Company Profile

News Release

Printer Friendly Version View printer-friendly version
<< Back
InvenSense Announces Second Quarter Of Fiscal Year 2017 Results

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 3, 2016-- InvenSense Inc. (NYSE: INVN), a leading provider of MEMS sensor platform solutions, today announced results for its second quarter of fiscal year 2017, ended October 2, 2016.

Net revenue for the second quarter of fiscal 2017 was $79.8 million, up 32 percent from $60.6 million for the first quarter of fiscal 2017 and down 29 percent from $112.5 million for the second quarter of fiscal 2016.

Gross margin determined in accordance with U.S. generally accepted accounting principles (GAAP) was 42 percent for the second quarter of fiscal 2017, up from 41 percent for the first quarter of fiscal 2017. GAAP gross margin for the second quarter of fiscal 2017 included stock-based compensation expense and related payroll taxes and amortization of acquisition-related intangibles. Excluding these items, non-GAAP gross margin was 46 percent for the second quarter of fiscal 2017, consistent with the non-GAAP gross margin for the first quarter of fiscal 2017.

GAAP net loss for the second quarter of fiscal 2017 was $12.5 million, or $.13 per share. By comparison, GAAP net loss was $20.2 million, or $.22 per share, for the first quarter of fiscal 2017. GAAP net loss for the second quarter of fiscal 2017 included stock-based compensation expense and related payroll taxes, accreting interest expense on convertible notes, amortization of acquisition-related intangibles, business acquisition costs and litigation-related expenses. Excluding these items and the income tax effect of the excluded items as well as other discrete tax items, non-GAAP net income for the second quarter of fiscal 2017 was $1.7 million, or $.02 per diluted share (based on the weighted average shares outstanding of 94.6 million) compared with non-GAAP net loss of $4.9 million, or $.05 per share, for the first quarter of fiscal 2017.

The reconciliation between GAAP and non-GAAP financial results for all referenced periods is provided in a table immediately following the Unaudited Condensed Consolidated Statements of Operations below.

Management Qualitative Comments

“The InvenSense team delivered solid results in the second fiscal quarter. We are encouraged that our R&D investments are beginning to pay off with new design wins which we anticipate will allow us to penetrate new markets,” said Behrooz Abdi, president and CEO. “While the consumer and mobile markets were and remain soft, we believe this design win activity will position us for strong top line growth in fiscal 2018 as we strive to diversify our business.”

Second Quarter of Fiscal Year 2017 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 (844) 413-0862 ten minutes prior to the start of the call, using the passcode 97991032. International callers, please dial (216) 562-0454. A taped replay will be made available approximately two hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 and enter passcode 97991032. International callers please dial (404) 537-3406. The conference call will be available via a live webcast on the investor relations section of InvenSense’s web site at www.invensense.com/ir. An archived webcast replay will be available on the web site for two months.

Note Regarding Use of Non-GAAP Financial Measures

As discussed above, in addition to the company’s condensed consolidated financial statements, which are presented according to GAAP, the company provides certain non-GAAP financial information that excludes stock-based compensation expense and related payroll taxes, accreting interest expense on the company’s 1.75% convertible senior notes, amortization of acquisition-related intangible assets, business acquisition costs and litigation-related expenses. The company uses these non-GAAP measures in its own financial and operational decision-making processes. Further, the company believes that these non-GAAP measures offer an important analytical tool to help investors understand the company’s core operating results and trends and facilitate comparability with the operating results of other companies that provide similar non-GAAP measures. These non-GAAP measures have certain limitations as analytical tools and are not meant to be considered in isolation or as a substitute for GAAP financial information. For example, stock-based compensation is an important component of the company’s compensation mix and will continue to result in significant expenses in the company’s GAAP results for the foreseeable future, but it is not reflected in the company’s non-GAAP measures. Also, other companies, including other companies in the company’s industry, may calculate non-GAAP financial measures differently, limiting their usefulness as comparative measures.

