Country for PR: United States
Contributor: PR Newswire New York
Wednesday, February 14 2018 - 11:30
AsiaNet
Intermolecular Reports Fourth Quarter and Full Year 2017 Financial Results
SAN JOSE, Calif., Feb. 14, 2018 /PRNewswire- AsiaNet/ --

Intermolecular, Inc. (NASDAQ: IMI), the trusted partner for advanced materials 
innovation, today reported results for its fourth quarter and full year ended 
December 31, 2017.

Results Highlights:

    -- Fourth quarter total revenue of $10.5 million, an increase of 22% over 
       prior quarter and 1% over the same period last year; 2017 fiscal year 
       revenue of $37.2 million. 
    -- Fourth quarter net income of $0.1 million compared to net loss of 
       $(3.0) million in the same period last year. 
    -- Fourth quarter Adjusted EBITDA of $2.1 million, or 20% of revenue.

"The fourth quarter of 2017 marked Intermolecular's first GAAP profitable 
quarter in five years, driven by a 22% increase in revenue and a 10% decrease 
in operating expense as compared to the prior quarter," said company president 
and CEO, Chris Kramer. "From an operational standpoint, we added three new 
programs during the fourth quarter and we also formed an important strategic 
alliance with the Shanghai Industrial Technology Research Institute (SITRI), 
which we believe will drive future revenue opportunities for Intermolecular in 
the second half of 2018 and beyond."

Fourth Quarter Fiscal 2017 Results

Revenue for the fourth quarter of 2017 was $10.5 million, up 22% compared to 
$8.6 million in the third quarter of 2017, and up 1% compared to $10.5 million 
in the same period a year ago. 

Net income for the fourth quarter of 2017 was $0.1 million, or $0.00 per share, 
compared to net loss of $(1.8) million, or $(0.04) per share, in the third 
quarter of 2017 and net loss of $(3.0) million, or $(0.06) per share, in the 
same period a year ago. 

Non-GAAP net income for the fourth quarter of 2017 was $0.4 million, or $0.01 
per share, compared to non-GAAP net loss of $(1.6) million, or $(0.03) per 
share, in the prior quarter and non-GAAP net loss of $(2.3) million, or $(0.05) 
per share, in the same period a year ago.  

Adjusted EBITDA for the fourth quarter of 2017 was $2.1 million, compared to 
$0.1 million in the prior quarter and Adjusted EBITDA loss of $(0.5) million in 
the same period a year ago.  

Cash and investments were $25.8 million at the end of fourth quarter of 2017, a 
decrease of $1.3 million compared to $27.1 million at the end of third quarter 
of 2017.    

Full Year Fiscal 2017 Results

Revenue for the full year ended December 31, 2017 was $37.2 million, down 21% 
compared to $47.3 million in 2016. The decrease in revenue was primarily due to 
the strategic transition of the company's business model in 2017 from a royalty 
and services model to a services-based program model.

Net loss for the full year ended December 31, 2017 was $(10.4) million, or 
$(0.21) per share, compared with $(15.4) million, or $(0.31) per share, for 
2016. 

Non-GAAP net loss for 2017 was $(8.9) million, or $(0.18) per share, compared 
to $(11.8) million, or $(0.24) per share, for 2016.

Cash and investments were $25.8 million at the end of 2017, compared to $27.8 
million at the end of 2016. 

First Quarter of 2018 Outlook

The following statements are based on Intermolecular's current expectations for 
the first quarter ending March 31, 2018. The following statements are 
forward-looking, and actual results could differ materially depending on market 
conditions and the factors set forth under "Forward-Looking Statements" below. 
Intermolecular does not plan to update, nor does it undertake any obligation to 
update, this outlook in the future.

    -- Revenue is projected to be in the range of $9.6 million to $9.9 
       million; 
    -- Net loss is projected to be between $(1.0) million and $(1.3) million, 
       or between $(0.02) to $(0.03) per share, based on approximately 49.6 
       million shares expected to be outstanding; 
    -- Non-GAAP net loss, excluding stock-based compensation expense, is 
       projected to be between $(0.7) million and $(1.0) million, or between 
       $(0.01) to $(0.02) per share based on 49.6 million shares expected to 
       be outstanding; and, 
    -- Adjusted EBITDA is projected to be between $0.4 million and $0.7 
       million.

