EXHIBIT 99.1
Immersion Corporation Reports Second Quarter
2003 Financial Results & Microsoft Settlement
SAN JOSE, Calif.--(BUSINESS WIRE)--July 28, 2003--
Immersion Separately Announces Agreements That
Provide Microsoft Broad Licensing Rights to Sense of Touch
Patents as Well as Settle Legal Differences
Immersion Corporation, (Nasdaq:IMMR), a leading developer and
licensor of haptic feedback technology, today announced revenues for
the quarter ended June 30, 2003 of $4.1 million compared to revenues
of $5.5 million in the second quarter of 2002. Net loss on a GAAP
(Generally Accepted Accounting Principles) basis for the second
quarter of 2003 was $4.4 million, or $0.22 per share, compared to a
net loss of $2.1 million, or $0.10 per share, for the second quarter
of 2002.
This quarter's net loss includes non-cash amortization charges for
stock-based compensation and intangible assets totaling $611,000,
which reduced earnings by approximately $0.03 per share. This compares
to non-cash charges of $712,000, attributable to non-cash amortization
for stock-based compensation and intangible assets that reduced
earnings by $0.04 per share for the same quarter last year.
Revenues for the six months ended June 30, 2003 were $7.9 million
compared to revenues of $10.3 million for the six months ended June
30, 2002. Net loss for the first six months of fiscal 2003 was $8.1
million or $0.40 per share compared to the net loss of $5.7 million or
$0.29 per share for the first six months of fiscal 2002.
Vic Viegas, Immersion's CEO, said, "The series of agreements
signed with Microsoft and announced separately today provide cash
payments of up to $35 million to Immersion in return for licensing
rights, equity, and settlement of Immersion's lawsuit filed against
Microsoft in February 2002. This milestone recognizes the value of
Immersion's industry-leading haptic technology."
Viegas added, "Continued weakness in the PC gaming and our Medical
businesses led to lower revenues. Higher margin royalties were a
smaller component of our revenue mix and the costs associated with the
patent infringement litigation increased our net loss. Going forward,
we are continuing to pursue growth in new markets for haptics, such as
for cell phones and PDAs, while gaining greater penetration of the
automotive and medical training markets. The settlement with Microsoft
enhances our ability to pursue and execute in these new markets. It
also provides us with significant resources to actively protect and
license our 196 haptic patents."
"In our Medical business, we continue to introduce new products
and attract development grants. In Automotive, we are seeing increased
interest in haptic control devices by both auto manufacturers and
OEMs. And in cell phones, we are pleased with the positive response
that we are receiving from leading handset manufacturers, content
providers, and OEM suppliers," Viegas concluded.
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 195 issued patents worldwide.
Immersion will host a conference call with company management on
Monday, July 28, 2003, at 5:00 p.m. EDT to discuss operating results
for the second quarter ended June 30, 2003. A question and answer
session will follow. To listen to the call, dial 800-365-3378,
reservation number 20977311. The call will be archived and available
for replay until August 1, 2003, by dialing 800-633-8284,
reservation number 20977311. 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 August 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, consumer and industry demand for haptic
technology and haptically enabled products, Immersion's ability to
increase market share and to succeed in new markets, realization of
revenues and other benefits under third party agreements, and the
effects 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 Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
------- ------- ------- -------
Revenues:
Royalty and license $ 804 $ 1,633 $ 1,637 $ 2,867
Product sales 2,465 2,821 4,613 5,219
Development contracts and other 873 1,007 1,628 2,180
------- ------- ------- -------
Total revenues 4,142 5,461 7,878 10,266
------- ------- ------- -------
Costs and expenses:
Cost of product sales 1,462 1,479 2,568 2,764
Sales and marketing 1,885 1,817 3,676 3,926
Research and development 1,739 1,588 3,428 3,291
General and administrative 2,860 1,813 5,016 3,791
Amortization of intangibles and
deferred stock compensation 611 712 1,260 1,626
Acquisition related and other
charges -- -- -- 397
------- ------- ------- -------
Total costs and expenses 8,557 7,409 15,948 15,795
------- ------- ------- -------
Operating loss (4,415) (1,948) (8,070) (5,529)
Interest and other income
(expense), net (29) (123) (31) (196)
------- ------- ------- -------
Net loss $(4,444) $(2,071) $(8,101) $(5,725)
======= ======= ======= =======
Basic and diluted net loss per
share $ (0.22) $ (0.10) $ (0.40) $ (0.29)
------- ------- ------- -------
Shares used in calculating basic
and diluted net loss per share 20,179 20,002 20,162 19,679
------- ------- ------- -------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2003 2002(1)
(Unaudited)
--------- ----------
ASSETS
Cash and cash equivalents $ 3,048 $ 8,717
Accounts receivable, net 2,950 3,645
Inventories 2,315 2,128
Prepaid expenses and other current assets 590 1,151
--------- ----------
Total current assets 8,903 15,641
Property and equipment, net 1,639 2,044
Intangibles and other assets, net 6,528 6,616
Other investments 1,000 1,000
--------- ----------
TOTAL ASSETS $ 18,070 $ 25,301
========= ==========
LIABILITIES
Accounts payable $ 1,126 $ 1,160
Accrued compensation 998 671
Other accrued liabilities 1,416 1,311
Deferred revenue and customer advances 3,708 3,515
Current portion of long-term debt 27 86
--------- ----------
Total current liabilities 7,275 6,743
Long-term debt 39 51
Long-term portion of deferred revenue 4,400 4,559
--------- ----------
Total liabilities 11,714 11,353
STOCKHOLDERS' EQUITY 6,356 13,948
--------- ----------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 18,070 $ 25,301
========= ==========
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Victor Viegas or Bridget McQueen, 408-467-1900
Invest@immersion.com