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INVENSENSE ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2012 RESULTS

INVENSENSE ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2012 RESULTS

  • Fourth Quarter of Fiscal 2012 Net Revenues: $33.1 Million 

  • Fourth Quarter of Fiscal 2012 Net Income: $5.9 Million 

  • Fourth Quarter of Fiscal 2012 Earnings Per Share (GAAP): $0.07 

  • Fiscal Year 2012 Net Revenues: $153.0 Million 

  • Fiscal year 2012 Net Income: $36.9 Million 

SUNNYVALE, California, May 3, 2012 - InvenSense, Inc. (NYSE: INVN), the leading provider of Motion Interface solution devices for consumer electronics, today announced 2012 fiscal fourth quarter and 2012 fiscal year results.

Fourth quarter 2012 net revenue was $33.1 million, up 38 percent from $23.9 million for the fourth quarter of 2011. Net revenue for fiscal year 2012 was $153.0 million, up 59 percent from $96.5 million for fiscal year 2011.

Net income for the fourth quarter of fiscal 2012 was $5.9 million, compared with net income of $2.5 million in the fourth quarter of fiscal 2011, an increase of 136 percent. For fiscal year 2012, net income was $36.9 million, an increase of 297 percent over $9.3 million for fiscal year 2011. Diluted earnings per share attributable to common stockholders* and diluted pro forma earnings per share** for the fourth quarter of fiscal 2012 was $0.07 per share and $0.07 per share, respectively, compared to $0.02 per share and $0.03 per share, respectively, for the fourth quarter of fiscal 2011. Diluted earnings per share attributable to common stockholders* and diluted pro forma earnings per share** for fiscal year 2012 was $0.37 per share and $0.47 per share, respectively, compared to $0.08 per share and $0.13 per share, respectively, for fiscal year 2011.

Cash flow from operating activities during fiscal year 2012 was $44.4 million, up 462 percent compared with cash flow from operating activities of $7.9 million during the prior fiscal year. InvenSense ended the fiscal year with $157.8 million in cash and cash equivalents and short-term investments.

Management Qualitative Comments
"We are excited to have concluded our fiscal year 2012 which demonstrates a significant increase in our overall unit shipments due to the rapid adoption of Motion Interface in all of our end markets. The market adoption of Motion Interface and our technology resulted  in  revenue growth of  59%  and net income growth of nearly 300% year over year", said Steven Nasiri, CEO, Chairman and Founder, "Looking forward to our fiscal 2013, we are encouraged by the continuing broad adoption of Motion Interface in smartphones and tablets, including some mid-range devices, and we expect adoption of our leading integrated six-axis MotionTracking devices to continue by leading customers in many of our end markets."  

*   Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders, calculated as net income less income allocable to the rights of Series A, Series B and Series C convertible preferred stock holders for the period prior to their conversion upon our initial public offering, by the weighted average number of common shares outstanding, including unvested restricted stock, and potential dilutive common shares assuming the dilutive effect of outstanding stock options using the treasury stock method.
**   Pro forma diluted net income per share was computed to give effect to the conversion of the Series A, Series B, and Series C convertible preferred shares and certain preferred stock warrants both using the as-if converted method into common shares as if the conversion had occurred as of the beginning of each period presented

Fourth Quarter Fiscal 2012 Earnings Conference Call
A conference call will be held today at 1:30 p.m. Pacific Time to discuss the quarter's results and management's current business outlook. To listen to the conference call, please dial (800) 299-7089 ten minutes prior to the start of the call, using the passcode 15873716.  International callers, please dial (617) 801-9714.  A taped replay will be made available approximately two hours after the conclusion of the call and will remain available for one week.  To access the replay, please dial (888) 286-8010 and enter passcode 84835944.  International callers please dial (617) 801-6888. The conference call will also be available via a live webcast on the investor relations section of InvenSense's web site at http://www.invensense.com/. An archived webcast replay will be available on the web site for three months.

