Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor
of touch feedback technology, today reported financial results for the
first quarter ended March 31, 2019.
In separate press releases issued today, the Company also announced that
it settled a patent litigation dispute with Samsung Electronics Co. Ltd.
and agreed to a global patent and technology license for mobile devices
for quarterly royalties, and that it signed an agreement with Sony
Interactive Entertainment to license Immersion’s advanced haptics patent
portfolio and leverage Immersion’s haptics technology for gaming and VR
controllers.
Results for the quarter ended March 31, 2019
Total revenues for the first quarter of 2019 were $5.1 million. Royalty
and license revenues for the first quarter of 2019 were $5.0 million.
Net loss for the first quarter of 2019 was $(11.0) million, or $(0.35)
per diluted share.
Non-GAAP net loss for the first quarter of 2019 was $(8.8) million, or
$(0.28) per share. (See attached table for a reconciliation of GAAP to
non-GAAP financial measures.)
As of March 31, 2019, Immersion’s cash, cash equivalents and short-term
investments were $117.6 million, compared to $124.9 million as of
December 31, 2018.
Management Commentary
Ramzi Haidamus, President and Chief Executive Officer of Immersion,
commented, “I am delighted to report that the successful transformation
of Immersion is well under way. All major litigation is now behind us.
Customers are once again recognizing the value of the innovative haptics
technologies and solutions we deliver. This is an exciting time for
Immersion as we lead the development and broad adoption of immersive
touch feedback technologies in closer partnership with our customers in
the mobility, gaming, automotive, IoT and other markets.”
“Taking into account the timing of expected revenue generation from our
expanded roster of licensees, we are raising our guidance and expect
revenues for 2019 to be in the range of $36 million to $41 million and
Non-GAAP net loss for 2019 to be in the range of ($6) million to ($13)
million,” concluded Mr. Haidamus.
Recent Business Highlights
-
Signed a license agreement with Alpine Electronics, Inc., enabling
Alpine to access Immersion’s patented touch feedback technology for
in-vehicle touchscreens. -
Announced its technology is now enhancing Konica Minolta, Inc.’s
latest multi-functional peripherals (MFPs), the bizhub C360i / C300i /
C250i /C4050i / C3350i for the office environment. -
Signed an agreement with TDK Corp subsidiary TDK Electronics for the
design and marketing of haptic feedback for TDK PowerHap™ piezo
actuators.
Conference Call Information
Immersion will host a conference call with company management on May 13,
2019 at 2:00 p.m. Pacific time (5:00 p.m.. Eastern time) to discuss
financial results for the first quarter ended March 31, 2019. To
participate on the live call, analysts and investors should dial +1
800-667-5617 (conference ID: 8906663) at least ten minutes prior to the
start of the call. A live and archived webcast of the conference call
will also be available for 90 days within the investor relations section
of Immersion’s corporate Web site at www.immersion.com.
About Immersion
Immersion Corporation (NASDAQ:IMMR) is the leading innovator of touch
feedback technology, also known as haptics. The company provides
technology solutions for creating immersive and realistic experiences
that enhance digital interactions by engaging users’ sense of touch.
With more than 3,600 issued or pending patents, Immersion’s technology
has been adopted in more than 3 billion digital devices, and provides
haptics in mobile, automotive, advertising, gaming, medical and consumer
electronics products. Immersion is headquartered in San Jose,
California with offices worldwide. Learn more at www.immersion.com.
Use of Non-GAAP Financial Measures
Immersion reports all financial information required in accordance with
generally accepted accounting principles (GAAP), but it believes that
evaluating its ongoing operating results may be difficult to understand
if limited to reviewing only GAAP financial measures. Immersion
discloses this non-GAAP information, such as Non-GAAP net income (loss)
and Non-GAAP net income (loss) per share, because it is useful in
understanding the company’s performance as it excludes certain non-cash
expenses like stock-based compensation expense and other special
charges, such as deferred tax assets valuation allowance and
restructuring costs, that many investors feel may obscure the company’s
true operating performance. Likewise, management uses these non-GAAP
financial measures to manage and assess the profitability of its
business. Investors are encouraged to review the related GAAP financial
measures.
