Achronix Semiconductor Corporation, a leader in high-performance
field-programmable gate arrays (FPGAs) and embedded FPGA (eFPGA)
IP, today announced financial results for the first quarter of
2021, ending March 31, 2021.
Financial Highlights:
- Revenue increased to $29.9 million from $5.5 million in the
first quarter of 2020.
- Gross margin expanded to 78%, compared to 74% in the prior
year’s quarter.
- GAAP net income was $8.8 million, or $0.18 per diluted share,
compared to a net loss of $5.3 million, or ($0.86) per share, in
the first quarter of 2020.
- Non-GAAP net income was $10.2 million, or $0.21 per diluted
share, compared to a net loss of $5.3 million, or ($0.86) per
share, in the same quarter a year ago.
- Cash, cash equivalents and restricted cash increased to $45.2
million.
Business Highlights:
- Began shipping engineering samples of 7nm Speedster®7t FPGAs to
customers.
- Reached shipment milestone of 10 million Speedcore embedded
FPGA IP cores.
- Announced partnership with Mobiveil to deliver proven
interconnect cores for storage, networking and compute
applications.
- Introduced optimized test and measurement IP solutions in
partnership with Logic Fruit.
Robert Blake, Achronix’s President and Chief Executive Officer
commented, “Our business continues to be strong and we are seeing
broad customer interest for both our latest Speedster7t FPGA family
and our Speedcore eFPGA IP technology. We are extremely pleased
with the initial testing of our first Speedster7t AC7t1500 devices
which we began shipping to customers in the first quarter. We
believe the Speedster7t device family offers the industry’s highest
bandwidth for data acceleration workloads.”
Blake continued, “Looking forward, we are uniquely positioned as
the only pure play provider of high-end data acceleration FPGA
products and eFPGA IP solutions for rapidly growing markets, such
as 5G wireless infrastructure, artificial intelligence and machine
learning, high-performance computing, computational storage,
automotive as well as networking. In addition to our substantial
pipeline opportunities, we have significant non-cancellable backlog
combined with a high margin operating model to support our growth
initiatives. We look forward to finalizing the merger transaction
with ACE Convergence Acquisition Corp.”
About Achronix Semiconductor Corporation
Achronix Semiconductor Corporation is a fabless semiconductor
corporation based in Santa Clara, California, offering high-end
FPGA-based data acceleration solutions, designed to address
high-performance, compute-intensive and real-time processing
applications. Achronix is the only supplier to have both
high-performance and high-density standalone FPGAs and licensed
eFPGA solutions. Achronix FPGA and eFPGA IP offerings are further
enhanced by ready-to-use accelerator cards targeting AI, machine
learning, networking and data center applications. All Achronix
products are fully supported by a complete and optimized range of
Achronix software tools called ACE, which enables customers to
quickly develop their own custom applications. Achronix has a
global footprint, with sales and design teams across the U.S.,
Europe and Asia. For more information, please visit
www.achronix.com.
About ACE Convergence Acquisition Corp.
ACE Convergence Acquisition Corp. is a $230 million special
purpose acquisition company whose business mandate is to identify
and acquire an emerging leader in the IT infrastructure
software/systems and system-on-a-chip markets that is
well-positioned to capitalize on the changing landscape of data
acceleration being driven by developments in AI, Cloud, and 5G
technologies. ACE is comprised of a team of sector specialists with
a solid track record of scaling complex technology organizations
and making transformative value-creation decisions. For more
information, please visit http://acev.io/home/default.aspx.
About ACE Equity Partners
ACE Equity Partners is an Asian-nexus mid-market cross-border
private equity firm with a single-minded focus on the convergence
of digital and industrial technologies. For more information,
please visit: http://acelp.co.kr.
Non-GAAP Results
We present non-GAAP supplemental performance measures in this
press release. We have presented this financial information because
we believe the exclusion of non-cash charges allows for a more
relevant comparison of our results of operations to other companies
used by industry analysts and investors to compare our performance
against that of our peer group and they provide a useful measure
for period-to-period comparisons of our core operating
performance.
We use non-GAAP financial measures to help us make strategic
decisions, establish budgets and operational goals for managing our
business, analyze our financial results, and evaluate our
performance. We also believe that the presentation of non-GAAP
financial measures provides an additional tool for investors to use
in comparing our core business and results of operations over
multiple periods with other companies in our industry, many of
which present similar non-GAAP financial measures to investors.
