Earnings Release • Aug 31, 2015
Earnings Release
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Grenoble, France and Durham, North Carolina, August 31, 2015 – MEMSCAP (NYSE Euronext: MEMS), the leading provider of innovative solutions based on MEMS (micro-electro-mechanical systems) technology, announced today its earnings for the first half of 2015, ending June 30, 2015.
In accordance with the figures given in the first and second quarter press releases, consolidated revenue for the first half of 2015 amounted to € 6.9 million (US\$ 7.6 million) compared to € 6.5 million (US\$ 8.9 million) for the first half of 2014 and € 6.7 million (US\$ 8.6 million) for the second half of 2014.
Consolidated revenue distribution by market segment over the first half of 2015 is as follows:
| Market Segments | Revenue (M€) | % |
|---|---|---|
| Aerospace | 2.5 | 37% |
| Optical Communications / Adaptive Optics | 1.9 | 27% |
| Medical / Biomedical | 1.9 | 27% |
| Mass Market / Other Applications | 0.6 | 9% |
| Total | 6.9 | 100% |
(Any apparent discrepancies in totals are due to rounding.)
MEMSCAP consolidated earnings for the first half of 2015 are given by the following table:
| For the 6 months ended | For the 6 months ended | |
|---|---|---|
| (In million euros) | 30 June 2015 | 30 June 2014 |
| Revenue | 6.9 | 6.5 |
| - Standard products* | 3.9 | 4.2 |
| - Custom products | 3.0 | 2.3 |
| Gross Margin | 2.6 | 2.0 |
| Operating Expenses** | (2.0) | (2.0) |
| Operating Profit / (Loss) | 0.6 | 0.0 |
| Financial profit / (Loss) | (0.1) | 0.0 |
| Net Profit / (Loss) | 0.5 | 0.0 |
(Financial data were subject to a limited review by the Group's statutory auditors. On August 31st, 2015, the MEMSCAP board of directors authorized the release of the HY 2015 consolidated financial statements. Any apparent discrepancies in totals are due to rounding.)
* Including the royalties from the dermo-cosmetics segment.
** Net of research & development grants.
* * *
The consolidated gross margin for the first half of 2015 increased by € 0.6 million and amounted to € 2.6 million. The gross margin rate was 38% of the consolidated revenue for the first half of 2015 compared to 31% for the first half of 2014 showing a significant increase by 7 points.
The growth of the Group's gross margin, resulting from the business strategy focused on high-added value markets, led to an operating profit of € 0.6 million for the first half of 2015 versus operating earnings at breakeven level for the first half of 2014.
Finally, the consolidated net profit amounted to € 0.5 million for the first half of 2015 compared to consolidated net earnings at break-even level for the first half of 2014.
The positive operating cash flow for the first half of 2015 was € 0.7 million. The operating cash flow excluding the variation of the working capital requirement amounted to € 1.0 million while the working capital requirement increased by € 0.3 million over the first half of 2015. Consequently, the consolidated EBITDA amounted to € 1.1 million compared to € 0.4 million for the first half of 2014.
At June 30, 2015, the Group's available liquidities amounted to € 3.7 million (June 30, 2014: € 3.2 million) including cash investments (Corporate bonds) recorded under financial assets available for sale. At June 30, 2015, net cash minus financial liabilities amounted to € 1.8 million (June 30, 2014: € 0.6 million).
MEMSCAP shareholders' equity totaled € 18.2 million at June 30, 2015 compared to € 17.2 million by end of June 2014.
MEMSCAP financial performance over the first half of 2015 confirmed the increase of the Group's profitability as well as the cash generation of its operations. These performances validate the Group's business strategy focused on its high-value markets based on avionics, medical / biomedical and optical communications market segments.
Over the second half of 2015, the Group intends to pursue its actions strengthening its net profit and operating cash flows.
