InvenSense Inc. (NYSE: INVN), a leading provider of MEMS sensor
platform solutions, today announced results for its fourth quarter
and fiscal year 2016, ended April 3, 2016.
Net revenue for the fourth quarter of fiscal 2016 was $79.5
million, down 34 percent from $120.0 million for the third quarter
of fiscal 2016, and down 20 percent from $99.3 million for the
fourth quarter of fiscal 2015.
Gross margin determined in accordance with U.S. generally
accepted accounting principles (GAAP) was 41 percent for the fourth
quarter of fiscal 2016, consistent with 41 percent for the third
quarter of fiscal 2016. GAAP gross margin for the fourth 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 45 percent for the fourth quarter
of fiscal 2016, up from 44 percent for the third quarter of fiscal
2016.
GAAP net loss for the fourth quarter of fiscal 2016 was $22.9
million, or $0.25 per share. By comparison, GAAP net income was
$1.9 million, or $0.02 per diluted share, for the third quarter of
fiscal 2016. GAAP net loss for the fourth quarter of fiscal 2016
included stock-based compensation and related payroll taxes,
accreting interest expense on convertible notes, amortization of
acquisition intangibles and other adjustments. 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 fourth
quarter of fiscal 2016 was $1.5 million, or $0.02 per diluted
share, compared with net income of $16.7 million, or $0.18 per
diluted share, for the third 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 Condensed Consolidated Statements of
Operations below.
Fiscal Year 2016 Results
Net revenue for the fiscal year 2016 was $418.4 million, up
$46.4 million, or 12% from $372.0 million for the fiscal year
2015.
GAAP net loss for the fiscal year 2016 was $21.2 million, or
$0.23 per share, compared with net loss of $1.1 million, or $0.01
per share for the fiscal year 2015. On a non-GAAP basis, net income
for the fiscal year 2016 was $45.6 million, or $0.49 per diluted
share. This compares with non-GAAP net income of $42.7 million, or
$0.46 per diluted share for the fiscal year 2015.
Management Qualitative Comments
"Q4 was a solid quarter, capping off a productive year for
InvenSense," said Behrooz Abdi, president and CEO. "Throughout
fiscal 2016, we drove significant technology advancement in key use
cases that are fueling sensor adoption today. These use cases can
be applied across a variety of vertical markets and applications,
which we believe will enable us to maximize our R&D investments
and drive significant TAM expansion. Our market-leading solutions
continued to gain traction in emerging Internet of Things (IoT)
platforms such as drones, virtual and augmented reality, wearables,
smart home, and industrial applications. We believe that the broad
applicability of our portfolio positions us for continued
diversification and growth in these exciting markets."
Fourth 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 and annual 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
86096939. 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 86096939. 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, accreting interest
expense on convertible notes, amortization of acquisition-related
intangible assets, certain legal and litigation expenses,
contingent consideration adjustment, legal settlement expense, 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 other companies in our
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
technology advantage and the benefits thereof, increased demand for
our products, our traction of IoT market and our prospects for
growth and diversifications. 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 ability to execute on our plan of
diversification and our success in growing our revenues in the
Internet of Things applications; 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. 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 Fiscal Years Ended April
