MRAM Everspin Technologies Inc

Second Consecutive Quarter with Positive Cash Flow From Operations

Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in MRAM, today announced preliminary unaudited financial results for the fourth fiscal quarter and full year ended December 31, 2020.

Fourth Quarter and Full Year 2020 Highlights

• 2020 revenue increased 12.1% year-over-year to $42.0 million
• Q4’20 GAAP net loss per share of ($0.08) was a significant improvement over both the prior quarter and year-ago periods
• Generated $0.6 million cash flow from operations in Q4’20, the second consecutive quarter with positive cash flow from operations
• Ended 2020 with cash and equivalents of $14.6 million
• First royalty revenue from GLOBALFOUNDRIES for embedded MRAM on their 22FDX process in Q4

“We are happy to report that in Q4 we continued our progress towards driving sustainable cash flow from operations. We are continuing to drive our critical R&D programs and key business initiatives, and we believe that we are positioned for profitable growth,” stated Darin Billerbeck, Everspin’s Executive Chairman and Interim CEO. “Our emphasis on cash management, product cost, and operational excellence have been fundamental to our continued progress.

“We are also pleased to report that, in Q1’21, we received a $3 million up-front payment for a license related to a U.S. Government Rad-Hard program that we anticipate signing before the end of the quarter. The total value of this STT-MRAM development project, including licenses, royalty, and NRE, is greater than $5 million, which we anticipate recognizing as revenue over the course of the next 36 months. We also anticipate additional manufacturing revenue from this program in 2023 and beyond.”

Preliminary Fourth Quarter 2020 Results

Total revenue for the fourth quarter of 2020 was $10.0 million, compared to $10.1 million in the prior quarter and $9.7 million in the fourth quarter of 2019.

GAAP gross margin for the fourth quarter of 2020 was 52.3%, compared to 23.0% in the prior quarter and 53.6% in the fourth quarter of 2019. Fourth quarter of 2020 gross margin included a $0.2 million non-cash charge related to excess and obsolete inventory reserve.

GAAP operating expenses for the fourth quarter of 2020 were $6.4 million, compared to $6.0 million in the prior quarter and $8.2 million in the fourth quarter of 2019. GAAP operating expenses in the fourth quarter of 2020 included $1.3 million of stock-based compensation, compared to $0.9 million last quarter and $1.1 million in the year-ago quarter. Stock-based compensation for the fourth quarter of 2020 included a $0.3 million reclassification of cash compensation to stock-based compensation from prior quarters in 2020 related to bonus payments in equity awards rather than cash.

In the fourth quarter of 2020, we recorded a $0.3 million non-cash uncertain tax position related to potential foreign tax liabilities accumulated over the past several years.

GAAP net loss for the fourth quarter of 2020 was $1.6 million, or ($0.08) per share, based on 19.0 million weighted-average shares outstanding. This compares to a GAAP net loss of $3.9 million, or ($0.21) per share, in the prior quarter, and a GAAP net loss of $3.1 million, or ($0.17) per share, in the fourth quarter of 2019.

Adjusted EBITDA for the fourth quarter of 2020 was $0.3 million, compared to a negative ($2.4) million last quarter and ($0.6) million in the prior year period.

Cash and cash equivalents as of December 31, 2020 increased to $14.6 million compared to $13.9 million at the end of the third quarter of 2020.

Business Outlook

For the first quarter of 2021, Everspin expects total revenue in a range between $10.0 million and $10.8 million, which at the mid-point represents a 2.9% increase over total revenue of $10.1 million in the year-ago quarter. GAAP net loss per share is expected to range between ($0.12) and ($0.06) per share, which reflects expected stock-based compensation expense of approximately $1.0 million.

Preliminary, Unaudited Financial Results

The financial results presented above reflect our preliminary estimates, are based on the information available as of the date hereof and are subject to further review by Everspin and its external auditors. Our actual results may differ materially from these estimates as a result of the completion of our financial closing procedures, final adjustments and other developments arising between now and the time that our financial results for this period are finalized. As a result, investors should exercise caution relying on this information and should not draw any inferences from this information regarding financial or operating data not provided. These preliminary financial results are not meant to be a comprehensive statement of our financial results for the fourth quarter and full-year 2020 and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. Full audited financial results for the fourth quarter and full-year 2020 will be included in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission (SEC) in early March.

