InvenSense, Inc. (NYSE: INVN), the leading provider of MEMS
sensor platforms, today announced results for its second quarter of
fiscal 2016, ended September 27, 2015.
Net revenue for the second quarter of fiscal 2016 was $112.5
million, up 6 percent from $106.3 million for the first quarter of
fiscal 2016, and up 25 percent from $90.2 million for the second
quarter of fiscal 2015.
Gross margin determined in accordance with U.S. generally
accepted accounting principles (GAAP) was 41 percent for the second
quarter of fiscal 2016, slightly down from 42 percent for the first
quarter of fiscal 2016. GAAP gross margin for second quarter of
fiscal 2016 included stock-based compensation and related payroll
taxes, and amortization of acquisition intangibles. Excluding these
items, non-GAAP gross margin was 44 percent for the second quarter
of fiscal 2016, slightly down from 45 percent for the first quarter
of fiscal 2016.
GAAP net income for the second quarter of fiscal 2016 was $5.7
million, or 6 cents per diluted share. By comparison, GAAP net loss
was $5.8 million, or 6 cents per diluted share for the first
quarter of fiscal 2016. GAAP net income for the second quarter of
fiscal 2016 included stock-based compensation and related payroll
taxes, accreting interest expense on convertible notes,
amortization of acquisition intangibles, certain legal and
litigation expenses and the income tax effect of non-GAAP
adjustments. Excluding these items, non-GAAP net income for the
second quarter of fiscal 2016 was $14.9 million, or 16 cents per
diluted share, compared with $12.6 million, or 14 cents per diluted
share, for the first quarter of fiscal 2016.
The reconciliation between GAAP and non-GAAP financial results
for all referenced periods is provided in a table immediately
following the Unaudited GAAP Condensed Consolidated Statements of
Operations below.
Management Qualitative Comments
“Q2 was a solid quarter in which revenue came in within our
expectations, and we outperformed our bottom line guidance,” said
Behrooz Abdi, president and CEO. “We continue to expand our
software-enabled sensor platform and are delivering high-value IoT
use cases that provide strategic differentiation and tangible
end-user experience enhancements. This is allowing us to drive more
content into our current customer base, and also to solidify our
6-axis customer wins. With our success in proving out real use
cases in mobile, we are poised to expand meaningfully to
applications spanning a number of vertical markets that offer
significant new opportunity for growth and diversification.”
Second Quarter of Fiscal Year 2016 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 (877) 788-4691 ten
minutes prior to the start of the call, using the passcode
59357002. International callers, please dial (530) 379-4724. 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 59357002. 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 three 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, certain legal and
litigation expenses, business acquisition costs, contingent
consideration adjustment, amortization of acquisition-related
intangible assets, accreting interest expense on convertible notes
and other adjustments. 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 our non-GAAP
measures. Also, other companies, including 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 any projection of revenue, gross margin,
expense, earnings, stockholder return or other financial items
discussed in this press release, including the strength of our
competitive positioning, the strength of design activity, increased
demand for our products and design wins contributing to revenue.
Investors are cautioned that all forward-looking statements in this
release involve risks and uncertainty that can cause actual results
to differ from those currently anticipated, due to a number of
factors, including without limitation, intense competition in our
industry; our achievement of design wins; our dependence on a
limited number of customers for a substantial portion of our
revenues; the continued adoption of motion tracking and motion
sensing as an interface in consumer electronics products; decreases
in average selling prices for our products; our lack of long-term
supply contracts and dependence on limited sources of supply;
consumer acceptance of our customers’ products that incorporate our
solutions and our ability to continue to develop and introduce new
and enhanced products on a timely basis; as well as changes in
economic conditions in our markets and other risk factors discussed
in InvenSense’s Annual Report on Form 10-K for the year ended March
29, 2015, subsequent quarterly reports on Form 10-Q, recent current
reports on Form 8-K, 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. The company’s patented InvenSense
Fabrication Platform and MotionFusion® technology address the
emerging needs of many mass-market consumer applications via
improved performance, accuracy, and intuitive motion-, gesture- and
sound-based interfaces. InvenSense technology can be found in
Mobile, Wearables, Smart Home, Industrial, and Automotive products.
InvenSense is headquartered in San Jose, California and has offices
in Boston, China, Taiwan, Korea, Japan, France, Canada, Slovakia
and Italy. More information can be found at www.invensense.com or
follow us on Twitter at @InvenSense.
