InvenSense Announces Second Quarter Of Fiscal Year 2017 Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 3, 2016-- InvenSense Inc. (NYSE: INVN), a leading provider of MEMS sensor platform solutions, today announced results for its second quarter of fiscal year 2017, ended October 2, 2016.
Net revenue for the second quarter of fiscal 2017 was $79.8 million, up 32 percent from $60.6 million for the first quarter of fiscal 2017 and down 29 percent from $112.5 million for the second quarter of fiscal 2016.
Gross margin determined in accordance with U.S. generally accepted accounting principles (GAAP) was 42 percent for the second quarter of fiscal 2017, up from 41 percent for the first quarter of fiscal 2017. GAAP gross margin for the second 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 second quarter of fiscal 2017, consistent with the non-GAAP gross margin for the first quarter of fiscal 2017.
GAAP net loss for the second quarter of fiscal 2017 was $12.5 million, or $.13 per share. By comparison, GAAP net loss was $20.2 million, or $.22 per share, for the first quarter of fiscal 2017. GAAP net loss for the second quarter of fiscal 2017 included stock-based compensation expense and related payroll taxes, accreting interest expense on convertible notes, amortization of acquisition-related intangibles, business acquisition costs 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 income for the second quarter of fiscal 2017 was $1.7 million, or $.02 per diluted share (based on the weighted average shares outstanding of 94.6 million) compared with non-GAAP net loss of $4.9 million, or $.05 per share, for the first quarter of fiscal 2017.
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
“The InvenSense team delivered solid results in the second fiscal quarter. We are encouraged that our R&D investments are beginning to pay off with new design wins which we anticipate will allow us to penetrate new markets,” said Behrooz Abdi, president and CEO. “While the consumer and mobile markets were and remain soft, we believe this design win activity will position us for strong top line growth in fiscal 2018 as we strive to diversify our business.”
Second 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 (844) 413-0862 ten minutes prior to the start of the call, using the passcode 97991032. International callers, please dial (216) 562-0454. 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 97991032. 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, business acquisition costs and litigation-related expenses. 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 our expectations with respect to the success of our R&D investments, design win activity, new market penetration, top line growth, consumer and mobile market conditions or diversification of our business 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, Californiaand has offices worldwide. For more information, go to www.invensense.tdk.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.
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INVENSENSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) |
||||||||||||||||||
| Three Months Ended | ||||||||||||||||||
| October 2, | July 3, | September 27, | ||||||||||||||||
| 2016 | 2016 | 2015 | ||||||||||||||||
| Net revenue | $ | 79,831 | $ | 60,636 | $ | 112,545 | ||||||||||||
| Costs of revenue | 46,299 | 35,891 | 65,974 | |||||||||||||||
| Gross profit | 33,532 | 24,745 | 46,571 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 28,144 | 26,541 | 24,991 | |||||||||||||||
| Selling, general and administrative | 14,869 | 13,862 | 15,186 | |||||||||||||||
| Total operating expenses | 43,013 | 40,403 | 40,177 | |||||||||||||||
| Income (loss) from operations | (9,481 | ) | (15,658 | ) | 6,394 | |||||||||||||
| Interest expense | (2,925 | ) | (2,881 | ) | (2,765 | ) | ||||||||||||
| Other income (expense), net | 138 | 226 | 104 | |||||||||||||||
| Income (loss) before income taxes | (12,268 | ) | (18,313 | ) | 3,733 | |||||||||||||
| Income tax provision (benefit) | 242 | 1,872 | (1,960 | ) | ||||||||||||||
| Net income (loss) | $ | (12,510 | ) | $ | (20,185 | ) | $ | 5,693 | ||||||||||
| Net income (loss) per share: | ||||||||||||||||||
| Basic | $ | (0.13 | ) | $ | (0.22 | ) | $ | 0.06 | ||||||||||
| Diluted | $ | (0.13 | ) | $ | (0.22 | ) | $ | 0.06 | ||||||||||
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Weighted average shares outstanding used in computing net income (loss) per share: |
||||||||||||||||||
| Basic | 93,657 | 93,236 | 91,574 | |||||||||||||||
| Diluted | 93,657 | 93,236 | 92,569 | |||||||||||||||
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INVENSENSE, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (In thousands, except per share amounts) (Unaudited) |
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| Three Months Ended | ||||||||||||||||||
| October 2, | July 3, | September 27, | ||||||||||||||||
| 2016 | 2016 | 2015 | ||||||||||||||||
| GAAP net income (loss) | $ | (12,510 | ) | $ | (20,185 | ) | $ | 5,693 | ||||||||||
| Adjustments: | ||||||||||||||||||
| Stock based compensation expense and related payroll taxes | 9,080 | 8,273 | 9,249 | |||||||||||||||
| Convertible note accretion interest expense | 2,158 | 2,113 | 1,999 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 2,415 | 2,284 | 2,254 | |||||||||||||||
| Business acquisition costs | 264 | - | - | |||||||||||||||
| Litigation-related expenses | 263 | 60 | 144 | |||||||||||||||
|
Income tax effect of pretax non-GAAP adjustments and other discrete tax items |
(6 | ) | 2,597 | (4,476 | ) | |||||||||||||