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 1537906. 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 and for 90 days thereafter. The replay can be accessed by dialing 1-855-859-2056 and using the passcode 1537906. 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 under the caption “Risk Factors” in Everspin’s Quarterly Report on Form 10-Q filed on November 5, 2020 and Everspin’s Annual Report on Form 10-K for the year ended December 31, 2020 to be filed with the SEC, 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)

 

 

 

 

 

 

 

 

 

December 31,

 

 

2020

 

 

2019

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,599

 

 

$

14,487

 

Accounts receivable, net

 

 

7,607

 

 

 

5,799

 

Inventory

 

 

5,721

 

 

 

7,863

 

Prepaid expenses and other current assets

 

 

270

 

 

 

539

 

Total current assets

 

 

28,197

 

 

 

28,688

 

Property and equipment, net

 

 

1,946

 

 

 

3,479

 

Right-of-use assets

 

 

2,313

 

 

 

3,132

 

Other assets

 

 

73

 

 

 

73

 

Total assets

 

$

32,529

 

 

$

35,372

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,224

 

 

$

2,873

 

Accrued liabilities

 

 

2,461

 

 

 

2,727

 

Current portion of long-term debt

 

 

4,242

 

 

 

670

 

Operating lease liabilities

 

 

1,508

 

 

 

1,582

 

Other liabilities

 

 

31

 

 

 

42

 

Total current liabilities

 

 

10,466

 

 

 

7,894

 

Long-term debt, net of current portion

 

 

3,748

 

 

 

7,149

 

Operating lease liabilities, net of current portion

 

 

903

 

 

 

1,840

 

Total liabilities

 

 

15,117

 

 

 

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 December 31, 2020 and 2019

 

 

—

 

 

 

—

 

Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 19,031,556 and 18,081,753 shares issued and outstanding as of December 31, 2020 and 2019

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

174,584

 

 

 

167,149

 

Accumulated deficit

 

 

(157,174

)

 

(148,662

)

Total stockholders’ equity

 

 

17,412

 

 

 

18,489

 

Total liabilities and stockholders’ equity

 

$

32,529

 

 

$

35,372

 

EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2020

 

2019

 

Product sales

 

$

39,848

 

 

$

34,595

 

 

Licensing, royalty, and other revenue

 

 

2,183

 

 

 

2,908

 

 

Total revenue

 

 

42,031

 

 

 

37,503

 

 

Cost of sales

 

 

23,942

 

 

 

19,172

 

 

Gross profit

 

 

18,089

 

 

 

18,331

 

 

Operating expenses:1

 

 

 

 

 

 

 

Research and development

 

 

10,896

 

 

 

14,183

 

 

General and administrative

 

 

10,773

 

 

 

12,414

 

 

Sales and marketing

 

 

3,983

 

 

 

5,364

 

 

Restructuring

 

 

—

 

 

 

782

 

 

Total operating expenses

 

 

25,652

 

 

 

32,743

 

 

Loss from operations

 

 

(7,563

)

 

 

(14,412

)

 

Interest expense

 

 

(665

)

 

 

(747

)

 

Other (expense) income, net

 

 

(24

)

 

 

490

 

 

Net loss before income taxes

 

 

(8,252

)

 

 

(14,669

)

 

Income tax expense

 

 

(260

)

 

 

—

 

 

Net loss and comprehensive loss

 

$

(8,512

)

 

$

(14,669

)

 

Net loss per common share, basic and diluted

 

$

(0.45

)

 

$

(0.85

)

 

Weighted-average shares used to compute net loss per common share, basic and diluted

 

 

18,782,287

 

 

 

17,317,042

 

 

 

 

 

 

 

 

 

 

1Operating expenses include stock-based compensation as follows:

 

 

 

 

 

 

 

Research and development

 

$

903

 

 

$

736

 

 

General and administrative

 

 

2,710

 

 

 

2,460

 

 

Sales and marketing

 

 

355

 

 

 

358

 

 

Total stock-based compensation

 

$

3,968

 

 

$

3,554

 

 

EVERSPIN TECHNOLOGIES, INC.

