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): May 7, 2019  

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 ]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per sharesIOTSNASDAQ

 

 

 
 

Item 2.02. Results of Operations and Financial Condition.

On May 7, 2019, 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 May 7, 2019


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: May 7, 2019By: /s/ RON SHELTON        
  Ron Shelton
  Chief Financial Officer and Secretary
  

EdgarFiling

EXHIBIT 99.1

Adesto Technologies Reports First Quarter 2019 Financial Results

Revenue Exceeds High-End of Guidance at $28.1 Million;
Achieves Positive Adjusted EBITDA for the 8th Consecutive Quarter

SANTA CLARA, Calif., May 07, 2019 (GLOBE NEWSWIRE) -- Adesto® Technologies Corporation (NASDAQ: IOTS), a leading provider of innovative application-specific semiconductors and embedded systems for the IoT, today announced financial results for its first quarter ended March 31, 2019.

First Quarter and Recent Highlights:

Commenting on the quarter, Narbeh Derhacobian, Adesto’s President and CEO, stated, “First quarter revenue exceeded the high-end of our guidance range as we continued to execute across our business. With the two 2018 acquisitions integrated, we have largely achieved our targeted $6-8 million of annual cost synergies ahead of plan.

“We continued to see an expanded pipeline of opportunities including some stemming from cross-selling success as our teams work closely together to expand the available content for Adesto at our end customers.  Further, we are also beginning to realize the benefits from our improved mix of higher-margin products, with further potential for expansion as we extrapolate increased value from our ongoing ASIC design projects as well as our system and solutions approach to addressing the needs of IoT deployments in different segments.

“As a result of our strategic actions over the past year, we are positioned with multiple growth vectors to drive increased revenue momentum into the second quarter and throughout the coming year. As such, we continue to expect revenue growth of more than 30% in the second half of the year compared to the same period in 2018, with adjusted EBITDA margins in excess of 10% and positive free cash flow. Overall, I am very pleased with our strong start to the year and solid execution by our team and believe 2019 will be a record year for Adesto with a greatly enhanced financial profile and operating model.”

First Quarter 2019 Results  
Revenue in the first quarter of 2019 was $28.1 million, compared to $15.3 million in the first quarter of 2018 and $28.1 million in the previous quarter.  

GAAP gross margin in the first quarter was 47.0%, compared to 46.9% in the first quarter of 2018 and 41.1% in the fourth quarter of 2018. Non-GAAP gross margin for the first quarter was up 230 basis points to 49.4% compared to 47.1% in the first quarter of 2018 and up 80 basis points from 48.6% last quarter.  

GAAP operating expenses in the first quarter of 2019 were $19.2 million, compared to $8.1 million in the first quarter of 2018 and $19.6 million in the prior quarter. On a non-GAAP basis, operating expenses in the first quarter 2019 were $14.4 million, compared to $7.4 million in the first quarter of 2018 and of $13.9 million in the prior quarter.

GAAP net loss in the first quarter of 2019 was $7.1 million, or ($0.24) per share, compared to a net loss of $1.1 million, or ($0.05) per share, in the first quarter of 2018, and a net loss of $6.9 million, or ($0.23) per share, in the previous quarter.

On a non-GAAP basis, net loss for the first quarter of 2019 was $1.6 million, or ($0.05) per share, compared to a net loss of $0.3 million, or ($0.02) per share, in the first quarter of 2018 and a net loss of $1.2 million, or ($0.04) per share, in the previous quarter.

Adjusted EBITDA for the first quarter of 2019 was a positive $12 thousand, compared to a positive $0.3 million in the first quarter of 2018 and a positive $0.5 million in the fourth quarter of 2018.

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

Business Outlook
For the second quarter of 2019, the Company expects revenue to increase to a range between $29.0 million and $31.0 million. Non-GAAP gross margin is expected to be between 48% and 50% and non-GAAP operating expenses are expected to range between $14.5 million and $15.5 million. Stock-based compensation expense is expected to be approximately $1.3 million and amortization of acquisition-related intangible assets approximately $1.8 million.

