Exhibit 99.1
Microvision Reports Second Quarter Revenue of $4.5 Million
BOTHELL, Wash.--(BUSINESS WIRE)--Aug. 12, 2003--
$5.1 million in new contract awards, product developments and key
technology achievements highlight second quarter activity
Microvision, Inc. (Nasdaq:MVIS), a leader in light scanning
technologies, today reported financial results for the second quarter
of 2003. Revenue for the three months ended June 30, 2003 was $4.5
million compared to $4.7 million for the same period in 2002. Revenue
for the six months ended June 30, 2003 was $8.0 million compared to
$8.5 million for the same period last year. Revenue in the second
quarter of 2003 was derived from ongoing work on development contracts
with U.S. military and commercial customers, sales of the Flic(TM)
Laser Bar Code Scanner, sales of the Nomad(TM) Augmented Vision
System, and development contracts at its subsidiary, Lumera. Revenue
from development contracts with U.S. government agencies was $2.7
million, revenue from commercial contracts was $1.6 million and
revenue from product sales was $146,000.
The net loss for the three months ended June 30, 2003 was $6.7
million or $.38 per share compared to the net loss of $6.6 million or
$.49 per share for the same period in 2002. The net loss for the six
months ended June 30, 2003 was $14.1 million or $.83 per share
compared to the net loss of $14.9 million or $1.12 per share. For the
six months ended June 30, 2003, net cash used in operating activities
was $14.4 million compared to $15.1 million for the same period in
2002.
The company, including Lumera, ended the quarter with $11.8
million in cash, cash equivalents and investment securities and a
contract backlog of $3.4 million.
"The second quarter was a strong quarter for us, with solid
financial results and the achievement of a number of very important
milestones," said Microvision CEO Rick Rutkowski. "Contract revenue
grew sequentially in the second quarter, reflecting higher government
contract work and a continued strong level of commercial contract
work. The gross profit margin continued to be strong, with this
quarter's margin again exceeding 50%. In addition, the second quarter
included several important milestones, such as key deliveries to Canon
and BMW and, most notably, the completion of a successful field trial
with Honda that subsequently led to a non-binding letter of intent to
purchase 3,800 units of our next generation Nomad display as announced
by the company on July 31, 2003. We also reported the demonstration of
a laser-scanning camera and the development and demonstration of a new
microscanner engine that can enable significant improvements in cost,
package size, power consumption and reliability across the range of
the company's display and imaging products. This is a breakthrough
that is particularly important for the development of affordable
miniature display solutions for consumer electronic products such as
digital still cameras and camcorders.
"Contract awards in the second quarter were quite strong, with new
awards totaling $5.1 million from both government and commercial
customers. We continue to build the order pipeline for Flic and expect
significantly higher Flic sales in the third quarter. However, our
preliminary outlook for the third quarter suggests that total revenue
may fall below the $4.2 million that we reported in the same quarter
in 2002. This short-term variability is due to uncertainty regarding
the timing of new contracts some of which are currently under
negotiation. We are, however, actively pursuing several outstanding
contract bids that could increase our revenue outlook for the third
quarter.
"We believe that our recent letter of intent from Honda sets the
stage for substantial growth in product revenue in 2004. We have begun
marketing the next generation Nomad display to additional customers in
the automotive segment as well as in other markets. We have been asked
to conduct a field trial for automotive maintenance with another
well-known truck and automaker later this month. We have recently
completed a field trial with a military customer where the Nomad's
performance was well received. We plan to build on our early success
and potential order with Honda with the aim of creating a significant
backlog of orders for the Nomad system during the second half of this
year.
"Our letter of intent with Honda is one of the most significant
events of the year for Microvision. We believe that the initial
indication of 3,800 units represents only a portion of Honda's
potential requirements and that the automotive maintenance and repair
market is potentially a very large market for us. Worldwide there are
nearly 1.4 million technicians that cover a broad range of automotive
and related services, with 1.1 million of those already having access
to online digital repair information. As a consequence, we believe
that we can address a substantial early adopter segment in this market
with the product currently in development.
"Our marketing effort for the Flic bar code scanner continues to
focus on developing our distribution channel, increasing end-user
product awareness and development of our sales organization. We have
also completed several improvements to the product and have scheduled
others in order to support a wider range of connectivity options and
extend the product's reach in the market. We have now signed 22
distribution agreements, including our recent agreement with
MobilePlanet to market both Flic and our soon-to-be-launched cordless
bar code scanner. We continue to have a large number of sales
proposals outstanding and we believe that we will begin to see
meaningful order flow later this year and significant growth in sales
and revenue through 2004. We expect to announce the launch of our Flic
cordless bar code scanner very soon. Market interest in this product
has been strong and we expect to attract one or more launch customers
for this unique product.
