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Everspin Reports Unaudited Second Quarter 2023 Financial Results

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Everspin Reports Unaudited Second Quarter 2023 Financial Results

Everspin continues to generate profits, reporting positive GAAP net income for the 9th quarter in a row along with strong operational cash flow in its second quarter results.

CHANDLER, Ariz.--(BUSINESS WIRE)--Aug. 2, 2023-- Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in MRAM, today announced preliminary unaudited financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Highlights

  • Q2’23 revenue exceeded the top end of guidance at $15.7 million.
  • The company reported net income of $3.9 million for Q2’23 compared to $0.8 million for Q1’23.
  • Adjusted EBITDA for Q2’23 was $5.4 million compared to $2.3 million for Q1’23.
  • Basic EPS for Q2’23 was $0.19 compared to $0.04 in Q1’23.
  • Everspin generated cash flows from operating activities of $6.3 million for Q2’23.
  • Everspin ended Q2’23 with cash and cash equivalents of $30.8 million.
  • Everspin received a one-time employee retention tax credit of $2.0 million.

“Everspin delivered revenue of $15.7 million in the second quarter, above the high end of guidance, while managing through the supply chain constraints for our Toggle business and delivering a strong performance on our Radiation Hard programs,” said Sanjeev Aggarwal, President & CEO. "We continue to exceed expectations on our Radiation Hard programs to deliver STT-MRAM based solutions for a "high-density memory array" and a "distributed configuration memory" for instant-on FPGAs with multiple time programmability. Healthy backlog in our industrial and automotive markets indicate strength in our core businesses.”

Second Quarter 2023 Results

Total revenue for the second quarter of 2023 was $15.7 million, an increase of 6% from the $14.8 million reported in the first quarter of 2023. This is an increase of 7% compared to $14.7 million of revenue in the second quarter of 2022.

MRAM product sales in the second quarter of 2023, which includes both Toggle and STT-MRAM revenue, was $13.4 million, compared to $13.8 million reported in the first quarter of 2023. This is compared to $13.2 million reported in the second quarter of 2022.

Licensing, royalties, patents and other revenue was $2.3 million, an increase from $1.1 million reported in the first quarter of 2023. This is an increase of 58% from $1.5 million reported in the second quarter of 2022.

Second quarter 2023 revenue increased from the prior quarter due to licensing revenue related to Everspin’s RAD-Hard projects.

Gross margin for the second quarter of 2023 was 58.4%, compared to 56.8% in the first quarter of 2023 and 58.4% in the second quarter of 2022.

GAAP operating expenses were $7.6 million in the second quarter of 2023, compared to $7.7 million in the first quarter of 2023 and $6.9 million in the second quarter of 2022. GAAP operating expenses increased in the second quarter of 2023 compared to the second quarter of 2022 as a result of increased development costs related to Everspin’s new xSPI family of lower density STT-MRAM products that are currently in low volume production.

GAAP net income for the second quarter of 2023 was $3.9 million, or $0.19 per basic share, based on 20.7 million weighted-average basic common shares outstanding. This is compared to net income of $0.8 million, or $0.04 per basic share, in the first quarter of 2023 and net income of $1.7 million, or $0.08 per basic share, in the second quarter of 2022.

Cash and cash equivalents as of the end of the second quarter of 2023 were $30.8 million, compared to $24.2 million as of the end of the first quarter of 2023, and $23.1 million as of the end of the second quarter of 2022.

Everspin generated cash flows from operating activities of $6.3 million in the second quarter of 2023, compared to $1.2 million in the first quarter of 2023, and $4.3 million in the second quarter of 2022.

During the second quarter of 2023, Everspin received a one-time Employee Retention Tax Credit (ERTC) refund from the United States Treasury totaling $2.0 million. The refund was received pursuant to provisions within the Coronavirus Aid, Relief, and Economic Security Act. Everspin recorded the one-time ERTC within other income during the second quarter of 2023.

Business Outlook

For the third quarter 2023, Everspin expects total revenue in a range of $15.4 million to $16.4 million. Everspin expects GAAP net income per basic share to be between $0.01 and $0.06.

This outlook is dependent on Everspin's current expectations, which may be impacted by, among other things, evolving external conditions, such as the resurgence of COVID-19 and its variants, local safety guidelines, worsening impacts due to supply chain constraints or interruptions, including due to the military conflict in Ukraine and recent market volatility, semiconductor downturn and the other risk factors described in Everspin's filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, its Quarterly Reports on Form 10-Q filed with the SEC during 2023, as well as in its subsequent filings with the SEC.

Use of Non-GAAP Financial Measures

Everspin supplements the reporting of its financial information determined under generally accepted accounting principles in the United States of America (GAAP) with Adjusted EBITDA, which is a non-GAAP financial measure. Everspin defines Adjusted EBITDA as net income adjusted for interest expense, taxes, depreciation and amortization, stock-based compensation expense, and restructuring costs if any.