Conference Call Information
Adesto will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its first quarter 2019 financial results. Investors and analysts may join the call by dialing 1-844-419-1786 and providing confirmation code 8590609. 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, May 14, 2019 at midnight Pacific Time. The replay dial-in number is 1-855-859-2056. International callers should dial +1-404-537-3406. The confirmation code is 8590609.

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, non-GAAP gross profit, non-GAAP gross margin 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 Corporation (NASDAQ: IOTS) is a leading provider of innovative application-specific semiconductors and embedded systems for the IoT. The company’s technology is used by more than 5,000 customers worldwide who are creating differentiated solutions across industrial, consumer, medical and communications markets. With its growing portfolio of high-value technologies, Adesto is helping its customers usher in the era of the Internet of Things. See: www.adestotech.com.

Follow Adesto on Twitter.

Forward Looking Statements
The quotes of our Chief Executive Officer in this release regarding our strategic direction, expansion opportunities, product mix impacts on our gross margins, expanding our sales opportunities, the integration of Echelon Corporation and the expected synergies and benefits to Adesto and its customers, stockholders and investors from integrating Echelon Corporation and S3 Semiconductors, 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. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: the businesses of the Company, Echelon and S3 Semiconductors may not be combined successfully, or such combinations may take longer, be more difficult, time-consuming or costly to accomplish than expected; the risk that sales of S3 Semiconductors and Echelon products will not be as high as anticipated; the expected growth opportunities from the acquisitions may not be fully realized or may take longer to realize than expected; customer losses and business disruption following the acquisitions, including adverse effects on ability to retain key personnel, may be greater than expected; and the risk that the Company may incur unanticipated or unknown losses or liabilities in the acquisition. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: our ability to predict the timing of design wins entering production and the potential future revenue associated with our design wins;  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 those discussed in the section captioned “Risk Factors” contained in an exhibit to our Current Report on Form 10-K for the period ended December 31, 2018 and filed with the SEC on March 18, 2019, 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 Tuesday, May 7, 2019, 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 May 7,2019 press release, or to reflect the occurrence of unanticipated events.

Adesto and the Adesto logo are trademarks or registered trademarks of Adesto Technologies Corporation or its subsidiaries in the United States and other countries.  Other company, product, and service names may be trademarks or service marks of others.

Adesto Technologies Media Contact:
Jen Bernier-Santarini
+1-650-336-4222
jen.bernier@adestotech.com


Adesto Technologies Investor Relations:
Shelton Group
Leanne K. Sievers, President
+1-949-224-3874
sheltonir@sheltongroup.com

 

          
ADESTO TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
          
     March 31, December 31,
     2019 2018
Assets      
Current assets:      
 Cash and cash equivalents $  7,645  $  8,630 
 Restricted cash    459     458 
 Accounts receivable, net    23,220     23,211 
 Inventories    16,643     18,635 
 Prepaid expenses    1,952     1,668 
 Other current assets    888     871 
  Total current assets    50,807     53,473 
Property and equipment, net    6,873     7,085 
Intangible assets, net    34,473     36,261 
Operating lease right-of-use asset    4,730     -  
Other non-current assets    1,704     1,729 
Goodwill    38,640     38,640 
Total assets $  137,227  $  137,188 
Liabilities and Stockholders' Equity      
Current liabilities:      
 Accounts payable    16,856     16,146 
 Accrued compensation and benefits    4,095     4,038 
 Accrued expenses and other current liabilities    5,471     5,172 
 Price adjustments and other revenue reserves    4,820     4,819 
 Earn-out liability, current    10,130     10,450 
 Operating lease liabilities, current    1,099     -  
 Term loan, current    161     141 
  Total current liabilities    42,632     40,766 
Term loan, non-current    29,362     29,418 
Operating lease liabilities, non-current    5,620     -  
Deferred rent, non-current    -      1,947 
Deferred tax liability, non-current    1,660     1,735 
Other non-current liabilities    591     580 
   Total liabilities    79,865     74,446 
          
