Everspin Reports First Quarter 2020 Financial Results

Revenue Above High-End of Guidance with Significant Improvement in EPS; Guides 19% Revenue Growth for 2Q at the Midpoint

CHANDLER, Ariz.–(BUSINESS WIRE)–Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in MRAM, today announced financial results for the first quarter ended March 31, 2020.

First Quarter and Recent Highlights

  • Total revenue increased sequentially and year-over-year to $10.1 million, exceeding the high-end of guidance
  • Gross margin expanded to 52.9% from 47.7% in the prior year quarter
  • GAAP loss improved to ($0.10) per share and non-GAAP loss to ($0.05), compared to ($0.25) and ($0.21), respectively, in year-ago quarter
  • Ended quarter with cash and equivalents of $14.0 million

First quarter revenue was above the high end of our guidance range and represented our third consecutive quarter of growth as data center demand combined with the breadth of our customer base continue to be positive factors for our business,” stated Kevin Conley, Everspin’s President and CEO. “Additionally, our expense reduction initiatives and ongoing improvement in mature product costs resulted in a dramatic increase in year-over-year bottom-line results.

Despite the moderate impact on orders and customer interactions associated with the COVID-19 pandemic, we remain fully operational and achieved growth in the quarter as well as a record number of design wins. We also continued to increase customer sampling of our STT-MRAM products as we pave the way for expanding design-ins. This is a testament to the persistence of the Everspin team and the strength of our leading technology and products.

Looking to the second quarter, we expect to achieve another quarter of sequential revenue growth, while we cautiously monitor the global environment and remain prepared to promptly address any possible changes in market dynamics.”

First Quarter 2020 Results

Total revenue for the first quarter of 2020 was $10.1 million, compared to $9.7 million last quarter and $10.0 million in the first quarter of 2019.

Gross margin for the first quarter of 2020 was 52.9%, compared to 53.6% in the prior quarter and 47.7% in the first quarter of 2019.

GAAP operating expenses for the first quarter of 2020 were $6.9 million, compared to $8.2 million in the fourth quarter of 2019 and $9.0 million in the first quarter of 2019. On a non-GAAP basis, operating expenses for the first quarter of 2020 were $6.2 million, compared to $6.3 million in the prior quarter and $8.3 million in the year-ago quarter.

GAAP net loss for the first quarter of 2020 was $1.7 million, or ($0.10) per share, based on 18.1 million weighted-average shares outstanding. This compares to a net loss of $3.1 million, or ($0.17) per share, in the fourth quarter of 2019, which included $0.8 million in restructuring charges, and a net loss of $4.3 million, or ($0.25) per share, in the first quarter of 2019. On a non-GAAP basis, net loss for the first quarter of 2020 was $1.0 million, or ($0.05) per share, compared to a net loss of $1.2 million, or ($0.07) per share, in the prior quarter and a net loss of $3.6 million, or ($0.21) per share, in the first quarter of 2019.

Cash and cash equivalents as of March 31, 2020 were $14.0 million, compared to $14.5 million at the end of the fourth quarter of 2019. Prior to suspending trading on its at-the-market (ATM) equity facility during the quarter, the Company issued 0.5 million new shares resulting in net proceeds $2.1 million.

Business Outlook

For the second quarter of 2020, Everspin expects total revenue to increase to a range of $11.5 million and $12.5 million, compared to $8.6 million in the year-ago quarter. GAAP net loss is expected to range between ($0.12) and ($0.05) per share. Excluding stock-based compensation expense, non-GAAP net loss is expected to range between ($0.06) and ($0.00) per share based on a weighted-average share count of 18.6 million shares outstanding.

Conference Call

Everspin will host a conference call for analysts and investors today at 5:00 p.m. Eastern Time. Interested participants can access the call by dialing 1-844-889-7788 and providing passcode 4869017. International callers may join the call by dialing +1-661-378-9932, using the same code. The call will also be available as a live and archived webcast in the Investor Relations section of the company’s website at investor.everspin.com.