| Non-GAAP net income (loss) | $ | 1,664 | $ | (4,858 | ) | $ | 14,863 | |||||||||||
| GAAP net income (loss) per share of common stock | $ | (0.13 | ) | $ | (0.22 | ) | $ | 0.06 | ||||||||||
| Non-GAAP net income (loss) per share of common stock, diluted | $ | 0.02 | $ | (0.05 | ) | $ | 0.16 | |||||||||||
| GAAP Gross profit | $ | 33,532 | $ | 24,745 | $ | 46,571 | ||||||||||||
| Adjustments: | ||||||||||||||||||
| Stock based compensation expense and related payroll taxes | 572 | 619 | 587 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 2,359 | 2,228 | 2,198 | |||||||||||||||
| Non-GAAP Gross profit | $ | 36,463 | $ | 27,592 | $ | 49,356 | ||||||||||||
| GAAP Operating Expenses | $ | 43,013 | $ | 40,403 | $ | 40,177 | ||||||||||||
| Adjustments: | ||||||||||||||||||
| Stock based compensation expense and related payroll taxes | 8,508 | 7,654 | 8,662 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 56 | 56 | 56 | |||||||||||||||
| Business acquisition costs | 264 | - | - | |||||||||||||||
| Litigation-related expenses | 263 | 60 | 144 | |||||||||||||||
| Non-GAAP Operating Expenses | $ | 33,922 | $ | 32,633 | $ | 31,315 | ||||||||||||
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INVENSENSE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) (Unaudited) |
||||||||||||||
| October 2, | April 3, | |||||||||||||
| 2016 | 2016 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 37,047 | $ | 41,105 | ||||||||||
| Short-term investments | 239,121 | 243,755 | ||||||||||||
| Accounts receivable | 36,599 | 41,447 | ||||||||||||
| Inventories | 46,101 | 62,297 | ||||||||||||
| Prepaid expenses and other current assets | 9,187 | 9,250 | ||||||||||||
| Total current assets | 368,055 | 397,854 | ||||||||||||
| Property and equipment, net | 33,140 | 36,271 | ||||||||||||
| Intangible assets, net | 43,988 | 43,169 | ||||||||||||
| Goodwill | 143,320 | 139,175 | ||||||||||||
| Other assets | 5,778 | 5,992 | ||||||||||||
| Total assets | $ | 594,281 | $ | 622,461 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 16,507 | $ | 35,200 | ||||||||||
| Accrued liabilities | 31,123 | 30,248 | ||||||||||||
| Total current liabilities | 47,630 | 65,448 | ||||||||||||
| Long-term debt | 155,310 | 151,038 | ||||||||||||
| Other long-term liabilities | 26,703 | 27,230 | ||||||||||||
| Total liabilities | 229,643 | 243,716 | ||||||||||||
| Stockholders' equity: | ||||||||||||||
| Preferred stock: | ||||||||||||||
|
Preferred stock, $0.001 par value — 20,000 shares authorized, no shares issued and outstanding at October 2, 2016 and April 3, 2016 |
- | - | ||||||||||||
| Common stock: | ||||||||||||||
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Common stock, $0.001 par value — 750,000 shares authorized, 93,855 shares issued and outstanding at October 2, 2016, 93,010 shares issued and outstanding at April 3, 2016 |
321,956 | 303,153 | ||||||||||||
| Accumulated other comprehensive (loss) | (241 | ) | (26 | ) | ||||||||||
| Retained earnings | 42,923 | 75,618 | ||||||||||||
| Total stockholders' equity | 364,638 | 378,745 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 594,281 | $ | 622,461 | ||||||||||
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INVENSENSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
| October 2, | July 3, | September 27, | ||||||||||
| 2016 | 2016 | 2015 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | (12,510 | ) | $ | (20,185 | ) | $ | 5,693 | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation | 3,471 | 3,310 | 3,195 | |||||||||
| Amortization of intangible assets | 2,507 | 2,375 | 2,361 | |||||||||
| Non cash interest expense | 2,158 | 2,113 | 2,000 | |||||||||
| Loss on other investments | - | 325 | - | |||||||||
| Stock-based compensation expense | 9,045 | 8,176 | 9,048 | |||||||||
| Deferred income tax assets | (5 | ) | 80 | (1,674 | ) | |||||||
| Tax effect of employee benefit plans | - | - | (457 | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 1,345 | 3,502 | (47 | ) | ||||||||
| Inventories | 5,526 | 10,670 | 2,807 | |||||||||
| Prepaid expenses and other current assets | (827 | ) | 833 | 1,154 | ||||||||
| Other assets | 191 | 207 | (1,715 | ) | ||||||||
| Accounts payable | 3,659 | (22,282 | ) | 8,253 | ||||||||
| Accrued liabilities | 3,885 | (3,379 | ) | 2,897 | ||||||||
| Net cash provided by (used in) operating activities | 18,445 | (14,255 | ) | 33,515 | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | (1,892 | ) | (1,892 | ) | (1,611 | ) | ||||||
| Sale and maturities of available-for-sale investments | 86,563 | 56,448 | 56,478 | |||||||||
| Purchase of available-for-sale investments | (78,676 | ) | (60,055 | ) | (91,305 | ) | ||||||
| Other non-marketable investments | (300 | ) | - | - | ||||||||
| Operating lease deposit | (207 | ) | - | - | ||||||||
| Acquisition, net of cash acquired | (9,845 | ) | - | - | ||||||||
| Net cash used in investing activities | (4,357 | ) | (5,499 | ) | (36,438 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of common stock | - | 1,703 | 226 | |||||||||
| Payments of loan | (95 | ) | - | - | ||||||||
| Net cash provided by (used in) financing activities | (95 | ) | 1,703 | 226 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 13,993 | (18,051 | ) | (2,697 | ) | |||||||
| Cash and cash equivalents: | ||||||||||||
| Beginning of period | 23,054 | 41,105 | 72,859 | |||||||||
| End of period | $ | 37,047 | $ | 23,054 | $ | 70,162 | ||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161103006615/en/
Source: InvenSense, Inc.
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