SAN JOSE, Calif., Oct. 25, 2012 (GLOBE NEWSWIRE) -- Intermolecular, Inc. (Nasdaq:IMI)—accelerating research and development (R&D) for semiconductor and clean energy industries—today announced results for its third quarter ended September 30, 2012.
Revenue for the third quarter of 2012 was $16.5 million, representing 11% growth on a year-over-year basis. Collaborative development program (or CDP) revenue was $12.5 million for the quarter, compared to $10.3 million in the prior year, reflecting the ramp of the Company's development program for advanced logic semiconductors, a performance incentive resulting from the successful completion of a micro-CDP program, and the initiation of new customer engagements for clean energy applications. Licensing and royalty revenue was $3.2 million, compared to $3.8 million for the same period a year ago. Workflow product revenue of $0.8 million included sales of elements of the Company's High Productivity Combinatorial (HPC) platform and Informatics. This compared to $0.7 million reported in the year-ago period.
For the third quarter of 2012, the Company reported a net loss of $(0.1) million or $(0.00) per share, compared to a net loss of $(2.8) million, or $(0.49) per share for the third quarter of 2011. Net loss for the third quarter of 2011 included a $(1.6) million expense associated with the accretion of convertible, redeemable preferred shares, equivalent to $(0.27) per share.
Intermolecular reports revenue, costs of revenue, gross margin, operating income (loss), net income (loss) and earnings (loss) per share in accordance with 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.
On a non-GAAP basis, the Company reported net income of $0.8 million or $0.02 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share in the third quarter of 2011.
"We are pleased with the technical, operational and financial performance the Company achieved in the third quarter," said David Lazovsky, President and CEO of Intermolecular. "Key milestones in the third quarter include IBM leveraging our HPC Platform to benefit its technology development alliance with GLOBALFOUNDRIES, and the rapid development of PV intellectual property with First Solar that exceeded customer expectations. Our Collaborative Development Programs continue to make technical progress, which improves visibility on IP licensing and royalty growth in our business."
Cash flows from operations for the third quarter of 2012 were $0.2 million, and represented the third consecutive quarter of positive cash flows from operations. The Company invested $1.9 million in capital expenditures in the third quarter, and ended the quarter with cash and investments of $80.4 million.
Outlook for Fourth Quarter 2012
The following statements are based on current expectations for the fourth quarter of 2012.
- The Company projects revenue in the range of $16.5 to $17.0 million. This revenue projection includes $13.8 million from reported backlog as of September 30, 2012.
- Non-GAAP net income, which excludes stock-based compensation expense, is projected between a non-GAAP net income of $1.0 million to a non-GAAP net income of $1.5 million or between $0.02 to $0.03 per share, on approximately 48 million diluted shares outstanding.
Conference Call Today
Intermolecular will hold a conference call at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time today with David Lazovsky, President and Chief Executive Officer, and Peter Eidelman, Chief Financial Officer, to discuss third quarter 2012 results.
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 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® has pioneered a proprietary approach to accelerate research and development, innovation, and time-to-market for the semiconductor and clean energy industries. The approach consists of the Company's proprietary High Productivity Combinatorial (HPCTM) platform, coupled with its multi-disciplinary team. Through paid collaborative development programs (CDPs) with its customers, Intermolecular develops proprietary technology and intellectual property for its customers focused on advanced materials, processes, integration and device architectures. Founded in 2004, Intermolecular is based in San Jose, California. "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.
The Intermolecular, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11116
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, expectations regarding our revenue, net income and backlog; our prospects for increased volume-based royalties from multiple customers; our ability to manage operating expenses and generate positive cash flow from operations; technical progress under our collaborative development programs with our customers; expectations of customers with respect to implementation of their technology roadmaps (including timing), and successful volume manufacturing and commercialization of products that incorporate Intermolecular technology; the impact of IBM leveraging our HPC platform; our ability to expand our presence in high-performance, advanced logic markets; the opportunity for the Company and Micron to work together in the future; the impact of our development tools on the capabilities of ATMI's new development center in Korea; our ability to achieve future technological success in clean energy markets; and the potential for new CDPs and extension and expansion of existing CDPs in 2013 in both semiconductor and clean energy markets. 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; 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; commercial acceptance of our HPC platform and methodology as effective R&D tools; our ability to achieve positive cash flow on a consistent basis and other risks described in our 2011 Form 10-K and our subsequent Forms 10-Q, as filed with the SEC and available at www.sec.gov, particularly in the sections titled "Risk Factors." Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.
