EXHIBIT 99.1
Immersion Corporation Reports Third Quarter 2003 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 27, 2003--Immersion
Corporation (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues for the quarter ended
September 30, 2003 of $4.1 million compared to revenues of $4.5
million in the third quarter of 2002. Net loss on a GAAP (Generally
Accepted Accounting Principles) basis for the third quarter of 2003
was $5.2 million, or $0.26 per share, compared to a net loss of $4.4
million, or $0.22 per share, for the third quarter of 2002.
This quarter's net loss includes non-cash amortization charges for
stock-based compensation and intangible assets totaling $609,000,
which reduced earnings by approximately $0.03 per share. This compares
to non-cash charges of $748,000, 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 nine months ended September 30, 2003 were $11.9
million compared to revenues of $14.7 million for the nine months
ended September 30, 2002. Net loss for the first nine months of fiscal
2003 was $13.3 million, or $0.66 per share, compared to the net loss
of $10.2 million, or $0.51 per share, for the first nine months of
fiscal 2002.
Vic Viegas, Immersion's CEO, said, "Our revenues for the quarter
were impacted by some medical product sales slipping into the fourth
quarter and our operating expenses were higher due to the costs
associated with the litigation to protect our patent portfolio. We
ended the quarter with a cash balance of $26.9 million. This increased
cash balance was primarily a result of the agreements announced with
Microsoft this past July. As a result, the Immersion team is better
positioned to execute our strategy and drive business forward."
Viegas concluded, "We have also begun to earn some modest
development revenue from cell phone handset manufacturers for whom we
have developed prototypes with haptic features. These prototypes
demonstrate our advances in force feedback fidelity and our success in
making our technology more miniaturized, less expensive, wireless,
with lower power consumption and available in a form that can fit into
a cell phone. We are pleased with the response that we have received
thus far and continue to view the cell phone/PDA market as one of the
next growth catalysts for Immersion."
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 190 issued patents worldwide.
Immersion will host a conference call with company management on
Monday, October 27, 2003, at 5:00 p.m. EST to discuss operating
results for the third quarter ended September 30, 2003. A question and
answer session will follow. To listen to the call, dial 800-365-3378,
reservation number 20977312. The call will be archived and available
for replay until October 31, 2003, by dialing 800-633-8284,
reservation number 20977312. 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 October 31,
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, including the
cell phone/PDA market, 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 Nine Months
Ended Sept. 30, Ended Sept. 30,
2003 2002 2003 2002
-------- -------- -------- --------
Revenues:
Royalty and license $ 905 $ 878 $ 2,542 $ 3,745
Product sales 2,080 2,612 6,693 7,831
Development contracts
and other 1,076 987 2,704 3,167
-------- -------- -------- --------
Total revenues 4,061 4,477 11,939 14,743
-------- -------- -------- --------
Costs and expenses:
Cost of product sales
(exclusive of
amortization
of intangibles shown
separately below) 1,161 1,623 3,729 4,387
Sales and marketing 1,761 1,607 5,437 5,533
Research and development 1,799 1,557 5,227 4,848
General and
administrative 3,579 2,062 8,595 5,853
Amortization of
intangibles and
deferred stock
compensation 609 748 1,869 2,374
Other charges -- -- -- 397
-------- -------- -------- --------
Total costs and
expenses 8,909 7,597 24,857 23,392
-------- -------- -------- --------
Operating loss (4,848) (3,120) (12,918) (8,649)
Interest and other income
(expense), net 48 (1,312) 17 (1,508)
-------- -------- -------- --------
Net loss (4,800) (4,432) (12,901) (10,157)
Cumulative dividends and
accretion on series A
preferred stock (417) -- (417) --
-------- -------- -------- --------
Net loss applicable to
common stockholders $ (5,217) $ (4,432) $(13,318) $(10,157)
======== ======== ======== ========
Basic and diluted net loss
per share $ (0.26) $ (0.22) $ (0.66) $ (0.51)
-------- -------- -------- --------
Shares used in calculating
basic and diluted
net loss per share 20,384 20,113 20,237 19,825
-------- -------- -------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
2003 2002(1)
(Unaudited)
--------- ---------
ASSETS
Cash and cash equivalents $ 26,896 8,717
Accounts receivable, net 3,161 3,645
Inventories 2,125 2,128
Prepaid expenses and other current assets 342 1,151
--------- ---------
Total current assets 32,524 15,641
Property and equipment, net 1,443 2,044
Intangibles and other assets, net 6,613 6,616
Other investments 1,000 1,000
--------- ---------
TOTAL ASSETS $ 41,580 $ 25,301
========= =========
LIABILITIES
Accounts payable $ 1,339 $ 1,160
Accrued compensation 950 671
Other accrued liabilities 1,420 1,311
Deferred revenue and customer advances 5,075 3,515
Current portion of long-term debt 36 86
--------- ---------
Total current liabilities 8,820 6,743
Long-term debt 23 51
Long-term liabilities and deferred revenue 24,320 4,559
Series A redeemable convertible
preferred stock 6,417 -
--------- ---------
Total liabilities 39,580 11,353
STOCKHOLDERS' EQUITY 2,000 13,948
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 41,580 $ 25,301
========= =========
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Bridget McQueen, 408-467-1900
Invest@immersion.com