MRAM - Earnings call transcript Q4 2019 | Everspin Technologies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Everspin Technologies' Fourth Quarter and Fiscal 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Investor Group, Shelton Sievers, Relations. Leanne Please go ahead.

Leanne Sievers

and XXXX earnings afternoon Shelton Everspin’s welcome Sievers, to and quarter Group, firm. Relations fourth Technologies Investor conference of Everspin President Good call. Leanne I’m

Controller Everspin’s today me CEO; Tenorio, are Conley, and Joining President CFO. Interim Kevin and and Matt Corporate

risks MRAM business conference technology, products including Everspin’s begin based I but of and to, XX-K SEC results risk XX, with the cause involve contained Form expectations filings, bringing for that this may forward-looking not customer trends encourage to from pipeline We discuss business, in those we manufacturing SEC adoption goals, forward-looking SEC factors conditions and to XXXX from judgments, financial the materially and are and with to in and actual statements we remind successfully in you forward-looking statements. you want including March limited in time Everspin. Before and made would to contains market to regarding future industry and may filings current investing performance on the differ filed that which call, call future our uncertainties review the events, statements estimates, on executing other associated plan. design and Everspin’s on XXXX time its These market our

section update website not available at to the of www.everspin.com. and be Relations of except call, replay intend for this information. as call are date law, at days All least the statements by we of Everspin’s in audio forward-looking do as made This Investor for required XX will this conference

Kevin and go ahead. Kevin, call And over now the please to I’d to Conley. Everspin’s President like CEO, turn

Kevin Conley

our am year. noteworthy both by on is those of and improved quarter and significantly supported with good STT-MRAM high-end positive for from guidance fourth progress very in results quarter especially the Leanne, broader in achieved the industrial by call. I you, to difficulty joining revenue with Revenue the to announce consecutive faced light the at market pleased Thank contributions toggle us afternoon the increased last margins. of which today’s second semiconductor

had growth Demand end factor sold function market rising saw server in last ongoing Toggle a We again in of data our as of the strong positive our increase controller's segment and storage number server well for continued products further the in a the entered were quarter, builds builds enterprise storage projected continued As year. the major progress as rate of strong applications we the into with center to we has important side which from as this coupled STT-MRAM demand products. on components be through new arrays card our benefits XXXX. as segment

customer norms a the by at healthy Demand and We serve as we also prior year. in a inventories at Chinese broad the market through beginning markets broader began year reflected good of recovery new levels. end year across of was returning the channel to the historical pace solid see to and the to grew which new remain the

resulted usual that since weeks in outbreak companies longer like new experienced we shutdowns pause then. from factory Chinese the growth the than a extended and the With demand in orders Coronavirus slowdown in many

protect healthy seasonally issues of had we demand. our chain focus date lower manage to indicated we manufacturing a demand are possible QX have to the rising to in our them partners supply for related disruption from we're as still the in being while quarter supply but put plans in contingency to chain any not China and invoke our need parts working those on closely place parts a typically guidance, that we with are world ourselves responding of other first However our seeing have To and by quarter COVID-XX signals for despite Everspin.

We'll As international monitor operate at where practical normal reduced a and but to business quarters. our the levels. meetings travel domestic situation could that impact future possible virtual otherwise continue to precaution to we be for in continue prepared changes stopped travel, moved and

Overall of gigabit gigabit year throughout total revenue Demand quarters X both STT-MRAM two and of our the in XX% and to the shipments remains line for megabit products in XXXX expectations. ramped growing over XXX well past for record have with revenue. contributing X our product

major orders. have and in the in have customer achieved also the now December achieved data component gigabit customer a we second center and qualification received announced As of production data one in qualification center customer

at the partners enterprise continue including announced to well of segment. set with customers we in as cultivate a datacenter companies storage as broader controller work FMS, Additionally, ecosystem the to others,

we’re development in We've that We market product also actively customers engaged an about that this last excited been industrial line. new opportunity. are STT of week announced expansion with