However, non-GAAP financial measures may not be comparable to
similarly titled measures reported by other companies due to
differences in the way that these measures are calculated. Non-GAAP
financial measures should not be considered as the sole measure of
our performance and should not be considered in isolation from, or
as a substitute for, comparable financial measures calculated in
accordance with GAAP.
A reconciliation between GAAP and non-GAAP financial results is
provided in the financial statements portion of this release.
In the first quarter of 2021, non-GAAP gross profit was $23.3
million, or 78% of revenue, non-GAAP operating expenses were $12.9
million, or 43% of revenue, non-GAAP income from operations was
$10.4 million, or 35% of revenue and non-GAAP net income was $10.2
million, or $0.21 per diluted share.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws. These
forward-looking statements generally are identified by the words
“intend,” “expect,” “estimate,” “project,” “potential,” “future,”
“may,” “will,” “would,” “will be,” and similar expressions.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. All statements, other than statements of present
or historical fact included in this press release, regarding ACE’s
proposed acquisition of Achronix, ACE’s ability to consummate the
proposed transaction, the benefits of the proposed transaction and
the combined company’s future financial performance, as well as the
combined company’s strategy, future operations, estimated financial
position, estimated revenue growth, prospects and pipeline
expectations, estimated market growth, estimated backlog, plans and
objectives of management are forward-looking statements. Many
factors could cause actual future events to differ materially from
the forward-looking statements in this press release, including but
not limited to: the risk that the proposed transaction may not be
completed in a timely manner or at all, which may adversely affect
the price of ACE’s securities; the risk that the proposed
transaction may not be completed by ACE’s business combination
deadline and the potential failure to obtain an extension of the
business combination deadline if sought by ACE; the failure to
satisfy the conditions to the consummation of the proposed
transaction, including the adoption of the Merger Agreement by the
shareholders of ACE or the stockholders of Achronix and the receipt
of certain governmental and regulatory approvals; the lack of a
third party valuation in determining whether or not to pursue the
proposed transaction; the inability to complete the concurrent PIPE
financing; the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger
Agreement; the effect of the announcement or pendency of the
transaction with ACE on Achronix’s business relationships,
operating results, and business generally; risks that the proposed
transaction disrupts current plans and operations of Achronix; the
outcome of any legal proceedings that may be instituted against
Achronix or against ACE related to the Merger Agreement or the
proposed transaction; the ability to maintain the listing of ACE’s
securities on a national securities exchange; risks related to new
accounting pronouncements or changes in accounting guidance;
changes in domestic and foreign business, market, financial,
political, and legal conditions and changes in the combined capital
structure; the ability to implement business plans, forecasts, and
other expectations after the completion of the proposed
transaction, and identify and realize additional opportunities;
failure to realize the anticipated benefits of the proposed
transaction; risks relating to the uncertainty of the projected
financial information with respect to Achronix; risks related to
the rollout of Achronix’s business and the timing of expected
business milestones; the effects of competition on Achronix’s
business; the effects of the cyclical nature of the semiconductor
industry on Achronix’s business; risks related to Achronix’s
customer concentration; the risks to Achronix’s business if
internal processes and information technology systems are not
properly maintained; risks associated with Achronix’s operational
dependence on independent contractors and third parties; risks
associated with Achronix’s reliance on certain suppliers for, among
other things, silicon wafers; risks and uncertainties related to
the ongoing COVID-19 pandemic; risks and uncertainties related to
Achronix’s international operations, including possible
restrictions on cross-border investments which could harm
Achronix’s financial position; and risks associated with Achronix’s
ability to develop new products and adapt to new markets. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in the “Risk Factors” section of ACE’s
registration statement on Form S-4 discussed above and other
documents filed, filed with the SEC on February 10, 2021, as may be
amended from time to time with the SEC and available on EDGAR at
www.sec.gov. These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. There may be additional risks that Achronix does not
presently know, or that Achronix currently believe are immaterial,
that could also cause actual results to differ from those contained
in the forward-looking statements. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements as predictions of
future events, and Achronix assumes no obligation and do not intend
to update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise, except as
may be required by applicable law.