"We continue to advance discussions with a number of the world's
leading consumer electronics companies relating to a range of
products, including electronic viewfinders for digital cameras and
camcorders and displays for gaming and entertainment applications.
Each of these represents a significant potential market opportunity
and we are encouraged with the rapid progress we are making to
initiate customer partnerships to pursue these markets. We continue to
make excellent progress toward establishing a manufacturing partner
for high volume production of our low-cost display engine for consumer
applications.
"We held our first public demonstration of our laser scanning
camera at our shareholder's meeting in June. The image quality of this
prototype camera is exceptional and we are working toward developing
partnerships to accelerate product development for a variety of
applications that utilize miniature cameras, including medical and
biomedical imaging, 2D bar code scanning, and machine vision.
"Development work on automotive displays continues to progress
rapidly toward the product development phase for a number of potential
applications. In early July, we were awarded a contract by the
Electronics Research Lab of Volkswagon of America to develop an
advanced prototype display that will be installed in an experimental
automobile later this year. We look forward to reporting in more
detail the specific application. We also continue to work toward
obtaining a design win from BMW and a leading Tier 1 automotive
supplier to provide certain automotive displays for the 2006 model
year, which would mean higher development revenue for 2004 and leading
to product revenue in late 2004 and beyond.
New Developments
"We completed the first phase development contract with a major
Asian manufacturer of printers and office equipment to design a new
scanning engine for high-speed laser printers. The customer was very
happy with the results and we are now in active discussions to
continue this development project into a second phase.
"We continue to develop and evaluate both wearable and handheld
product concepts for mobile and cellular communications under contract
to one of the world's leading wireless network operators. We are
seeing renewed interest in this product category as new portable media
products emerge from a variety of the world's leading technology
companies.
"We are enthusiastic about new product directions that Lumera is
working on based on its platform materials technology. The company was
awarded two new development contracts in the second quarter and we are
pleased with the excellent progress Lumera is making on its technology
and products.
"We are very pleased with Microvision's progress and its future
prospects on multiple fronts. The company continues to pursue
high-growth market opportunities and is rapidly developing new
products to expand our product pipeline."
Conference Call
Microvision will host a conference call to discuss its second
quarter of 2003 financial results at 4:30 p.m. ET today. Participants
may join the conference call by dialing (800) 299-8538 (for U.S.
participants) ten minutes prior to the start of the conference.
International participants can dial (617) 786-2902. The passcode
number is 10193863. Additionally, the call will be broadcast over the
Internet and can be accessed from the company's web site at
www.microvision.com. A telephone replay of the call will be available
through 11:00 p.m. ET August 19, 2003 and can be accessed by dialing
888-286-8010 (for U.S. participants) or 617-801-6888 (for
international participants). The conference passcode is 24187278.
Also, a replay of the conference call will be available on the
company's web site.
About Microvision: www.microvision.com
Headquartered in Bothell, Wash., Microvision Inc. is the world
leader in the development of high resolution displays and imaging
systems based on the company's proprietary silicon micromirror
technology. The company's technology has applications in a broad range
of military, medical, industrial, professional and consumer products.
Microvision has been working with Canon, BMW, the Electronics
Research Lab of Volkswagen of America, Johnson & Johnson's Ethicon
Endo Surgery subsidiary, Honda and others to develop a number of
display and image capture product applications based on its
proprietary scanned beam technology.
About Lumera: www.microvision.com
Lumera, a majority owned subsidiary of Microvision, Inc., is
developing and commercializing a new class of electro-optic materials
and devices that utilize proprietary polymer compounds and processing
technologies. These new devices and materials are expected to
dramatically improve performance and reduce costs of electro-optic
components for telecommunications, phased array antenna systems,
optical computing, optical signal processing and optical
interconnects. The properties of these materials are also expected to
enable new applications in other technologies such as organic light
emitting diode displays, low k dielectrics and coating materials.