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.

Conference Call 

Intermolecular will host a conference call and simultaneous audio-only webcast 
today (February 13, 2018) at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to 
discuss these results. The call will be hosted by Intermolecular President and 
CEO Chris Kramer and CFO Bill Roeschlein.

U.S. dial-in number: (877) 251-1860
International dial-in number: (244) 357-2386
Conference ID: 5955988

Please call the conference telephone number five to ten minutes prior to start 
time. An operator will register your name and organization. If you have 
difficulty connecting with the conference call, please contact Liolios Group at 
(949) 574-2386

A live and archived webcast (audio only) of the call will be available on 
Intermolecular's website (http://ir.intermolecular.com/ ) for up to 30 days 
after the call.

About Intermolecular, Inc.
Intermolecular(R) 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.

"Intermolecular" and the Intermolecular logo are registered trademarks; all 
rights reserved. Learn more at www.intermolecular.com.  

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 are commonly identified by words such as "would," 
"may," "expects," "believes," "plans," "intends," "projects" and other terms 
with similar meaning. Investors are cautioned that the forward-looking 
statements in this document are based on current beliefs, assumptions and 
expectations, speak only as of the date of this document and involve risks and 
uncertainties that could cause actual results to differ materially from current 
expectations. Such statements are subject to certain known and unknown risks 
and uncertainties, many of which are difficult to predict and generally beyond 
Intermolecular's control, that could cause actual results and other future 
events to differ materially from those expressed in, or implied or projected 
by, the forward-looking information and statements. Material factors that could 
cause actual results to differ materially from current expectations include, 
without limitation, the following: our ability to productize our workflows with 
existing and future customers; expectations regarding our future revenue, cash 
flow and GAAP and non-GAAP net income or loss; financial condition; the ability 
of our new business model to generate profits and long-term shareholder 
returns; the extent to which technology developed in collaboration with our 
customers will continue to remain on the critical path and have significant 
value for such customers and us as well as the industry as a whole; and 
anticipated growth in our current markets through expansion of existing 
customer programs and the entry into other engagements with new customers. 
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; 
commercial acceptance of our HPC platform and methodology as effective R&D 
tools; our ability to achieve and sustain profitability; 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; our ability to manage the growth of our business; the 
rapid technology changes and volatility of the customers and industries we 
serve; our potential need for future capital to finance our operations; and 
other risks described in our most recent annual report on Form 10-K as updated 
by our quarterly reports on Form 10-Q and other filings with the Securities and 
Exchange Commission available at www.sec.gov, particularly in the sections 
titled "Risk Factors." All forward-looking statements are based on management's 
current estimates, projections and assumptions, and we assume no obligation to 
update them.

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.


                              Intermolecular, Inc.
                   Condensed Consolidated Statements of Operations
               (In thousands, except per share amounts, Unaudited)

	            Three Months Ended           Twelve Months Ended
                          December 31,               December 31,
	                2017      2016		2017             2016
Revenue:											
Program revenue	      $ 8,850	$ 8,833		$ 29,010		$ 39,690
Licensing and 
royalty revenue		1,698	  1,644		   8,193		   7,608
Total revenue	       10,548	 10,477		  37,203		  47,298
Cost of revenue:								
Cost of program 
revenue		        3,353	  3,421		  11,449		  15,705
Cost of licensing 
and royalty revenue	  344	     25		     656	             125
Total cost of revenue	3,697	  3,446		  12,105		  15,830
Gross profit		6,851	  7,031		  25,098		  31,468
Operating expenses:						
Research and development	4,206	  5,847		  21,535		  28,126
Sales and marketing	  734	  1,518		   4,019		   7,383
General and 
administrative		1,974	  2,777		   9,198		  10,713
Restructuring charges	    -	     (6)	           1,351	           1,114
Total operating 
expenses		        6,914	 10,136		  36,103		  47,336
Loss from operations       (63)	 (3,105)		 (11,005)	 (15,868)
Other income (expense):							
Interest income 
(expense), net		   84	     50		     266		     173
Other income (expense), 
net		           95	     63		     337		     265
Total other income
(expense), net		  179	    113		     603		     438
Income (loss) before 
provision for 
income taxes		  116 	 (2,992)		 (10,402)	 (15,430)
Provision for income taxes  -	      -		       1		       7
Net income (loss)	$ 116  $ (2,992)	       $ (10,403)       $ (15,437)

