UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): February 13, 2018  

Adesto Technologies Corporation
(Exact Name of Registrant as Specified in Charter)

Delaware001-3758216-1755067
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

3600 Peterson Way, Santa Clara, California 95054
(Address of Principal Executive Offices) (Zip Code)

(408) 400-0578
(Registrant's telephone number, including area code)

1250 Borregas Avenue, Sunnyvale, CA 94089
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ X ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ X ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On February 13, 2018, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated February 13, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Adesto Technologies Corporation
   
  
Date: February 13, 2018By: /s/ RON SHELTON        
  Ron Shelton
  Chief Financial Officer and Secretary
  

EdgarFiling

EXHIBIT 99.1

Adesto Technologies Reports Fourth Quarter and Full Year 2017 Financial Results

Fourth Quarter Revenue Grows 31.0% Year-Over-Year with 
Second Consecutive Quarter of Positive Cash Flow from Operations; 
Full Year Revenue Up 27.6% over 2016 with Positive EBITDA

SANTA CLARA, Calif., Feb. 13, 2018 (GLOBE NEWSWIRE) -- Adesto Technologies Corporation (NASDAQ:IOTS), a leading provider of application-specific, ultra-low power and smart non-volatile memory products, today announced financial results for its fourth quarter and year ended December 31, 2017.

Fourth Quarter Financial Summary:

2017 Highlights:

Commenting on the quarter, Narbeh Derhacobian, Adesto’s president and CEO, stated, “Revenue in the fourth quarter was at the high-end of our guidance range with operating expenses below the low-end of the range, contributing to our achievement of non-GAAP profitability, positive adjusted EBITDA and operating cash flow for the quarter. These results conclude a pivotal year for Adesto as we gained significant momentum ramping production of past design wins, resulting in three consecutive quarters of revenue growing by over 30% year-over-year and 27.6% for the full year.

“We are equally excited about our growth prospects in 2018 and beyond as we layered on a record number of design wins this past year, which should add to our current momentum.    In fact, the annual revenue run rate potential of our secured design wins for 2017 increased by over 85% from 2016 and four times over that of 2015.  We believe this is a clear indication that the growth we experienced in 2017 will carry forward into 2018 and beyond. We are seeing a number of new IoT and embedded applications coming to market that are benefitting from our low-power smart memory devices, including voice-activated home appliances, touch-sensors, asset trackers, smart lighting as well as health monitors.

“Finally, we significantly improved our balance sheet and financial position during the year, ending with more than $30 million in cash and giving us the capital and resources necessary to grow our existing business.  With operating expenses well under control and gross margins remaining within our targeted range, we are well positioned to deliver improving profits and cash flow. We are starting out the year with expectations to achieve our fourth consecutive quarter of revenue increasing 30% year-over-year and strong growth anticipated throughout the year as we expect to reach GAAP profitability in 2018.”

Fourth Quarter and 2017 Results
Revenue in the fourth quarter of 2017 was a record $16.2 million, an increase of 31.0% from $12.3 million in the fourth quarter of 2016 and an increase of 6.0% from $15.2 million last quarter. For the full year 2017, revenue increased 27.6% to $56.1 million from $44.0 million in 2016.

Gross margin in the fourth quarter of 2017 was 47.9%, compared to 50.6% in the fourth quarter of 2016 and 49.0% in the third quarter of 2017. Gross margin remains within the Company’s targeted range.  Gross margin for the full year 2017 was up 40 basis points to 49.0% from the prior year.

GAAP operating expenses in the fourth quarter of 2017 were $7.7 million, compared to $7.8 million in the prior year quarter and $8.3 million last quarter. On a non-GAAP basis, operating expenses in the fourth quarter were $6.8 million, compared to $6.7 million in the fourth quarter of 2016 and $6.9 million in the prior quarter.  For the full year 2017, GAAP operating expenses were $32.3 million, compared to $31.7 million in 2016 and non-GAAP operating expenses were $27.7 million, compared to $29.1 million in the prior year.

