EX-99.1 2 imi-ex991_6.htm EX-99.1 imi-ex991_6.htm

 

Exhibit 99.1

Intermolecular Reports Second Quarter 2019 Financial Results

 

SAN JOSE, Calif., August 8, 2019 -- Intermolecular, Inc. (Nasdaq: IMI), the trusted partner for advanced materials innovation, today reported results for its second quarter ended June 30, 2019.

 

Second Quarter of 2019 Financial Results

Revenue for the second quarter of 2019 was $4.6 million, a decrease of 31% from $6.7 million in the first quarter of 2019, and a decrease of 53% from $9.8 million in the same period a year ago. Program revenue was $4.5 million, a 30% decrease from $6.4 million in the first quarter of 2019, and a 52% decrease from $9.4 million in the same period a year ago.

 

Gross profit for the second quarter of 2019 was $3.2 million (69% of total revenue), a 34% decrease from $4.8 million (73% of total revenue) in the first quarter of 2019, and a 54% decrease from $6.9 million (71% of total revenue) in the same period a year ago.

 

Total operating expenses for the second quarter of 2019 were $8.7 million, an 18% increase from $7.4 million in the first quarter of 2019, and an increase of 30% compared to $6.7 million in the same period a year ago.

 

Net loss for the second quarter of 2019 totaled $(5.3) million, or $(0.11) per basic and diluted share, compared to net loss of $(2.3) million, or $(0.05) per basic and diluted share in the first quarter of 2019, and compared to net income of $0.5 million, or $0.01 per basic and diluted share in the same period a year ago.

 

Non-GAAP net loss, which excludes stock-based compensation expense, for the second quarter of 2019 totaled $(4.9) million, or $(0.10) per basic and diluted share, compared to non-GAAP net loss of $(1.8) million, or $(0.04) per basic and diluted share in the first quarter of 2019, and compared to non-GAAP net income of $0.7 million, or $0.01 per basic and diluted share in the same period a year ago.  

 

Adjusted EBITDA for the second quarter of 2019 totaled $(4.6) million, compared to an adjusted EBITDA of $(1.3) million in the first quarter of 2019 and Adjusted EBITDA of $1.8 million in the same period a year ago.  

 

Cash and investments totaled $23.9 million at the end of second quarter of 2019, a decrease of $3.5 million compared to $27.4 million at the end of first quarter of 2019. The company had no debt as of June 30, 2019.    

 

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. Please refer to “Reconciliation of GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Loss to Non-GAAP Net Loss” below.

 

Agreement and Plan of Merger

Intermolecular will not hold an earnings call, nor provide forward guidance for the third quarter of fiscal year 2019, due to the previously announced proposed acquisition of Intermolecular by Merck KGaA, Darmstadt, Germany.

 

About Intermolecular, Inc.

Intermolecular® is the trusted partner for advanced materials innovation. Advanced materials are at the core of innovation in the 21st century for a wide range of industries including semiconductors, consumer electronics, automotive and aerospace. With its substantial materials expertise, accelerated learning and experimentation platform, and information and analytics infrastructure, Intermolecular has a ten-year track record helping leading companies accelerate and de-risk materials innovation. Learn more at www.intermolecular.com.

 

“Intermolecular” and the Intermolecular logo are registered trademarks; all rights reserved.

 

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 expense. 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, Adjusted EBITDA, 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.

 

Investor Contact

Bill Roeschlein

Intermolecular, Inc.

Chief Financial Officer

bill.roeschlein@intermolecular.com

(408) 582-5415

 

 

Intermolecular, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts, Unaudited)

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Program revenue

 

$

4,485

 

 

$

9,365

 

 

$

10,870

 

 

$

18,621

 

Licensing and royalty revenue

 

 

133

 

 

 

437

 

 

 

399

 

 

 

856

 

Total revenue

 

 

4,618

 

 

 

9,802

 

 

 

11,269

 

 

 

19,477

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of program revenue

 

 

1,437

 

 

 

2,856

 

 

 

3,255

 

 

 

6,231

 

Cost of licensing and royalty revenue

 

 

—

 

 

 

3

 

 

 

—

 

 

 

4

 

Total cost of revenue

 

 

1,437

 

 

 

2,859

 

 

 

3,255

 

 

 

6,235

 

Gross profit

 

 

3,181

 

 

 

6,943

 

 

 

8,014

 

