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Everspin Reports Third Quarter 2019 Financial Results

Everspin Technologies, Inc. (Nasdaq: MRAM), the market leader in MRAM, today announced financial results for the third quarter ended September 30, 2019.

Third Quarter and Recent Highlights

  • Total revenue was $9.2 million, up 6% sequentially and above the high-end of guidance
  • Achieved record STT-MRAM revenue, which included both 256Mb and 1Gb devices
  • Signed IP assignment and cross-licensing agreement with Seagate Technology, demonstrating the strength of its MRAM intellectual property portfolio
  • Expanded Toggle product portfolio with additional densities targeting new market applications
  • Reduced cash used for operations to $770,000 from $1.8 million in the prior quarter

“Revenue in the quarter was above the high-end of our guidance range, driven by record revenue from our STT-MRAM products combined with a return to growth for our Toggle products,” stated Kevin Conley, Everspin’s President and CEO. “Furthermore, our ongoing focus on closely managing expenses and cash utilization have contributed to continued improvements in our operating results and positions us to benefit from increased leverage as revenue grows.

“Also during the quarter, we made further progress on customer qualifications for our 1Gb STT-MRAM device, while continuing to gain traction on our efforts toward advancing the MRAM ecosystem with enterprise storage controller companies. Looking forward, our priority remains on growing our design win pipeline and targeting new opportunities in secular growth markets with an expanded product portfolio based on both Toggle and STT-MRAM technologies.”

Third Quarter 2019 Results

Total revenue for the third quarter of 2019 was $9.2 million, compared to $11.5 million in the third quarter of 2018 and $8.6 million in the previous quarter.

Gross margin for the third quarter of 2019 was 47.4%, and compares to 47.0% in the third quarter of 2018 and 46.5% in the previous quarter.

Operating expenses for the third quarter of 2019 were $7.9 million, compared to the $10.9 million in the year-ago quarter and $7.6 million in the previous quarter.

Net loss for the third quarter of 2019 was $3.7 million, or ($0.21) per share, based on 17.3 million weighted-average shares outstanding, compared to a net loss of $5.6 million, or ($0.33) per share, in the third quarter of 2018, and a net loss of $3.7 million, or ($0.21) per share, in the second quarter of 2019.

Cash and cash equivalents as of September 30, 2019 were $14.8 million, compared to $15.3 million at the end of the second quarter of 2019. During the quarter, the Company issued new shares through its at-the-market equity facility, resulting in net proceeds $2.2 million.

Business Outlook

For the fourth quarter of 2019, Everspin expects total revenue in the range of $9.3 million and $9.7 million. Net loss per share is expected to be between ($0.18) and ($0.14) based on a weighted-average share count of 17.4 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 3075878. 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 November 14, 2019. The replay can be accessed by dialing 1-855-859-2056 and using the passcode 3075878. International callers should dial +1-404-537-3406 and enter the same passcode at the prompt.

About Everspin Technologies

Headquartered in Chandler, Arizona, Everspin Technologies, Inc. is the worldwide leader in the design, volume production and distribution of Magnetoresistive RAM (MRAM) into markets and applications where data persistence, performance, and endurance are paramount. Serving applications across the data center, industrial, and transportation markets, Everspin has built the strongest and fastest-growing foundation of MRAM users in the world. For more information, visit www.everspin.com.

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-Q filed with the Securities and Exchange Commission on August 7, 2019, 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)

September 30,

December 31,

2019

2018

Assets

Current assets:

Cash and cash equivalents

$

14,780

$

23,379

Accounts receivable, net

5,568

7,522

Inventory

8,318

9,097

Prepaid expenses and other current assets

222

688

Total current assets

28,888

40,686

Property and equipment, net

3,558

4,286

Right-of-use assets

2,595

Other assets

73

73

Total assets

$

35,114

$

45,045

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

3,178

$

2,637

Accrued liabilities

3,167

5,001

Current portion of long-term debt

72

5,977

Operating lease liabilities

1,606

Other liabilities

48

Total current liabilities

8,071

13,615

Long-term debt, net of current portion

7,676

6,509

Operating lease liabilities, net of current portion

1,307

Total liabilities

17,054

20,124

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 September 30, 2019 and December 31, 2018

Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 17,535,746 and 17,095,456 shares issued and outstanding as of September 30, 2019 and December 31, 2018

2

2

Additional paid-in capital

163,640

158,912

Accumulated deficit

(145,582

)

(133,993

)

Total stockholders’ equity

18,060

24,921

Total liabilities and stockholders’ equity

$

35,114

$

45,045

EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Product sales

$

8,370

$

10,469

$

25,396

$

29,283

Licensing, royalty, and other revenue

808

1,049

2,454

7,853

Total revenue

9,178

11,518

27,850

37,136

Cost of sales

4,824

6,109

14,692

17,235

Gross profit

4,354

5,409

13,158

19,901

Operating expenses:

Research and development

3,395

6,453

10,912

19,706

General and administrative

3,050

2,913

9,501

9,461

Sales and marketing

1,491

1,582

4,094

4,661

Total operating expenses

7,936

10,948

24,507

33,828

Loss from operations

(3,582

)

(5,539

)

(11,349

)

(13,927

)

Interest expense

(170

)

(229

)

(567

)

(662

)

Other income, net

89

139

327

315

Net loss and comprehensive loss

$

(3,663

)

$

(5,629

)

$

(11,589

)

$

(14,274

)

Net loss per common share, basic and diluted

$

(0.21

)

$

(0.33

)

$

(0.67

)

$

(0.88

)

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

17,312,226

16,944,660

17,183,306

16,130,882

EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended

September 30,

2019

2018

Cash flows from operating activities

Net loss

$

(11,589

)

$

(14,274

)

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

Depreciation and amortization

1,297

1,069

Loss on disposal of property and equipment

20

19

Stock-based compensation

2,397

2,064

Non-cash interest expense

219

286

Compensation expense related to vesting of common stock to GLOBALFOUNDRIES

709

Changes in operating assets and liabilities:

Accounts receivable

1,954

(1,876

)

Inventory

779

309

Prepaid expenses and other current assets

466

154

Accounts payable

518

(140

)

Accrued liabilities

(1,444

)

4,840

Operating lease liabilities

(72

)

Shipping term reversal

(39

)

Net cash used in operating activities

(5,455

)

(6,879

)

Cash flows from investing activities

Purchases of property and equipment

(566

)

(1,513

)

Net cash used in investing activities

(566

)

(1,513

)

Cash flows from financing activities

Proceeds from the issuance of common stock, net of offering costs

24,524

Proceeds from debt

1,000

Payments on debt

(4,840

)

(1,000

)

Payments of debt issuance costs

(80

)

Payments on finance lease obligation

(8

)

(8

)

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

178

2,364

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

2,172

Net cash (used in) provided by financing activities

(2,578

)

26,880

Net (decrease) increase in cash and cash equivalents

(8,599

)

18,488

Cash and cash equivalents at beginning of period

23,379

12,950

Cash and cash equivalents at end of period

$

14,780

$

31,438

Supplementary cash flow information:

Interest paid

$

373

$

370

Operating cash flows paid for operating leases

$

1,264

$

Financing cash flows paid for finance leases

$

8

$

Right-of-use assets obtained in exchange for new operating leases

$

23

$

Non-cash investing and financing activities:

Purchases of property and equipment in accounts payable

$

33

$

183

Modification of warrant

$

36

$

Issuance of warrant with debt

$

$

43

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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