universal in reliability line memory growing product see our memories applications. Using IOT latest industrial deliver of Our nanometer economics technology to capabilities these to we nonvolatile STT a in very established will cost deliver sensitive for applications. at allows as a performance unprecedented in XX and what competitive us endpoint opportunity address these

and products in of Toggle Toggle the and of identified sweet our customers these both needs already production initial address end last XX well The we have select In our the produced reflects for qualification completed portfolio products QX. have spot announced capacities. quarter these customers qualifications that orders how the megabit MRAM with X megabit speed

in MRAM of continued broader the signaling Design wins half for product this XXXX the doubled first growth second workhorse forward-looking product the half, portfolio. business line for over healthy in new toggle

an on associated customer to see foundries readiness announcement or the along proud Global public EMRAM. this This expect front royalty with partnership the by from first we're On important engagements and embedded revenue licensing the nanometer to milestone is MRAM we see quarter year-end. our this FDX this XX production from

MRAM extension of technology pleased development our that XX Foundries also for agreement partnership joint cooperation announce GF in now technology our We and have we Global another to development further with nanometer are signed of the expands to node.

partnership has productive industry are what most extending be step about MRAM and We reach. will further part in this for proud are excited mean MRAM's what the next to been the of

the significantly is we while restructuring as technology the top the investing of operational growth enabling operating reduces product completed January, announced As footprint. a combined team to our our leadership. with us well The net continue as more stronger that result future company drive objectives to in our customer and expenses, growth current in integrated cost-effective engagement more line

lead to with our That in expand market portfolio continue the need disruptive turn and MRAM our to technology. better product our supports

While driving key our hard these decisions has and team is difficult reorganized priorities. our structure implement were on to our well to adapted

additional our driving wins on our which existing business As includes across as growth capacity we as products is well look design primary ahead increasing to by increasing reaching the and an the expanded an both year with breakeven customers our for focus cash products of ecosystem applications, into flow new coming center then converting for improved revenue structure. STT-MRAM and data growth partners design number Toggle end the on ultimately into cost products segment engagements driving wins within

over call Tenorio, update on to Matt I to the permanent our for wanted CFO, Interim our provide CFO. a turning Before search a quick

has ability who finance quarters Corporate worked from very interim role Controller. that pleased confidence support CFO. In focus he's in responsibilities fulfill Matt's role our done job this candidate I've to finance to want up the step operations our few to the the Matt opportunity be on positive team. My to been in and a Matt building last with directly have received say the served our solid over previously to with these finding our provide First to his leadership strength. I'm as ability to the that I pleased next right

process. the during appropriate as updates provide will We

the fourth Matt as Now I'll quarter financials quarter full call who will turn guidance. you well through take year over to XXXX first our and XXXX as our

Matt Tenorio

million good our review fourth of afternoon statement, fourth XXXX. income in $XX.X of high a third with everyone. end and the quarter in XXXX Starting at the quarter the quarter million guidance the compared in to of Kevin million you, of XXXX $X.X the quarter and was at revenue $X.X Thank

XXXX million year $XX.X million in revenue $XX.X full to was the compared XXXX. For

at quarter increase includes $X.X MRAM revenue million revenue STT-MRAM with MRAM in and record for XXXX. quarter another fourth million $XX.X $X.X sequential of at specifically fourth was products. of million quarter the by to STT-MRAM in which compared Toggle in sales growth the product combined Looking our quarter and revenue previous driven product Toggle The in was the

the $XX.X revenue automotive an to quarter and revenue For previous compared other gross ending the full in impact million as fourth compared the $XXX,XXX XXXX approximately in in year million the with year-over-year MRAM to were XXXX. This fourth the to minimal sales quarter at contributed $XX.X in reduced XXXX. of reflects $X our our of million $XXX,XXX but with quarter engagement decline approximately Licensing and profit. royalties our product program of which

