MEMSCAP Regulatory News:
MEMSCAP (Paris:MEMS) (NYSE Euronext: MEMS), the leading provider of innovative solutions based on MEMS (micro-electro-mechanical systems) technology, today announced its earnings for the 2019 financial year ending December 31, 2019.
Analysis of the consolidated income statement
In line with the previous quarterly press releases, MEMSCAP reported an audited revenue of EUR 12.8 million for FY 2019 compared to EUR 13.0 million for FY 2018. Expressed in US dollar, consolidated sales for FY 2019 amounted to US$ 14.3 million against US$ 15.3 million for FY 2018. It is to be noted that sales made in US dollar represented approximately 83% of the Group's revenue in 2019.
Consolidated revenue distribution by market segment, over FY 2019, is as follows:
Market segments / Revenue (In million euros) | FY 2019 | % |
| FY 2018 | % |
Aerospace | 6.8 | 53% |
| 6.2 | 48% |
Optical communications / Adaptive optics | 3.5 | 27% |
| 4.1 | 32% |
Medical / Biomedical | 1.7 | 13% |
| 2.1 | 16% |
Others | 0.8 | 7% |
| 0.6 | 4% |
Total | 12.8 | 100% |
| 13.0 | 100% |
(Any apparent discrepancies in totals are due to rounding.)
The continued sales growth of the avionics business was confirmed over FY 19 with an annual growth rate of +9% compared to FY 2018. The Group's avionics business accounts for more than 53% of the Group's consolidated sales for FY 2019. The optical communications business, which was impacted by trade tensions between the United States of America and China in Q3 19, reported a -15% evolution compared to FY 2018. This impact appears to be temporary since the optical communications business returned to normative sales in Q4 2019.
The increase in other activities of the Custom products division in FY 2019 offset the decrease in sales observed in the medical segment, a semi-cyclical business.
MEMSCAP’s consolidated earnings for FY 2019 are given within the following table:
In million euros | FY 2019 |
| FY 2018 Restated (1) |
| FY 2018 Published (1) |
Revenue | 12.8 |
| 13.0 |
| 13.0 |
- Standard products* - Custom products | 8.5 4.3 |
| 8.3 4.7 |
| 8.3 4.7 |
Cost of revenue | (8.7) |
| (8.5) |
| (8.5) |
Gross margin | 4.1 |
| 4.5 |
| 4.4 |
% of revenue | 32% |
| 34% |
| 34% |
Operating expenses** | (3.9) |
| (3.9) |
| (3.9) |
Operating profit / (loss) | 0.1 |
| 0.6 |
| 0.5 |
Financial profit / (loss) | (0.0) |
| 0.0 |
| 0.2 |
Income tax expense | (0.1) |
| (0.3) |
| (0.3) |
Net profit / (loss) | (0.0) |
| 0.3 |
| 0.3 |
(Financial data were subject to an audit by the Group’s statutory auditors who will issue their reports at a later date. On March 20th, 2020, the MEMSCAP’s board of directors authorized the release of the FY 2019 consolidated financial statements. Any apparent discrepancies in totals are due to rounding.)
* Including the royalties from the dermo-cosmetics segment.
** Net of research & development grants.
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
* * *
The financial data for the 2018 financial year and presented in the comments below have been adjusted from the restatements relating to the adoption of IFRS 16, mandatory from 1 January 2019. These "restated" financial data are therefore different from those previously "published" for the 2018 financial year. The Group has applied IFRS 16 using the full retrospective approach with restatement of comparative information. At 31 December 2019, the adoption of IFRS 16 led to an increase of EUR 5.1 million in total consolidated assets and EUR 5.7 million in total consolidated liabilities, resulting in a -EUR.0.6 million reduction in total consolidated equity. For FY 2019 and FY 2018, the adoption of IFRS 16 resulted in a non-significant reduction in net income and an increase in EBITDA of +EUR 0.5 million in these periods.
For FY 2019, the volume effect related to the activities of the Custom products division impacted the Group's gross margin rate, which stood at 32% compared to 34% for FY 2018. The consolidated gross margin thus amounted to EUR 4.1 million compared to EUR 4.5 million for FY 2018.
