Everspin Technologies(US:MRAM)2024-02-29 21:13Financial Performance - Total revenue increased by $3.8 million, or 6.3%, from $59.985 million in 2022 to $63.765 million in 2023, primarily driven by a $5.7 million increase in licensing, royalty, patent, and other revenue [200]. - Adjusted EBITDA for 2023 was $15.309 million, up from $11.807 million in 2022, reflecting a significant increase in operational performance [192]. - The company had a net income of $9.1 million for the year ended December 31, 2023, compared to $6.1 million in 2022 [217]. - Net income for 2023 was $9.052 million, a 47.5% increase from $6.129 million in 2022 [265]. - Basic earnings per share (EPS) increased to $0.44 in 2023 from $0.30 in 2022, reflecting a growth of about 46.7% [383]. - Diluted EPS rose to $0.42 in 2023 compared to $0.29 in 2022, marking an increase of approximately 45.5% [384]. Revenue Breakdown - Product sales decreased by $1.909 million, or 3.5%, from $55.032 million in 2022 to $53.123 million in 2023, attributed to volume shifts in customer demand [200]. - Licensing, royalty, patent, and other revenue increased significantly to $10.642 million in 2023, up 114.5% from $4.953 million in 2022 [265]. - Revenue from licenses is recognized upon transfer of rights, with no future performance obligations required for non-refundable upfront payments [242]. - Revenue recognized over time increased significantly to $9,582,000 in 2023 from $3,310,000 in 2022, indicating a shift in revenue recognition methods [337]. - Revenue from distributors decreased to $49,845,000 in 2023 from $50,943,000 in 2022, while non-distributor revenue increased to $13,920,000 from $9,042,000 [337]. Expenses and Costs - Research and development expenses rose by $0.668 million, or 6.0%, from $11.108 million in 2022 to $11.776 million in 2023, primarily due to the development of new products [208]. - General and administrative expenses increased by $2.555 million, or 21.8%, from $11.741 million in 2022 to $14.296 million in 2023, driven by higher professional service costs and share-based compensation [209]. - Total cost of sales increased by $0.480 million, or 1.8%, from $26.040 million in 2022 to $26.520 million in 2023, with a notable increase in costs associated with licensing and royalty revenue [203]. - Operating expenses for 2023 were $31.360 million, up from $27.718 million in 2022, indicating an increase of 13.5% [265]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2023, were $36.9 million, up from $26.8 million in 2022, with no outstanding debt after paying off the 2019 Credit Facility in March 2023 [214]. - Cash provided by operating activities for 2023 was $13.1 million, consisting of net income of $9.1 million and non-cash charges of $6.4 million [217]. - Cash used in investing activities decreased from $2.6 million in 2022 to $1.4 million in 2023, primarily for capital expenditures on manufacturing equipment [220]. - Cash used in financing activities was $1.6 million in 2023, mainly due to $2.8 million in payments to pay off the 2019 Credit Facility, offset by $1.2 million from stock option exercises [222]. - The company anticipates sufficient cash and cash equivalents to meet capital requirements for the next 12 months, influenced by growth rate and R&D spending [214]. Assets and Liabilities - Total assets grew to $67.303 million in 2023, compared to $55.333 million in 2022, marking an increase of 21.7% [263]. - Total stockholders' equity increased to $53.921 million in 2023 from $38.664 million in 2022, representing a growth of 39.4% [263]. - Inventory balance as of December 31, 2023, was $8.391 million, an increase from $6.683 million in 2022, reflecting a rise of 25.5% [263]. - Total accrued liabilities increased to $4,336,000 in 2023 from $3,533,000 in 2022, primarily due to higher payroll-related expenses [341]. - The total lease liabilities as of December 31, 2023, were $5,580,000, with future non-cancellable lease payments totaling $6,139,000 [347]. Tax and Regulatory Matters - The Company has federal net operating loss carryforwards of approximately $96.2 million, with $55.8 million expiring between 2028 and 2037 if not utilized [377]. - The net valuation allowance against deferred tax assets decreased by $2.6 million in 2023, reflecting management's assessment of the recoverability of these assets [376]. - The total unrecognized tax benefits at the end of 2023 amounted to $473,000, up from $105,000 at the end of 2022, indicating a significant increase of 350% [381]. - The company accrued penalties and interest of $155,000 as of December 31, 2023, consistent with the amount accrued in 2022 [382]. Customer and Market Insights - The company generated 78% of its revenue from products sold through distributors in 2023, down from 85% in 2022, indicating a shift in sales strategy [200]. - The company’s significant customers included Customer A, which represented 18% of total revenue in 2023, and Customer E, which accounted for 17% [284]. - The Company has a joint development agreement with GLOBALFOUNDRIES for the development of STT-MRAM technology, which has been extended to include support for 12nm MRAM development [371].