INTERMOLECULAR INC SAN JOSE, Calif., Feb. 4, 2016 /PRNewswire/ -- Intermolecular, Inc. (NASDAQ: IMI) today reported results for its fourth quarter and full year ended December 31, 2015.
Fourth Quarter 2015 Results
Revenue was $13.5 million, up 17% compared to $11.5 million in the prior quarter. Program revenue was $10.5 million, up 21% compared to $8.7 million in the prior quarter. Licensing and royalty revenue was $3.0 million, up 4% compared to $2.8 million in the prior quarter.
Non-GAAP net loss for the fourth quarter was $(1.1) million, or $(0.02) per share. This compared with non-GAAP net loss of $(4.7) million, or $(0.10) per share in the prior quarter. GAAP net loss for the fourth quarter was $(1.9) million, or $(0.04) per share, compared to net loss of $(5.8) million, or $(0.12) per share in the prior quarter.
"Reaching positive operating cash flow and achieving sequential revenue growth are strong indications that our changes to the business model, team and operations are paying off," said Bruce McWilliams, President and CEO of Intermolecular. "Our turnaround strategy is working. In 2016 we look forward to further expanding our market opportunity within the semiconductor industry and other large markets where access to the IMI platform for materials discovery and understanding can offer a substantial competitive advantage to customers."
Full Year 2015 Results
For the year ended December 31, 2015, revenue was $45.8 million compared to revenue of $47.7 million in 2014. Net loss for 2015 was $(20.4) million, or $(0.42) per share, compared with a net loss of $(21.8) million, or $(0.47) per share, for 2014.
Non-GAAP net loss for the year ended December 31, 2015 was $(14.8) million, or $(0.31) per share. This compared with non-GAAP net loss of $(14.4) million, or $(0.31) per share, for 2014.
Outlook for First Quarter 2016 based on current expectations:
-- Intermolecular projects revenue in the range of $13.7 million to $14.2
million.
-- Non-GAAP net loss, which excludes stock-based compensation expense, is
projected between $(2.0) million and $(3.0) million, or between $(0.04)
to $(0.06) per share, on approximately 49 million shares outstanding.
Intermolecular reports revenue, cost of revenue, gross margin, operating income (loss), net income (loss) and earnings (loss) per share in accordance with U.S. generally accepted accounting principles (GAAP) and additionally on a non-GAAP basis. A reconciliation of the non-GAAP financial measures with the most directly comparable GAAP measures, as well as a description of the items excluded from the non-GAAP measures, is included in the financial statements portion of this press release.
Conference Call Information
Intermolecular will host a conference call and simultaneous audio-only webcast at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time today with Bruce McWilliams, president and chief executive officer, and Rick Neely, senior vice president and chief financial officer, for Intermolecular.
The call can be accessed by dialing (877) 251-1860; international callers should dial (224) 357-2386. Please dial-in ten minutes prior to the scheduled conference call time. A live and archived audio webcast of the call will be available on Intermolecular's Website at http://ir.intermolecular.com for up to 30 days after the call.
About Intermolecular, Inc.
Intermolecular is a leading source for advanced materials discovery and understanding. We work closely with our customers using our High Productivity Combinatorial (HPC) platform to discover, develop and characterize engineered materials for next generation high-technology products. The company's products and services consist of information products and materials experiments that enable customers' R&D teams to efficiently evaluate, select and integrate materials that are critical to their next generation products. Intermolecular's solutions and services create significant economic value for its customers by enabling then to rapidly discover and create new options for mission-critical materials decisions.
"Intermolecular" and the Intermolecular logo are registered trademarks; and "HPC" is a trademark of Intermolecular, Inc.; all rights reserved. Learn more at www.intermolecular.com.