3, December 27, March 29,
April 3, March 29, 2016
2015 2015 2016 2015 Net revenue $
79,525 $ 120,029 $ 99,279 $ 418,395 $ 372,019 Costs of revenue
46,590 70,228 56,333
244,257 216,160 Gross profit 32,935
49,801 42,946 174,138 155,859 Operating expenses: Research and
development 26,432 25,690 25,231 97,368 90,623 Selling, general and
administrative 16,860 14,295 15,325 62,165 59,386 Legal settlement
accrual - - -
11,708 - Total operating expenses
43,292 39,985 40,556
171,241 150,009 Income (loss) from operations
(10,357 ) 9,816 2,390 2,897 5,850 Interest (expense) (3,071 )
(2,798 ) (2,659 ) (11,358 ) (10,553 ) Other income, net 262
(35 ) 269 392
1,368 Income (loss) before income taxes (13,166 ) 6,983 -
(8,069 ) (3,335 ) Income tax provision (benefit) 9,780
5,093 (399 ) 13,141
(2,255 ) Net income (loss) $ (22,946 ) $ 1,890 $ 399
$ (21,210 ) $ (1,080 ) Net income (loss) per share:
Basic $ (0.25 ) $ 0.02 $ 0.00 $ (0.23 ) $ (0.01 )
Diluted $ (0.25 ) $ 0.02 $ 0.00 $ (0.23 ) $ (0.01 )
Weighted average shares outstanding used in computing net
income per share: Basic 92,487 91,957
90,359 91,787 89,359
Diluted 92,487 92,922
92,619 91,787 89,359
INVENSENSE, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended Fiscal Years Ended April
3, December 27,
March 29, April 3,
March 29, 2016 2015 2015 2016
2015 GAAP net income (loss) $ (22,946 ) $ 1,890 $ 399
$ (21,210 ) $ (1,080 ) Adjustments: Stock based compensation
expense and related payroll taxes 9,517 8,198 7,954 35,813 31,140
Convertible note accretion interest expense 2,237 2,034 1,926 8,228
7,484 Amortization of acquisition-related intangible assets 2,199
2,200 2,034 8,687 6,940 Amortization of fair value write-up of
acquired inventory - - - 146 Business acquisition costs - 198 119
198 3,388 Legal settlement - - - 11,708 - Patent litigation legal
expense, net 120 (138 ) 905 1,236 3,304 Gain on equity investment -
- - - (890 ) Write-off of in-process research and development - - -
- 770 Contingent consideration adjustment - - - (5,307 ) - Other -
- - - 68 Income tax effect of pretax non-GAAP adjustments and other
discrete tax items 10,358 2,288
(1,896 ) 6,247 (8,607 )
Non-GAAP net
income $ 1,485 $ 16,670 $ 11,441 $ 45,600
$ 42,663
GAAP net income (loss) per share
of common stock, diluted (0.25 ) $ 0.02 $ 0.00
$ (0.23 ) $ (0.01 )
Non-GAAP net income per share of
common stock, diluted 0.02 $ 0.18 $ 0.12
$ 0.49 $ 0.46
GAAP Gross profit
$ 32,935 $ 49,801 $ 42,946 $ 174,138 $ 155,859 Adjustments: Stock
based compensation expense and related payroll taxes 669 628 621
2,493 2,431 Amortization of acquisition-related intangible assets
2,143 2,144 1,978 8,463 6,716 Amortization of fair value write-up
of acquired inventory - - -
- 146
Non-GAAP Gross
profit $ 35,747 $ 52,573 $ 45,545 $
185,094 $ 165,152
GAAP Operating
Expense $ 43,292 $ 39,985 $ 40,556 $ 171,241 $ 150,009
Adjustments: Stock based compensation expense and related payroll
taxes 8,848 7,570 7,333 33,320 28,709 Amortization of
acquisition-related intangible assets 56 56 56 224 224 Business
acquisition costs - 198 119 198 3,388 Legal settlement accrual - -
- 11,708 - Patent litigation legal expense, net 120 (138 ) 905
1,236 3,304 Write-off of in-process research and development - - -
- 770 Contingent consideration adjustment - - - (5,307 ) - Other
- - - -
68
Non-GAAP Operating Expense $ 34,268
$ 32,299 $ 32,143 $ 129,862 $ 113,546
INVENSENSE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
April 3, March 29, 2016 2015
Assets Current assets: Cash and cash equivalents $ 41,105 $
85,637 Short-term investments 243,755 129,919 Accounts receivable
41,447 44,522 Inventories 62,297 75,105 Prepaid expenses and other
current assets 9,250 14,950 Total current assets 397,854 350,133
Property and equipment, net 36,271 41,849 Intangible assets, net
43,169 45,508 Goodwill 139,175 139,175 Other assets 5,992 9,019
