Exhibit 99.1
Immersion Corporation Reports Fourth Quarter 2003 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 9, 2004--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues for the quarter ended
December 31, 2003 of $8.3 million compared to revenues of $5.5 million
in the fourth quarter of 2002. Net loss on a GAAP (Generally Accepted
Accounting Principles) basis for the fourth quarter of 2003 was $3.7
million, or $0.18 per share, compared to a net loss of $6.4 million,
or $0.32 per share, for the fourth quarter of 2002.
This quarter's net loss includes approximately $2.1 million, or
$0.10 per share, in non-cash charges relating to amortization for
stock-based compensation and intangible assets, the write off of an
investment in a privately held company and accretion on our Series A
Redeemable Convertible Preferred Stock. This compares to non-cash
charges of approximately $4.5 million, or $0.22 per share,
attributable to amortization for stock-based compensation and
intangible assets and impairment of goodwill in the same quarter last
year.
Revenues for the year ended December 31, 2003 were $20.2 million
compared to revenues of $20.2 million for the year ended December 31,
2002. Net loss for the year ended December 31, 2003 was $17.0 million,
or $0.83 per share, compared to a net loss of $16.5 million, or $0.83
per share, for the year ended December 31, 2002.
Vic Viegas, Immersion's CEO said, "We attained the highest
quarterly revenue in the company's history. Our revenues were higher
from all sources, especially royalties, which increased gross margins
and reduced the company's operating loss. Each of our businesses
showed year-over-year improvement, and Medical was profitable for the
full year. A big part of our revenue growth was as a result of
achieving the second, and most significant, of three milestones
associated with our development and licensing agreements with
Medtronic. By delivering a suite of new simulation products in
December 2003, which Medtronic is currently using for cardiac-related
therapy training, Immersion was able to recognize $2.9 million, the
majority of which was previously deferred revenue. Of the $2.9 million
recognized, $1.9 million was included in royalty and license revenue
and $1.0 million was included in development contract and other
revenue. As a result of this milestone, Immersion received a $1.0
million cash payment from Medtronic the first week of January, which
is not reflected in our year-end cash balance."
"Our 2003 operating loss was heavily impacted by increased
litigation expense. Litigation expense was $2.3 million in the fourth
quarter of 2003 and was $7.0 million for all of 2003, or $5.1 million
higher than in 2002. While litigation expense is a burden on our
mission to achieve profitability, we are prepared to spend whatever is
necessary to protect and defend our intellectual property," Viegas
added.
"We begin 2004 with the signing of Immersion's first cell phone
licensee -- Samsung -- to a multi-year, worldwide agreement that
Samsung anticipates will enable them to deliver a new generation of
cellular phones to their global markets and customers. We view the
large cell phone/PDA market as one of the next growth catalysts for
the company," 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 210 issued patents worldwide.
Immersion will host a conference call with company management on
Monday, February 9, 2004, at 5:00 p.m. ET to discuss operating results
for the fourth quarter ended December 31, 2003. A question and answer
session will follow. To listen to the call, dial (800) 374-2366,
reservation number 4572190. The call will be archived and available
for replay until February 13, 2004, by dialing (800) 642-1687,
reservation number 4572190. 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 February 9,
2005.
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, and realization of revenues and other benefits
under third party agreements. 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 Year Ended
December 31, December 31,
2003 2002 2003 2002
------- ------- ------- --------
Revenues:
Royalty and license $ 3,546 $ 1,486 $ 6,088 $ 5,231
Product sales 2,762 2,892 9,455 10,723
Development contracts and other 1,976 1,114 4,680 4,281
------- ------- ------- --------
Total revenues 8,284 5,492 20,223 20,235
------- ------- ------- --------
Costs and expenses:
Cost of product sales (exclusive of
amortization of intangibles shown
separately below) 1,547 1,494 5,276 5,881
Sales and marketing 2,327 2,033 7,764 7,566
Research and development 1,818 1,648 7,045 6,496
General and administrative 3,913 2,211 12,508 8,064
Amortization of intangibles and
deferred stock compensation 611 734 2,480 3,108
Impairment of goodwill -- 3,758 -- 3,758
Other charges -- -- -- 397
------- ------- ------- --------
Total costs and expenses 10,216 11,878 35,073 35,270
------- ------- ------- --------
Operating loss (1,932) (6,386) (14,850) (15,035)
Interest and other income
(expense), net (1,570) 13 (1,970) (1,495)
------- ------- ------- --------
Loss before provision for income
taxes (3,502) (6,373) (16,820) (16,530)
Provision for income taxes (154) -- (154) --
Net loss $(3,656)$(6,373)$(16,974) $(16,530)
------- ------- ------- --------
Basic and diluted net loss per
share $ (0.18)$ (0.32)$ (0.83) $ (0.83)
------- ------- ------- --------
Shares used in calculating basic
and diluted net loss per share 20,619 20,134 20,334 19,906
------- ------- ------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2003 2002 (1)
(Unaudited)
-------- --------
ASSETS
Cash and cash equivalents $21,738 $ 8,717
Accounts receivable, net 4,927 3,645
Inventories 2,099 2,128
Prepaid expenses and other current assets 1,099 1,151
-------- --------
Total current assets 29,863 15,641
Property and equipment, net 1,454 2,044
Intangibles and other assets, net 6,596 6,616
Other investments -- 1,000
-------- --------
TOTAL ASSETS $37,913 $25,301
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LIABILITIES
Accounts payable $ 1,752 $ 1,160
Accrued compensation 864 671
Other accrued liabilities 2,066 1,311
Deferred revenue and customer advances 3,116 3,515
Current portion of long-term debt 33 86
-------- --------
Total current liabilities 7,831 6,743
Long-term debt 16 51
Long-term liabilities and deferred revenue 4,235 4,559
Long-term customer advance from Microsoft 27,050 -
-------- --------
Total liabilities 39,132 11,353
STOCKHOLDERS' EQUITY/(DEFICIENCY) (1,219) 13,948
-------- --------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY/(DEFICIENCY) $37,913 $25,301
======== ========
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Mike Zuckerman, 408-467-1900
Invest@immersion.com