Forward-Looking Statements
Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, our ability to productize our workflows with existing and future customers; expectations regarding our future revenue, cash flow and GAAP and non-GAAP net income or loss; the ability of our new business model to generate long-term shareholder returns; the extent to which technology developed in collaboration with our customers will continue to remain on the critical path and have significant value for such customers and us as well as the industry as a whole; and anticipated growth in our current markets through expansion of existing customer programs and the entry into other engagements with new customers. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: our ability to execute on our strategy, prove our business model and remain technologically competitive in rapidly evolving industry conditions; commercial acceptance of our HPC platform and methodology as effective R&D tools; our ability to achieve and sustain profitability; the ability of our customers to achieve their announced product roadmaps in a timely manner; the extent to which we are able to successfully extend and expand relationships with existing customers; our ability to manage the growth of our business; the rapid technology changes and volatility of the customers and industries we serve; our potential need for future capital to finance our operations; and other risks described in our most recent Form 10-K and our quarterly reports on Form 10-Q, each as filed with the SEC and available at www.sec.gov, particularly in the sections titled "Risk Factors." All forward-looking statements are based on management's current estimates, projections and assumptions, and we assume no obligation to update them.
Intermolecular, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue:
Program revenue $10,493 $7,090 $33,451 $30,540
Product revenue - 84 75 84
Licensing and royalty revenue 2,962 3,827 12,296 17,071
----- ----- ------ ------
Total revenue 13,455 11,001 45,822 47,695
Cost of revenue 4,281 6,280 19,436 24,651
----- ----- ------ ------
Gross profit 9,174 4,721 26,386 23,044
Operating expenses:
Research and development 7,301 6,129 28,383 24,320
Sales and marketing 1,349 1,422 5,884 5,770
General and administrative 2,462 3,092 12,229 12,636
Restructuring charges - - - 1,361
--- --- --- -----
Total operating expenses 11,112 10,643 46,496 44,087
------ ------ ------ ------
Operating loss (1,938) (5,922) (20,110) (21,043)
Interest expense, net 40 (150) (267) (682)
Other income (expense), net (1) (16) (12) (29)
--- --- --- ---
Loss before provision for
income taxes (1,899) (6,088) (20,389) (21,754)
Income tax provision 1 - 8 7
--- --- --- ---
Net loss $(1,900) $(6,088) $(20,397) $(21,761)
Basic and diluted net loss per
common share $(0.04) $(0.13) $(0.42) $(0.47)
====== ====== ====== ======
Shares used in basic and
diluted net loss per common
share 48,681 46,906 48,158 46,718
====== ====== ====== ======
Intermolecular, Inc.
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
As of December 31, As of December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $11,676 $21,765
Marketable securities 23,656 43,304
------ ------
Total cash, cash equivalents and
marketable securities 35,332 65,069
Accounts receivable, net 6,614 5,321
Inventory, current portion - 34
Prepaid expenses and other current assets 1,608 1,784
----- -----
Total current assets 43,554 72,208
Inventory, net of current portion 4,413 5,894
Property and equipment, net 15,735 19,106
Intangible assets, net 5,969 7,941
Other assets 506 288
--- ---
Total assets $70,177 $105,437
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $848 $862
Accrued compensation and employee
benefits 4,416 1,628
Deferred revenue 2,595 3,540
Accrued liabilities 2,385 2,101
Note payable - 2,000
--- -----
Total current liabilities 10,244 10,131
Note payable, net of current portion - 21,000
Deferred revenue, net of current portion - 1,103
Other long-term liabilities 3,334 2,938
----- -----
Total liabilities 13,578 35,172
Stockholders' equity:
Common stock 49 48
Additional paid-in capital 208,856 202,139
Accumulated other comprehensive loss (24) (37)
Accumulated deficit (152,282) (131,885)
-------- --------
Total stockholders' equity 56,599 70,265
------ ------
Total liabilities and stockholders'
equity $70,177 $105,437
======= ========
Intermolecular, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands, Unaudited)
Twelve Months Ended December 31,
--------------------------------
2015 2014
---- ----
Cash flows from operating
activities:
Net loss $(20,397) $(21,761)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation and amortization 10,728 10,948
Stock-based compensation 5,557 6,021
Impairment of long-lived assets 18 629
Realized loss/(gain) from
investments 8 -