GAAP net loss in the fourth quarter of 2017 was $165,000, or ($0.01) per share, compared to a net loss of $1.7 million, or ($0.11) per share, in the fourth quarter of 2016 and a net loss of $1.0 million, or ($0.05) per share, in the previous quarter.  The full year 2017 net loss was $5.7 million or ($0.31) per share, compared to a loss of $11.6 million, or ($0.77) per share in 2016.

On a non-GAAP basis, net income in the fourth quarter of 2017 was $0.8 million, or $0.03 per diluted share, compared to a net loss of $0.6 million, or ($0.04) per share, in the fourth quarter of 2016 and net income of $0.4 million, or $0.02 per diluted share, last quarter.  For the full year 2017, non-GAAP net loss declined to $1.0 million, or ($0.05) per share, from $9.0 million, or ($0.60) per share, in 2016.

Adjusted EBITDA for the fourth quarter of 2017 was a positive $1.4 million, compared to a loss of $0.1 million in the fourth quarter of 2016 and a positive $0.9 million in the previous quarter. For the full year 2017, adjusted EBITDA was a positive $1.3 million, compared to a loss of $6.7 million in 2016.

A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.

Cash and cash equivalents as of December 31, 2017 totaled $30.1 million, compared to $19.7 million at the end of 2016.

Business Outlook
For the first quarter of 2018, the Company expects revenue to range between $14.7 million and $15.0 million, representing a 31.3% increase year-over-year at the mid-point even when considering the typical seasonality associated with the quarter. Gross margin is expected to be between 46% and 49%. GAAP operating expenses are expected to range between $8.5 million and $8.7 million, or $7.5 million and $7.7 million on a non-GAAP basis, which excludes approximately $0.7 million in stock-based compensation expense and $0.3 million in amortization of acquisition-related intangible assets. 

Conference Call Information
Adesto will host a conference call today at 2:00 p.m. Pacific Time to discuss its financial results. Investors and analysts may join the call by dialing 1-844-419-1786 and providing confirmation code 6459898. International callers may join the teleconference by dialing +1-216-562-0473 using the same confirmation code. The call will also be available as a live and archived webcast in the Investor Relations section of the Company’s website at http://www.adestotech.com.

A telephone replay of the conference call will be available approximately two hours after the conference call until Tuesday, February 20, 2018 at midnight Pacific Time. The replay dial-in number is 1-855-859-2056. International callers should dial +1-404-537-3406. The pass code is 6459898.

Non-GAAP Financial Information
To supplement our financial results presented in accordance with generally accepted accounting principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income (loss), non-GAAP net income (loss) per share and non-GAAP operating expenses. We believe these non-GAAP financial measures are useful in evaluating our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.  Our management regularly uses our supplemental non-GAAP financial measures internally to help us evaluate growth trends, establish budgets, measure the effectiveness of our business strategies and assess operational efficiencies. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items:  

Our non-GAAP Financial Measures are described as follows:

For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of GAAP to Non-GAAP Financial Information.”

About Adesto Technologies 
Adesto Technologies (NASDAQ:IOTS) is a leading provider of application-specific, ultra-low power and smart non-volatile memory products. The company has designed and built a portfolio of innovative products with intelligent features to conserve energy and enhance performance, including Fusion Serial Flash, DataFlash®, EcoXiP™ and products based on its trademark resistive RAM technology, called Conductive Bridging RAM (CBRAM®). For more information, please visit http://www.adestotech.com.

Adesto Technologies and the Adesto logo are trademarks of Adesto Technologies in the United States and other regions. All other trademarks are property of their respective owners.