Everspin’s management and board of directors use Adjusted EBITDA to understand and evaluate its operating performance and trends, to prepare and approve its annual budget and to develop short-term and long-term operating and financing plans. Accordingly, Everspin believes that Adjusted EBITDA provides useful information for investors in understanding and evaluating its operating results in the same manner as its management and board of directors. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP. Moreover, other companies may define Adjusted EBITDA differently, which limits the usefulness of this measure for comparisons with such other companies. Everspin encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Conference Call

Everspin will host a conference call for analysts and investors on Wednesday, August 2, 2023, at 5:00 p.m. Eastern Time. Interested participants can pre-register online to receive a telephone number and a unique passcode at:

https://register.vevent.com/register/BI6f420adaead04896a89f74be1072e951

The conference call will be broadcast live in listen-only mode at:

https://edge.media-server.com/mmc/p/k8k7f8ap

The registration link and archived webcast will be available in the Investor Relations section of Everspin’s website at investor.everspin.com.

About Everspin Technologies

Everspin Technologies, Inc. is the world’s leading provider of Magnetoresistive RAM (MRAM). Everspin MRAM delivers the industry’s most robust, highest performance non-volatile memory for Industrial IoT, Data Center, and other mission-critical applications where data persistence is paramount. Headquartered in Chandler, Arizona, Everspin provides commercially available MRAM solutions to a large and diverse customer base. For more information, visit www.everspin.com. NASDAQ: MRAM.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding future results 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 the statements made under the caption “Business Outlook.” Forward-looking statements are identified by words such as “expects” or similar expressions. These include, but are not limited to, Everspin’s future financial performance, including the outlook for third quarter 2023 results. Actual results could differ materially from these forward-looking statements as a result of certain risks and uncertainties, including, without limitation, the risks set forth under the caption “Risk Factors” in Everspin’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 2, 2023, and its Quarterly Reports on Form 10-Q filed with the SEC during 2023, as well as in its subsequent filings with the SEC. Any forward-looking statements made by Everspin in this press release speak only as of the date on which they are made and subsequent events may cause these expectations to change. 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, except as required by law.

EVERSPIN TECHNOLOGIES, INC.

Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2023

 

2022

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

30,830

 

 

$

26,795

 

Accounts receivable, net

 

 

9,026

 

 

 

10,665

 

Inventory

 

 

7,345

 

 

 

6,683

 

Prepaid expenses and other current assets

 

 

411

 

 

 

604

 

Total current assets

 

 

47,612

 

 

 

44,747

 

Property and equipment, net

 

 

3,522

 

 

 

3,883

 

Right-of-use assets

 

 

6,074

 

 

 

6,641

 

Other assets

 

 

62

 

 

 

62

 

Total assets

 

$

57,270

 

 

$

55,333

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,230

 

 

$

2,778

 

Accrued liabilities

 

 

2,832

 

 

 

3,533

 

Deferred revenue

 

 

725

 

 

 

821

 

Current portion of long-term debt

 

 

—

 

 

 

2,594

 

Lease liabilities, current portion

 

 

1,156

 

 

 

1,122

 

Other liabilities

 

 

50

 

 

 

27

 

Total current liabilities

 

 

5,993

 

 

 

10,875

 

Long-term debt, net of current portion

 

 

—

 

 

 

—

 

Lease liabilities, net of current portion

 

 

4,991

 

 

 

5,580

 

Long-term income tax liability

 

 

214

 

 

 

214

 

Total liabilities

 

$

11,198

 

 

$

16,669

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

—

 

 

 

—

 

Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 20,743,422 and 20,374,288 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

188,126

 

 

 

185,364

 

Accumulated deficit

 

 

(142,056

)

 

 

(146,702

)

Total stockholders’ equity

 

 

46,072

 

 

 

38,664

 

Total liabilities and stockholders’ equity

 

$

57,270

 

 

$

55,333

 

 

EVERSPIN TECHNOLOGIES, INC.

Statements of Income and Comprehensive Income

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

2022

 

2023

 

2022

Product sales

 

$

13,406

 

$

13,223

 

 

$

27,183

 

 

$

25,894

 

Licensing, royalty, patent, and other revenue

 

 

2,341

 

 

1,484

 

 

 

3,410

 

 

 

3,160

 

Total revenue

 

 

15,747

 

 

14,707

 

 

 

30,593

 

 

 

29,054

 

Cost of product sales

 

 

6,090

 

 

5,793

 

 

 

12,213

 

 

 

11,545

 

Cost of licensing, royalty, patent, and other revenue

 

 

464

 

 

323

 

 

 

757

 

 

 

595

 

Total cost of sales

 

 

6,554

 

 

6,116

 

 

 

12,970

 

 

 

12,140

 

Gross profit

 

 

9,193

 

 

8,591

 

 

 

17,623

 

 

 

16,914

 

Operating expenses:1

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,708

 

 

2,699

 

 

 

5,907

 

 

 