our XXXX XXXX, the and royalties $X.X licensing, year, as natural agreement multiyear sizable was million in revenue licensing the adding in to full revenue Gross prior of this the the included million of of $X.X quarter to in revenue profit $X.X quarter $X.X stream. of For quarter the or and fourth million revenue variability in other compared XX.X% to which of revenue fourth for of was compared million or XX.X% XXXX or quarter XXXX. of million XX.X% $X.X the first

margin year-over-year and manufacturing primarily the continued year. yields in improvement throughout sequential gross reflects increases The our in

other $X.X which revenue. $XX.X full of was or the reflects million million XX.X% $XX.X XXXX, XX.X% million of of in For licensing, to benefit year royalty compared in profit or the and revenue gross revenue the

million XXXX. as and a were quarter $X.X in GAAP the compared quarter quarter in $X.X for year million follows. quarter million million $X.X and of to million fourth $X.X of for million included were million the $X.X operating to $X.X and quarter compared a development million charge $X.X the $X.X which expenses prior expenses ago and fourth and expenses SG&A operating restructuring to The million million previous quarter $X.X were same Research in one-time fourth the breakdown XXXX the of quarter $X.X quarter the of was in fourth in XXXX. of the compared expenses last

million the For in operating fourth of million to compared included year the million which full charge restructuring $XX.X were $X.X in quarter XXXX $XX.X the XXXX. expenses

decreased our year our target toward recent accelerate full to expected cash actions As These operating cost successful million with breakeven XXXX to efforts, XXXX expenses end. additional flow path million collective evidence $XX are year achieving of this an reduction restructuring. approximately compared by reduction our by $X year from

stock in GAAP ago. and $XXX,XXX XX.X $X.XX same $XXX,XXX $XX,XXX the as was The during to quarter year $XXX,XXX Interest well of to Other the fourth last based million quarter million charge per net outstanding. the fourth restructuring million XXXX compensation on the a as $X.X was or loss shares share weighted was approximately $X.X million XXXX based quarter loss for during compared including previous expense $XXX,XXX for $X.X average the fourth fourth quarter $XXX,XXX and the a income quarter and in of quarter the compared XXXX. quarter was

with This a $X.XX share $X.XX $X.X prior during compares or a or the same per per quarter GAAP and loss share year loss of loss the $X.X net in quarter million a net of a ago. million loss

For stock-based as well based the per $X.XX fourth XXXX net full on was $X.X quarter average year weighted was of restructuring million $X.X of loss $XX.X which shares charge million the million included million outstanding. and GAAP or share, as approximately XX.X compensation

or and For million per quarter the XXXX $XX.X quarter $X.X million the million a loss year the full the of fourth for $X.X Adjusted a quarter million previous XXXX fourth to of loss was $X.X GAAP compared XXXX. loss share. EBITDA in of of loss of was net a in $X.XX

compared a was The to expense full to manufacturing yields. for the EBITDA sequentially For are improved adjusted and loss a and attributed million year-over-year loss both million of XXXX. reduction of operating our XXXX efforts improvement $X.X $XX year

million fourth the balance of end in fourth cash cash fourth and for used to Cash and capital $XXX,XXX million quarter to the the the compared million last quarter of quarter $XX.X of sheet, at at the operations was equivalents third expenditures $X.X were quarter last turning end of compared Now of the the million to quarter XXXX. $XX.X $X.X in year.

million operations full the plus XXXX. $X expenditures million year for capital compared amounted $XX.X in to used to XXXX For cash

or new last $X million stocks of is a August. credit strengthen balance of including $X.X During a our quarter in cash line our available $X raised quarter pay to of place sheet the portion the balance We've aftermarket The we of still ATM down to through proceeds put our facility and reduce credit the from used that of net we us. the million line company's after end. million issuance fourth

our to and we we actions these support cash believe With reduction and efforts, recent sufficient operations growth our cost objectives. have

as the million of liabilities our third quarter. our Total was Total the to the quarter in compared have utilization end were to financial equity were in million million million $XX.X the We confident have XXXX. plan quarter suspended $XX.X $XX.X in and quarter Stockholders' the quarter ATM XXXX. in $XX.X million of at previous $XX.X covered the third fourth in compared the asset of facility. of fourth $XX.X million