Forward-Looking Statements
Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release, including the potential for an increase in the attach rates of our motion-processing technology in our markets and the potential for rapid and broad adoption of our fully integrated 6-axis gyroscope and accelerometer product by customers. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, the continued adoption of motion tracking and motion sensing as an interface in consumer electronics products, our achievement of design wins, consumer acceptance of our customers' products that incorporate our solutions, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; our lack of long-term supply contracts and dependence on limited sources of supply; our ability to continue to develop and introduce new and enhanced products on a timely basis; and potential decreases in average selling prices for our products, as well as changes in economic conditions in our markets and other risk factors discussed in documents filed by us with the Securities and Exchange Commission (SEC) from time to time. Copies of InvenSense's SEC filings are posted on the company's website and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About InvenSense
InvenSense Inc. (NYSE: INVN) is the leading provider of MotionTracking(TM) solutions for consumer electronic devices in the world. The company's patented Nasiri-Fabrication platform and patent-pending MotionFusion(TM) technology address the emerging needs of many mass-market consumer applications such as, improved performance, accuracy, and intuitive motion and gesture based interfaces. InvenSense technology can be found in consumer electronic markets including smartphones, tablets, gaming devices, optical image stabilization, and remote controls for Smart TVs. InvenSense is headquartered in Sunnyvale, California and has offices in China, Taiwan, Korea, Japan, and Dubai. More information can be found at http://www.invensense.com/.

# # #

For Investor Inquiries, Contact:
Alan Krock
Chief Financial Officer
ir@invensense.com

For Press Inquiries, Contact:
David Almoslino
408.988.7339 x285
dalmoslino@invensense.com

© 2012 InvenSense, Inc. All rights reserved. InvenSense, MotionTracking, MotionProcessing, MotionProcessor, MotionFusion, MotionApps, DMP, and the InvenSense logo are trademarks of InvenSense, Inc. Other company and product names may be trademarks of the respective companies with which they are associated.

INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
(Unaudited)

           Three Months Ended Year Ended
April 1,
2012
April 3,
2011
April 1,
2012
April 3,
2011
Net revenue    $ 33,077    $ 23,852    $ 152,967    $ 96,547   
Cost of revenue    14,652    10,633    67,571    43,647   
Gross profit    18,425    13,219    85,396    52,900   
Operating expenses:
Research and development    5,573    4,446    19,672    15,826   
Selling, general and administrative    5,873    4,118    18,710    15,596   
Total operating expenses    11,446 8,564    38,382    31,422   
Income from operations    6,979    4,655    47,014    21,478   
Other income (expense):
Change in fair value of warrant liabilities    - - -    (4,025 )
Other income (expense), net (30) 32 138 31   
Other income (expense)- net (30) 32 138 (3,994 )
Income before income taxes    6,949 4,687    47,152 17,484   
Income tax provision    1,058 2,139    10,205 8,137   
Net income    5,891 2,548    36,947    9,347   
Net income allocable to preferred stockholders    - 2,079    20,618    7,716   
Net income attributable to common stockholders    $ 5,891 $ 469    $ 16,329    $ 1,631   
Basic    $ 0.07 $ 0.03    $ 0.39    $ 0.09   
Diluted    $ 0.07 $ 0.02    $ 0.37    $ 0.08   
Weighted average shares outstanding in computing net income per share attributable to common stockholders:
Basic    80,163 17,966    41,614    17,592   
Diluted    87,510 22,265    47,011    22,202   
Pro forma net income per share of common stock
Basic $ 0.07 $ 0.04    $ 0.50 $ 0.14   
Diluted $ 0.07 $ 0.03    $ 0.47 $ 0.13   
Weighted average shares outstanding pro forma
Basic 80,163 68,949    73,268 67,903   
Diluted 87,510 74,816    79,381 74,079   
Supplemental Information - stock-based compensation expenses included in:
Cost of revenue $ 88 $ 58    $ 325 $ 261
Research and development 479 253 1,474 946
Selling, general and administrative 614 237 1,889 983
Total stock-based compensation expense $ 1,181 $ 548    $ 3,688 $ 2,190

INVENSENSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except par value)
(Unaudited)

   April 1,
2012
April 3,
2011
  
Assets   
Current assets:   
Cash and cash equivalents    $ 153,643    $ 28,795   
Short-term investments    4,129    9,280   
Accounts receivable    11,931    9,765   
Inventories    12,240    15,208   
Prepaid expenses and other current assets    4,188    2,249   
  
Total current assets    186,131    65,297   
Property and equipment, net    4,011    3,492   
Restricted time deposit    192    194   
Other assets    2,984    1,763   
  