5,135

 

General and administrative

 

 

3,507

 

 

2,860

 

 

 

6,727

 

 

 

5,589

 

Sales and marketing

 

 

1,355

 

 

1,292

 

 

 

2,670

 

 

 

2,426

 

Total operating expenses

 

 

7,570

 

 

6,851

 

 

 

15,304

 

 

 

13,150

 

Income from operations

 

 

1,623

 

 

1,740

 

 

 

2,319

 

 

 

3,764

 

Interest expense

 

 

—

 

 

(70

)

 

 

(63

)

 

 

(145

)

Other income (expense), net

 

 

2,262

 

 

1

 

 

 

2,390

 

 

 

(13

)

Net income before income taxes

 

 

3,885

 

 

1,671

 

 

 

4,646

 

 

 

3,606

 

Income tax expense

 

 

—

 

 

—

 

 

 

—

 

 

 

—

 

Net income and comprehensive income

 

$

3,885

 

$

1,671

 

 

$

4,646

 

 

$

3,606

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.19

 

$

0.08

 

 

$

0.23

 

 

$

0.18

 

Diluted

 

$

0.18

 

$

0.08

 

 

$

0.22

 

 

$

0.17

 

Weighted average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,657,404

 

 

20,069,444

 

 

 

20,554,769

 

 

 

19,983,526

 

Diluted

 

 

21,234,253

 

 

20,424,283

 

 

 

21,068,059

 

 

 

20,626,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Operating expenses include stock-based compensation as follows:

Research and development

 

$

503

 

$

462

 

 

$

949

 

 

$

795

 

General and administrative

 

 

624

 

 

647

 

 

 

1,235

 

 

 

1,018

 

Sales and marketing

 

 

133

 

 

202

 

 

 

236

 

 

 

322

 

Total stock-based compensation

 

$

1,260

 

$

1,311

 

 

$

2,420

 

 

$

2,135

 

 

EVERSPIN TECHNOLOGIES, INC.

Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2023

 

2022

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

4,646

 

 

$

3,606

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

617

 

 

 

462

 

Gain on sale of property and equipment

 

 

(15

)

 

 

(167

)

Stock-based compensation

 

 

2,420

 

 

 

2,135

 

Loss on prepayment and termination of credit facility

 

 

170

 

 

 

—

 

Non-cash warrant revaluation

 

 

23

 

 

 

(21

)

Non-cash interest expense

 

 

26

 

 

 

62

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

1,639

 

 

 

(1,090

)

Inventory

 

 

(662

)

 

 

20

 

Prepaid expenses and other current assets

 

 

193

 

 

 

(38

)

Other assets

 

 

—

 

 

 

664

 

Accounts payable

 

 

(741

)

 

 

(201

)

Accrued liabilities

 

 

(701

)

 

 

(1,414

)

Deferred revenue

 

 

(96

)

 

 

(832

)

Lease liabilities

 

 

12

 

 

 

164

 

Net cash provided by operating activities

 

 

7,531

 

 

 

3,350

 

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,063

)

 

 

(996

)

Proceeds received from sale of property and equipment

 

 

15

 

 

 

202

 

Net cash used in investing activities

 

 

(1,048

)

 

 

(794

)

Cash flows from financing activities

 

 

 

 

 

 

Payments on long-term debt

 

 

(2,790

)

 

 

(1,200

)

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

 

 

342

 

 

 

286

 

Net cash used in financing activities

 

 

(2,448

)

 

 

(914

)

Net increase in cash and cash equivalents

 

 

4,035

 

 

 

1,642

 

Cash and cash equivalents at beginning of period

 

 

26,795

 

 

 

21,409

 

Cash and cash equivalents at end of period

 

$

30,830

 

 

$

23,051

 

Supplementary cash flow information:

 

 

 

 

 

 

Interest paid

 

$

37

 

 

$

83

 

Operating cash flows paid for operating leases

 

$

692

 

 

$

635

 

Financing cash flows paid for finance leases

 

$

6

 

 

$

5

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

—

 

 

$

3,350

 

Right-of-use assets obtained in exchange for finance lease liabilities

 

$

—

 

 

$

36

 

Purchases of property and equipment in accounts payable and accrued liabilities

 

$

—

 

 

$

783

 

 

EVERSPIN TECHNOLOGIES, INC.

Adjusted EBITDA Reconciliation

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

Net income

 

$

3,885

 

$

761

 

$

1,671

Depreciation and amortization

 

 

284

 

 

333

 

 

204

Stock-based compensation expense

 

 

1,260

 

 

1,160

 

 

1,311

Interest expense

 

 

-

 

 

63

 

 

70

Income tax expense

 

 

-

 

 

-

 

 

-

Adjusted EBITDA

 

$

5,429

 

$

2,317

 

$

3,256

 

Anuj Aggarwal, CFO
T: 480-347-1082
E: anuj.aggarwal@everspin.com

Source: Everspin Technologies, Inc.