SAN JOSE, Calif.–(BUSINESS WIRE)–May 9, 2016– 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 theInternet 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, 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) |
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| 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 | ||||||||||||||||||||||||||||||||||
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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 | 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 | |||||||||||||||||||||||||||||
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INVENSENSE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) (Unaudited) |
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| 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: | |||||||||||||||
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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 |
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| – | – | ||||||||||||||
| Common stock: | |||||||||||||||
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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 |
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| 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 | |||||||||||||
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INVENSENSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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| 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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Source: InvenSense Inc.
