDA
$
(2,029)
$
200
$
(2,177)
EVERSPIN TECHNOLOGIES, INC.
Condensed Statement of Cash
Flows
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2020
2019
Cash flows from operating
activities
Net loss
$
(6,921)
$
(11,589)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,611
1,297
Loss on disposal of property and
equipment
—
20
Stock-based compensation
2,633
2,397
Non-cash loss on warrant revaluation
2
—
Non-cash interest expense
231
219
Inventory reserves
1,692
—
Changes in operating assets and
liabilities:
Accounts receivable
(2,368)
1,954
Inventory
(2)
779
Prepaid expenses and other current
assets
440
466
Accounts payable
(31)
518
Accrued liabilities
(692)
(1,444)
Lease liabilities
(132)
(72)
Net cash used in operating activities
(3,537)
(5,455)
Cash flows from investing
activities
Purchases of property and equipment
(307)
(566)
Net cash used in investing activities
(307)
(566)
Cash flows from financing
activities
Payments on debt
—
(4,840)
Payments of debt issuance costs
—
(80)
Payments on finance lease obligation
(6)
(8)
Proceeds from exercise of stock options
and purchase of shares in employee stock purchase plan
1,206
178
Proceeds from issuance of common stock in
at-the-market offering, net of issuance costs
2,084
2,172
Net cash provided by (used in) financing
activities
3,284
(2,578)
Net decrease in cash and cash
equivalents
(560)
(8,599)
Cash and cash equivalents at beginning of
period
14,487
23,379
Cash and cash equivalents at end of
period
$
13,927
$
14,780
Supplementary cash flow
information:
Interest paid
$
271
$
373
Operating cash flows paid for operating
leases
$
1,298
$
1,264
Financing cash flows paid for finance
leases
$
6
$
8
Non-cash investing and financing
activities:
Right-of-use assets obtained in exchange
for new operating leases
$
—
$
23
Increase of right-of-use asset and lease
liability due to lease modification
$
545
$
—
Purchase of property and equipment in
accounts payable and accrued liabilities
$
8
$
33
Bonus settled in shares of common
stock
$
315
$
—
Modification of warrant
$
—
$
36
Issuance of warrant
$
152
$
—
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105006095/en/
Daniel Berenbaum, CFO T: 480-347-1099 E:
daniel.berenbaum@everspin.com
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