 

 

13,242

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,216

 

 

 

4,056

 

 

 

8,362

 

 

 

8,087

 

Sales and marketing

 

 

974

 

 

 

858

 

 

 

1,864

 

 

 

1,654

 

General and administrative

 

 

3,494

 

 

 

1,748

 

 

 

5,832

 

 

 

4,034

 

Total operating expenses

 

 

8,684

 

 

 

6,662

 

 

 

16,058

 

 

 

13,775

 

Income (loss) from operations

 

 

(5,503

)

 

 

281

 

 

 

(8,044

)

 

 

(533

)

Other income (expenses), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

172

 

 

 

140

 

 

 

355

 

 

 

245

 

Other income (expense), net

 

 

(3

)

 

 

75

 

 

 

93

 

 

 

162

 

Total other income (expense), net

 

 

169

 

 

 

215

 

 

 

448

 

 

 

407

 

Income (loss) before provision for income taxes

 

 

(5,334

)

 

 

496

 

 

 

(7,596

)

 

 

(126

)

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1

 

Net income (loss)

 

$

(5,334

)

 

$

496

 

 

$

(7,596

)

 

$

(127

)

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

0.01

 

 

$

(0.15

)

 

$

(0.00

)

Diluted

 

$

(0.11

)

 

$

0.01

 

 

$

(0.15

)

 

$

(0.00

)

Weighted-average number of shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

49,758,224

 

 

 

49,672,739

 

 

 

49,757,917

 

 

 

49,627,584

 

Diluted

 

 

49,758,224

 

 

 

50,059,639

 

 

 

49,757,917

 

 

 

49,627,584

 

 

 

 

Intermolecular, Inc.

Condensed Consolidated Balance Sheets

(In thousands, Unaudited)

 

As of June 30, 2019

 

 

As of December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,160

 

 

$

8,351

 

Short-term investments

 

 

21,753

 

 

 

22,098

 

Total cash, cash equivalents and short-term investments

 

 

23,913

 

 

 

30,449

 

Accounts receivable

 

 

1,941

 

 

 

3,349

 

Prepaid expenses and other current assets

 

 

1,004

 

 

 

936

 

Total current assets

 

 

26,858

 

 

 

34,734

 

Materials inventory

 

 

2,375

 

 

 

2,638

 

Property and equipment, net

 

 

2,809

 

 

 

3,432

 

Intangible assets, net

 

 

1,892

 

 

 

2,075

 

Right-of-use lease assets - operating

 

 

10,841

 

 

 

—

 

Other assets

 

 

503

 

 

 

514

 

Total assets

 

$

45,278

 

 

$

43,393

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

112

 

 

$

760

 

Accrued liabilities

 

 

1,592

 

 

 

1,234

 

Accrued compensation and employee benefits

 

 

1,984

 

 

 

3,431

 

Current portion of lease obligation - operating

 

 

1,816

 

 

 

—

 

Deferred revenue

 

 

159

 

 

 

917

 

Total current liabilities

 

 

5,663

 

 

 

6,342

 

Deferred rent

 

 

—

 

 

 

2,667

 

Long term lease obligation - operating

 

 

11,832

 

 

 

—

 

Total liabilities

 

 

17,495

 

 

 

9,009

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

50

 

 

 

50

 

Additional paid-in capital

 

 

216,974

 

 

 

216,034

 

Accumulated other comprehensive income (loss)

 

 

28

 

 

 

(27

)

Accumulated deficit

 

 

(189,269

)

 

 

(181,673

)

Total stockholders’ equity

 

 

27,783

 

 

 

34,384

 

Total liabilities and stockholders’ equity

 

$

45,278

 

 

$

43,393

 

 

Intermolecular, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands, Unaudited)

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(7,596

)

 

$

(127

)

Adjustments to reconcile net loss to net cash used in operating

   activities:

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

 

1,123

 

 

 

2,693

 

Amortization expense - Right of use lease assets operating

 

 

787

 

 

 

—

 

Stock-based compensation

 

 

935

 

 

 

482

 

Loss on disposal of property and equipment

 

 

2

 

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,408

 

 

 

4,074

 

Prepaid expenses and other assets

 

 

(57

)

 

 

393

 

Materials inventory

 

 

291

 

 

 

(134

)

Accounts payable

 

 

(520

)

 

 

(750

)

Accrued and other liabilities

 