Operating expenses, net of research and development grants, amounted to EUR 3.9 million for FY 2019, at a similar level than FY 2018. Research and development expenses, net of grants, amounted to EUR 1.6 million for FY 2019 and represented 12% of consolidated sales (FY 2018: EUR 1.5 million / 12% of consolidated sales). Total sales and administrative expenses, at EUR 2.3 million, were slightly down compared to FY 2018 (EUR 2.4 million). In addition, the total number of full-time equivalent employees in the Group rose from 61 in FY 2018 to 65 in FY 2019, an increase of +7%.
For FY 2019, the Group posted an operating profit of EUR 0.1 million compared to an operating profit of EUR 0.6 million for FY 2018. The net financial loss for FY 2019 is not significant and included a foreign exchange gain of EUR 0.2 million, similar to the foreign exchange gain recognized in FY 2018. The tax expense recognized over FY 2019 and FY 2018 corresponded to the change in deferred tax assets related to the Norwegian and US entities of MEMSCAP. This expense had no impact on the Group's cash position.
The Group therefore reported a breakeven net result for FY 2019 compared to a net profit at EUR 0.3 million for FY 2018.
* * *
Evolution of the Group’s cash / Consolidated shareholders’ equity
For FY 2019, the Group posted a positive EBITDA at EUR 1.5 million compared to EUR 1.9 million for the previous year. Including the EUR 0.4 million increase in the working capital requirement, the positive cash flow from operating activities amounted to EUR 1.0 million against a cash generation of EUR 0,9 million for FY 2018. The change in the working capital requirement resulted from the ramping up of buffer stocks related to the avionics business and the reduction of trade payables at the end of FY 2019 in accordance with the material requirements planning over the year.
At December 31, 2019, the Group reported available cash at EUR 3.4 million (December 31, 2018: EUR 3.7 million) including cash investments (Corporate bonds) recorded under non-current financial assets. In addition to this amount, the available unused credit lines amounted to EUR 0.3 million at December 31, 2019.
MEMSCAP shareholders’ equity totalled EUR 16.7 million at December 31, 2019. This amount is similar to the shareholders’ equity reported at December 31, 2018.
* * *
Analysis and perspectives / Impact of COVID-19 pandemic
The 2019 financial year confirmed the robustness of the Group's avionics activities, up +9% compared with FY 2018 and now representing more than 53% of the annual consolidated revenue. This evolution compensated the temporary reduction of the optical communications business, previously affected by trade tensions between the United States of America and China.
Regarding the COVID-19 pandemic, the Group's production sites located in Norway and the United States (North Carolina) remain operational. The Group is currently assessing the impacts of this pandemic.
MEMSCAP pursues its strategy focused on avionics, medical and optical communications segments, backed by its own intellectual property, as well as the development of an increased flexibility of its production capacities.
* * *
Q1 2020 earnings: April 27, 2020
Annual meeting of shareholders: May 28, 2020
About MEMSCAP
MEMSCAP is the leading provider of innovative micro-electro-mechanical systems (MEMS)-based solutions.
MEMSCAP’s products and solutions include components, component designs (IP), manufacturing and related services.
MEMSCAP is listed on Euronext Paris ™ - Segment C - ISIN: FR0010298620 - MEMS.
