Everspin: Fiscal 1Q19 Financial Results

(in $ million)	1Q18	1Q19	Growth
Revenue	14.9	10.0	*-5%*
Net income (loss)	(1.3)	(4.3)

Everspin Technologies, Inc. announced financial results for the first quarter ended March 31, 2019.

First Quarter and Recent Highlights
• Total revenue was $10.0 million
• Gross margin improved sequentially to 48%
• Operating expenses decreased by 19% Y/Y
• Secured two design-ins for 28nm 1Gb STT-MRAM product
• Support extended for 256Mb STT-MRAM in third enterprise storage array product by AFA customer
• Appointed Troy Winslow as VP of global sales

“Revenue in the quarter exceeded the high-end of our guidance range with gross margins improving 350 basis points sequentially, reflecting yield improvements on Toggle production,” stated Kevin Conley, president and CEO. “We also continued to advance sampling of our 1Gb STT-MRAM product with select customers and recently secured two design-ins since introducing the product only a few months ago. Our first quarter results represent the new baseline upon which we are building our future growth strategy. We remain focused on strategically expanding high-value Toggle revenue opportunities, broadening the customer base and ecosystem partners for our STT-MRAM products, as well as maintaining disciplined execution across all areas of our business.”

1FQ19 Results

Total revenue was $10.0 million, compared to $14.9 million in 1FQ18, which included $5.5 million in licensing, royalty and other revenue, and $12.3 million in 4FQ18.
Gross margin was 47.7%, compared to 67.0% in 1FQ18, which included the benefit from a material one-time licensing agreement, and 44.2% in 4FQ18.
Operating expenses were $9.0 million, compared to $11.1 million in 1FQ18 and $8.8 million in 4FQ18.
Net loss was $4.3 million, or ($0.25) per share, based on 17.1 million weighted-average shares outstanding, compared to a net loss of $1.3 million, or ($0.09) per share, in 1FQ18, and a net loss of $3.5 million, or ($0.20) per share, in 4FQ18.
Cash and cash equivalents as of March 31, 2019 were $18.5 million, compared to $23.4 million at the end of 4FQ18.

Business Outlook
For 2FQ19, the company expects total revenue in the range of $9.6 million and $10.0 million. Net loss per share is expected to be between ($0.27) and ($0.23) based on an weighted-average share count of 17.2 million shares outstanding.

Comments

Kevin Conley, CEO, president and director:
"IBM [is] our largest STT-MRAM customer [for AFA].
"We expect to announce availability of new Toggle MRAM products in 4Q."

Jeffrey G. Winzeler, CFO and secretary:
"Revenue in the quarter was above the high-end of guidance at $10 million compared to $14.9 million in 1FQ18, which included $5.5 million in licensing, royalty and other revenue and compared to revenue of $12.3 million in 4FQ18.
"MRAM product sales in the first quarter, which includes Toggle and STT-MRAM were $8.5 million compared to $8.9 million in 1FQ18 and $9.7 million in the previous quarter. The sequential decline in MRAM product revenue reflects high end of the year distributor inventory levels for Toggle products, exiting last year as well as the program reduction at a large Toggle customer."