 

(1,634

)

 

 

(67

)

Deferred revenue

 

 

(759

)

 

 

(633

)

Net cash (used in) provided by operating activities

 

 

(6,020

)

 

 

5,931

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of investments

 

 

(13,804

)

 

 

(19,367

)

Redemption of investments

 

 

14,202

 

 

 

12,010

 

Purchase of property and equipment

 

 

(574

)

 

 

(489

)

Net cash used in investing activities

 

 

(176

)

 

 

(7,846

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of common stock options

 

 

5

 

 

 

172

 

Net cash provided by financing activities

 

 

5

 

 

 

172

 

Net decrease in cash and cash equivalents

 

 

(6,191

)

 

 

(1,743

)

Cash and cash equivalents at beginning of period

 

 

8,351

 

 

 

6,090

 

Cash and cash equivalents at end of period

 

$

2,160

 

 

$

4,347

 

 

Intermolecular, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts and percentages, Unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

GAAP cost of net revenue

 

$

1,437

 

 

$

2,859

 

 

$

3,255

 

 

$

6,235

 

Stock-based compensation expense (a)

 

 

(36

)

 

 

(39

)

 

 

(81

)

 

 

(92

)

Non-GAAP cost of net revenue

 

$

1,401

 

 

$

2,820

 

 

$

3,174

 

 

$

6,143

 

GAAP gross profit

 

$

3,181

 

 

$

6,943

 

 

$

8,014

 

 

$

13,242

 

Stock-based compensation expense (a)

 

 

36

 

 

 

39

 

 

 

81

 

 

 

92

 

Non-GAAP gross profit

 

$

3,217

 

 

$

6,982

 

 

$

8,095

 

 

$

13,334

 

As a percentage of net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

68.9

%

 

 

70.8

%

 

 

71.1

%

 

 

68.0

%

Non-GAAP gross margin

 

 

69.7

%

 

 

71.2

%

 

 

71.8

%

 

 

68.5

%

GAAP operating income (loss)

 

$

(5,503

)

 

$

281

 

 

$

(8,044

)

 

$

(533

)

Stock-based compensation expense (a):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Cost of net revenue

 

 

36

 

 

 

39

 

 

 

81

 

 

 

92

 

- Research and development

 

 

120

 

 

 

59

 

 

 

233

 

 

 

114

 

- Sales and marketing

 

 

57

 

 

 

21

 

 

 

110

 

 

 

51

 

- General and administrative

 

 

259

 

 

 

93

 

 

 

511

 

 

 

225

 

Non-GAAP operating income (loss)

 

$

(5,031

)

 

$

493

 

 

$

(7,109

)

 

$

(51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(5,334

)

 

$

496

 

 

$

(7,596

)

 

$

(127

)

Stock-based compensation expense (a)

 

 

472

 

 

 

212

 

 

 

935

 

 

 

482

 

Non-GAAP net income (loss)

 

$

(4,862

)

 

$

708

 

 

$

(6,661

)

 

$

355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(5,334

)

 

$

496

 

 

$

(7,596

)

 

$

(127

)

Interest (income) expense, net

 

 

(172

)

 

 

(140

)

 

 

(355

)

 

 

(245

)

Provision for taxes

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

Depreciation, amortization, impairments and accretion

 

 

458

 

 

 

1,270

 

 

 

1,123

 

 

 

2,693

 

Stock-based compensation expense (a)

 

 

472

 

 

 

212

 

 

 

935

 

 

 

482

 

Adjusted EBITDA

 

$

(4,576

)

 

$

1,838

 

 

$

(5,893

)

 

$

2,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic and diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

49,758,224

 

 

 

49,672,739

 

 

 

49,757,917

 

 

 

49,627,584

 

Diluted

 

 

49,758,224

 

 

 

50,059,639

 

 

 

49,757,917

 

 

 

49,627,584

 

GAAP earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

0.01

 

 

$

(0.15

)

 

$

(0.00

)

Diluted

 

$

(0.11

)

 

$

0.01

 

 

$

(0.15

)

 

$

(0.00

)

Non-GAAP earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.10

)

 

$

0.01

 

 

$

(0.13

)

 

$

0.01

 

Diluted

 

$

(0.10

)

 

$

0.01

 

 

$

(0.13

)

 

$

0.01

 

 

 

(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 provides it a meaningful understanding of its core operating performance.