MEMSCAP is the leading provider of innovative micro-electro-mechanical systems (MEMS)-based solutions. MEMSCAP standard and custom products and solutions include components, component designs (IP), manufacturing and related services. MEMSCAP customers include Fortune 500 businesses, major research institutes and universities. The company's shares are traded on the Eurolist of NYSE Euronext Paris S.A (ISIN: FR0010298620-MEMS). More information on the company's products and services can be obtained at www.memscap.com.
For more information, please contact:
Yann Cousinet CFO Ph: +33 4 76 92 85 00 Email: [email protected]
| 30 June 2015 |
31 December 2014 |
|
|---|---|---|
| €000 | €000 | |
| Assets | ||
| Non-current assets | ||
| Property, plant and equipment | 3 134 | 3 057 |
| Goodwill and intangible assets | 8 722 | 8 635 |
| Available-for-sale financial assets | 1 284 | 1 277 |
| Deferred tax asset | 1 162 | 1 107 |
| 14 302 | 14 076 | |
| Current assets | ||
| Inventories | 2 902 | 2 809 |
| Trade and other receivables | 2 630 | 2 591 |
| Prepayments | 253 | 237 |
| Cash and short-term deposits | 2 375 | 2 494 |
| 8 160 | 8 131 | |
| Total assets | 22 462 | 22 207 |
| Equity and liabilities | ||
| Equity | ||
| Issued capital1 782 | 1 772 | |
| Share premium 18675 | 18 771 | |
| Treasury shares (122) | (117) | |
| Retained earnings(633) | (1 656) | |
| Foreign currency translation (1528) | (1 972) | |
| 18 174 | 16 798 | |
| Non-current liabilities | ||
| Interest-bearing loans and borrowings | 1 048 | 1 282 |
| Employee benefit liability | 205 | 199 |
| 1 253 | 1 481 | |
| Current liabilities | ||
| Trade and other payables | 2 104 | 2 224 |
| Interest-bearing loans and borrowings | 652 | 1 150 |
| Other current financial liabilities | 201 | 476 |
| Provisions | 78 | 78 |
| 3 035 | 3 928 | |
| Total liabilities | 4 288 | 5 409 |
| Total equity and liabilities | 22 462 | 22 207 |
| For the six months ended 30 June | ||
|---|---|---|
| 2015 | 2014 | |
| €000 | €000 | |
| Continuing operations | ||
| Sales of goods and services | 6 856 | 6 463 |
| Revenue | 6 856 | 6 463 |
| Cost of sales | (4 267) | (4 472) |
| Gross profit | 2 589 | 1 991 |
| Other income | 262 | 283 |
| Research and development expenses | (924) | (1 120) |
| Selling and distribution costs | (346) | (332) |
| Administrative expenses | (1 010) | (870) |
| Operating profit / (loss) | 571 | (48) |
| Finance costs | (109) | (54) |
| Finance income | 34 | 80 |
| Profit / (loss) for the period from continuing operations before tax | 496 | (22) |
| Income tax expense | -- | -- |
| Profit / (loss) for the period from continuing operations | 496 | (22) |
| Profit / (loss) for the period | 496 | (22) |
| Earnings per share: | ||
| - Basic, for profit / (loss) for the period attributable to ordinary equity |
||
| holders of the parent (in euros) | € 0.070 | € (0.003) |
| - Diluted, for profit / (loss) for the period attributable to ordinary equity holders of the parent (in euros) |
€ 0.070 | € (0.003) |
| For the six months ended 30 June | ||
|---|---|---|
| 2015 | 2014 | |
| €000 | €000 | |
| Profit / (loss) for the period | 496 | (22) |
| Items that will not be reclassified subsequently to profit or loss | ||
| Actuarial gains / (losses) | -- | -- |
| Income tax on items that will not be reclassified to profit or loss | -- | -- |
| Total items that will not be reclassified to profit or loss | -- | -- |
| Items that may be reclassified subsequently to profit or loss | ||