Now we GAAP both will the going guidance, beginning begin first and non-GAAP with turning earnings quarter to forward guidance and our per share. XXXX for of providing

first Our compensation. GAAP will based range non-GAAP expect said, to we quarter and million results between exclude X.X With stock $X.X that revenue million.

loss share $X.XX expect and per per a a of between $X.XX We between GAAP non-GAAP $X.XX of $X.XX basis share. and on loss

past loss and the EPS significant outstanding estimated we first of on revenue drive of an line quarter operating are increased highlighting share of average of the first have the the non-GAAP company's cost to This our share The quarter improve on count for initiatives bottom reduction of the per results. shares ranges for over in million based XXXX leverage XX.X year both on the made $X.XX compares $XX XXXX. progress GAAP GAAP and million

Operator, open questions. now you the may line for

Operator

[Operator question instructions] Your & comes from [indiscernible] from line Company. Needham of the first

Your line is open.

ask may your You question.

Unidentified Analyst

about for Kevin, nanometer on XX impact how XX some of that we talked how FDX to new embedded level, agreement opportunity you a expect good question solution extension nanometer, Wanted that's the at high a revenue terms Global potential a there? in -- from Congrats of see very and to the the positive a Foundries the to all try royalty should to from you that about the think on MRAM. the indication about though understand revenue royalty with that think momentum.

Kevin Conley

will the has XX based a in As Global past, FDX that we've be forums sizable the nanometer public their talked talked in of on EMRAM. about pipeline revenue

on timing not I'm a However, shape of or that provide any ramp. in position the to insights

will of significant thing be is then look course start in the time. of think the which significance over I growing we at that that

Unidentified Analyst

the seeing your as And the customer, how proposition center X MRAM the can to also as kind you value for of the with for rates there non-storage non-storage gig attach product customers. about data for you ramp center data you're What's - data the talk traction center move seeing the that you're and second you customers?

Kevin Conley

specifically buffer center data engagements our storage The that the around for as and in about non-volatile talked many center. So are most of we've data designed were parts write in specifically data utilized center applications and more applications.

initial orders the So initial ramp. we will have the start and

that probably will the more of So end toward be we that do year. expect significant the

Unidentified Analyst

have Is in is going on on just takes, And last based improved question going about in of smoother lumpy puts because and -- the but think been yields, gross margins, profile the how be or gross should it's past royalty of margins manufacturing licensing there do obviously the different margins? the the volatility expect we more and forward? it the we margin kind to a

Kevin Conley

of what us our a guess stable been stabilizing focus of is been more a some we strong couple our years efforts legacy for own it's them. focused the I on we is I on would is lot threefold; that first keep forward on products going for do a Toggle those and intention and the improve to have Our comment manufacturing

set The we insight licensing provide of opportunistic margins to into and long-term lot the of our margins products for sell see published to something we the market XX% looking timing model of gross something a fit talked greater then as not which that is from on. STT about regard with how is and is along which of Toggle we're we that we’ve that where the the financial than products we with that our can

time you will more we increasingly Although believe for license revenue look sources of that become important. we over new do

Operator

the comes Richard Craig-Hallum. And question your line next of from Shannon from

Your is sir. open line

You may ask question. your

Richard Shannon

for thanks couple tactical your in bit Kevin, quite Hi margin questions taking I’ll the gross maybe questions, nice ask a quarter fourth related of my a very as product well, here. up financial

was the fourth I in any effect think only is called that yield, here, from mix out effect quarter? you the

Kevin Conley

effects what margins about was for saw case product our improvement reason in would I mix talked this from we Matt the to always in the say improvement in was quarter overwhelming yields. that There this quarter.

Richard Shannon

sustainable they think they're or to can improved not reason Any from be even that there?

