InvenSense Inc. (NYSE:INVN), a leading provider of MEMS sensor
platform solutions, today announced results for its first quarter
of fiscal year 2017, ended July 3, 2016.
Net revenue for the first quarter of fiscal 2017 was $60.6
million, down 24 percent from $79.5 million for the fourth quarter
of fiscal 2016, and down 43 percent from $106.3 million for the
first quarter of fiscal 2016.
Gross margin determined in accordance with U.S. generally
accepted accounting principles (GAAP) was 41 percent for the first
quarter of fiscal 2017, consistent with the fourth quarter of
fiscal 2016. GAAP gross margin for the first 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 first
quarter of fiscal 2017, up from non-GAAP gross margin of 45 percent
for the fourth quarter of fiscal 2016.
GAAP net loss for the first quarter of fiscal 2017 was $20.2
million, or $0.22 per share. By comparison, GAAP net loss was $22.9
million, or $0.25 per share, for the fourth quarter of fiscal 2016.
GAAP net loss for the first quarter of fiscal 2017 included
stock-based compensation expense and related payroll taxes,
accreting interest expense on convertible notes, amortization of
acquisition-related intangibles 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 loss for
the first quarter of fiscal 2017 was $4.9 million, or $0.05 per
share, compared with non-GAAP net income of $1.5 million, or $0.02
per diluted share, for the fourth 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.
Management Qualitative Comments
“While worldwide consumer and mobile markets were somewhat soft
in the first fiscal quarter of 2017, the InvenSense team delivered
on our financial guidance, posting incrementally higher non-GAAP
gross margins in a competitive environment," said Behrooz Abdi,
president and CEO. "This was the result of improved manufacturing
efficiency and product mix, as well as our traction in both mobile
and non-mobile markets. We are successfully leveraging investments
in our robust sensor platform to integrate and enable high-value,
consumer-driven use cases, such as image stabilization, augmented
and virtual reality, and inertial navigation, for applications
spanning a number of vertical markets. These are creating exciting
growth opportunities that we believe play well into our focused
strengths.”
First 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 (877) 788-4691 ten
minutes prior to the start of the call, using the passcode
46679441. 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 46679441. 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, contingent consideration adjustments related to
acquisition milestone payments, patent-related settlement expense
and litigation-related expenses, including patent-related
litigation expense in the three months ended June 28, 2015. 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 any projection of revenue, gross margin,
expense, earnings, stockholder return or other financial items
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 July 3,2016
April 3,2016 June 28,2015 Net revenue $
60,636 $ 79,525 $ 106,296 Costs of revenue 35,891
46,590 61,465 Gross profit 24,745
32,935 44,831 Operating expenses: Research and development 26,541
26,432 20,255 Selling, general and administrative 13,862 16,860
15,824 Legal settlement - -
11,708 Total operating expenses 40,403
43,292 47,787 Loss from operations (15,658 )
(10,357 ) (2,956 ) Interest (expense) (2,881 ) (3,071 ) (2,724 )
Other income (expense), net 226 262
61 Loss before income taxes (18,313 ) (13,166 )
(5,619 ) Income tax provision 1,872 9,780
228 Net loss $ (20,185 ) $ (22,946 ) $ (5,847
) Net loss per share: Basic $ (0.22 ) $ (0.25 ) $ (0.06 )
Diluted $ (0.22 ) $ (0.25 ) $ (0.06 )
Weighted average shares outstanding used
in computing net loss per share:
Basic 93,236 92,487 91,076
Diluted 93,236 92,487
91,076
INVENSENSE, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended July 3,2016
April 3,2016 June 28,2015 GAAP net
loss $ (20,185 ) $ (22,946 ) $ (5,847 ) Adjustments: Stock
based compensation expense and related payroll taxes 8,273 9,517
8,849 Convertible note accretion interest expense 2,113 2,237 1,958
Amortization of acquisition-related intangible assets 2,284 2,199
2,034 Legal settlement - - 11,708 Litigation-related expenses 60
120 1,110 Contingent consideration adjustment - - (5,307 )
Income tax effect of pretax non-GAAP