Forward-looking Statements
This press release contains “forward-looking statements” that involve
risks and uncertainties as well as assumptions that, if they never
materialize or prove incorrect, could cause the results of Immersion
Corporation and its consolidated subsidiaries to differ materially from
those expressed or implied by such forward-looking statements.
All statements, other than the statements of historical fact, are
statements that may be deemed forward-looking statements, including, but
not limited to, the company being well positioned to introduce new
haptic technology to maintain and grow our leadership in the haptics
market, the timing of expected revenue generation from our expanded
roster of licensees, our revenue outlook for 2019 anticipated to be in
the range of $36 to $41 million, and our expectation that non-GAAP net
loss will be between ($6) and ($13) million for 2019. Immersion’s actual
results might differ materially from those stated or implied by such
forward-looking statements due to risks and uncertainties associated
with Immersion’s business, which include, but are not limited to,
potential and actual claims and proceedings, including litigation
involving Immersion’s intellectual property; the impact of litigation
developments on existing and potential customers; delay in or failure to
achieve commercial demand for Immersion’s or its licensees’ products;
the impact of new accounting standards that will affect key items such
as revenue recognition and sales commissions; unexpected difficulties in
monetizing the patent portfolio; the commercial success of applications
or devices into which Immersion’s technology is licensed; the continued
popularity of mobile games and wearables; potentially lengthy sales
cycles and design processes; unanticipated difficulties and challenges
encountered in development efforts; unexpected costs; the fact that
certain target markets are still relatively nascent; risks associated
with doing business internationally; litigation costs in any current or
future litigation; failure to retain key personnel; ability to retain
personnel; competition; the inherently uncertain nature of litigation
which makes future outcomes and timing difficult to predict; the impact
of global economic conditions and foreign currency exchange rates and
other factors. Many of these risks and uncertainties are beyond the
control of Immersion.
For a more detailed discussion of these factors, and other factors that
could cause actual results to vary materially, interested parties should
review the risk factors listed in Immersion’s Annual Report on Form 10-K
for 2018 and its most recent Quarterly Report on Form 10-Q which are on
file with the U.S. Securities and Exchange Commission. The
forward-looking statements in this press release reflect Immersion’s
beliefs and predictions as of the date of this release. Immersion
disclaims any obligation to update these forward-looking statements as a
result of financial, business, or any other developments occurring after
the date of this release.
Immersion, the Immersion logo and TouchSense are trademarks or
registered trademarks of Immersion Corporation in the United States and
other countries. All other trademarks are the property of their
respective owners.
The use of the word “partner” or “partnership” in this press release
does not mean a legal partner or legal partnership.
(IMMR – C)
| Immersion Corporation | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In thousands) | |||||||
| March 31, 2019 | December 31, 2019 | ||||||
| (Unaudited) | (1) | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 102,654 | $ | 110,988 | |||
| Short-term investments | 14,959 | 13,930 | |||||
| Accounts and other receivables | 1,505 | 1,051 | |||||
| Prepaid expenses and other current assets | 8,774 | 9,856 | |||||
| Total current assets | 127,892 | 135,825 | |||||
| Property and equipment, net | 2,144 | 2,343 | |||||
| Other assets | 18,445 | 7,827 | |||||
| TOTAL ASSETS | $ | 148,481 | $ | 145,995 | |||
| LIABILITIES | |||||||
| Accounts payable | $ | 12,375 | $ | 3,612 | |||