Total assets $ 622,461 $ 585,684
Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
35,200 $ 23,130 Accrued liabilities 30,248 31,991 Total current
liabilities 65,448 55,121 Long-term debt 151,038 142,810 Other
long-term liabilities 27,230 28,252 Total liabilities 243,716
226,183 Stockholders' equity: Preferred stock:
Preferred stock, $0.001 par value —
20,000 shares authorized, no shares
issued and outstanding and outstanding
at April 3, 2016 and March 29, 2015
- - Common stock:
Common stock, $0.001 par value —
750,000 shares authorized, 93,010
shares issued and outstanding at
April 3, 2016, 90,894 shares issued
and outstanding at March 29, 2015
303,153 262,677 Accumulated other comprehensive (loss) (26) (4)
Retained earnings 75,618 96,828 Total stockholders' equity 378,745
359,501 Total liabilities and stockholders' equity $ 622,461 $
585,684
INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended Fiscal Years Ended April
3, December 27, March 29,
April 3, March 29, 2016
2015 2015 2016 2015 Cash flows from
operating activities: Net income (loss) $ (22,946 ) $ 1,890 $
399 $ (21,210 ) $ (1,080 ) Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation 3,221 3,303
2,847 12,769 10,203 Amortization of intangible assets 2,290 2,295
2,074 9,088 7,003 Non cash interest expense 2,237 2,033 1,926 8,228
7,505 Write-off of in-process research and development - - - - 770
Loss on disposal of property and equipment - - 95 - 552 Loss (gain)
on other investments 525 - - 525 (890 ) Stock-based compensation
expense 9,003 8,193 7,566 34,879 30,504 Contingent consideration
adjustment - - - (5,307 ) - Deferred income tax assets 8,809 5,113
(272 ) 10,424 (5,484 ) Tax effect of employee benefit plans 876
(118 ) - - 42 Excess tax benefit from stock-based compensation (876
) - - (42 ) Changes in operating assets and liabilities: Accounts
receivable 1,082 7,905 29,413 3,075 (4,895 ) Inventories (631 ) 18
(7,304 ) 12,808 (2,072 ) Prepaid expenses and other current assets
(610 ) 104 7,778 1,607 8,778 Other assets (498 ) 52 25 (2,279 )
(135 ) Accounts payable (9,118 ) 9,313 2,494 12,639 3,122 Accrued
liabilities 2,776 (12,856 ) 4,737
5,792 12,961 Net cash provided
by (used in) operating activities (3,860 ) 27,245
51,778 83,038 66,842
Cash flows from investing activities: Purchase
of property and equipment (1,538 ) (2,280 ) (2,031 ) (7,771 )
(27,315 ) Sale and maturities of available-for-sale investments
55,064 43,081 33,252 169,988 145,974 Purchase of available-for-sale
investments (45,249 ) (93,553 ) (55,845 ) (284,534 ) (55,845 )
Other non-marketable investments (850 ) - - (850 ) Purchase of
intangible assets - - (2,120 ) - (2,120 ) Acquisitions, net of cash
acquired (6,700 ) - -
(6,700 ) (71,326 ) Net cash provided by (used in) investing
activities 727 (52,752 ) (26,744 )
(129,867 ) (10,632 )
Cash flows from
financing activities: Proceeds from exercise of common stock
865 1,130 2,602 5,586 10,425 Payments of long-term debt and capital
lease obligations - - - - (9 ) Payments of acquisition holdback
(1,380 ) - - (1,380 ) - Payments contingent consideration - (1,908
) (7,056 ) (1,909 ) (7,056 ) Excess tax benefit from stock-based
compensation 876 - -
- 42 Net cash provided by (used in)
financing activities 361 (778 ) (4,454
) 2,297 3,402 Net increase
(decrease) in cash and cash equivalents (2,772 ) (26,285 ) 20,580
(44,532 ) 59,612 Cash and cash equivalents: Beginning of period
43,877 70,162 65,057
85,637 26,025 End of period $ 41,105
$ 43,877 $ 85,637 $ 41,105 $ 85,637
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For Investor Inquiries, Contact:Green Communications
Consulting, LLCLeslie Green,
650-312-9060leslie@greencommunicationsllc.comir@invensense.comorFor
Media Inquiries, Contact:InvenSense, Inc.David Almoslino,
408-501-2278Senior DirectorCorporate Marketingpr@invensense.com
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