Kevin Conley

margin our ongoing efforts in the long-term our keep design to efforts the improve product have financial in We stated our our with we and have margins of line model. constant to as firmly

Richard Shannon

Let your couple just that in quarter; more it see me seasonally that higher just ask you be seen is to be sequentially up or financial about by question in is any we've the to to a wanted of two quarter, the quarters, give there I if gave or obviously nice growth guidance guess not that revenues it's past on sequential licensing driven make the see you sure will for can relatively down color than contribution the products. very

Kevin Conley

give Richard, those talked we’re is about of that we I did in demand on in what product our guidance giving there reason that specific why we is guidance contributors as we things confident in the this don't what the terms of quarter the see. signals of view terms are really that and

Richard Shannon

That's I figured. I what just make wanted Okay. to sure.

margin So trying line be to from you’re sounds go so amount. line, margins of like suggest a your here, the to down sequentially that confident your gross in then of bottom OpEx trying OpEx fair to should your that think and it would range gross top

together. a So rate or that sure of and help million we as you $X about any us can quite not you run OpEx yearly or kind much variables year kind way first that saving not talked of I am expect fitting quarter or quarterly if the be this about those should in think

Kevin Conley

restructuring we the our schedule. that that and January did was would we in that target our January you at on to the in end happen said press as release to guide of complete did by I What look is

As the will not might date all that happen you cost year. imagine be savings timed initiatives of and the throughout on

think a way this yearly is number for rate a it the run about So as not number, the number. to year

Richard Shannon

attach Okay. server X us second get your guess a question little the whether rates are you Maybe Gig success see application. of one these follow to greater and last Fair or enough. my how you're a with their that diversely think up question similar in I about and can I the bit talked a first data time. maybe the offline; will and even customer is a may you prior deployed on from customer infrastructure having over about centers sense

Kevin Conley

current about that liberty at long a arrays really the also all in there At application we've in over but time about NVMe different the not I'm as about the flash applications. talked those time memory we've look SSDs, we've talked specific things and we're seeing for we past, at talk we've data talked center where cards to fabrics, talked side about the fabric talked for and persistent and historically the applications accelerators traction of do types and like about but storage in

these speed the and of objectives. of are of very some are hard some broad key solve to are and which at these emerging to hold take but to interest deliver their the make some a the applications. applications centers lot types commentary bit applications they value data on have that are of very Obviously -- It's will mainstream the emerging

Operator

to now at I I turn no like am closing for would back Kevin conference you. Mr. this questions further showing remarks. Conley Thank to the time.

Kevin Conley

with participating and entire team to continue today's questions call. to those bottom the and balance and performance closing tough I of in the objectives. significantly the face ended partners support Everspin we the year for conditions. on We who the our our for line In growth for and all in sheet and gratitude express of my would market throughout persistence you top us quarter the like strengthened strong the Thank

our we the QX With flow cash the objectives year-end. near serve We'll with profitability. we improved outlook to with monitor have to uncertainties we for decisions near-term restructured position by market and our contingencies current long-term goal for breakeven opportunity by to make carefully remain the our encouraged achieve growth strive demand continued and operation financial for continue significantly our as and and pay that

engagement remain we our by term the enabled the with about nm Longer portfolio growth GF. and expanded optimistic potential XX traction, product

the inform May investors, Conference to at participate interested we we you XX. is to For Growth the in want permitted situation, that plan on COVET-XX Emergent New Oppenheimer by York

also plan meetings additional Needham. to Coast the East arrange on with We investor

contact interested So scheduling a for those firm. Sheldon please the the hosting meeting group in or

products and our We may our look on progress next business call. you next now call new forward reporting disconnect to with results the Operator quarter. our

Operator

participation Ladies you. this conference. have gentlemen, concludes wonderful a your day. for and Thank today's and you Thank

all now may disconnect. You

Everspin (MRAM) 12 Mar 202019 Q4 Earnings call transcript