A telephone replay of the conference call will be available approximately two hours after the call through May 14, 2020. The replay can be accessed by dialing 1-855-859-2056 and using the passcode 4869017. International callers should dial +1-404-537-3406 and enter the same passcode at the prompt.

About Everspin Technologies

Everspin Technologies, Inc. is the world’s leading provider of Magnetoresistive RAM (MRAM). Everspin MRAM delivers the industry’s most robust, highest performance non-volatile memory for Industrial IoT, Data Center, and other mission-critical applications where data persistence is paramount. Headquartered in Chandler, Arizona, Everspin provides commercially available MRAM solutions to a large and diverse customer base. For more information, visit www.everspin.com. NASDAQ: MRAM.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding future events that involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to the statements made under the caption “Business Outlook.” Actual results could differ materially from these forward-looking statements as a result of certain factors, including, without limitation, the risks set forth in Everspin’s Form 10-K filed with the Securities and Exchange Commission on March 13, 2020, under the caption “Risk Factors.” Subsequent events may cause these expectations to change, and Everspin disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

 

EVERSPIN TECHNOLOGIES, INC.

Condensed Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

March 31,

 

December 31,

 

 

2020

 

2019

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,950

 

 

$

14,487

 

Accounts receivable, net

 

 

6,320

 

 

 

5,799

 

Inventory

 

 

7,944

 

 

 

7,863

 

Prepaid expenses and other current assets

 

 

518

 

 

 

539

 

Total current assets

 

 

28,732

 

 

 

28,688

 

Property and equipment, net

 

 

3,077

 

 

 

3,479

 

Right-of-use assets

 

 

2,770

 

 

 

3,132

 

Other assets

 

 

73

 

 

 

73

 

Total assets

 

$

34,652

 

 

$

35,372

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,761

 

 

$

2,873

 

Accrued liabilities

 

 

1,965

 

 

 

2,727

 

Current portion of long-term debt

 

 

1,271

 

 

 

670

 

Operating lease liabilities

 

 

1,613

 

 

 

1,582

 

Other liabilities

 

 

34

 

 

 

42

 

Total current liabilities

 

 

6,644

 

 

 

7,894

 

Long-term debt, net of current portion

 

 

6,621

 

 

 

7,149

 

Operating lease liabilities, net of current portion

 

 

1,426

 

 

 

1,840

 

Total liabilities

 

 

14,691

 

 

 

16,883

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020 and December 31, 2019

 

 

 

 

Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 18,638,555 and 18,081,753 shares issued and outstanding as of March 31, 2020 and December 31, 2019

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

170,353

 

 

 

167,149

 

Accumulated deficit

 

 

(150,394

)

 

 

(148,662

)

Total stockholders’ equity

 

 

19,961

 

 

 

18,489

 

Total liabilities and stockholders’ equity

 

$

34,652

 

 

$

35,372

 

 

 

 

 

 

 

 

 

EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2020

 

2019

 

Product sales

$

9,635

 

 

$

9,023

 

 

Licensing, royalty, and other revenue

 

473

 

 

 

1,003

 

 

Total revenue

 

10,108

 

 

 

10,026

 

 

Cost of sales

 

4,757

 

 

 

5,241

 

 

Gross profit

 

5,351

 

 

 

4,785

 

 

Operating expenses:1

 

 

 

 

 

 

Research and development

 

3,030

 

 

 

3,998

 

 

General and administrative

 

2,800

 

 

 

3,595

 

 

Sales and marketing

 

1,103

 

 

 

1,364

 

 

Total operating expenses

 

6,933

 

 

 

8,957

 

 

Loss from operations

 

(1,582

)

 

 

(4,172

)

 

Interest expense

 

(172

)

 

 

(211

)

 

Other income, net

 

22

 

 

 

127

 

 

Net loss and comprehensive loss

$

(1,732

)

 

$

(4,256

)

 

Net loss per common share, basic and diluted

$

(0.10

)

 

$

(0.25

)

 

Weighted-average shares used to compute net loss per common share, basic and diluted

 

18,055,693

 

 

 

17,097,999

 

 

 

 

 

 

 

 

 

1Operating expenses include stock-based compensation as follows:

 

 

 

 

 

 

Research and development

$

162

 

 

$

147

 

 

General and administrative

 

585

 

 

 

509

 

 

Sales and marketing

 

58

 

 

 

48

 

 

Total stock-based compensation

$

805

 

 

$

704

 

 

 
 

EVERSPIN TECHNOLOGIES, INC.

