Exhibit 99.1
Microvision Reports 2003 Revenue of $14.7 Million; Company Announces
Nomad Expert Technician System is in Initial Stage of Commercial
Production
BOTHELL, Wash.--(BUSINESS WIRE)--March 10, 2004--Microvision, Inc.
(Nasdaq:MVIS), a leader in light scanning technologies, today reported
financial results for the fourth quarter and full year of 2003.
Revenue for the twelve months ended December 31, 2003 was $14.7
million compared to $15.9 million for the same period in 2002. Revenue
for the fourth quarter of 2003 was $4.0 million compared to $3.2
million for the same period in 2002. The company had previously
reported that it expected fourth quarter of 2003 revenue to be $4.6
million and revenue for 2003 to be $15.2 million, however, revenue was
negatively impacted by the timing of a $950,000 contract at Lumera
that was awarded later in the fourth quarter than anticipated. As a
result, Lumera refocused its efforts to completing the development of
commercial products for launch in the first quarter of 2004 and later
in the year. Consolidated revenue for 2003 was derived from ongoing
work on development contracts with U.S. military and commercial
customers, sales of the Nomad(R) Augmented Vision System, sales of the
Flic(R) Laser Bar Code Scanner, and development contracts at its
subsidiary, Lumera. For the twelve months ended December 31, 2003,
revenue from development contracts with U.S. government agencies was
$7.1 million, revenue from commercial contracts was $6.4 million and
revenue from product sales was $1.2 million.
For the twelve months ended December 31, 2003, Microvision
reported a consolidated net loss of $26.2 million or $1.46 per share
compared to a net loss of $27.2 million or $1.93 per share for the
same period in 2002. For the three months ended December 31, 2003, the
company reported a consolidated net loss of $5.2 million or $.26 per
share compared to a net loss of $6.9 million or $.46 per share for the
same period in 2002. For the twelve months ended December 31, 2003,
net cash used in operating activities was $26.4 million compared to
$28.0 million for the same period in 2002.
The company, including Lumera, ended the year with $21.8 million
in cash, cash equivalents and investment securities and backlog of
$3.8 million. Additions to backlog subsequent to year-end total $1.1
million.
The company indicated that it expects revenue for the first
quarter of 2004 to be approximately $3.5 million depending on the
progress of work performed under certain development contracts and the
number and timing of Nomad units shipped during the quarter. The Nomad
Expert Technician System is currently in the initial phase of
commercial production and the first commercial units are expected to
ship before March 31, 2004. The company has begun taking orders for
Nomad and expects to have orders for more than 100 units by the end of
the quarter, representing a value of approximately $400,000. The
company also indicated that it expects a record quarter with respect
to sales of its Flic bar code scanner, with revenue of $600,000 or
higher. Contract revenue for both Microvision and Lumera will also be
modestly lower than originally anticipated ($200,000 to $300,000) due
to the utilization of resources to bring commercial products to
market.
"Overall results for 2003 were solid, with strong growth in
revenue from commercial development contracts, higher revenue from
product sales, a reduced cash burn and a stronger balance sheet," said
Rick Rutkowski, Microvision's CEO. "We achieved a number of milestones
that will serve as the platform for our future growth, including the
sale of 100 Nomad units to the Stryker Brigade; the recent launch of
the Nomad Expert Technician System and the development of the
automotive maintenance application; the launch of Flic Cordless and
the increasing sales activity through both direct sales and NCR;
significant progress in the automotive HUD market; continuing
development work with Canon and the U.S. military; and a number of
important developments at Lumera, including its first commercial
product introductions for Wi-Fi antennas.
"During the fourth quarter of 2003, we achieved a number of
milestones, including booking $3.4 million in commercial contracts, a
record level for a quarter. Our commercial activity included the
largest contract to date with Canon and a development contract for a
laser print engine.
"The outlook for 2004 is very positive, as we believe the stage is
set for significant revenue growth that will be driven primarily by
product sales, particularly sales of the Nomad system which we believe
will begin to ramp significantly in the second quarter and throughout
the rest of the year.
Product Update
"We continue to work closely with Honda in anticipation of a
rollout of the Nomad Expert Technician System to its dealers. In
addition to dealers, the potential applications with Honda have
expanded to include some of its parts assembly operations. The next
step is to complete a product certification process that Honda
requires of all of its tools. The certification process is expected to
be underway this week.