Changes in operating assets and
liabilities:
Prepaid expenses and other assets (42) 94
Inventory (319) 1,581
Accounts receivable (1,293) 1,701
Accounts payable (24) (635)
Accrued and other liabilities 2,985 (1,769)
Deferred revenue (2,048) 1,341
------ -----
Net cash (used in) provided by
operating activities (4,827) (1,850)
------ ------
Cash flows from investing
activities:
Purchase of short-term investments (32,577) (48,451)
Redemption of short-term
investments 51,410 4,802
Purchase of property and equipment (1,452) (2,815)
Capitalized intangible assets (803) (1,194)
---- ------
Net cash (used in) provided by
investing activities 16,578 (47,658)
------ -------
Cash flows from financing
activities:
Payment of debt (23,000) (2,000)
Proceeds from exercise of common
stock options 1,160 1,190
----- -----
Net cash (used in) provided by
financing activities (21,840) (810)
------- ----
Net (decrease) increase in cash
and cash equivalents (10,089) (50,318)
Cash and cash equivalents at
beginning of period 21,765 72,083
------ ------
Cash and cash equivalents at end
of period $11,676 $21,765
======= =======
Non-GAAP Financial Measures
To supplement the financial data
presented on a GAAP basis, we also
disclose certain non-GAAP financial
measures, which exclude the effect of
stock-based compensation and
restructuring related charges. These
non-GAAP financial measures are not
prepared in accordance with GAAP, do
not serve as an alternative to GAAP and
may be calculated differently than non-
GAAP financial information disclosed by
other companies. These results should
only be used to evaluate our results of
operations in conjunction with the
corresponding GAAP measures. We believe
that our non-GAAP financial
information provides useful information
to management and investors regarding
financial and business trends relating
to our financial condition and results
of operations because the non-GAAP
measures exclude charges that
management considers to be outside of
Intermolecular's core operating
results. We believe that the non-GAAP
measures of revenue, cost of net
revenue, gross profit, gross margin,
operating (loss) income, net (loss)
income, earnings per share and net
(loss) income per share, viewed in
combination with our financial results
calculated in accordance with GAAP,
provide investors with additional
perspective and a more meaningful
understanding of our ongoing operating
performance. In addition, management
uses these non-GAAP measures to review
and assess financial performance, to
determine executive officer incentive
compensation and to plan and forecast
performance in future periods.
Intermolecular, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts and percentages, Unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2015 2014 2015 2014
---- ---- ---- ----
GAAP cost of net revenue $4,281 $6,280 $19,436 $24,651
Stock-based compensation expense (a) (152) (360) (1,108) (1,315)
---- ---- ------ ------
Non-GAAP cost of net revenue $4,129 $5,920 $18,328 $23,336
------ ------ ------- -------
GAAP gross profit $9,174 $4,721 $26,386 $23,044
Stock-based compensation expense (a) 152 360 1,108 1,315
--- --- ----- -----
Non-GAAP gross profit $9,326 $5,081 $27,494 $24,359
------ ------ ------- -------
As a percentage of net revenue:
GAAP gross margin 68.2% 42.9% 57.6% 48.3%
==== ==== ==== ====
Non-GAAP gross margin 69.3% 46.2% 60.0% 51.1%
==== ==== ==== ====
GAAP operating loss $(1,938) $(5,922) $(20,110) $(21,043)
Stock-based compensation expense (a):
- Cost of net revenue 152 360 1,108 1,315
- Research and development 276 358 1,614 1,234
- Sales and marketing (26) 398 654 1,470
- General and administrative 367 376 2,181 2,002
Restructuring charges (b) - - - 1,361
--- --- --- -----
Non-GAAP operating loss $(1,169) $(4,430) $(14,553) $(13,661)
------- ------- -------- --------
GAAP net loss $(1,900) $(6,088) $(20,397) $(21,761)
Stock-based compensation expense (a) 769 1,492 5,557 6,021
Restructuring charges (b) - - - 1,361
--- --- --- -----
Non-GAAP net loss $(1,131) $(4,596) $(14,840) $(14,379)
======= ======= ======== ========
Shares used in computing Non-GAAP basic
and diluted earnings per share 48,681 46,906 48,158 46,718
Non-GAAP earnings per share:
Basic and diluted net loss per common
share $(0.02) $(0.10) $(0.31) $(0.31)
====== ====== ====== ======
(a) Stock-based
compensation
reflects
expense
recorded
relating to
stock-based
awards. The
Company
excludes this
item when it
evaluates the
continuing
operational
performance
of the
Company, as
management
believes this
GAAP measure
is not
indicative of
its core
operating
performance.
(b) Restructuring
charges
incurred in
connection
with a
reduction in
headcount
primarily
comprised of
employee
severance and
benefit
costs.
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SOURCE Intermolecular, Inc.