Reconciliation of GAAP and Non-GAAP Financial Information

(In thousands, except share and per share amounts)

(Unaudited)

Three Months Ended

Mar 31, 2020

 

Dec 31, 2019

 

Mar 31, 2019

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses

$ 6,933

 

$ 8,199

 

$ 8,957

 

Reconciling item included in research and development

Stock-based compensation

137

 

193

 

118

 

Reconciling item included in selling, general and administrative

Stock-based compensation

643

 

914

 

557

 

Restructuring

782

 

Total reconciling items included in operating expenses

780

 

1,889

 

675

 

Non-GAAP operating expenses

$ 6,153

 

$ 6,311

 

$ 8,282

 

 

GAAP NET INCOME (LOSS)

$ (1,732

)

$ (3,079

)

$ (4,256

)

Reconciling items included in operating expenses

780

 

1,889

 

675

 

Non-GAAP net income (loss)

$ (951

)

$ (1,191

)

$ (3,581

)

Non-GAAP net income (loss) per share, basic and diluted

$ (0.05

)

$ (0.07

)

$ (0.21

)

Weighted average shares to compute net loss per common share, basic and diluted

18,056

 

17,714

 

17,098

 

 

EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss

 

$

(1,732

)

 

$

(4,256

)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

409

 

 

 

393

 

 

Loss on disposal of property and equipment

 

 

 

 

20

 

 

Stock-based compensation

 

 

805

 

 

 

704

 

 

Non-cash gain on warrant revaluation

 

 

(6

)

 

 

 

Non-cash interest expense

 

 

73

 

 

 

81

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

(521

)

 

 

1,540

 

 

Inventory

 

 

(81

)

 

 

(562

)

 

Prepaid expenses and other current assets

 

 

21

 

 

 

93

 

 

Accounts payable

 

 

(1,067

)

 

 

(955

)

 

Accrued liabilities

 

 

(435

)

 

 

(187

)

 

Lease liabilities

 

 

(21

)

 

 

(20

)

 

Net cash used in operating activities

 

 

(2,555

)

 

 

(3,149

)

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(64

)

 

 

(225

)

 

Net cash used in investing activities

 

 

(64

)

 

 

(225

)

 

Cash flows from financing activities

 

 

 

 

 

 

 

Payments on debt

 

 

 

 

(1,500

)

 

Payments on finance lease obligation

 

 

(2

)

 

 

(3

)

 

Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan

 

 

 

 

13

 

 

Proceeds from issuance of common stock in at-the-market offering, net of issuance costs

 

 

2,084

 

 

 

 

Net cash provided by (used in) financing activities

 

 

2,082

 

 

 

(1,490

)

 

Net decrease in cash and cash equivalents

 

 

(537

)

 

 

(4,864

)

 

Cash and cash equivalents at beginning of period

 

 

14,487

 

 

 

23,379

 

 

Cash and cash equivalents at end of period

 

$

13,950

 

 

$

18,515

 

 

Supplementary cash flow information:

 

 

 

 

 

 

 

Interest paid

 

$

99

 

 

$

135

 

 

Operating cash flows paid for operating leases

 

$

486

 

 

$

416

 

 

Financing cash flows paid for finance leases

 

$

2

 

 

$

3

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Purchase of property and equipment in accounts payable and accrued liabilities

 

$

 

$

20

 

 

Bonus settled in shares of common stock

 

$

315

 

 

$

 

 

Contacts

Everspin Investor Relations Contact:
Leanne K. Sievers, President

Shelton Group Investor Relations

T: 949-224-3874

E: sheltonir@sheltongroup.com

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