Important Information for Investors and Stockholders
In connection with the proposed merger transaction, ACE has
filed a registration statement on Form S-4 (the “Registration
Statement”) with the SEC, which includes a preliminary proxy
statement to be distributed to holders of Ace’s common stock in
connection with ACE’s solicitation of proxies for the vote by ACE’s
stockholders with respect to the proposed transaction and other
matters as described in the Registration Statement, as well as the
prospectus relating to the offer of securities to be issued to
Achronix’s stockholders in connection with the proposed
transaction. After the Registration Statement has been filed and
declared effective, ACE will mail a definitive proxy statement,
when available, to its stockholders. Investors and security holders
and other interested parties are urged to read the proxy
statement/prospectus, any amendments thereto and any other
documents filed with the SEC carefully and in their entirety when
they become available because they will contain important
information about ACE, Achronix and the proposed transaction.
Investors and security holders may obtain free copies of the
preliminary proxy statement/prospectus and definitive proxy
statement/prospectus (when available) and other documents filed
with the SEC by ACE through the website maintained by the SEC at
http://www.sec.gov, or by directing a request to: ACE Corporation,
1013 Centre Road, Suite 403S, Wilmington, DE. The information
contained on, or that may be accessed through, the websites
referenced in this press release is not incorporated by reference
into, and is not a part of, this press release.
Participants in the Solicitation
ACE and its directors and officers may be deemed participants in
the solicitation of proxies of ACE’s shareholders in connection
with the proposed business combination. Security holders may obtain
more detailed information regarding the names, affiliations and
interests of certain of ACE’s executive officers and directors in
the solicitation by reading ACE’s final prospectus filed with the
SEC on July 28, 2020, the registration statement on Form S-4, proxy
statement/prospectus and other relevant materials filed with the
SEC in connection with the business combination when they become
available. Information concerning the interests of ACE’s
participants in the solicitation, which may, in some cases, be
different than those of their stockholders generally, will be set
forth in the registration statement, proxy statement relating to
the business combination when it becomes available.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of ACE, the combined company or Achronix, nor shall there be any
sale of any such securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act of 1933, as amended.
Trademarks
Achronix and Speedster are registered trademarks, and Speedcore
and Speedchip are trademarks of Achronix Semiconductor Corporation.
All other brands, product names and marks are the property of their
respective owners.
ACHRONIX SEMICONDUCTOR
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Dollar in thousands, except
shares and per share amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Revenue: Product
$
25,604
$
5,216
Licensing
4,249
246
Total revenue
29,853
5,462
Cost of revenue
6,627
1,423
Gross profit
23,226
4,039
Operating expenses Research and development
7,582
6,565
Sales and marketing
2,589
1,945
General and administrative
3,382
973
Total operating expenses
13,553
9,483
Income (loss) from operations
9,673
(5,444
)
Total other income (expense), net
(811
)
120
Income (loss) before income tax expenses
8,862
(5,324
)
Provision for income tax
99
23
Net income (loss)*
$
8,763
$
(5,347
)
Net income (loss) per share Basic
$
0.53
$
(0.86
)
Diluted
$
0.18
$
(0.86
)
Weighted - average shares used in computing net income
per share: Basic
16,506
6,203
Diluted**
48,020
6,203
* Net income does not exclude
undistributed earnings attributable to participating
securities.
**Diluted shares include options and
warrants on an as-if-converted basis and exclude redeemable
preferred stocks.
ACHRONIX SEMICONDUCTOR
CORPORATION
RECONCILIATION OF GAAP NET
INCOME (LOSS)
TO NON-GAAP MEASURES
(Dollar in thousands, except
shares and per share amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Non-GAAP gross margin GAAP
gross profit
$
23,226
$
4,039
GAAP gross margin
78
%
74
%
Stock-based compensation expense - cost of revenue
33
20
Non-GAAP gross profit
$
23,260
$
4,060
Non-GAAP gross margin
78
%
74
%
Non-GAAP Operating income
(loss) GAAP operating income (loss)
$
9,673
$
(5,444
)
Stock-based compensation expense Cost of revenues
33
20
Research and development
251
107
Sales and marketing
140
100
General and administrative
284
112
Total stock-based compensation expense
708
339
Non-GAAP operating income (loss)
$
10,381
$
(5,105
)
Non-GAAP net income GAAP
net income (loss)
$
8,763
$
(5,347
)
Stock-based compensation expense
708
339
Change in fair value of warrant liability
767
(340
)
Non-GAAP net income (loss)
$
10,238
$
(5,348
)
GAAP basic earnings per share
$
0.53
$
(0.86
)
Effect of non-GAAP adjustments on basic earnings per share
0.09
(0.00
)
Non-GAAP basic earnings per share
$
0.62
$
(0.86
)
GAAP diluted earnings per share
$
0.18
$
(0.86
)
Effect of non-GAAP adjustments on diluted earnings per share
0.03
(0.00
)
Non-GAAP diluted earnings per share
$
0.21
$
(0.86
)
Weighted - average shares used in computing net income
(loss) per share: Basic
16,506
6,203
Diluted*
48,020
6,203
*Diluted shares include options and
warrants on an as-if-converted basis and exclude redeemable
preferred stocks.
