Exhibit 99.1
Immersion Corporation Reports First Quarter 2003 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--April 28, 2003--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of haptic
feedback technology, today announced revenues for the quarter ended
March 31, 2003 of $3.7 million compared to revenues of $4.8 million in
the first quarter of 2002. Operating expenses for the quarter were
$5.6 million, down 3% from the same period last year. Net loss on a
GAAP (Generally Accepted Accounting Principles) basis for the first
quarter of 2003 was $3.7 million, or $0.18 per share, compared to a
net loss of $3.7 million, or $0.19 per share, for the first quarter of
2002. This quarter's net loss includes non-cash amortization charges
for stock-based compensation and intangible assets totaling $649,000,
which reduced earnings by approximately $0.03 per share. This compares
to non-cash charges of $1.3 million, attributable to amortization for
stock-based compensation and intangible assets and acquisition related
charges and other charges that reduced earnings by $0.07 per share for
the same quarter last year.
"While we are disappointed in our performance this quarter, we
signed two very important multi-year, multi-million dollar agreements
with Medtronic, Inc.," said Vic Viegas, Immersion's CEO. "While they
contributed to our cash position and are expected to result in
additional cash over the next nine quarters, recognition of the
associated revenues on these licensing and development agreements must
be deferred in accordance with GAAP until certain development
milestones are achieved. In addition, during the quarter we entered
into a royalty prepayment arrangement with an existing licensee that
also generated cash in the quarter." Viegas added, "Our results
continue to be affected by the longer sales cycles stemming from
general economic weakness and market uncertainty in light of
geopolitical events. Until the current economic environment improves,
it is difficult for us to remain confident in our ability to achieve
our earlier revenue target for the full year of 2003 of $23 million to
$25 million. Accordingly, we are currently unable to forecast our 2003
revenues with any degree of confidence."
About Immersion Corporation (www.immersion.com)
Founded in 1993, Immersion Corporation is a recognized leader in
developing, licensing and marketing haptic technology and products.
Bringing value to markets where user/product interaction needs to be
made more compelling, safe or productive, Immersion helps its partners
develop and increase competitive advantage and broaden market reach by
making the use of touch sense feedback as critical a user experience
as sight and sound. Immersion's technology is deployed across personal
computing, entertainment, medical training, automotive and
three-dimensional simulation markets. Immersion and its wholly owned
subsidiaries hold over 185 issued patents worldwide.
Immersion will host a conference call with company management on
Monday, April 28, 2003, at 5:00 p.m. EDT to discuss operating results
for the first quarter ended March 31, 2003. A question and answer
session will follow. To listen to the call, dial (800) 365-3378,
reservation number 20977310. The call will be archived and available
for replay until May 2, 2003, by dialing (800) 633-8284, reservation
number 20977310. The call will also be simulcast on the Internet
through Immersion Corporation's web site, http://www.immersion.com. An
audio replay of the call will be archived and available at
http://www.immersion.com for replay until May 1, 2004.
Statements made in this press release, other than statements of
historical fact are forward-looking statements including those that
reflect management's current forecast of Immersion's future revenue
and operating results, customer demand for medical and force feedback
products, realization of revenues and other benefits under third party
agreements and the effect of the economic downturn. Forward looking
statements made in this press release are based on current
information, which management has assessed but which by its nature is
dynamic and subject to rapid and even abrupt changes. 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.
Risks and uncertainties related to Immersion's business are
further outlined in Immersion's Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q. These reports are filed with the
Securities and Exchange Commission. These factors may not constitute
all factors that could cause actual results to differ materially from
those discussed in any forward-looking statement. Immersion is not
obligated to revise or update any forward-looking statements in order
to reflect events or circumstances that may arise after the date of
this release.
Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
2003 2002
------- -------
Revenues:
Royalty and license $ 833 $ 1,234
Product sales 2,148 2,398
Development contracts and other 755 1,173
------- -------
Total revenues 3,736 4,805
------- -------
Costs and expenses:
Cost of product sales 1,106 1,285
Sales and marketing 1,791 2,109
Research and development 1,689 1,703
General and administrative 2,156 1,978
Amortization of intangibles and
deferred stock compensation 649 914
Acquisition related and other
charges -- 397
------- -------
Total costs and expenses 7,391 8,386
------- -------
Operating loss (3,655) (3,581)
Interest and other income (expense),
net (2) (73)
------- -------
Net loss $ (3,657) $ (3,654)
======= =======
Basic and diluted net loss per share $ (0.18) $ (0.19)
------- -------
Shares used in calculating basic and
diluted net loss per share 20,144 19,351
------- -------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2003 2002 (1)
(Unaudited)
----------- ------------
ASSETS
Cash and cash equivalents $ 5,767 $ 8,717
Accounts receivable, net 3,121 3,645
Inventories 2,382 2,128
Prepaid expenses and other
current assets 975 1,151
----------- ------------
Total current assets 12,245 15,641
Property and equipment, net 1,840 2,044
Intangibles and other assets,
net 6,601 6,616
Other investments 1,000 1,000
----------- ------------
TOTAL ASSETS $ 21,686 $ 25,301
=========== ============
LIABILITIES
Accounts payable $ 1,015 $ 1,160
Accrued compensation 1,007 671
Other accrued liabilities 1,098 1,311
Deferred revenue and customer
advances 2,436 3,515
Current portion of long-term
debt 54 86
----------- ------------
Total current liabilities 5,610 6,743
Long-term debt 47 51
Long-term portion of deferred
revenue 5,479 4,559
----------- ------------
Total liabilities 11,136 11,353
STOCKHOLDERS' EQUITY 10,550 13,948
----------- ------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 21,686 $ 25,301
=========== ============
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Victor Viegas/Bridget McQueen, 408/467-1900
Invest@immersion.com