Revenue Grows 28% Year-over-Year; Sales of MRAM Products Increase 14%

Sequentially

Second Quarter 2018 Financial Results to be Restated to Reflect $770

Thousand decrease in Inventory and increase in Cost of Goods Sold

CHANDLER, Ariz.--(BUSINESS WIRE)--Everspin Technologies, Inc. (Nasdaq: MRAM), the world's leading

developer and manufacturer of discrete and embedded MRAM, today

announced financial results for the third quarter ended September 30,

2018.

Third Quarter and Recent Highlights



  • Total revenue of $11.5 million, an increase of 28% year-over-year


  • Executed joint agreement with SilTerra to establish additional
    manufacturing capacity for Toggle products


  • Extended length of joint development agreement with GLOBALFOUNDRIES
    providing both companies more effective controls on their respective
    development programs


  • Everspin 256Mb STT-MRAM will be available on another storage array
    platform from the company’s leading enterprise storage customer


  • Ended quarter with cash balance of $31.4 million

“Third quarter results demonstrated meaningful progress from both a

revenue and an operational perspective. The third quarter results show

an important return to top line growth for the company. I am pleased

with the ongoing improvement our team has made in our Toggle operations

and with the traction our 256Mb STT-MRAM product is gaining both within

our lead customers and beyond. We remain on track with the planned

sampling of our 1Gb STT product next month. And finally, we’ve

successfully executed multiple strategic agreements and initiatives that

we believe will support longer-term profitable growth,” said Kevin

Conley, Everspin’s President and CEO.

Summary of Preliminary Restated Second Quarter Financial Results

Everspin also announced today that the company will be restating its

second quarter 2018 financial results due to a discrepancy related to

the timing of recognizing scrapped inventory in the amount of $770

thousand. As a result, the company will reflect an additional $770

thousand increase in cost of sales for the three- and six-month periods

ended June 30, 2018, which will reduce gross profit and increase both

loss from operations and net loss. The company anticipates filing its

third quarter 10-Q and an amended second quarter form 10-Q/A on or

before November 16, 2018. The second quarter 2018 financials are

expected to be restated as follows:



  • Company to restate second quarter inventory to $8.9 million, versus
    $9.6 million previously reported


  • Cost of sales to be restated to be $6.2 million, versus $5.5 million
    as previously reported


  • Gross profit to be restated to be $4.5 million, versus $5.3 million as
    previously reported


  • Gross margin to be restated to be 42%, versus the 49% as previously
    reported


  • Loss from operations to be restated to be $7.3 million, versus $6.5
    million as previously reported


  • Net loss and comprehensive loss to be restated to be $7.4 million,
    versus $6.6 million as previously reported

Third Quarter Results (Second Quarter 2018 Results as restated for

comparison)

Revenue for the third quarter of 2018 was $11.5 million, a 28% increase

over the $9.0 million reported in the third quarter of 2017 and a 7.0%

increase over the $10.8 million in the previous quarter.

Gross margin for the third quarter of 2018 was 47% compared to gross

margin in the third quarter of 2017 of 58% and in the second quarter of

2018 of 42%.

Operating expenses for the third quarter of 2018 were $10.9 million, an

increase from the $10.6 million in the year-ago quarter and $11.8

million in the previous quarter.

Net loss for the third quarter of 2018 was $5.6 million, or ($0.33) per

share, based on 16.9 million weighted-average shares outstanding,

compared with a net loss of $5.4 million, or ($0.43) per share, in the

third quarter of 2017 and a net loss of $7.4 million, or ($0.44) per

share, in the second quarter of 2018.

Cash and cash equivalents as of September 30, 2018 were $31.4 million as

compared to $32.7 million at the end of the second quarter of 2018.

Business Outlook

For the fourth quarter of 2018, Everspin expects revenue to range

between $11.8 million and $12.2 million. Net loss per share is expected

to range between ($0.22) and ($0.18) based on an average-weighted share

count of 17.1 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 7429825.

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

A telephone replay of the conference call will be available

approximately two hours after the call until Thursday, November 15,

2018, at midnight, Eastern Time. The replay can be accessed by dialing

1-855-859-2056 and using the passcode 7429825. 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,

Everspin’s expectations as to the timing of sampling of its 1Gb STT-MRAM

product and 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 9, 2018, 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,





2018



2017

Assets








Current assets:








Cash and cash equivalents




$

31,438




$

12,950


Accounts receivable, net





5,582





4,041


Inventory





9,482





9,837


Prepaid expenses and other current assets




 

436

 



 

590

 

Total current assets





46,938





27,418


Property and equipment, net





4,438





3,946


Other assets




 

73

 



 

73

 