| Intermolecular, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (In thousands, except per share amounts, Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Revenue: | ||||
| Collaborative development program and services revenue | $ 12,481 | $ 10,349 | $ 35,836 | $ 26,169 |
| Product revenue | 760 | 678 | 3,495 | 2,038 |
| Licensing and royalty revenue | 3,248 | 3,847 | 10,053 | 10,491 |
| Total revenue | 16,489 | 14,874 | 49,384 | 38,698 |
| Cost of revenue | 7,204 | 6,676 | 21,866 | 17,999 |
| Gross profit | 9,285 | 8,198 | 27,518 | 20,699 |
| Operating expenses: | ||||
| Research and development | 5,174 | 5,113 | 16,002 | 14,601 |
| Sales and marketing | 1,322 | 1,249 | 3,834 | 3,229 |
| General and administrative | 2,650 | 2,231 | 8,190 | 6,156 |
| Total operating expenses | 9,146 | 8,593 | 28,026 | 23,986 |
| Operating income (loss) | 139 | (395) | (508) | (3,287) |
| Interest (expense) income, net | (255) | 6 | (754) | 16 |
| Other income (expense), net | 10 | (839) | 16 | (1,174) |
| Loss before provision for income taxes | (106) | (1,228) | (1,246) | (4,445) |
| Income tax provision | 6 | 6 | 12 | 19 |
| Net loss | (112) | (1,234) | (1,258) | (4,464) |
| Accretion on redeemable convertible preferred stock | — | (1,565) | — | (8,660) |
| Net loss attributable to common stockholders | $ (112) | $ (2,799) | $ (1,258) | $ (13,124) |
| Basic and diluted net loss per common share | $ (0.00) | $ (0.49) | $ (0.03) | $ (2.30) |
| Shares used in basic and diluted net loss per common share | 43,279 | 5,751 | 42,725 | 5,717 |
| Intermolecular, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (In thousands, Unaudited) | ||
|
As of September 30, 2012 |
As of December 31, 2011 |
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 78,715 | $ 81,002 |
| Marketable securities | 1,701 | — |
| Total cash, cash equivalents and marketable securities | 80,416 | 81,002 |
| Accounts receivable, net | 5,592 | 11,162 |
| Inventory, current portion | 1,561 | — |
| Prepaid expenses and other current assets | 858 | 1,763 |
| Total current assets | 88,427 | 93,927 |
| Inventory, net of current portion | 3,004 | 2,532 |
| Property and equipment, net | 23,131 | 25,128 |
| Intangible assets, net | 6,214 | 6,067 |
| Other assets | 162 | 160 |
| Total assets | $ 120,938 | $ 127,814 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 1,185 | $ 1,079 |
| Accrued compensation and employee benefits | 2,853 | 2,452 |
| Deferred revenue, current portion | 2,926 | 11,168 |
| Accrued liabilities | 2,981 | 3,759 |
| Note payable, current portion | 945 | 804 |
| Total current liabilities | 10,890 | 19,262 |
| Note payable, net of current portion | 25,800 | 26,514 |
| Deferred revenue, net of current portion | — | 716 |
| Other long-term liabilities | 889 | 1,149 |
| Total liabilities | 37,579 | 47,641 |
| Stockholders' equity: | ||
| Common stock | 44 | 42 |
| Additional paid-in capital | 185,122 | 180,680 |
| Accumulated deficit | (101,807) | (100,549) |
| Total stockholders' equity | 83,359 | 80,173 |
| Total liabilities and stockholders' equity | $ 120,938 | $ 127,814 |
| Intermolecular, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (In thousands, Unaudited) | ||
| Nine Months Ended September 30, | ||
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net loss | $ (1,258) | $ (4,464) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 5,865 | 5,239 |
| Stock-based compensation | 2,687 | 1,803 |
| Impairment of long-lived assets | 949 | — |
| Revaluation of preferred stock warrant liability | — | 694 |
| Revaluation of derivative liability | — | 609 |
| Common stock warrant charge (contra revenue) | — | 312 |
| Loss on disposal of property and equipment | — | 65 |
| Changes in operating assets and liabilities: | ||
| Prepaid expenses and other assets | 912 | (4,682) |
| Inventory | (1,233) | 36 |