For more information, visit our website at: www.memscap.com.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2019
| 31 December
| 31 December
Restated (1)
|
| €000 | €000 |
Assets |
|
|
Non-current assets |
|
|
Property, plant and equipment................................................................................. | 1 757 | 1 794 |
Goodwill and intangible assets.................................................................................. | 7 804 | 7 908 |
Right-of-use assets.................................................................................................... | 5 934 | 6 316 |
Other non-current financial assets............................................................................ | 1 254 | 1 309 |
Deferred tax asset.................................................................................................... | 412 | 541 |
| 17 161 | 17 868 |
Current assets |
|
|
Inventories............................................................................................................... | 3 111 | 2 807 |
Trade and other receivables...................................................................................... | 2 938 | 2 943 |
Prepayments............................................................................................................ | 186 | 280 |
Other current financial assets................................................................................... | 47 | 35 |
Cash and short-term deposits................................................................................... | 2 204 | 2 380 |
| 8 486 | 8 445 |
|
|
|
Total assets | 25 647 | 26 313 |
|
|
|
Equity and liabilities |
|
|
Equity |
|
|
Issued capital............................................................................................................ | 1 867 | 1 867 |
Share premium......................................................................................................... | 18 775 | 18 775 |
Treasury shares........................................................................................................ | (131) | (130) |
Retained earnings..................................................................................................... | (1 204) | (1 199) |
Foreign currency translation..................................................................................... | (2 601) | (2 641) |
| 16 706 | 16 672 |
Non-current liabilities |
|
|
Lease liabilities......................................................................................................... | 5 685 | 5 977 |
Interest-bearing loans and borrowings...................................................................... | 127 | 236 |
Employee benefit liability.......................................................................................... | 56 | 20 |
| 5 868 | 6 233 |
Current liabilities |
|
|
Trade and other payables......................................................................................... | 2 083 | 2 297 |
Lease liabilities......................................................................................................... | 588 | 589 |
Interest-bearing loans and borrowings...................................................................... | 324 | 444 |
Provisions................................................................................................................. | 78 | 78 |
| 3 073 | 3 408 |
|
|
|
Total liabilities | 8 941 | 9 641 |
Total equity and liabilities | 25 647 | 26 313 |
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
CONSOLIDATED STATEMENT OF INCOME
For the year ended 31 December 2019
| 2019
| 2018
Restated (1)
|
| €000 | €000 |
Continuing operations |
|
|
|
|
|
Sales of goods and services...................................................................................... | 12 779 | 12 961 |
Revenue................................................................................................................. | 12 779 | 12 961 |
|
|
|
Cost of sales............................................................................................................ | (8 720) | (8 493) |
Gross profit............................................................................................................. | 4 059 | 4 468 |
|
|
|
Other income.......................................................................................................... | 497 | 527 |
Research and development expenses...................................................................... | (2 077) | (2 030) |
Selling and distribution costs................................................................................... | (766) | (725) |
Administrative expenses.......................................................................................... | (1 581) | (1 680) |
Operating profit / (loss).......................................................................................... | 132 | 560 |
Finance costs........................................................................................................... |
(185) |
(178) |
Finance income....................................................................................................... | 157 | 212 |
Profit / (loss) for the year from continuing operations before tax........................... | 104 | 594 |
Income tax expense................................................................................................. |
(136) |
(330) |
|
|
|
Profit / (loss) for the year from continuing operations............................................ | (32) | 264 |
|
|
|
Profit / (loss) for the year........................................................................................ | (32) | 264 |
|
|
|
Earnings per share: |
|
|
|
|
|
- Basic, for profit / (loss) for the year attributable to ordinary equity
|
€ (0.004) |
€ 0.036 |
- Diluted, for profit / (loss) for the year attributable to ordinary equity
|
€ (0.004) |
€ 0.036 |
|
|
|
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2019
| 2019
| 2018
Restated (1)
|
| €000 | €000 |
|
|
|
Profit / (loss) for the year.......................................................................................... | (32) | 264 |
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
Actuarial gains / (losses)............................................................................................ | (69) | (30) |
Income tax on items that will not be reclassified to profit or loss................................ | -- | -- |
Total items that will not be reclassified to profit or loss............................................ | (69) | (30) |
|
|
|