Three Months Ended
March 31,
2021
2020
Adjusted EBIT GAAP net income
(loss)
$
8,763
$
(5,347
)
Stock-based compensation expense
708
339
Total other income (expense), net
811
(120
)
Provision for income tax
99
23
Adjusted EBIT
$
10,381
$
(5,105
)
In addition to disclosing financial results calculated in
accordance with U. S. generally accepted accounting principles
(GAAP), the operating results presented contain non-GAAP financial
measures that exclude the income statement effects of stock-based
compensation expense and expenses related to the change in fair
value of our redeemable preferred stock warrants. Management
believes it is useful to provide these non-GAAP financial measures
and a reconciliation to comparable GAAP financial measures as we
believe non-GAAP measures provide useful supplemental information
for investors to evaluate our operating results in the same manner
as used by industry research analysts, all of whom present non-GAAP
projections in their published reports. As such, non-GAAP measures
provided by Achronix facilitate a more direct comparison of its
performance with the financial reports published by the industry
analysts. The items reconciling GAAP financial measures to non-GAAP
financial measures and additional comments and the usefulness of
each item are set forth below:
(1)
Stock-based compensation is excluded by management when evaluating
operating activities and for strategic decision making, forecasting
future results and evaluating current performance. Management
believes that utilizing non-GAAP financial measures that exclude
this non-cash item is useful in providing an alternate measure that
excludes the variability caused by different methodologies and
subjective assumptions used in the valuation of equity awards
across different companies.
(2)
Redeemable preferred stock warrant is excluded from the internal
analysis of Achronix's operations and management does not view this
non-cash expense as reflective of the business' current
performance. Management believes that utilizing non-GAAP financial
measures that exclude this non-cash item is useful in providing an
alternate measure that excludes the variability caused by such
item. Non-GAAP financial measures are not prepared in
accordance with GAAP; therefore, the information is not necessarily
comparable to other companies' financial information and should be
considered as a supplement to, not a substitute for, or superior
to, the corresponding measures calculated in accordance with GAAP.
ACHRONIX SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollar in thousands)
March 31,
December 31,
2021
2020
(unaudited)
(audited)
Assets Current assets: Cash and cash equivalents
$
40,193
$
38,546
Restricted Cash
5,011
5,011
Accounts receivable, net
10,218
16,900
Inventories
10,021
2,116
Prepaid expenses and other current assets
2,016
2,251
Total current assets
67,459
64,824
Property and equipment, net
9,335
3,723
Operating lease assets, net
6,049
-
Intangible assets, net
19,251
16,432
Other current assets
3,232
1,247
Total assets
$
105,326
$
86,226
Liabilities, redeemable convertible preferred
shares and stockholders' equity (deficit) Current liabilities:
Accounts payable
$
9,542
$
5,938
Accrued liabilities
11,178
13,414
Operating lease liabilities
941
-
Deferred revenue
1,476
4,176
Total current liabilities
23,137
23,528
Preferred stock warrant liability
5,078
4,311
Deferred revenue - noncurrent
2,558
2,800
Operating lease liabilities - noncurrent
5,400
-
Other noncurrent liabilities
8,413
6,125
Total liabilities
$
44,586
$
36,764
Redeemable convertible preferred stock
$
320,916
$
320,916
Stockholders' equity (deficit): Common stock
18
9
Additional paid-in capital
8,488
5,983
Currency translation adjustment
(86
)
(87
)
Accumulated deficit
(268,596
)
(277,359
)
Total stockholders’ equity (deficit)
(260,176
)
(271,454
)
Total liabilities, redeemable convertible preferred shares and
stockholders' equity (deficit)
$
105,326
$
86,226
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For Achronix: IR@Achronix.com Media@Achronix.com
ACE Convergence Acquisition Corp.: info@acev.io
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