Lumera expects to be able to sell and license its technology in a
variety of forms, including custom polymer materials, coated wafers,
and discrete and integrated component devices, both packaged and
unpackaged. Additional information can be found at Lumera's web site
at http://www.lumera.com.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including expected
results, projections of future revenues, plans for product development
and production, future contracts and commercial arrangements, growth
in demand, future product benefits and future operations, as well as
statements containing words like "believes,""estimate," "expects,"
"anticipates," "target," "plans," "will", "could," "would" and other
similar expressions, are forward-looking statements that involve a
number of risks and uncertainties. Factors that could cause actual
results to differ materially from those projected in the company's
forward-looking statements include the following: our ability to raise
additional capital when needed; market acceptance of our technologies
and products; our financial and technical resources relative to those
of our competitors; our ability to keep up with rapid technological
change; our dependence on the defense industry and a limited number of
government development contracts; government regulation of our
technologies; our ability to enforce our intellectual property rights
and protect our proprietary technologies; the ability to obtain
additional contract awards; the timing of commercial product launches
and delays in product development; the ability to achieve key
technical milestones in key products; dependence on third parties to
develop, manufacture, sell and market our products; potential product
liability claims and other risk factors identified from time to time
in the company's SEC reports, including the Company's Annual Report on
Form 10-K filed with the SEC. Except as expressly required by the
federal securities laws, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, changes circumstances or any other reason.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
(Unaudited)
June 30, Dec. 31,
2003 2002
--------- ---------
Assets
Current Assets
Cash and cash equivalents $9,275 $9,872
Investment securities, available-for-sale 2,495 5,304
Accounts receivable, net 2,476 1,315
Costs and estimated earnings in excess of
billings on
uncompleted contracts 1,445 1,073
Inventory, net 450 747
Other current assets 1,680 2,348
--------- ---------
Total current assets 17,821 20,659
Property and equipment, net 6,509 7,672
Restricted investments 1,269 1,356
Receivables from related parties, net 1,843 2,043
Other assets 358 537
--------- ---------
Total assets $27,800 $32,267
========= =========
Liabilities, Minority Interests and Shareholders' Equity
Current Liabilities
Accounts payable $1,261 $1,462
Accrued liabilities 5,189 4,309
Current portion of research liability 2,002 -
Billings in excess of costs and estimated
earnings on uncompleted contracts 119 230
Current portion of capital lease obligations 77 84
Current portion of long-term debt 67 63
--------- ---------
Total current liabilities 8,715 6,148
Research liability, net of current portion - 1,025
Capital lease obligations, net of current portion 56 94
Long-term debt, net of current portion 135 169
Deferred rent, net of current portion 149 192
--------- ---------
Total liabilities 9,055 7,628
--------- ---------
Commitments and Contingencies - -
Minority Interests 3,482 7,223
--------- ---------
Shareholders' Equity
Common stock and paid-in capital 158,644 147,058
Deferred compensation (1,072) (1,490)
Subscriptions receivable from related parties (166) (166)
Accumulated other comprehensive income 52 121
Accumulated deficit (142,195) (128,107)
--------- ---------
Total shareholders' equity 15,263 17,416
--------- ---------
Total liabilities, minority interests and
shareholders' equity $27,800 $32,267
========= =========
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
Revenue $4,511 $4,734 $8,048 $8,538
Cost of revenue 2,201 2,195 3,610 4,006
-------- -------- --------- ---------
Gross margin 2,310 2,539 4,438 4,532
-------- -------- --------- ---------
Research and development
expense 6,079 5,960 12,879 13,329
Marketing, general and
administrative expense 4,386 4,373 8,671 8,882
Non-cash compensation expense 452 398 917 913
-------- -------- --------- ---------
Total operating
expenses 10,917 10,731 22,467 23,124
-------- -------- --------- ---------
Loss from operations (8,607) (8,192) (18,029) (18,592)
Interest income 91 281 214 619
Interest expense (10) (11) (24) (29)
Loss on disposal of fixed
assets (31) - (31) -
Realized gain on sale of
investment securities 12 - 39 -
Loss due to impairment of
long-term investment - (624) - (624)
-------- -------- --------- ---------
Loss before minority interests (8,545) (8,546) (17,831) (18,626)
Minority interests in loss of
consolidated subsidiary 1,853 1,898 3,743 3,752
-------- -------- --------- ---------
Net loss $(6,692) $(6,648) $(14,088) $(14,874)
======== ======== ========= =========
Net loss per share before non-
cash compensation expense $(0.35) $(0.46) $(0.78) $(1.05)
Non-cash compensation expense (0.03) (0.03) (0.05) (0.07)
-------- -------- --------- ---------
Net loss per share - basic and
diluted $(0.38) $(0.49) $(0.83) $(1.12)
======== ======== ========= =========
Weighted-average shares
outstanding -
basic and diluted 17,799 13,530 16,878 13,287
======== ======== ========= =========
CONTACT: Microvision
Brian Heagler (investors) 425/415-6794
Matt Nichols (media) 425/415-6657