Items that may be reclassified subsequently to profit or loss |
|
|
Net gain / (loss) on available-for-sale financial assets.................................................. | 95 | (171) |
Exchange differences on translation of foreign operations.......................................... | 40 | (35) |
Income tax on items that may be reclassified to profit or loss..................................... | -- | -- |
Total items that may be reclassified to profit or loss................................................. | 135 | (206) |
|
|
|
Other comprehensive income for the year, net of tax............................................... | 66 | (236) |
|
|
|
Total comprehensive income for the year, net of tax................................................ | 34 | 28 |
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
(In thousands of euros, except for number of shares) |
Number |
Issued |
Share |
Treasury |
Retained |
Foreign |
Total |
| of shares
| capital
| premium
| shares
| earnings
| currency
| shareholders’
|
|
| €000 | €000 | €000 | €000 | €000 | €000 |
|
|
|
|
|
|
|
|
At 1 January 2018 Restated (1)............................................................. | 7 246 190 | 1 812 | 18 770 | (126) | (1 242) | (2 606) | 16 608 |
Profit for the year............................................................................. |
-- |
-- |
-- |
-- |
264 |
-- |
264 |
Other comprehensive income for the year, net of tax........................ | -- | -- | -- | -- | (201) | (35) | (236) |
Total comprehensive income............................................................ | -- | -- | -- | -- | 63 | (35) | 28 |
|
|
|
|
|
|
|
|
Capital increase................................................................................ | 222 150 | 55 | 5 | -- | (54) | -- | 6 |
Treasury shares................................................................................ | -- | -- | -- | (4) | -- | -- | (4) |
Share-based payment....................................................................... | -- | -- | -- | -- | 34 | -- | 34 |
|
|
|
|
|
|
|
|
At 31 December 2018 Restated (1)....................................................... | 7 468 340 | 1 867 | 18 775 | (130) | (1 199) | (2 641) | 16 672 |
|
|
|
|
|
|
|
|
At 1 January 2019 Restated (1)............................................................. | 7 468 340 | 1 867 | 18 775 | (130) | (1 199) | (2 641) | 16 672 |
Loss for the year............................................................................... |
-- |
-- |
-- |
-- |
(32) |
-- |
(32) |
Other comprehensive income for the year, net of tax........................ | -- | -- | -- | -- | 26 | 40 | 66 |
Total comprehensive income............................................................ | -- | -- | -- | -- | (6) | 40 | 34 |
|
|
|
|
|
|
|
|
Treasury shares................................................................................ | -- | -- | -- | (1) | -- | -- | (1) |
Share-based payment....................................................................... | -- | -- | -- | -- | 1 | -- | 1 |
|
|
|
|
|
|
|
|
At 31 December 2019....................................................................... | 7 468 340 | 1 867 | 18 775 | (131) | (1 204) | (2 601) | 16 706 |
|
|
|
|
|
|
|
|
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2019
| 2019
| 2018
Restated (1)
|
| €000 | €000 |
Cash flows from operating activities: |
|
|
Net profit / (loss) for the year....................................................................................... | (32) | 264 |
Non-cash items written back: |
|
|
Amortization and depreciation................................................................................ | 1 247 | 1 199 |
Loss / (capital gain) on disposal of fixed assets......................................................... | 35 | (16) |
Other non-financial activities.................................................................................. | 87 | 344 |
Accounts receivable...................................................................................................... | (49) | (90) |
Inventories................................................................................................................... | (274) | (312) |
Other debtors............................................................................................................... | 16 | (176) |
Accounts payable.......................................................................................................... | (72) | (326) |
Other liabilities............................................................................................................. | (6) | 21 |
Total net cash flows from operating activities.............................................................. | 952 | 908 |
Cash flows from investing activities: |
|
|
Purchase of fixed assets................................................................................................ | (388) | (644) |
Proceeds from sale / (purchase) of financial assets........................................................ | 118 | (276) |
Total net cash flows from investing activities............................................................... | (270) | (920) |
Cash flows from financing activities: |
|
|
Repayment of borrowings............................................................................................. | (108) | (106) |
Payment of lease liabilities............................................................................................ | (573) | (581) |
Sale / (purchase) of treasury shares.............................................................................. | (2) | (4) |
Proceeds from issue of shares....................................................................................... | -- | 6 |
Total net cash flows from financing activities............................................................... | (683) | (685) |
Net foreign exchange difference................................................................................... |
(53) |
(1) |
Increase / (decrease) in net cash and cash equivalents................................................. | (54) | (698) |
Opening cash and cash equivalents balance................................................................. | 2 044 | 2 742 |
Closing cash and cash equivalents balance................................................................... | 1 990 | 2 044 |
|
|
|
(1) The Group has applied IFRS 16 using the full retrospective approach and the comparative information is not the same as the information previously presented in the prior year’s financial statements.
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