Basic net income 
(loss) per common share $ 0.00   $ (0.06)	         $ (0.21)	 $ (0.31)
Diluted net income 
(loss) per common share	$ 0.00	$ (0.06)	         $ (0.21)	 $ (0.31)

Shares used in basic 
net income (loss) per 
common share		49,559    49,486		  49,547		  49,396
Shares used in diluted 
net income (loss) per 
common share		49,765    49,486		  49,547		  49,396


                                   Intermolecular, Inc.
                        Condensed Consolidated Balance Sheets
                                (In thousands, Unaudited)

	                  As of December 31,           As of December 31,
	                         2017                          2016
ASSETS					
Current assets:					
Cash and cash equivalents	$ 6,090		             $ 5,759
Short-term investments		 18,060			      20,035
Total cash, cash 
equivalents and 
short-term investments		 24,150			      25,794
Accounts receivable		  5,519			       5,063
Prepaid expenses and 
other current assets		  1,069			       1,397
Total current assets		 30,738			      32,254
Long-term investments		  1,657			       1,995
Materials inventory		  2,781			       3,357
Property and equipment, net	  5,913			      10,964
Intangible assets, net		  2,620			       4,001
Other assets		            600			         597
Total assets	               $ 44,309		            $ 53,168
					
LIABILITIES AND 
STOCKHOLDERS' EQUITY					
Current liabilities:					
Accounts payable                   $ 928		               $ 309
Accrued liabilities		    865			       1,451
Accrued compensation and 
employee benefits		  2,535			       1,663
Deferred revenue		            941			       1,533
Total current liabilities	  5,269			       4,956
Other long-term liabilities	  2,967			       3,216
Total liabilities		  8,236			       8,172
Stockholders' equity:					
Common stock		             50			          50
Additional paid-in capital	214,796			     213,313
Accumulated other 
comprehensive loss		    (36)			         (32)
Accumulated deficit	       (178,737)			    (168,335)
Total stockholders' equity	 36,073			      44,996
Total liabilities and 
stockholders' equity	       $ 44,309		             $ 53,168


                                   Intermolecular, Inc.
                        Condensed Consolidated Statements of Cash Flows
                                (In thousands, Unaudited)

                                  Twelve Months Ended December 31,
	                            2017                    2016
Cash flows from operating 
activities:					
Net loss                       $ (10,403)		      $ (15,437)
Adjustments to reconcile 
net loss to net cash 
used in operating 
activities:					
Depreciation, amortization
 and accretion		           7,194			  9,537
Stock-based compensation		   1,472			  3,627
(Gain) loss on disposal of 
property and equipment		      68			    (12)
Changes in operating assets 
and liabilities:					
Accounts receivable		    (456)		  1,051
Prepaid expenses and other assets     585			    122
Materials inventory		     557			    333
Accounts payable		             592			   (493)
Accrued and other liabilities	     110			 (3,069)
Deferred revenue		            (592)		 (1,063)
Net cash used in operating
activities		            (873)		 (5,404)
Cash flows from investing 
activities:					
Purchase of investments		 (20,888)	        (23,486)
Redemption of investments	  22,861			 24,676
Purchase of property and 
equipment		            (777)		 (2,381)
Proceeds from sale of equipment	      14			     22
Purchased and capitalized 
intangible assets		       -			    (45)
Net cash (used in) provided by 
investing activities		   1,210			 (1,214)
Cash flows from financing 
activities:					
Payment of capital leases             (13)		    (13)
Proceeds from exercise of 
common stock options		       7			    714
Net cash (used in) provided by 
financing activities		      (6)		    701
Net increase (decrease) in cash 
and cash equivalents		     331			 (5,917)
Cash and cash equivalents at
beginning of period		   5,759			 11,676
Cash and cash equivalents
 at end of period	         $ 6,090		        $ 5,759