Forward Looking Statements
The quotes of our Chief Executive Officer in this release regarding our momentum and expected revenue growth and non-GAAP operating expense maintenance, as well as all statements under “Business Outlook” are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: our ability to predict the timing of design wins entering production and the potential future revenue associated with our design wins; market adoption of our CBRAM-based products; our limited operating history; our rate of growth; our ability to predict customer demand for our existing and future products and to secure adequate manufacturing capacity; consumer demand conditions affecting our end markets; our ability to manage our growth; our ability to hire, retain and motivate employees; the effects of competition, including price competition; technological, regulatory and legal developments; and developments in the economy and financial markets.

For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017, filed with the SEC on November 13, 2017, which are available on our investor relations Web site (ir.adestotech.com) and on the SEC’s Web site (www.sec.gov).

All information provided in this release and in the attachments is as of February 13, 2018, and stockholders of Adesto are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Adesto does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this February 13, 2018 press release, or to reflect the occurrence of unanticipated events.

Company Contact:
Ron Shelton
Chief Financial Officer
P: 408-400-0578
E: ron.shelton@adestotech.com

Adesto Technologies Investor Relations:
Shelton Group
Leanne K. Sievers, President
P: 949-224-3874
E: sheltonir@sheltongroup.com

           
ADESTO TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
           
           
     December 31,  December 31,
     2017   2016 
Assets       
Current assets:       
 Cash and cash equivalents $  30,078    $  19,719  
 Accounts receivable, net    8,668       6,111  
 Inventories    5,814       5,182  
 Prepaid expenses    993       462  
 Other current assets    52       105  
  Total current assets    45,605       31,579  
Property and equipment, net    6,833       5,962  
Intangible assets, net    7,452       8,324  
Other non-current assets    900       296  
Goodwill    22       22  
Total assets $  60,812    $  46,183  
Liabilities and Stockholders' Equity       
Current liabilities:       
 Accounts payable    7,075       5,167  
 Accrued compensation and benefits    2,614       1,599  
 Accrued expenses and other current liabilities    2,359       2,176  
 Line of credit, current    1,500       -   
 Term loan, current    926       6,466  
  Total current liabilities    14,474       15,408  
Line of credit, non-current    -        1,807  
Term loan, non-current    10,908       9,775  
Other non-current liabilities    75       -   
Deferred rent, non-current    2,404       2,826  
Deferred tax liability, non-current    1       2  
   Total liabilities    27,862       29,818  
           
Stockholders' equity:       
 Common stock    2       2  
 Additional paid-in capital    133,087       110,749  
 Accumulated other comprehensive loss    (295)     (230)
 Accumulated deficit    (99,844)     (94,156)
Total stockholders' equity    32,950       16,365  
Total liabilities and stockholders' equity $  60,812    $  46,183  
           


                  
ADESTO TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)
                  
     Three Months Ended December 31,    Year Ended December 31,
    2017   2016   2017   2016 
                  
Revenue, net   $   16,154     $   12,330     $   56,112     $   43,968  
Cost of revenue      8,422       6,087       28,637       22,618  
  Gross profit     7,732        6,243       27,475       21,350  
Operating expenses:                
  Research and development     3,441       3,369       14,094       15,896  
  Sales and marketing     2,656       2,711       11,064       11,026  
  General and administrative     1,579       1,709       7,148       6,693  
  Gain from settlement with former foundry supplier     -        -        -        (1,962)
   Total operating expenses     7,676       7,789       32,306       31,653  
Income (loss) from operations     56       (1,546)     (4,831)     (10,303)
Other income (expense):                
  Interest expense, net     (172)     (217)     (753)     (1,275)
  Other income (expense), net     (5)     (21)     (3)     (50)
   Total other income (expense), net     (177)     (238)     (756)     (1,325)
Loss before provision for income taxes     (121)     (1,784)     (5,587)     (11,628)
Provision for (benefit from) income taxes     44       (62)     101       (16)
Net loss   $   (165)   $   (1,722)   $   (5,688)   $   (11,612)
                  
