Business Wire | Aug 6, 2020 04:06PM EDT

Everspin Reports Second Quarter 2020 Financial Results

Aug. 06, 2020

CHANDLER, Ariz.--(BUSINESS WIRE)--Aug. 06, 2020--Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in MRAM, today announced financial results for the second quarter ended June 30, 2020.

Second Quarter and Recent Highlights

* Total revenue increased 37% year-over-year and 17% sequentially to $11.8 million * Operating expenses declined 18% over the prior year period * GAAP loss improved to $1.3 million, or ($0.07) per share, and non-GAAP loss to $0.4 million, or ($0.02), compared to $3.7 million, or ($0.21) per share, and $2.9 million, or ($0.17) per share, respectively, in the second quarter of 2019 * Achieved positive adjusted EBITDA of $0.2 million, compared to a negative ($2.2) million in the year-ago quarter * Appointed Daniel Berenbaum CFO bringing strong semiconductor finance and Wall Street experience to the executive team * Ended quarter with cash and equivalents of $12.9 million

"We extended our momentum into the second quarter, achieving the fourth consecutive quarter of growth including record revenue from the ramp of our 1Gb STT-MRAM product," stated Kevin Conley, Everspin's President and CEO. "A significant contributor to this growth was our ability to respond to a surge in demand from our OEM customers that supply the data center market.

"Entering the third quarter, we are seeing a delay of customers' new product introduction plans, resulting in reduced visibility and expectations for the quarter. Despite these current market challenges, we remain encouraged about our future growth opportunities, growing pipeline of business and improved financial positioning."

Second Quarter 2020 Results

Total revenue for the second quarter of 2020 was $11.8 million, an increase of 17% from the $10.1 million last quarter and 37% over the $8.6 million reported in the second quarter of 2019.

Gross margin for the second quarter of 2020 was 43.9%, compared to 52.9% in the prior quarter and 46.5% in the second quarter of 2019.

GAAP operating expenses for the second quarter of 2020 decreased to $6.3 million, compared to $6.9 million in the first quarter of 2020 and $7.6 million in the second quarter of 2019. On a non-GAAP basis, operating expenses for the second quarter of 2020 were $5.4 million, compared to $6.2 million in the prior quarter and $6.8 million in the year-ago quarter.

GAAP net loss for the second quarter of 2020 was $1.3 million, or ($0.07) per share, based on 18.7 million weighted-average shares outstanding. This compares to a net loss of $1.7 million, or ($0.10) per share, in the first quarter of 2020 and a net loss of $3.7 million, or ($0.21) per share, in the second quarter of 2019.

On a non-GAAP basis, net loss for the second quarter of 2020 was $0.4 million, or ($0.02) per share, compared to a net loss of $1.0 million, or ($0.05) per share, in the prior quarter, and a net loss of $2.9 million, or ($0.17) per share, in the second quarter of 2019.

Adjusted EBITDA for the second quarter of 2020 improved to a positive $0.2 million, compared to a negative ($0.3) million last quarter and a negative ($2.2) million in the prior year period.

Cash and cash equivalents as of June 30, 2020 were $12.9 million, compared to $14.0 million at the end of the first quarter of 2020.

Business Outlook

For the third quarter of 2020, Everspin expects total revenue of between $10.0 million and $10.8 million, compared to $9.2 million in the year-ago quarter. GAAP net loss is expected to range between ($0.11) and ($0.05) per share. Excluding stock-based compensation expense of $0.05 per share, non-GAAP net loss is expected to range between a loss of ($0.06) per share and breakeven.

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 3958179. 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 August 13, 2020. The replay can be accessed by dialing 1-855-859-2056 and using the passcode 3958179. 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 results 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-Qs filed with the Securities and Exchange Commission on May 8, 2020, and August 6, 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)



June 30, December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents $ 12,916 $ 14,487

Accounts receivable, net 7,339 5,799

Inventory 8,368 7,863

Prepaid expenses and other current assets 501 539

Total current assets 29,124 28,688

Property and equipment, net 2,908 3,479

Right-of-use assets 2,985 3,132

Other assets 73 73

Total assets $ 35,090 $ 35,372



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 2,074 $ 2,873

Accrued liabilities 1,392 2,727

Current portion of long-term debt 1,073 670

Operating lease liabilities 1,546 1,582

Other liabilities 44 42

Total current liabilities 6,129 7,894

Long-term debt, net of current portion 6,893 7,149

Operating lease liabilities, net of current 1,656 1,840 portion

Total liabilities 14,678 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 June 30, 2020 and December 31,2019

Common stock, $0.0001 par value per share;100,000,000 shares authorized; 18,869,775 and 2 2 18,081,753 shares issued and outstanding as ofJune 30, 2020 and December 31, 2019

Additional paid-in capital 172,098 167,149

Accumulated deficit (151,688 ) (148,662 )

Total stockholders' equity 20,412 18,489

Total liabilities and stockholders' equity $ 35,090 $ 35,372

EVERSPIN TECHNOLOGIES, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)



Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Product sales $ 10,927 $ 8,003 $ 20,562 $ 17,026

