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Intermolecular Reports First Quarter 2019 Financial Results
[May 14, 2019]

Intermolecular Reports First Quarter 2019 Financial Results


SAN JOSE, Calif., May 14, 2019 /PRNewswire/ -- Intermolecular, Inc. (Nasdaq: IMI), the trusted partner for advanced materials innovation, today reported results for its first quarter ended March 31, 2019.

Q1 2019 Financial and Operational Highlights

  • Program revenue totaled $6.4 million or 96% of total revenue of $6.7 million.
  • Gross profit totaled $4.8 million or 73% of total revenue.
  • Adjusted EBITDA loss totaled $(1.3) million.
  • Net loss totaled $(2.3) million.

First Quarter of 2019 Financial Results
Revenue for the first quarter of 2019 was $6.7 million, an increase of 5% from $6.3 million in the fourth quarter of 2018, and a decrease of 31% from $9.7 million in the same period a year ago. Program revenue was $6.4 million, a 6% increase from $6.0 million in the fourth quarter of 2018, and a 31% decrease from $9.3 million in the same period a year ago.

Gross profit for the first quarter of 2019 was $4.8 million (73% of total revenue), a 5% increase from $4.6 million (73% of total revenue) in the fourth quarter of 2018, and a 23% decrease from $6.3 million (65% of total revenue) in the same period a year ago.

Total operating expenses for the first quarter of 2019 were $7.4 million, a 2% decrease from $7.5 million in the fourth quarter of 2018, and an increase of 4% compared to $7.1 million in the same period a year ago.

Net loss for the first quarter of 2019 totaled $(2.3) million or $(0.05) per basic and diluted share, compared to net loss of $(2.6) million or $(0.05) per basic and diluted share in the fourth quarter of 2018, and compared to net loss of $(0.6) 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 first quarter of 2019 totaled $(1.8) million, or $(0.04) per basic and diluted share, compared to non-GAAP net loss of $(2.2) million, or $(0.04) per basic and diluted share in the fourth quarter of 2018, and compared to non-GAAP net loss of $(0.4) million, or $(0.01) per basic and diluted share in the same period a year ago. 

Adjusted EBITDA loss for the first quarter of 2019 totaled $(1.3) million, compared to an adjusted EBITDA loss of $(1.5) million in the fourth quarter of 2018 and Adjusted EBITDA of $1.0 million in the same period a year ago. 

Cash and investments totaled $27.4 million at the end of first quarter of 2019, a decrease of $3.0 million compared to $30.4 million at the end of fourth quarter of 2019. The company had no debt at quarter end.   

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 second 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, 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.

Corporate Contact
Bill Roeschlein
Intermolecular, Inc.
Chief Financial Officer
bill.roeschlein@intermolecular.com
(408) 582-5415

Investor Contact
Matt Glover or Najim Mostamand, CFA
Liolios
IMI@liolios.com
(949) 574-3860





Intermolecular, Inc.

Condensed Consolidated Statements of Operations

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



Three Months Ended March 31,


2019


2018

Revenue:






Program revenue

$

6,385


$

9,256

Licensing and royalty revenue


266



419

Total revenue


6,651



9,675

Cost of revenue:






Cost of program revenue


1,818



3,375

Cost of licensing and royalty revenue




1

Total cost of revenue


1,818



3,376

Gross profit


4,833



6,299

Operating expenses:






Research and development


4,146



4,032

Sales and marketing


890



796

General and administrative


2,338



2,286

Total operating expenses


7,374



7,114

Loss from operations


(2,541)



(815)

Other income (expenses), net






Interest income (expense), net


183



106

Other income (expense), net


96



87

Loss before provision for income taxes


(2,262)



(622)

Provision for income taxes


-



1

Net loss

$

(2,262)


$

(623)

Net loss per share, basic and diluted

$

(0.05)


$

(0.01)

Weighted-average number of shares used in computing loss per share, basic and diluted:


49,757,606



49,581,927


 

Intermolecular, Inc.