| Accrued compensation | 1,360 | 3,948 | |||||
| Other current liabilities | 6,314 | 3,194 | |||||
| Deferred revenue | 4,816 | 4,591 | |||||
| Total current liabilities | 24,865 | 15,345 | |||||
| Long-term deferred revenue | 29,074 | 30,203 | |||||
| Other long-term liabilities | 3,609 | 787 | |||||
| TOTAL LIABILITIES | 57,548 | 46,335 | |||||
| STOCKHOLDERS’ EQUITY | 90,933 | 99,660 | |||||
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 148,481 | $ | 145,995 | |||
|
(1) Derived from Immersion’s annual audited consolidated financial statements. |
|||||||
| Immersion Corporation | |||||||||
| Condensed Consolidated Statements of Operations | |||||||||
| (In thousands, except per share amounts) | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2019 | 2018 | ||||||||
| Revenues: | |||||||||
| Royalty and license | $ | 5,047 | $ | 85,335 | |||||
| Development, services, and other | 75 | 81 | |||||||
| Total revenues | 5,122 | 85,416 | |||||||
| Costs and expenses: | |||||||||
| Cost of revenues | 15 | 35 | |||||||
| Sales and marketing | 1,609 | 1,220 | |||||||
| Research and development | 2,302 | 2,820 | |||||||
| General and administrative | 12,695 | 11,236 | |||||||
| Total costs and expenses | 16,621 | 15,311 | |||||||
| Operating income (loss) | (11,499 | ) | 70,105 | ||||||
| Interest and other income | 598 | 231 | |||||||
| Income (loss) before provision for income taxes | (10,901 | ) | 70,336 | ||||||
| Provision for income taxes | (115 | ) | (453 | ) | |||||
| Net income (loss) | $ | (11,016 | ) | $ | 69,883 | ||||
| Basic net income (loss) per share | $ | (0.35 | ) | $ | 2.35 | ||||
| Shares used in calculating basic net income (loss) per share | 31,089 | 29,700 | |||||||
| Diluted net income (loss) per share | $ | (0.35 | ) | $ | 2.29 | ||||
| Shares used in calculating diluted net income (loss) per share | 31,089 | 30,566 | |||||||
| Immersion Corporation | ||||||||||
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) |
||||||||||
| (In thousands, except per share amounts) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| GAAP net income (loss) | $ | (11,016 | ) | $ | 69,883 | |||||
| Add: Provision for income taxes | 115 | 453 | ||||||||
| Less: Non-GAAP provision for income taxes | (42 | ) | (90 | ) | ||||||
| Add: Stock-based compensation | 2,103 | 1,222 | ||||||||
| Non-GAAP net income (loss) | $ | (8,840 | ) | $ | 71,468 | |||||
| Non-GAAP net income (loss) per share | $ | (0.28 | ) | $ | 2.34 | |||||
|
Dilutive shares used in calculating Non-GAAP net income (loss) per share |
31,089 | 30,566 | ||||||||
| Immersion Corporation | |||||||||
| Disaggregated Revenue Information | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
|
Three Months Ended
March 31, |
|||||||||
| 2019 | 2018 | ||||||||
| Fixed fee license revenue | $ | 1,740 | $ | 75,756 | |||||
| Per-Unit royalty revenue | 3,307 | 9,579 | |||||||
| Total royalty and license revenue | 5,047 | 85,335 | |||||||
| Development, services, and other revenue | 75 | 81 | |||||||
| Total revenues | $ | 5,122 | $ | 85,416 | |||||
| Immersion Corporation | |||||||||
| Revenue by Line of Business | |||||||||
| (Unaudited) | |||||||||
|
Three Months Ended
March 31, |
|||||||||
| 2019 | 2018 | ||||||||
| Mobility | 41 | % | 90 | % | |||||
| Gaming | 24 | % | 2 | % | |||||
| Automotive | 33 | % | 8 | % | |||||
| Medical | 2 | % | 0 | % | |||||
| Immersion Corporation | |||||||||
|
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses |
|||||||||
| (In thousand) | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2019 | 2018 | ||||||||
| GAAP operating expenses | $ | 16,606 | $ | 15,276 | |||||
| Adjustments to non-GAAP operating expenses: | |||||||||
| Stock-based compensation expense – S&M | (320 | ) | 67 | ||||||
| Stock-based compensation expense – R&D | (630 | ) | (256 | ) | |||||
| Stock-based compensation expense – G&A | (1,153 | ) | (1,033 | ) | |||||
| Depreciation and amortization expense | (205 | ) | (227 | ) | |||||
| Non-GAAP operating expense | $ | 14,298 | $ | 13,827 | |||||
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