adjustments and other discrete tax items
2,597 10,358 (1,923 )
Non-GAAP net income (loss) $ (4,858 ) $ 1,485 $
12,582
GAAP net loss per share of common stock
$ (0.22 ) $ (0.25 ) $ (0.06 )
Non-GAAP net income (loss) per
share of common stock, diluted $ (0.05 ) $ 0.02 $ 0.14
GAAP Gross profit $ 24,745 $ 32,935 $ 44,831
Adjustments: Stock based compensation expense and related payroll
taxes 619 669 609 Amortization of acquisition-related intangible
assets 2,228 2,143 1,978
Non-GAAP Gross profit $ 27,592 $ 35,747 $
47,418
GAAP Operating Expenses $ 40,403 $
43,292 $ 47,787 Adjustments: Stock based compensation expense and
related payroll taxes 7,654 8,848 8,240 Amortization of
acquisition-related intangible assets 56 56 56 Legal settlement
accrual - - 11,708 Patent litigation legal expense, net 60 120
1,110 Contingent consideration adjustment - -
(5,307 )
Non-GAAP Operating Expenses $ 32,633
$ 34,268 $ 31,980
INVENSENSE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
July 3,2016 April 3,2016
Assets Current assets: Cash and cash equivalents $ 23,054 $
41,105 Short-term investments 247,274 243,755 Accounts receivable
37,945 41,447 Inventories 51,626 62,297 Prepaid expenses and other
current assets 8,012 9,250 Total
current assets 367,911 397,854 Property and equipment, net 35,134
36,271 Intangible assets, net 40,795 43,169 Goodwill 139,175
139,175 Other assets 5,750 5,992 Total
assets $ 588,765 $ 622,461
Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
13,282 $ 35,200 Accrued liabilities 27,261
30,248 Total current liabilities 40,543 65,448 Long-term
debt 153,151 151,038 Other long-term liabilities 26,755
27,230 Total liabilities 220,449
243,716 Stockholders' equity: Preferred stock:
Preferred stock, $0.001 par value — 20,000
shares authorized, no shares issued and outstanding at July 3, 2016
and April 3, 2016
- - Common stock:
Common stock, $0.001 par value — 750,000
shares authorized, 93,641 shares issued and outstanding at July 3,
2016, 93,010 shares issued and outstanding at April 3, 2016
312,912 303,153 Accumulated other comprehensive (loss) (29 ) (26 )
Retained earnings 55,433 75,618 Total
stockholders' equity 368,316 378,745
Total liabilities and stockholders' equity $ 588,765 $
622,461
INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended July 3,2016
April 3,2016 June 28,2015
Cash flows from operating activities: Net loss $ (20,185 ) $
(22,946 ) $ (5,847 ) Adjustments to reconcile net income to net
cash provided by (used in) operating activities: Depreciation 3,310
3,221 3,050 Amortization of intangible assets 2,375 2,290 2,142 Non
cash interest expense 2,113 2,237 1,958 Loss on other investments
325 525 - Stock-based compensation expense 8,176 9,003 8,635
Contingent consideration adjustment - - (5,307 ) Deferred income
tax assets 80 8,809 (1,824 ) Tax effect of employee benefit plans -
876 (301 ) Excess tax benefit from stock-based compensation - (876
) Changes in operating assets and liabilities: Accounts receivable
3,502 1,082 (5,865 ) Inventories 10,670 (631 ) 10,614 Prepaid
expenses and other current assets 833 (610 ) 959 Other assets 207
(498 ) (118 ) Accounts payable (22,282 ) (9,118 ) 4,191 Accrued
liabilities (3,379 ) 2,776 12,975
Net cash provided by (used in) operating activities
(14,255 ) (3,860 ) 25,262
Cash flows
from investing activities: Purchase of property and equipment
(1,892 ) (1,538 ) (2,342 ) Sale and maturities of
available-for-sale investments 56,448 55,064 15,365 Purchase of
available-for-sale investments (60,055 ) (45,249 ) (54,427 ) Other
non-marketable investments - (850 ) - Acquisitions, net of cash
acquired - (6,700 ) - Net cash
provided by (used in) investing activities (5,499 )
727 (41,404 )
Cash flows from financing
activities: Proceeds from exercise of common stock 1,703 865
3,364 Payments of acquisition holdback - (1,380 ) - Excess tax
benefit from stock-based compensation - 876
- Net cash provided by financing activities
1,703 361 3,364
Net decrease in cash and cash equivalents (18,051 ) (2,772 )
(12,778 ) Cash and cash equivalents: Beginning of period
41,105 43,877 85,637 End of
period $ 23,054 $ 41,105 $ 72,859
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version on businesswire.com: http://www.businesswire.com/news/home/20160728006575/en/
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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