Stockholders' equity:      
 Common stock    3     3 
 Additional paid-in capital    185,718     184,158 
 Accumulated other comprehensive loss    (263)    (135)
 Accumulated deficit    (128,096)    (121,284)
Total stockholders' equity    57,362     62,742 
Total liabilities and stockholders' equity $  137,227  $  137,188 
          

 

         
ADESTO TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)
         
     Three Months Ended March 31, 
    2019 2018
         
Revenue, net  $   28,113   $   15,302 
Cost of revenue    14,893     8,122 
 Gross profit    13,220     7,180 
Operating expenses:      
 Research and development    7,522     3,559 
 Selling, general and administrative    7,935     4,277 
 Amortization of intangible assets    1,788     294 
 Acquisition related expenses    222     -  
 Impairment and other charges    1,694     -  
  Total operating expenses    19,161     8,130 
Income (loss) from operations    (5,941)    (950)
Other income (expense):      
 Interest expense, net    (1,370)    (141)
 Other income (expense), net    220     10 
  Total other income (expense), net    (1,150)    (131)
Loss before provision for (benefit from) income taxes    (7,091)    (1,081)
Provision for (benefit from) income taxes    (31)    21 
Net loss  $   (7,060)  $   (1,102)
         
Net loss per share:      
 Basic and diluted  $   (0.24)  $   (0.05)
Weighted average number of shares used in computing      
net loss per share:      
 Basic and diluted    29,592,247     21,370,927 
         

 

         
ADESTO TECHNOLOGIES CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(in thousands, except for share and per share amounts)
 (unaudited) 
 
  Three Months Ended
March 31,
 
 2019 2018
          
GAAP gross profit   $   13,220   $   7,180 
Stock-based compensation expense     65     25 
Inventory step-up related to acquisition accounting     616     -  
Non-GAAP gross profit   $   13,901   $   7,205 
         
GAAP research and development expenses   $   7,522   $   3,559 
Stock-based compensation expense     (389)    (183)
Non-GAAP research and development expenses   $   7,133   $   3,376 
         
GAAP selling, general and administrative expenses   $   7,935   $   4,277 
Stock-based compensation expense     (621)    (235)
Non-GAAP selling, general and adminitrative expenses   $   7,314   $   4,042 
         
GAAP operating expenses   $   19,161   $   8,130 
Stock-based compensation expense     (1,010)    (418)
Amortization of intangible assets     (1,788)    (294)
Acquisition related expenses     (222)    -  
Impairment and other charges     (1,694)    -  
Non-GAAP operating expenses   $   14,447   $   7,418 
         
GAAP income (loss) from operations   $   (5,941)  $   (950)
Stock-based compensation expense     1,075     443 
Inventory step-up related to acquisition accounting     616     -  
Amortization of intangible assets     1,788     294 
Acquisition-related expenses     222     -  
Impairment and other charges     1,694     -  
Non-GAAP income (loss) from operations   $   (546)  $   (213)
         
      
Reconciliation from GAAP net loss to adjusted EBITDA:       
GAAP net loss:   $   (7,060)  $   (1,102)
 Stock-based compensation expense     1,075     443 
 Inventory step-up related to acquisition accounting     616     -  
 Amortization of intangible assets     1,788     294 
 Acquisition-related expenses     222     -  
 Impairment and other charges     1,694     -  
 Revaluation of earn-out liability     (320)    -  
 Debt amortization costs     401     18 
         
  Non-GAAP net income (loss)    (1,584)    (347)
 Interest expense     981     136 
 Provision for (benefit from) income taxes     (31)    21 
 Depreciation and amortization     646     488 
 Adjusted EBITDA  $   12   $   298 
        
    
Non-GAAP diluted net income (loss) per share   ($0.05)  ($0.02)
      
 Weighted-average number of shares used in calculating non-GAAP basic net income (loss) per share     29,592,247     21,370,927 
         
 Incremental shares upon conversion of stock options, restricted stock units and warrants     -      -  
           
 Weighted-average shares used in calculating non-GAAP diluted net income (loss) per share     29,592,247     21,370,927