"In addition to Honda, we have been working with other OEMs and
distributors from whom we have consistently received excellent
feedback and strong interest. We are building a backlog of orders for
the Nomad Expert Technician System and we are very excited about the
potential for success in this very large market segment. According to
the Automotive Aftermarket Industry Association the service portion of
the automotive aftermarket is estimated at $132 billion in 2003, with
roughly $59 billion of that coming from labor. Sales of tools used in
aftermarket service and maintenance were estimated at $7.9 billion for
the year.
"We have a proposal under evaluation by the U.S. Army to supply
Nomad units to the next Stryker Brigade Combat Team, which is expected
to deploy during the second quarter. The feedback from the field for
our first order of 100 units, which were deployed in November to Iraq,
has been very positive. The units have performed well in a very
demanding environment and we are encouraged about our prospects for a
follow-on sale in the second quarter.
"We expect to have a record quarter for sales of the Flic bar code
scanner in the first quarter with sales coming from NCR, other
distributors and web-based unit sales. The web-based sales are
typically evaluation orders and may serve as leads for potentially
much larger orders. We are also encouraged with the large volume
opportunities that are being pursued by NCR and we expect resulting
sales volume to ramp throughout the year.
"Last month, Lumera introduced its first commercial products, two
antennas for the high growth Wi-Fi market. The company has focused its
sales launch for the products on high volume categories including
commercial hotspot operators and OEM customers. One potential
customer, a large hotspot operator, has concluded its lab test of the
antenna and is now engaged in field-testing of the unit. Another
prospective OEM customer, a large computer manufacturer, will shortly
begin evaluating the device for possible integration into a laptop
computer. The company believes that the products offer compelling cost
and performance advantages aimed at a growing market and we are
excited about its near term and long term prospects.
Development Update
"Development work on automotive head-up displays (HUDs) continues
to progress toward the product development phase and opportunities
relating to this application are beginning to accelerate. During 2003
we were awarded 3 contracts for $1.3 million to build and deliver
prototype units to Volkswagen and several Tier 1 suppliers. Recently,
a Microvison prototype HUD, along with competing HUDs, was installed
in an automobile for evaluation and testing by a consumer focus group.
We believe the advantages that we can deliver over competing LCD-based
HUDs include superior performance, smaller overall package size, and a
larger viewing area. We are seeing increasing interest by automakers
for HUDs and are now in discussion with several new OEMs and Tier 1
suppliers.
"Work continues to progress under our largest contract to date
with Canon to provide pre-commercial microdisplay prototypes for
potential application in consumer product designs, including digital
camera and digital video camera designs. Work also continues under the
$1.0 million contract with an Asian manufacturer of printers and
office equipment to develop a MEMS-based scanning engine for
high-speed laser printers.
"Lumera was awarded a $950,000 follow-on contract with a U.S.
government agency to continue development of high-performance
electro-optic polymer materials and devices for wideband optical
modulators, bringing the total amount awarded for this project to $3.6
million. In addition, Lumera expects to move quickly from development
to commercial products for two other applications of its proprietary
materials technology and we expect to report on those product
introductions soon.
"We are very excited about 2004 and believe that we are set to
achieve record revenue growth as both Microvision and Lumera introduce
compelling products to high growth markets."
Conference Call
Microvision will host a conference call to discuss its 2003
financial results at 4:30 p.m. ET today. Participants may join the
conference call by dialing 800-901-5213 (for U.S. participants) ten
minutes prior to the start of the conference. International
participants can dial 617-786-2962. The conference passcode is
50216050. 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 5:00 p.m. ET March 17, 2004 and can be accessed by dialing
888-286-8010 (for U.S. participants) or 617-801-6888 (for
international participants). The conference passcode for the replay is
25935855. 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 micro-mirror
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 and others to develop a number
of display and image capture product applications based on its
proprietary scanned beam technology.
About Lumera: www.Lumera.com
Lumera, a majority owned subsidiary of Microvision, Inc., is an
emerging leader in nanotechnology-based applications. The company
designs proprietary molecular structures and polymer compounds for a
broad range of electro-optic, RF and specialty coating applications.
The company also develops high performance RF and electro-optic
devices based on its materials technology, and has developed
proprietary processes for fabricating such devices.