| Accounts receivable | 5,526 | (3,024) |
| Accounts payable | (364) | (468) |
| Accrued and other liabilities | (580) | 5,393 |
| Deferred revenue | (9,714) | (11,812) |
| Net cash provided by (used in) operating activities | 2,790 | (10,299) |
| Cash flows from investing activities: | ||
| Purchase of short-term investments | (2,201) | (750) |
| Redemption of short-term investments | 500 | — |
| Purchase of property and equipment | (3,760) | (8,026) |
| Capitalized intangible assets | (776) | (472) |
| Net cash used in investing activities | (6,237) | (9,248) |
| Cash flows from financing activities: | ||
| Payment of debt | (573) | — |
| Proceeds from exercise of common stock options | 1,733 | 362 |
| Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | — | 24,882 |
| Net cash provided by financing activities | 1,160 | 25,244 |
| Net (decrease) increase in cash and cash equivalents | (2,287) | 5,697 |
| Cash and cash equivalents at beginning of period | 81,002 | 23,064 |
| Cash and cash equivalents at end of period | $ 78,715 | $ 28,761 |
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, for certain 2011 periods, a common stock warrant charge against revenue and preferred stock warrant and derivative 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 revenue, gross margin, operating income (loss), net income (loss) and earnings (loss) 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 the financial performance of the Company, 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, Unaudited) | |||
| Three Months Ended September 30, 2012 | |||
|
GAAP Results |
Stock-based Compensation |
Non-GAAP Results |
|
| Revenue: | |||
| Collaborative development program and services revenue | $ 12,481 | $ — | $ 12,481 |
| Product revenue | 760 | — | 760 |
| Licensing and royalty revenue | 3,248 | — | 3,248 |
| Total revenue | 16,489 | — | 16,489 |
| Cost of revenue (a) | 7,204 | (250) | 6,954 |
| Gross profit | 9,285 | 250 | 9,535 |
| Operating expenses: | |||
| Research and development (a) | 5,174 | (212) | 4,962 |
| Sales and marketing (a) | 1,322 | (199) | 1,123 |
| General and administrative (a) | 2,650 | (272) | 2,378 |
| Total operating expenses | 9,146 | (683) | 8,463 |
| Operating income | 139 | 933 | 1,072 |
| Interest (expense) income, net | (255) | — | (255) |
| Other income (expense), net | 10 | — | 10 |
| (Loss) income before provision for income taxes | (106) | 933 | 827 |
| Income tax provision | 6 | — | 6 |
| Net (loss) income | $ (112) | $ 933 | $ 821 |
| Basic net (loss) income per common share | $ (0.00) | $ 0.02 | |
| Diluted net (loss) income per common share | $ (0.00) | $ 0.02 | |
| Shares used in basic net (loss) income per common share | 43,279 | 43,279 | |
| Shares used in diluted net (loss) income per common share | 43,279 | 47,586 | |
| (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. | |||
| Intermolecular, Inc. | |||
| Reconciliation of GAAP to Non-GAAP Financial Measures | |||
| (In thousands, except per share amounts, Unaudited) | |||
| Nine Months Ended September 30, 2012 | |||
|
GAAP Results |
Stock-based Compensation |
Non-GAAP Results |
|
| Revenue: | |||
| Collaborative development program and services revenue | $ 35,836 | $ — | $ 35,836 |
| Product revenue | 3,495 | — | 3,495 |
| Licensing and royalty revenue | 10,053 | — | 10,053 |
| Total revenue | 49,384 | — | 49,384 |
| Cost of revenue (a) | 21,866 | (780) | 21,086 |
| Gross profit | 27,518 | 780 | 28,298 |
| Operating expenses: | |||
| Research and development (a) | 16,002 | (642) | 15,360 |
| Sales and marketing (a) | 3,834 | (550) | 3,284 |
| General and administrative (a) | 8,190 | (715) | 7,475 |
| Total operating expenses | 28,026 | (1,907) | 26,119 |
| Operating (loss) income | (508) | 2,687 | 2,179 |
| Interest (expense) income, net | (754) | — | (754) |