Reconciliation of Adjusted EBITDA

(In thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

 

Dec 31, 2020

 

Sep 30, 2020

 

Dec 31, 2019

Adjusted EBITDA reconciliation:

Net loss

$ (1,591

)

$ (3,895

)

$ (3,081

)

Depreciation and amortization

370

 

799

 

397

 

Stock-based compensation expense

1,335

 

910

 

1,157

 

Interest Expense

164

 

157

 

180

 

Restructuring Expense

782

 

Adjusted EBITDA

$ 278

 

$ (2,029

)

$ (565

)

EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(8,512

)

 

$

(14,669

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,982

 

 

 

1,694

 

Loss on disposal of property and equipment

 

 

30

 

 

 

20

 

Stock-based compensation

 

 

3,968

 

 

 

3,554

 

Non-cash gain on warrant revaluation

 

 

(2

)

 

 

(3

)

Non-cash interest expense

 

 

323

 

 

 

290

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(1,808

)

 

 

1,723

 

Inventory

 

 

2,142

 

 

 

1,234

 

Prepaid expenses and other current assets

 

 

269

 

 

 

149

 

Accounts payable

 

 

(820

)

 

 

202

 

Accrued liabilities

 

 

(303

)

 

 

(2,210

)

Lease liabilities

 

 

(192

)

 

 

(100

)

Net cash used in operating activities

 

 

(2,923

)

 

 

(8,116

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(320

)

 

 

(861

)

Net cash used in investing activities

 

 

(320

)

 

 

(861

)

Cash flows from financing activities

 

 

 

 

 

 

Payments on debt

 

 

—

 

 

 

(4,840

)

Payments of debt issuance costs

 

 

—

 

 

 

(80

)

Payments on finance lease obligation

 

 

(9

)

 

 

(11

)

Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan

 

 

1,280

 

 

 

282

 

Proceeds from issuance of common stock in at-the-market offering, net of issuance costs

 

 

2,084

 

 

 

4,734

 

Net cash provided by financing activities

 

 

3,355

 

 

 

85

 

Net increase (decrease) in cash and cash equivalents

 

 

112

 

 

 

(8,892

)

Cash and cash equivalents at beginning of period

 

 

14,487

 

 

 

23,379

 

Cash and cash equivalents at end of period

 

$

14,599

 

 

$

14,487

 

Supplementary cash flow information:

 

 

 

 

 

 

Interest paid

 

$

342

 

 

$

480

 

Cash paid for taxes

 

$

—

 

 

$

48

 

Operating cash flows paid for operating leases

 

$

1,736

 

 

$

1,693

 

Financing cash flows paid for finance leases

 

$

9

 

 

$

11

 

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

 

 

$

895

 

Purchases of property and equipment in accounts payable and accrued liabilities

 

$

216

 

 

$

57

 

Bonus settled in restricted stock units

 

$

(49

)

 

$

—

 

Modification of warrant

 

$

—

 

 

$

36

 

Issuance of warrant with debt

 

$

152

 

 

$

—

 

EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

Three Months Ended December 31,

 

 

 

 

 

2020

 

 

2019

 

Product sales

$

9,709

 

$

9,199

 

Licensing, royalty, and other revenue

 

268

 

 

454

 

Total revenue

 

9,977

 

 

9,653

 

Cost of sales

 

4,759

 

 

4,480

 

Gross profit

 

5,218

 

 

5,173

 

Operating expenses:1

 

 

 

 

Research and development

 

2,513

 

 

3,271

 

General and administrative

 

2,976

 

 

2,913

 

Sales and marketing

 

912

 

 

1,270

 

Restructuring

 

 

 

782

 

Total operating expenses

 

6,401

 

 

8,236

 

Loss from operations

 

(1,183

)

 

(3,063

)

Interest expense

 

(164

)

 

(180

)

Other (expense) income, net

16

 

163

 

Loss before Income Taxes

 

(1,331

)

 

(3,081

)

Income tax expense

 

(260

)

 

 

Net loss and comprehensive loss

$

(1,591

)

$

(3,081

)

 

 

 

 

Net loss per common share, basic and diluted

$

(0.08

)

$

(0.18

)

Weighted-average shares used to compute net loss per common share, basic and diluted

 

18,782,287

 

 

17,317,042

 

 

1Operating expenses include stock-based compensation as follows:

Research and development

$

365

 

$

768

 

General and administrative

822

 

137

 

Sales and marketing

 

148

 

 

167

 

Total stock-based compensation

$

1,335

 

$

1,072

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006144/en/

Company Contact: Daniel Berenbaum, CFO T: 480-347-1099 E: daniel.berenbaum@everspin.com