Net loss per share:                
  Basic and diluted   $   (0.01)   $   (0.11)   $   (0.31)   $   (0.77)
Weighted average number of shares used in computing                 
 net loss per share:                
  Basic and diluted     21,232,518       15,349,715       18,591,308       15,085,973  
                  


                   
ADESTO TECHNOLOGIES CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(in thousands, except for share and per share amounts)
 (unaudited)
                   
      Three Months Ended December 31,    Year Ended December 31,
      2017    2016    2017    2017 
                   
GAAP gross profit     $   7,732     $   6,243     $   27,475     $   21,350  
Stock-based compensation expense       26       21       112       81  
Non-GAAP gross profit    $   7,758     $   6,264     $   27,587     $   21,431  
                   
GAAP research and development expenses     $   3,441     $   3,369     $   14,094     $   15,896  
Stock-based compensation expense       (235)     (251)     (1,172)     (1,038)
Amortization of acquisition-related intangible assets      (107)     (121)     (471)     (484)
Non-GAAP research and development expenses    $   3,099     $   2,997     $   12,451     $   14,374  
                   
GAAP sales and marketing expenses     $   2,656     $   2,711     $   11,064     $   11,026  
Stock-based compensation expense       (143)     (176)     (764)     (706)
Amortization of acquisition-related intangible assets      (188)     (187)     (751)     (751)
Non-GAAP sales and marketing expenses    $   2,325     $   2,348     $   9,549     $   9,569  
                   
GAAP general and administrative expenses     $   1,579     $   1,709     $   7,148     $   6,693  
Stock-based compensation expense       (225)     (387)     (1,454)     (1,518)
Non-GAAP general and administrative expenses    $   1,354     $   1,322     $   5,694     $   5,175  
                   
GAAP operating expenses     $   7,676     $   7,789     $   32,306     $   31,653  
Stock-based compensation expense       (603)     (814)     (3,390)     (3,262)
Amortization of acquisition-related intangible assets      (295)     (308)     (1,222)     (1,235)
Gain from settlement with former foundry supplier      -        -        -        1,962  
Non-GAAP operating expenses    $   6,778     $   6,667     $   27,694     $   29,118  
                   
GAAP income (loss) from operations     $   56     $   (1,546)   $   (4,831)   $   (10,303)
Stock-based compensation expense       629       835       3,502       3,343  
Amortization of acquisition-related intangible assets      295       308       1,222       1,235  
Gain from settlement with former foundry supplier      -        -        -        (1,962)
Non-GAAP income (loss) from operations    $   980     $   (403)   $   (107)   $   (7,687)
                   
                   
Reconciliation from GAAP net loss to adjusted EBITDA:                  
GAAP net loss:     $   (165)   $   (1,722)   $   (5,688)   $   (11,612)
 Stock-based compensation expense       629       835       3,502       3,343  
 Gain from settlement with former foundry supplier      -        -        -        (1,962)
 Amortization of acquisition-related intangible assets      295       308       1,222       1,235  
     Non-GAAP net income (loss)    759       (579)     (964)     (8,996)
 Interest expense       170       227       781       1,321  
 Provision for (benefit from) income taxes       44       (62)     101       (16)
 Depreciation and amortization      380       303       1,384       987  
     Adjusted EBITDA  $   1,353     $   (111)   $   1,302     $   (6,704)
                   
                   
Non-GAAP diluted net income (loss) per share    $0.03     ($0.04)   ($0.05)   ($0.60)
                   
Reconciliation of shares used in computing non-GAAP                 
net income (loss) per share:                 
Diluted shares:                 
 Weighted-average shares used in calculating                  
 non-GAAP basic net income (loss) per share      21,232,518       15,349,715       18,591,308       15,085,973  
                   
  Incremental shares upon conversion of                  
  stock options, restricted stock units and warrants     1,082,995      -        -        -   
                   
 Weighted-average shares used in calculating                  
 non-GAAP diluted net income (loss) per share      22,315,513       15,349,715       18,591,308       15,085,973