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 our expectations with respect to the success of our R&D investments, design win activity, new market penetration, top line growth, consumer and mobile market conditions or diversification of our business discussed in this press release, as well as the expected benefits of leveraging our investments in our sensor platform and our beliefs regarding potential growth opportunities. Investors are cautioned that all forward-looking statements in this press release involve risks and uncertainty that can cause actual results to differ materially from those currently anticipated due to a number of factors, including without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; the receipt, reduction, cancellation or delay of significant orders by our customers; advances and trends in new technologies and industry standards; the continued adoption of motion tracking and motion sensing as an interface in consumer electronics products; decreases in average selling prices for our products; market acceptance and changes in end-user demand for our customers’ products; our ability to continue to develop and introduce new and enhanced products on a timely basis; and new product announcements and introductions by our competitors, as well as the other risk factors discussed in InvenSense’s Annual Report on Form 10-K for the year ended April 3, 2016 and other 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 world’s leading provider of MEMS sensor platforms. InvenSense’s vision of Sensing Everything targets the consumer electronics and industrial markets with integrated Motion and Sound solutions. Our solutions combine MEMS (micro electrical mechanical systems) sensors, such as accelerometers, gyroscopes, compasses, and microphones with proprietary algorithms and firmware that intelligently process, synthesize, and calibrate the output of sensors, maximizing performance and accuracy. InvenSense’s motion tracking, audio and location platforms, and services can be found in Mobile, Wearables, Smart Home, Industrial, Automotive, and IoT products. InvenSense is headquartered in San Jose, California and has offices worldwide. For more information, go to www.invensense.com and http://www.coursaretail.com.

©2016 InvenSense, Inc. All rights reserved. InvenSense, Sensing Everything, FireFly, SensorStudio, TrustedSensor, Coursa, UltraPrint, MotionTracking, MotionProcessing, MotionProcessor, MotionFusion, MotionApps, InvenSenseTV, DMP, AAR, 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 OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

               
Three Months Ended
October 2, July 3, September 27,
  2016     2016     2015  
Net revenue $ 79,831 $ 60,636 $ 112,545
Costs of revenue   46,299     35,891     65,974  
Gross profit 33,532 24,745 46,571
Operating expenses:
Research and development 28,144 26,541 24,991
Selling, general and administrative   14,869     13,862     15,186  
Total operating expenses   43,013     40,403     40,177  
Income (loss) from operations (9,481 ) (15,658 ) 6,394
Interest expense (2,925 ) (2,881 ) (2,765 )
Other income (expense), net   138     226     104  
Income (loss) before income taxes (12,268 ) (18,313 ) 3,733
Income tax provision (benefit)   242     1,872     (1,960 )
Net income (loss) $ (12,510 ) $ (20,185 ) $ 5,693  
 
Net income (loss) per share:
Basic $ (0.13 ) $ (0.22 ) $ 0.06  
Diluted $ (0.13 ) $ (0.22 ) $ 0.06  
 

Weighted average shares outstanding used in computing net income (loss) per share:

Basic   93,657     93,236     91,574  
Diluted   93,657     93,236     92,569  
 

INVENSENSE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(In thousands, except per share amounts)

(Unaudited)

               
Three Months Ended
October 2,   July 3, September 27,
  2016     2016     2015  
GAAP net income (loss) $ (12,510 ) $ (20,185 ) $ 5,693
Adjustments:
Stock based compensation expense and related payroll taxes 9,080 8,273 9,249
Convertible note accretion interest expense 2,158 2,113 1,999
Amortization of acquisition-related intangible assets 2,415 2,284 2,254
Business acquisition costs 264 - -
Litigation-related expenses 263 60 144

Income tax effect of pretax non-GAAP adjustments and other discrete tax items

  (6 )   2,597     (4,476 )
Non-GAAP net income (loss) $ 1,664   $ (4,858 ) $ 14,863  
 
GAAP net income (loss) per share of common stock $ (0.13 ) $ (0.22 ) $ 0.06  
Non-GAAP net income (loss) per share of common stock, diluted $ 0.02   $ (0.05 ) $ 0.16  
 
GAAP Gross profit $ 33,532 $ 24,745 $ 46,571
Adjustments:
Stock based compensation expense and related payroll taxes 572 619 587
Amortization of acquisition-related intangible assets   2,359     2,228     2,198  
Non-GAAP Gross profit $ 36,463   $ 27,592   $ 49,356  
 