Total assets    $ 193,318    $ 70,746   
  
Liabilities and Stockholders' Equity   
Current liabilities:   
Accounts payable    $ 5,446    $ 6,687   
Accrued liabilities    7,726    4,307   
Long-term debt - current portion    28    18   
Total current liabilities    13,200    11,012   
Long-term debt    22    16   
Other long-term liabilities    3,219    577   
  
Total liabilities    16,441    11,605   
  
Stockholders' equity:   
Preferred stock:   
Preferred stock, $0.001 par value - 20,000 shares authorized, no shares issued and outstanding at April 1, 2012, no shares authorized, issued and outstanding at April 3, 2011    -    -   
Convertible preferred stock:   
Series A convertible preferred stock, $0.001 par value - no shares issued and outstanding at April 1, 2012; 8,060 shares authorized, 8,000 shares issued and outstanding (aggregate liquidation value of $8,000) at April 3, 2011    -    9,019   
Series B convertible preferred stock, $0.001 par value - no shares issued and outstanding, at April 1, 2012; 6,566 shares authorized, 5,920 shares issued and outstanding (aggregate liquidation value of $11,000) at April 3, 2011    -    22,341   
Series C convertible preferred stock, $0.001 par value - no shares issued and outstanding at April 1, 2012; 15,510 shares authorized, 15,510 shares issued and outstanding (aggregate liquidation value of $19,000) at April 3, 2011    -    18,881   
Common stock:   
Common stock, $0.001 par value - 750,000 shares authorized, and 80,890 shares issued and outstanding at April 1, 2012; 80,000 shares authorized, 18,005 shares issued and outstanding at April 3, 2011    136,792    5,762   
Accumulated other comprehensive income    1 1   
Retained earnings    40,084 3,137   
  
Total stockholders' equity    176,877    59,141   
  
Total liabilities and stockholders' equity    $ 193,318    $ 70,746   
  

INVENSENSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)

                                                          (Unaudited) Year Ended
   April 1,
2012
April 3,
2011
  
Cash flows from operating activities:   
Net income    $ 36,947    $ 9,347   
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization    1,992    1,778   
Loss (gain) on disposal of property and equipment    (154)    91   
Stock-based compensation expense    3,688 2,190   
Change in fair value of warrant liability    - 4,025   
Deferred income tax assets    (702) 489   
Write-off of deferred offering costs    - 1,388   
Changes in operating assets and liabilities:   
Accounts receivable    (2,222) (4,564 )
Inventories    2,968 (10,896 )
Prepaid expenses and other current assets    (1,018) 390   
Other assets    (1,404) (805 )
Accounts payable    (1,245) 3,351   
Accrued liabilities    5,567 1,124   
Advances from customer    - (16 )
  
Net cash provided by operating activities    44,417 7,892   
  
Cash flows from investing activities:   
Purchase of property and equipment    (2,502) (2,176 )
Proceeds from the sale of property and equipment    188 -   
Sale of available for sale investments    15,176 15,675   
Purchase of available for sale investments    (10,025) (10,062 )
Changes in restricted time deposits    - 60   
  
Net cash provided by investing activities    2,837 3,497   
  
Cash flows from financing activities:   
Proceeds from initial public offering and secondary offering, net of underwriter commissions    77,904 -   
Net proceeds from issuance of preferred stock    499 -   
Proceeds from issuance of common stock    1,357 717   
Offering costs    (2,141) (1,388 )
Proceeds from long-term debt and capital lease obligations    - 43   
Payments of long-term debt and capital lease obligations    (25) (360 )
Refund from refundable customer advances    - (4,000 )
  
Net cash provided by (used in) financing activities    77,594 (4,988 )
  
Net increase in cash and cash equivalents    124,848 6,401   
Cash and cash equivalents:   
Beginning of period    $ 28,795 $ 22,394   
  
End of period    $ 153,643 $ 28,795   
  
Supplemental disclosures of cash flow information:   
Cash paid for interest    $ 23    $ 16   
  
Cash paid for income taxes    $ 9,078    $ 7,735   
  
Noncash investing and financing activities:   
Unpaid accounts payable for property and equipment purchased    $ 274    $ 278   
  
Unrealized gain from available for sale investments    $ 8    $ 10   
  
Fixed assets acquired under capital leases    $ 40    $ 43   
  
Unpaid offering costs    $ 494    $ 23   
  
Reclassification of warrants from liabilities to equity    $ -    $ 11,877   
  

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