©2015 InvenSense, Inc. All rights reserved. InvenSense, Sensing
Everything, FireFly, UltraPrint, MotionTracking, MotionProcessing,
MotionProcessor, MotionFusion, MotionApps, 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 September 27,2015
June 28,2015 September 28,2014
Net revenue $ 112,545 $ 106,296 $ 90,195 Costs of revenue
65,974 61,465 58,854 Gross
profit 46,571 44,831 31,341 Operating expenses: Research and
development 24,991 20,255 21,593 Selling, general and
administrative 15,186 15,824 14,592 Legal settlement accrual
- 11,708 - Total operating
expenses 40,177 47,787 36,185
Income (loss) from operations 6,394 (2,956 ) (4,844 )
Interest (expense) (2,765 ) (2,724 ) (2,620 ) Other income, net
104 61 1,199 Income
(loss) before income taxes 3,733 (5,619 ) (6,265 ) Income tax
provision (benefit) (1,960 ) 228 603
Net income (loss) $ 5,693 $ (5,847 ) $ (6,868 )
Net income (loss) per share: Basic $ 0.06 $ (0.06 ) $
(0.08 ) Diluted $ 0.06 $ (0.06 ) $ (0.08 )
Weighted average shares outstanding used
in computing net income (loss) per share:
Basic 91,574 91,076 88,997
Diluted 92,569 91,076
88,997
INVENSENSE, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended September 27,2015
June 28,2015 September 28,2014
GAAP net income (loss) $ 5,693 $ (5,847 ) $ (6,868 )
Adjustments: Stock based compensation expense 9,249 8,849 7,136
Convertible note accretion interest expense 1,999 1,958 1,856
Amortization of acquisition-related intangible assets 2,254 2,034
1,628 Business acquisition costs - - 1,060 Legal settlement accrual
- 11,708 - Patent litigation legal expense, net 144 1,110 477 Gain
on equity investment - - (890 ) Write-off of in-process research
and development - - 770 Contingent consideration adjustment -
(5,307 ) - Income tax effect of pretax non-GAAP adjustments
(4,476 ) (1,923 ) (267 )
Non-GAAP net income $
14,863 $ 12,582 $ 4,902
GAAP net
income (loss) per share of common stock, diluted $ 0.06
$ (0.06 ) $ (0.08 )
Non-GAAP net income per share of common
stock, diluted $ 0.16 $ 0.14 $ 0.05
GAAP Gross profit $ 46,571 $ 44,831 $ 31,341 Adjustments:
Stock based compensation expense 587 609 646 Amortization of
acquisition-related intangible assets 2,198
1,978 1,572
Non-GAAP Gross profit $
49,356 $ 47,418 $ 33,559
GAAP
Operating Expense $ 40,177 $ 47,787 $ 36,185 Adjustments: Stock
based compensation expense 8,662 8,240 6,490 Amortization of
acquisition-related intangible assets 56 56 56 Business acquisition
costs - - 1,060 Legal settlement accrual - 11,708 - Patent
litigation legal expense, net 144 1,110 477 Write-off of in-process
research and development - - 770 Contingent consideration
adjustment - (5,307 ) -
Non-GAAP Operating Expense $ 31,315 $ 31,980 $
27,332
INVENSENSE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
September 27,2015 March 29,2015
Assets Current assets: Cash and cash equivalents $ 70,162 $
85,637 Short-term investments 203,221 129,919 Accounts receivable
50,434 44,522 Inventories 61,684 75,105 Prepaid expenses and other
current assets 13,143 14,950 Total
current assets 398,644 350,133 Property and equipment, net 39,091
41,849 Intangible assets, net 41,005 45,508 Goodwill 139,175
139,175 Other assets 14,424 9,019 Total
assets $ 632,339 $ 585,684
Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
34,951 $ 23,130 Accrued liabilities 43,768
31,991 Total current liabilities 78,719 55,121 Long-term
debt 146,767 142,810 Other long-term liabilities 27,197
28,252 Total liabilities 252,683
226,183 Stockholders' equity: Preferred stock:
Preferred stock, $0.001 par value — 20,000
shares authorized, no shares issued and outstanding at September
27, 2015 and March 29, 2015
- - Common stock:
Common stock, $0.001 par value — 750,000
shares authorized, 92,012 shares issued and outstanding at
September 27, 2015, 90,894 shares issued and outstanding at March
29, 2015
283,084 262,677 Accumulated other comprehensive (loss) (102 ) (4 )
Retained earnings 96,674 96,828 Total
stockholders' equity 379,656 359,501
Total liabilities and stockholders' equity $ 632,339 $
585,684
INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended September 27,2015
June 28,2015 September 28,2014
Cash flows from operating activities: Net income (loss) $
5,693 $ (5,847 ) $ (6,868 ) Adjustments to reconcile net income
(loss) to net cash provided by operating activities: Depreciation
3,195 3,050 2,562 Amortization of intangible assets 2,361 2,142
1,627 Non cash interest expense 2,000 1,958 1,856 Write-off of
in-process research and development - - 770 Loss on disposal of
property and equipment - - 326 Gain on equity investment - - (890 )
Stock-based compensation expense 9,048 8,635 7,003 Contingent
consideration adjustment - (5,307 ) - Deferred income tax assets
(1,674 ) (1,824 ) 27 Tax effect of employee benefit plans (457 )
(301 ) - Changes in operating assets and liabilities: Accounts
receivable (47 ) (5,865 ) (29,949 ) Inventories 2,807 10,614 2,502
Prepaid expenses and other current assets 1,154 959 (1,727 ) Other
assets (1,715 ) (118 ) (412 ) Accounts payable 8,253 4,191 5,628
Accrued liabilities 2,897 12,975
8,110 Net cash provided by (used in) operating activities
33,515 25,262 (9,435 )
Cash flows from investing activities: Purchase of property
and equipment (1,611 ) (2,342 ) (9,200 ) Sale and maturities of
available-for-sale investments 56,478 15,365 88,141 Purchase of
available-for-sale investments (91,305 ) (54,427 ) - Acquisitions,
net of cash acquired - - (71,446
) Net cash provided by (used in) investing activities
(36,438 ) (41,404 ) 7,495
Cash flows
from financing activities: Proceeds from exercise of common
stock 226 3,364 3,938 Net
cash provided by financing activities 226
3,364 3,938 Net increase (decrease) in
cash and cash equivalents (2,697 ) (12,778 ) 1,998 Cash and cash
equivalents: Beginning of period 72,859 85,637
36,426 End of period $ 70,162 $ 72,859
$ 38,424
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version on businesswire.com: http://www.businesswire.com/news/home/20151028006699/en/
For Investor Inquiries, Contact:Green Communications
Consulting, LLCLeslie Green,
650-312-9060leslie@greencommunicationsllc.comir@invensense.comorFor
Press Inquiries, Contact:InvenSense, Inc.David Almoslino,
408-501-2278Senior DirectorMarketing and
Communicationspr@invensense.com
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