GAAP Operating Expenses $ 43,013 $ 40,403 $ 40,177
Adjustments:
Stock based compensation expense and related payroll taxes 8,508 7,654 8,662
Amortization of acquisition-related intangible assets 56 56 56
Business acquisition costs 264 - -
Litigation-related expenses   263     60     144  
Non-GAAP Operating Expenses $ 33,922   $ 32,633   $ 31,315  
 

INVENSENSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

             
October 2, April 3,
  2016     2016  
Assets
Current assets:
Cash and cash equivalents $ 37,047 $ 41,105
Short-term investments 239,121 243,755
Accounts receivable 36,599 41,447
Inventories 46,101 62,297
Prepaid expenses and other current assets   9,187     9,250  
Total current assets 368,055 397,854
Property and equipment, net 33,140 36,271
Intangible assets, net 43,988 43,169
Goodwill 143,320 139,175
Other assets   5,778     5,992  
Total assets $ 594,281   $ 622,461  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 16,507 $ 35,200
Accrued liabilities   31,123     30,248  
Total current liabilities 47,630 65,448
Long-term debt 155,310 151,038
Other long-term liabilities   26,703     27,230  
Total liabilities   229,643     243,716  
 
Stockholders' equity:
Preferred stock:

Preferred stock, $0.001 par value — 20,000 shares authorized, no shares issued and outstanding at October 2, 2016 and April 3, 2016

- -
Common stock:

Common stock, $0.001 par value — 750,000 shares authorized, 93,855 shares issued and outstanding at October 2, 2016, 93,010 shares issued and outstanding at April 3, 2016

321,956 303,153
Accumulated other comprehensive (loss) (241 ) (26 )
Retained earnings   42,923     75,618  
Total stockholders' equity   364,638     378,745  
Total liabilities and stockholders' equity $ 594,281   $ 622,461  
 

INVENSENSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
Three Months Ended
October 2,   July 3,   September 27,
  2016     2016     2015  
Cash flows from operating activities:
Net income (loss) $ (12,510 ) $ (20,185 ) $ 5,693
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation 3,471 3,310 3,195
Amortization of intangible assets 2,507 2,375 2,361
Non cash interest expense 2,158 2,113 2,000
Loss on other investments - 325 -
Stock-based compensation expense 9,045 8,176 9,048
Deferred income tax assets (5 ) 80 (1,674 )
Tax effect of employee benefit plans - - (457 )
Changes in operating assets and liabilities:
Accounts receivable 1,345 3,502 (47 )
Inventories 5,526 10,670 2,807
Prepaid expenses and other current assets (827 ) 833 1,154
Other assets 191 207 (1,715 )
Accounts payable 3,659 (22,282 ) 8,253
Accrued liabilities   3,885     (3,379 )   2,897  
Net cash provided by (used in) operating activities   18,445     (14,255 )   33,515  
 
Cash flows from investing activities:
Purchase of property and equipment (1,892 ) (1,892 ) (1,611 )
Sale and maturities of available-for-sale investments 86,563 56,448 56,478
Purchase of available-for-sale investments (78,676 ) (60,055 ) (91,305 )
Other non-marketable investments (300 ) - -
Operating lease deposit (207 ) - -
Acquisition, net of cash acquired   (9,845 )   -     -  
Net cash used in investing activities   (4,357 )   (5,499 )   (36,438 )
 
Cash flows from financing activities:
Proceeds from exercise of common stock - 1,703 226
Payments of loan   (95 )   -     -  
Net cash provided by (used in) financing activities   (95 )   1,703     226  
 
Net increase (decrease) in cash and cash equivalents 13,993 (18,051 ) (2,697 )
Cash and cash equivalents:
Beginning of period   23,054     41,105     72,859  
End of period $ 37,047   $ 23,054   $ 70,162  

Source: InvenSense, Inc.

For Investor Inquiries, Contact:
Darrow Associates
Dave Allen, 408-427-4463
dallen@darrowir.com
ir@invensense.com
or
For Media Inquiries, Contact:
InvenSense, Inc.
David Almoslino, 408-501-2278
Senior Director
Corporate Marketing
pr@invensense.com

loading