Devices based on Lumera's new materials may dramatically improve
the performance and reduce the costs of smart antenna systems for the
full range of wireless communications markets, and may provide similar
improvements for electro-optic components for telecommunications,
optical computing, optical signal processing and optical
interconnects. The company has also developed materials and process
techniques that may simplify and improve the production of Organic
Light Emitting Diode (OLED) flat panel displays. The properties of
these materials have also shown promise for application in coating
materials used in wafer processing for semiconductor fabrication and
in bioassay systems. Lumera expects 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.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including
projections of revenues, expenses and losses, plans for product
development, sales, customers and channel partners, reductions in
sales cycle, signing of contracts, future operations and shipping of
products, as well as statements containing words like "believe,"
"anticipate," "estimate," "intend," "will," "may," "seek," "look
forward," "expect," 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: market acceptance of our technologies and products; our
financial and technical resources relative to those of our
competitors; our ability to obtain financing, our ability to keep up
with rapid technological change; 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 and to develop partnership opportunities;
the timing of commercial product launches; the ability to achieve key
technical milestones in key products; dependency on advances by third
parties in certain technology used by us and other risk factors
identified from time to time in the company's SEC reports, including
in its Prospectuses filed pursuant to Rule 424(b) on November 3, 2003,
its Annual Report on 10-K for the year ended December 31, 2002 and its
Quarterly Reports on Form 10-Q. 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, changed circumstances or any other reason.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
(Unaudited)
December 31, December 31,
2003 2002
------------ ------------
Assets
Current Assets
Cash and cash equivalents $10,700 $9,872
Investment securities, available-for-sale 11,078 5,304
Accounts receivable, net 1,896 1,315
Costs and estimated earnings in excess of
billings on uncompleted contracts 664 1,073
Inventory, net 331 747
Other current assets 1,684 2,348
------------ ------------
Total current assets 26,353 20,659
Property and equipment, net 5,958 7,672
Restricted investments 1,269 1,356
Receivables from related parties, net - 2,043
Other assets 338 537
------------ ------------
Total assets $33,918 $32,267
============ ============
Liabilities, Minority Interests and
Shareholders' Equity
Current Liabilities
Accounts payable $1,223 $1,462
Accrued liabilities 5,164 4,309
Current portion of research liability - -
Billings in excess of costs and estimated
earnings on uncompleted contracts 53 230
Current portion of capital lease
obligations 62 84
Current portion of long-term debt 70 63
------------ ------------
Total current liabilities 6,572 6,148
Research liability, net of current portion 1,948 1,025
Capital lease obligations, net of current
portion 34 94
Long-term debt, net of current portion 99 169
Deferred rent, net of current portion 107 192
Other long-term liabilities 16 -
------------ ------------
Total liabilities 8,776 7,628
------------ ------------
Commitments and Contingencies - -
Minority Interests 1,847 7,223
------------ ------------
Shareholders' Equity
Common stock at par value 21 -
Paid-in capital and no par common stock 180,354 147,058
Deferred compensation (846) (1,490)
Subscriptions receivable from related
parties (166) (166)
Receivable from related parties (1,823) -
Accumulated other comprehensive income 25 121
Accumulated deficit (154,270) (128,107)
------------ ------------
Total shareholders' equity 23,295 17,416
------------ ------------
Total liabilities, minority interests
and shareholders' equity $33,918 $32,267
============ ============
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2003 2002 2003 2002
--------- -------- --------- ---------
Revenue $4,039 $3,193 $14,652 $15,917
Cost of revenue 1,937 1,072 7,046 6,997
--------- -------- --------- ---------
Gross margin 2,102 2,121 7,606 8,920
--------- -------- --------- ---------
Research and development
expense 4,913 6,757 23,316 25,519
Marketing, general and
administrative expense 3,541 4,012 15,827 16,798
Non-cash compensation expense 695 621 2,156 1,984
--------- -------- --------- ---------
Total operating
expenses 9,149 11,390 41,299 44,301
--------- -------- --------- ---------
Loss from operations (7,047) (9,269) (33,693) (35,381)
Interest income 91 205 381 1,059
Interest expense (16) (14) (51) (59)
Gain on disposal of fixed
assets, net 3 - 36 -
Realized gain on sale of
investment securities - 88 39 88
Loss due to impairment of long-
term investment - - - (624)
--------- -------- --------- ---------
Loss before minority interests (6,969) (8,990) (33,288) (34,917)
Minority interests in loss of
consolidated subsidiary 1,759 2,089 7,125 7,741
--------- -------- --------- ---------
Net loss $(5,210) $(6,901) $(26,163) $(27,176)
========= ======== ========= =========
Net loss per share before non-
cash compensation expense $(0.23) $(0.42) $(1.34) $(1.79)
Non-cash compensation expense (0.03) (0.04) (0.12) (0.14)
--------- -------- --------- ---------
Net loss per share - basic and
diluted $(0.26) $(0.46) $(1.46) $(1.93)
========= ======== ========= =========
Weighted-average shares
outstanding - basic and
diluted 20,194 15,154 17,946 14,067
========= ======== ========= =========
CONTACT: Microvision
Brian Heagler (investors), 425-415-6794
Matt Nichols (media), 425-415-6657