Condensed Consolidated Balance Sheets

(In thousands, Unaudited)



As of March 31, 2019


As of December 31, 2018

ASSETS






Current assets:






Cash and cash equivalents

$

3,816


$

8,351

Short-term investments


23,613



22,098

Total cash, cash equivalents and short-term investments


27,429



30,449

Accounts receivable


2,451



3,349

Prepaid expenses and other current assets


952



936

Total current assets


30,832



34,734

Materials inventory


2,561



2,638

Property and equipment, net


3,125



3,432

Intangible assets, net


1,979



2,075

Right-of-use lease assets - operating


11,201



Other assets


509



514

Total assets

$

50,207


$

43,393







LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Accounts payable

$

193


$

760

Accrued liabilities


1,338



1,234

Accrued compensation and employee benefits


1,639



3,431

Current portion of lease obligation - operating


1,772



Deferred revenue


333



917

Total current liabilities


5,275



6,342

Deferred rent




2,667

Long term lease obligation - operating


12,307



Total liabilities


17,582



9,009

Stockholders' equity:






Common stock


50



50

Additional paid-in capital


216,502



216,034

Accumulated other comprehensive income (loss)


7



(27)

Accumulated deficit


(183,934)



(181,673)

Total stockholders' equity


32,625



34,384

Total liabilities and stockholders' equity

$

50,207


$

43,393

 

Intermolecular, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands, Unaudited)



Three Months Ended March 31,


2019


2018

Cash flows from operating activities:






Net loss

$

(2,262)


$

(623)

Adjustments to reconcile net loss to net cash used in operating activities:






Depreciation, amortization and accretion


664



1,423

Amortization expense - Right of use lease assets operating


426



Stock-based compensation


463



270

Loss on disposal of property and equipment


2



Changes in operating assets and liabilities:






Accounts receivable


898



1,796

Prepaid expenses and other assets


(10)



121

Materials inventory


76



(69)

Accounts payable


(489)



(554)

Accrued and other liabilities


(2,099)



(730)

Deferred revenue


(584)



56

Net cash (used in) provided by operating activities


(2,915)



1,690

Cash flows from investing activities:






Purchase of investments


(7,613)



(6,252)

Redemption of investments


6,122



3,070

Purchase of property and equipment


(134)



(194)

Net cash used in investing activities


(1,625)



(3,376)

Cash flows from financing activities:






Proceeds from exercise of common stock options


5



17

Net cash provided by financing activities


5



17

Net decrease in cash and cash equivalents


(4,535)



(1,669)

Cash and cash equivalents at beginning of period


8,351



6,090

Cash and cash equivalents at end of period

$

3,816


$

4,421

 

Intermolecular, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

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



Three Months Ended March 31,



2019



2018


GAAP cost of net revenue

$

1,818



$

3,376


Stock-based compensation expense (a)


(46)




(53)


Non-GAAP cost of net revenue

$

1,772



$

3,323


GAAP gross profit

$

4,833



$

6,299


Stock-based compensation expense (a)


46




53


Non-GAAP gross profit

$

4,879



$

6,352


As a percentage of net revenue:








GAAP gross margin


72.7

%



65.1

%

Non-GAAP gross margin


73.4

%



65.7

%

GAAP operating loss

$

(2,541)



$

(815)


Stock-based compensation expense (a):








- Cost of net revenue


46




53


- Research and development


113




55


- Sales and marketing


53




30


- General and administrative


251




132


Non-GAAP operating loss

$

(2,078)



$

(545)










GAAP net loss

$

(2,262)



$

(623)


Stock-based compensation expense (a)


463




270


Non-GAAP net loss

$

(1,799)



$

(353)










GAAP net loss

$

(2,262)



$

(623)


Interest (income) expense, net


(183)




(106)


Provision for taxes





1


Depreciation, amortization, impairments and accretion


665




1,423


Stock-based compensation expense (a)


463




270


Adjusted EBITDA

$

(1,317)



$

965










Shares used in computing GAAP basic and diluted earnings per share


49,758




49,582


GAAP earnings per share:








Basic and diluted net loss per share

$

(0.05)



$

(0.01)


Shares used in computing Non-GAAP basic and diluted earnings per share


49,758




49,582


Non-GAAP earnings per share:








Basic and diluted net loss per share

$

(0.04)



$

(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.



(b)

Restructuring charges incurred in connection with a reduction in headcount primarily comprised of employee severance and benefit costs.

 

Intermolecular Logo (PRNewsfoto/Intermolecular, Inc.)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/intermolecular-reports-first-quarter-2019-financial-results-300850067.html

SOURCE Intermolecular, Inc.


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