Licensing,royalty, and 899 643 1,372 1,646 other revenue

Total revenue 11,826 8,646 21,934 18,672

Cost of sales 6,635 4,627 11,392 9,868

Gross profit 5,191 4,019 10,542 8,804

Operating expenses:^1

Research and 2,774 3,519 5,804 7,517 development

General and 2,448 2,856 5,248 6,451 administrative

Sales and 1,056 1,239 2,159 2,603 marketing

Total operating 6,278 7,614 13,211 16,571 expenses

Loss from (1,087 ) (3,595 ) (2,669 ) (7,767 ) operations

Interest expense (172 ) (186 ) (344 ) (397 )

Other (expense) (35 ) 111 (13 ) 238 income, net

Net loss andcomprehensive $ (1,294 ) $ (3,670 ) $ (3,026 ) $ (7,926 ) loss

Net loss percommon share, $ (0.07 ) $ (0.21 ) $ (0.16 ) $ (0.46 ) basic anddiluted

Weighted-averageshares used tocompute net loss 18,747,124 17,137,338 18,585,339 17,117,777 per commonshare, basic anddiluted



^1Operating expenses include stock-based compensation as follows:

Research and $ 194 $ 161 $ 356 $ 308 development

General and 646 556 1,231 1,065 administrative

Sales and 78 81 136 129 marketing

Totalstock-based $ 918 $ 798 $ 1,723 $ 1,502 compensation

EVERSPIN TECHNOLOGIES, INC.

Reconciliation of GAAP and Non-GAAP Financial Information

(In thousands, except share and per share amounts)

(Unaudited)

Three Months Ended

Jun 30, Mar 31, Jun 30, 2020 2020 2019

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses $ 6,278 $ 6,933 $ 7,614

Reconciling item included in research and development

Stock-based compensation 160 137 133

Reconciling item included in selling, general and administrative

Stock-based compensation 724 643 636

Total reconciling items included in 884 780 769 operating expenses

Non-GAAP operating expenses $ 5,394 $ 6,153 $ 6,845

GAAP NET INCOME (LOSS) $ (1,294 ) $ (1,732 ) $ (3,670 )

Reconciling items included in operating 884 780 769 expenses

Non-GAAP net income (loss) $ (410 ) $ (951 ) $ (2,901 )

Non-GAAP net income (loss) per share, $ (0.02 ) $ (0.05 ) $ (0.17 )basic and diluted

Weighted average shares to compute net 18,747 18,056 17,137 loss per common share, basic and diluted

EVERSPIN TECHNOLOGIES, INC.

Reconciliation of Adjusted EBITDA

(In thousands)

(Unaudited)

Three Months Ended

Jun 30, Mar 31, Jun 30, 2020 2020 2019

Adjusted EBITDA reconciliation:

Net loss $ (1,294 ) $ (1,732 ) $ (3,670 )

Depreciation and amortization 404 409 483

Stock-based compensation expense 918 805 798

Interest Expense 172 172 186

Adjusted EBITDA $ 200 $ (346 ) $ (2,203 )

Our management and board of directors use Non-GAAP operating expenses, Non-GAAP net income (loss) and Adjusted EBITDA to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operating and financing plans.

EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)



Six Months Ended June 30,

2020 2019

Cash flows from operating activities

Net loss $ (3,026 ) $ (7,926 )

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

Depreciation and amortization 813 876

Loss on disposal of property and equipment - 20

Stock-based compensation 1,723 1,502

Non-cash gain on warrant revaluation 7 -

Non-cash interest expense 147 153

Changes in operating assets and liabilities:

Accounts receivable (1,540 ) 1,658

Inventory (505 ) 133

Prepaid expenses and other current assets 38 200

Accounts payable (776 ) (456 )

Accrued liabilities (1,008 ) (907 )

Lease liabilities (73 ) (43 )

Net cash used in operating activities (4,200 ) (4,790 )

Cash flows from investing activities

Purchases of property and equipment (277 ) (461 )

Net cash used in investing activities (277 ) (461 )

Cash flows from financing activities

Payments on debt - (3,000 )

Payments on finance lease obligation (5 ) (5 )

Proceeds from exercise of stock options and 827 150 purchase of shares in employee stock purchase plan

Proceeds from issuance of common stock in 2,084 - at-the-market offering, net of issuance costs

Net cash provided by (used in) financing activities 2,906 (2,855 )

Net decrease in cash and cash equivalents (1,571 ) (8,106 )

Cash and cash equivalents at beginning of period 14,487 23,379

Cash and cash equivalents at end of period $ 12,916 $ 15,273

Supplementary cash flow information:

Interest paid $ 197 $ 257

Operating cash flows paid for operating leases $ 862 $ 837

Financing cash flows paid for finance leases $ 5 $ 5

Non-cash investing and financing activities:

Right-of-use assets obtained in exchange for new $ - $ 23 operating leases

Increase of right-of-use asset and lease liability $ 545 $ - due to lease modification

Purchase of property and equipment in accounts $ 22 $ 27 payable and accrued liabilities

Bonus settled in shares of common stock $ 315 $ -

View source version on businesswire.com: https://www.businesswire.com/news/home/20200806006014/en/

CONTACT: Company Contact: Daniel Berenbaum, CFO T: 480-347-1099 E: daniel.berenbaum@everspin.com

CONTACT: Investor Relations Contact: Leanne K. Sievers, President Shelton Group Investor Relations T: 949-224-3874 E: sheltonir@sheltongroup.com