Intermolecular, Inc. (NASDAQ:IMI) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 05:00 pm ET

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Intermolecular, Inc. (NASDAQ:IMI) Q4 2018 Earnings Conference Call Transcript

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Operator
Operator

Good day, ladies and gentlemen, and welcome to the Intermolecular's Fourth Quarter and Financial Year 2018 Earnings Conference Call. My name is Valerie, and I'll be your operator for today's call. All participants will be in a listen-only mode. Please note, this call is being recorded.

I would now like to turn the conference over to your host for today, Mr. Bill Roeschlein, Senior Vice President and Chief Financial Officer. Sir, you may proceed.

Executive
Bill Roeschlein

Thank you, Valerie. Good afternoon, and welcome to Intermolecular's fourth quarter and full year 2018 earnings conference call. After the market closed today, we issued our financial results for the fourth quarter and full year ended December 31st, 2018. A copy of the earnings release is available in the Investors section of our website at www.intermolecular.com. Joining me on the call today is our President and Chief Executive Officer, Chris Kramer.

Today's conference call contains forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events, including financial projections and future market conditions is a forward-looking statement. Actual results may differ materially from those expressed in these forward-looking statements and Intermolecular assumes no obligation to update these forward-looking statements, which speak only as of today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks described in our Form 10-K for fiscal year 2017 as filed with the SEC, particularly in the section titled Risk Factors.

Before we begin, please note that during this call, we will discuss non-GAAP financial measures as defined by the SEC and Regulation G. We believe non-GAAP financial measures provide useful supplemental information to both management and investors, but note that these measurements are not a substitute for GAAP and should only be used to evaluate the Company's results of operations in conjunction with corresponding GAAP measures. All non-GAAP measures are reconciled to the most directly comparable GAAP financial measures in our press release issued today.

Now I would like to turn the call over to Chris. Chris?

Executive
Chris Kramer

Thanks, Bill, and good afternoon, everyone. Thank you for joining us today. We ended the fourth quarter of 2018 with $6.3 million in revenue, substantially above our guidance of $5.2 million to $5.8 million. This performance was primarily driven by a major program we started with a new customer, which we were able to ramp up sooner than expected. While our top line results for the full year were somewhat tempered due to the successful conclusion of certain programs last quarter and delays in start dates for new and extension programs, we were still able to deliver meaningful improvement in key areas.

This includes a 10% growth in program revenues for 2018, expanded gross profit margins, which reached more than 70% as well as a 22% decrease in operating expenses, which collectively helped drive the first full year of adjusted EBITDA profitability for IMI since 2013. Additionally, we generated $5.9