| Net gain / (loss) on available-for-sale financial assets | 6 | 20 |
| Hedging instruments | 370 | -- |
| Exchange differences on translation of foreign operations | 444 | 1 |
| Income tax on items that may be reclassified to profit or loss | -- | -- |
| Total items that may be reclassified to profit or loss | 820 | 21 |
| Other comprehensive income for the period, net of tax | 820 | 21 |
| Total comprehensive income for the period, net of tax | 1 316 | (1) |
| (In thousands euros, except for number of shares) |
Number of shares |
Issued capital |
Share premium |
Treasury shares |
Retained earnings |
Foreign currency translation |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|
| €000 | €000 | €000 | €000 | €000 | €000 | ||
| At 1 January 2014 |
6 943 718 |
1 736 |
20 383 |
(123) | (3 074) |
(1 842) |
17 080 |
| Loss for the period |
-- | -- | -- | -- | (22) | -- | (22) |
| Other comprehensive income for the period, net of tax |
-- | -- | -- | -- | 20 | 1 | 21 |
| Total comprehensive income |
-- | -- | -- | -- | (2) | 1 | (1) |
| Capital increase |
145 497 |
36 | 103 | -- | (14) | -- | 125 |
| Retained earnings offset with share premium | -- | -- | (1 713) |
-- | 1 713 |
-- | -- |
| Treasury shares | -- | -- | -- | (5) | -- | -- | (5) |
| Share-based payment |
-- | -- | -- | -- | 20 | -- | 20 |
| At 30 June 2014 |
7 089 215 |
1 772 |
18 773 |
(128) | (1 357) |
(1 841) |
17 219 |
| At 1 January 2015 |
7 089 215 |
1 772 |
18 771 |
(117) | (1 656) |
(1 972) |
16 798 |
| Loss for the period |
-- | -- | -- | -- | 496 | -- | 496 |
| Other comprehensive income for the period, net of tax |
-- | -- | -- | -- | 376 | 444 | 820 |
| Total comprehensive income |
-- | -- | -- | -- | 872 | 444 | 1 316 |
| Capital increase 39 |
471 | 10 | 43 | -- | -- | -- | 53 |
| Retained earnings offset with share premium | -- | -- | (139) | -- | 139 | -- | -- |
| Treasury shares | -- | -- | -- | (5) | -- | -- | (5) |
| Share-based payment |
-- | -- | -- | -- | 12 | -- | 12 |
| At 30 June 2015 |
7 128 686 |
1 782 |
18 675 |
(122) | (633) | (1 528) |
18 174 |
| For the six months ended 30 June | ||
|---|---|---|
| 2015 | 2014 | |
| €000 | €000 | |
| Cash flows from operating activities: | ||
| Net profit / (loss) for the period 496 | (22) | |
| Non-cash items written back: | ||
| Amortization and depreciation424 | 394 | |
| Capital gain or loss on disposal of fixed assets | 8 | (19) |
| Other non-financial activities 86 | 46 | |
| Accounts receivable(137) | 285 | |
| Inventories 24 | 426 | |
| Other debtors (73) | (77) | |
| Accounts payable(179) | (372) | |
| Other liabilities 35 | 57 | |
| Total net cash flows from operating activities 684 | 718 | |
| Cash flows from investing activities: | ||
| Purchase of fixed assets(102) | (112) | |
| Proceeds from sale / (purchase) of financial assets (9) | (107) | |
| Total net cash flows from investing activities (111) | (219) | |
| Cash flows from financing activities: | ||
| Repayment of borrowings (295) | (280) | |
| Payment of finance lease liabilities(67) | (59) | |
| Sale / (purchase) of treasury shares (5) | (5) | |
| Proceeds from issue of shares 53 | 125 | |
| Total net cash flows from financing activities (314) | (219) | |
| Net foreign exchange difference 16 | 24 | |
| Increase / (decrease) in net cash and cash equivalents275 | 304 | |
| Opening cash and cash equivalents balance 1959 | 1 175 | |
| Closing cash and cash equivalents balance 2234 | 1 479 |
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