Total assets




$

51,449

 



$

31,437

 








 

Liabilities and Stockholders’ Equity








Current liabilities:








Accounts payable




$

2,847




$

2,920


Accrued liabilities





8,588





3,748


Deferred income on shipments to distributors











1,720


Current portion of long-term debt




 

4,472

 



 

3,987

 

Total current liabilities





15,907





12,375


Long-term debt, net of current portion




 

7,928

 



 

8,178

 

Total liabilities




 

23,835

 



 

20,553

 

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,
2018 and December 31, 2017














Common stock, $0.0001 par value per share; 100,000,000 shares
authorized; 17,065,846 and 12,817,201 shares issued and outstanding
as of September 30, 2018 and December 31, 2017





2





1


Additional paid-in capital





158,125





128,422


Accumulated deficit




 

(130,513

)



 

(117,539

)

Total stockholders’ equity




 

27,614

 



 

10,884

 

Total liabilities and stockholders’ equity




$

51,449

 



$

31,437

 








 



 

 

 


 

 


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,





 



 





2018

 

 

2017



2018

 

 

2017

Product sales




$

10,469




$

8,323




$

29,283




$

22,171


Licensing, royalty, and other revenue




 

1,049

 



 

685

 



 

7,853

 



 

3,642

 

Total revenue





11,518





9,008





37,136





25,813


Cost of sales




 

6,109

 



 

3,753

 



 

17,235

 



 

10,549

 

Gross profit





5,409





5,255





19,901





15,264


Operating expenses:














Research and development





6,453





6,420





19,706





19,236


General and administrative





2,913





3,031





9,461





8,669


Sales and marketing




 

1,582

 



 

1,112

 



 

4,661

 



 

3,331

 

Total operating expenses




 

10,948

 



 

10,563

 



 

33,828

 



 

31,236

 

Loss from operations





(5,539

)




(5,308

)




(13,927

)




(15,972

)

Interest expense





(229

)




(178

)




(662

)




(584

)

Other income, net





139





40





315





83


Loss on extinguishment of debt




 



 



 



 



 



 



 

(246

)

Net loss and comprehensive loss




$

(5,629

)



$

(5,446

)



$

(14,274

)



$

(16,719

)

Net loss per common share, basic and diluted




$

(0.33

)



$

(0.43

)



$

(0.88

)



$

(1.35

)

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




 

16,944,660

 



 

12,559,812

 



 

16,130,882

 



 

12,425,390

 














 



 

 

 


EVERSPIN TECHNOLOGIES, INC.

Condensed Statement of Cash Flows

(In thousands)

(Unaudited)





 





Nine Months Ended





September 30,





2018

 

 

2017

Cash flows from operating activities








Net loss




$

(14,274

)



$

(16,719

)

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








Depreciation and amortization





1,069





837


Loss on disposal of property and equipment





19








Stock-based compensation





2,064





1,511


Non-cash loss on extinguishment of debt











185


Non-cash interest expense





286





188


Compensation expense related to vesting of common stock to
GLOBALFOUNDRIES





709





1,224


Changes in operating assets and liabilities:








Accounts receivable





(1,876

)




(527

)

Inventory





309





(2,628

)

Prepaid expenses and other current assets





154





320


Other assets











(11

)

Accounts payable





(140

)




(333

)

Accrued liabilities





4,840





1,109


Deferred income on shipments to distributors











323


Shipping term reversal




 

(39

)



 



 

Net cash used in operating activities




 

(6,879

)



 

(14,521

)

Cash flows from investing activities








Purchases of property and equipment




 

(1,513

)



 

(2,170

)

Net cash used in investing activities




 

(1,513

)



 

(2,170

)

Cash flows from financing activities








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





24,524








Proceeds from debt





1,000





12,000


Payments on debt





(1,000

)




(8,356

)

Payments of debt issuance costs











(49

)

Payments on capital lease obligation





(8

)




(7

)

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




 

2,364

 



 

1,218

 

Net cash provided by financing activities




 

26,880

 



 

4,806

 

Net increase (decrease) in cash and cash equivalents





18,488





(11,885

)

Cash and cash equivalents at beginning of period




 

12,950

 



 

29,727

 

Cash and cash equivalents at end of period




$

31,438

 



$

17,842

 

Supplementary cash flow information:








Interest paid




$

370

 



$

396

 

Non-cash investing and financing activities:








Purchase of property and equipment in accounts payable




$

183

 



$

764

 

Issuance of warrants with debt




$

43

 



$



 

Contacts

Everspin

Charlie Rubin, 510-908-3356

Story Public

Relations

or

Shelton

Group

Leanne K. Sievers, 949-224-3874

Investor Relations