                                   Intermolecular, Inc.
                 Reconciliation of GAAP to Non-GAAP Financial Measures
      (In thousands, except per share amounts and percentages, Unaudited)
 
	              Three Months Ended               Twelve Months Ended
                         December 31,                     December 31,
	              2017	   2016                 2017	      2016	
GAAP cost of net
revenue	           $ 3,697       $ 3,446		    $ 12,105	  $ 15,830
Stock-based 
compensation 
expense (a)	       (47)	   (102)		        (191)	      (510)
Non-GAAP cost 
of net revenue	   $ 3,650	$ 3,344		    $ 11,914	  $ 15,320 
GAAP gross profit  $ 6,851	$ 7,031		    $ 25,098	  $ 31,468
Stock-based 
compensation
expense (a)		47	    102			 191	       510
Non-GAAP gross
profit	           $ 6,898       $ 7,133		    $ 25,289	  $ 31,978
As a percentage
of net revenue:								
GAAP gross margin     65.0 %	   67.1 %		67.5 %	      66.5 %
Non-GAAP gross margin 65.4 %	   68.1	%		68.0 %	      67.6 %
GAAP operating loss  $ (63)     $ (3,105)		   $ (11,005)	 $ (15,868)
Stock-based 
compensation
expense (a):								
- Cost of net revenue	47	    102			 191	       510
- Research and 
development		66          189			 373	       949
- Sales and marketing	23	    (40)			 119	       527
- General and 
administrative	       115	    440			 789	     1,641
Non-GAAP operating
income (loss)	     $ 188     $ (2,414)		    $ (9,533)	 $ (12,241)	
GAAP net income 
(loss)	             $ 116     $ (2,992)		    $ (10,403)	 $ (15,437)
Stock-based 
compensation 
expense (a)	       251	    691			1,472	     3,627
Non-GAAP net
income (loss)	     $ 367     $ (2,301)		     $ (8,931)	 $ (11,810)	
GAAP net income
(loss)	             $ 116     $ (2,992)		    $ (10,403)	 $ (15,437)
Interest (income) 
expense, net	       (84)         (50)			 (266)	      (173)
Provision for taxes	 -	     -			    1		 7
Depreciation, 
amortization, impairment
 and accretion	     1,824	  1,829			7,194	     9,537
Restructuring 
charges (b)		 -	     (6)			1,351	     1,114
Stock based compensation
expense (a)	       251	    691			1,472	     3,627
Adjusted EBITDA	   $ 2,107	 $ (528)		       $ (651)	  $ (1,325)	
Shares used in 
computing earnings 
per share:								
Basic		    49,559	 49,486		       49,547	    49,396
Diluted		    49,765	 49,486		       49,547	    49,396
GAAP earnings (loss)
 per share:								
Basic	            $ 0.00	$ (0.06)		      $ (0.21)	   $ (0.31)
Diluted	            $ 0.00	$ (0.06)		      $ (0.21)	   $ (0.31)
Non-GAAP earnings
(loss) per share:							
Basic	            $ 0.01	$ (0.05)		      $ (0.18)	   $ (0.24)
Diluted	            $ 0.01	$ (0.05)		      $ (0.18)	   $ (0.24)	
	
(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, Inc.
             First Quarter 2018 Outlook
    Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
     (In thousands, except per share amounts, Unaudited)

GAAP net loss range	          $(1,000)  -    $(1,300)
Stock-based compensation	             $300   -       $300
Non-GAAP net loss range	            $(700)  -    $(1,000)
			
GAAP and Non-GAAP diluted shares	         49,600
GAAP net loss per share range	   $(0.02)  -     $(0.03)
Non-GAAP net loss per share range   $(0.01)  -	  $(0.02)

Corporate Contact:
Bill Roeschlein
Intermolecular, Inc.
Chief Financial Officer
bill.roeschlein@intermolecular.com
+1 (408) 582-5415

Investor Contact:
Matt Glover or Najim Mostamand, CFA
Liolios Group, Inc.
IMI@liolios.com
+1 (949) 574-3860

Logo - https://mma.prnewswire.com/media/641639/Intermolecular_Logo.jpg

SOURCE:  Intermolecular, Inc.

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