| Other income (expense), net | 16 | — | 16 |
| (Loss) income before provision for income taxes | (1,246) | 2,687 | 1,441 |
| Provision for income taxes | 12 | — | 12 |
| Net (loss) income | $ (1,258) | $ 2,687 | $ 1,429 |
| Basic net (loss) income per common share | $ (0.03) | $ 0.03 | |
| Diluted net (loss) income per common share | $ (0.03) | $ 0.03 | |
| Shares used in basic net (loss) income per common share | 42,725 | 42,725 | |
| Shares used in diluted net (loss) income per common share | 42,725 | 47,422 | |
| (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. | |||
| Intermolecular, Inc. | ||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
| (In thousands, except per share amounts and percentages, Unaudited) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| GAAP revenue | $ 16,489 | $ 14,874 | $ 49,384 | $ 38,698 |
| Common stock warrant charge (contra revenue) (a) | — | — | — | 312 |
| Non-GAAP revenue | $ 16,489 | $ 14,874 | $ 49,384 | $ 39,010 |
| GAAP cost of net revenue | $ 7,204 | $ 6,676 | $ 21,866 | $ 17,999 |
| Stock-based compensation expense (b) | (250) | (185) | (780) | (418) |
| Non-GAAP cost of net revenue | $ 6,954 | $ 6,491 | $ 21,086 | $ 17,581 |
| GAAP gross profit | $ 9,285 | $ 8,198 | $ 27,518 | $ 20,699 |
| Common stock warrant charge (contra revenue) (a) | — | — | — | 312 |
| Stock-based compensation expense (b) | 250 | 185 | 780 | 418 |
| Non-GAAP gross profit | $ 9,535 | $ 8,383 | $ 28,298 | $ 21,429 |
| As a percentage of net revenue: | ||||
| GAAP gross margin | 56.3% | 55.1% | 55.7% | 53.5% |
| Non-GAAP gross margin | 57.8% | 56.4% | 57.3% | 54.9% |
| GAAP operating income (loss) | $ 139 | $ (395) | $ (508) | $ (3,287) |
| Common stock warrant charge (contra revenue) (a) | — | — | — | 312 |
| Stock-based compensation expense (b): | ||||
| - Cost of net revenue | 250 | 185 | 780 | 418 |
| - Research and development | 212 | 136 | 642 | 327 |
| - Sales and marketing | 199 | 324 | 550 | 627 |
| - General and administrative | 272 | 176 | 715 | 431 |
| Non-GAAP operating income (loss) | $ 1,072 | $ 426 | $ 2,179 | $ (1,172) |
| GAAP net loss attributable to common stockholders | $ (112) | $ (2,799) | $ (1,258) | $ (13,124) |
| Stock-based compensation expense (b) | 933 | 821 | 2,687 | 1,803 |
| Preferred stock warrant and derivative charges (c) | — | 848 | — | 1,303 |
| Common stock warrant charge (contra revenue) (a) | — | — | — | 312 |
| Accretion on redeemable convertible preferred stock | — | 1,565 | — | 8,660 |
| Non-GAAP net income (loss) attributable to common stockholders | $ 821 | $ 435 | $ 1,429 | $ (1,046) |
| Shares used in computing Non-GAAP basic earnings per share (d) | 43,279 | 5,751 | 42,725 | 5,717 |
| Shares used in computing Non-GAAP diluted earnings per share (d) | 47,586 | 41,567 | 47,422 | 5,717 |
| Non-GAAP earnings per share: | ||||
| Basic net income (loss) per common share | $ 0.02 | $ 0.08 | $ 0.03 | $ (0.18) |
| Diluted net income (loss) per common share | $ 0.02 | $ 0.01 | $ 0.03 | $ (0.18) |
| (a) Reduction in revenue as a result of common stock warrants issued in connection with a customer agreement. | ||||
| (b) Reflects the stock-based compensation 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. | ||||
| (c) Changes in fair value of our preferred stock warrant prior to its exercise in connection with our initial public offering and the revaluation of our derivative liability prior to the consummation of the asset purchase transaction with Symyx Technologies, Inc. | ||||
| (d) Increase in share count year over year includes the conversion of preferred shares to common in connection with the Company's initial public offering in November 2011 as well as new shares issued as part of the Company's Series E Preferred Stock financing and the Company's initial public offering completed in 2011. | ||||