Everspin: Fiscal 4Q19 Financial Results

Everspin Technologies, Inc. announced financial results for the fourth quarter ended December 31, 2019.

4FQ19 and Recent Highlights

• Total revenue of $9.7 million was up 5% sequentially and at the high-end of guidance
• Ended year with cash and equivalents of $14.5 million
• Implemented restructuring to accelerate path to profitability
• Achieved second data center OEM qualification of 1Gb STT-MRAM
• Announced development of STT-MRAM for Industrial and IoT applications
• Signed joint development agreement extension with GLOBALFOUNDRIES for development of 12nm MRAM

“We ended 2019 on a strong quarter of progress in a year in which the semiconductor industry faced broad cyclicality, exacerbated by protracted global trade tensions in our core industrial market,” stated Kevin Conley, president and CEO. “Fourth quarter revenue increased sequentially and was supported by improved costs and reduced OpEx. Revenue was at the high-end of guidance, driven by another quarter of record STT-MRAM revenue and continued growth for Toggle products. Our quarterly loss per share, excluding a one-time restructuring charge, was also well above our guidance.

“Building on our successful spending reductions in 2019, Everspin recently implemented a restructuring plan that fully supports our strategic objectives while capturing significant savings in 2020, thereby accelerating our path toward achieving cash flow breakeven by year-end. With the confidence we have in our cash position and business outlook, we have suspended use of the at-the-market facility we put in place last year.

“Additionally, we continue to meaningfully advance new and existing engagements for our 1Gb STT-MRAM device through a combination of successful customer qualifications and partnerships in the enterprise server and storage ecosystem. Everspin secured an additional data center design win for our 1Gb STT-MRAM and continued to see significant quarter-over-quarter growth in our Toggle MRAM design wins. With this growing pipeline and interest for our expanding portfolio of MRAM solutions, combined with our improved margins, we are increasingly well positioned to drive profitable growth and value for our shareholders.”

4FQ19 and FY19 Results

• Total revenue for 4FQ19 was $9.7 million, compared to $9.2 million in 3FQ19 and $12.3 million in 4FQ18. For FY19, total revenue was $37.5 million, compared to $49.4 million in FY18, which included $9.9 million in licensing, royalty and other revenue.
• Gross margin for 4FQ19 increased to 53.6%, compared to 47.4% in 3FQ19 and 44.2% in 4FQ18. FY019 gross margin was 48.9%, compared to 51.3% in FY18.
• Operating expenses for 4FQ19 were $8.2 million, which included $0.8 million in one-time restructuring charges, compared to $7.9 million in 3FQ19 and $8.8 million in 4FQ18. For FY19, operating expenses were $32.7 million, including the fourth quarter one-time restructuring charge, compared to $42.7 million in FY18.
• GAAP net loss for 4FQ19 was $3.1 million, or ($0.17) per share, based on 17.7 million weighted-average shares outstanding. 4FQ19 GAAP results included the $0.8 million restructuring charge as well as approximately $1.1 million of stock-based compensation expense. This compared to a net loss of $3.7 million, or ($0.21) per share, in 3FQ019 and a net loss of $3.5 million, or ($0.20) per share, in 4FQ18.
• For FY19, GAAP net loss was $14.7 million, or ($0.85) per share, based on 17.3 million weighted-average shares outstanding, which included the $0.8 million fourth quarter restructuring charge as well as approximately $3.6 million of stock-based compensation expense. For FY18, GAAP net loss was $17.8 million, or ($1.08) per share.
• Cash and cash equivalents as of December 31, 2019 were $14.5 million, compared to $14.8 million at the end of 3FQ19. During the quarter, the company issued 0.5 million new shares through its at-the-market equity facility, resulting in net proceeds $2.6 million.

Business Outlook
For 1FQ20, the firm expects total revenue in the range of $9.5 million and $9.9 million. GAAP net loss is expected to range between ($0.15) and ($0.11) per share, and non-GAAP net loss, which excludes stock-based compensation expense, is expected to range between ($0.09) and ($0.05) per share based on a weighted-average share count of 18.1 million shares outstanding. This compares to a GAAP loss per share of ($0.25) in 1FQ19 on $10 million of revenue, highlighting the significant progress made over the past year on cost reduction initiatives to drive increased operating leverage and improve the company’s bottom-line results.