Exhibit 99.1
Immersion Corporation Reports Second Quarter 2004 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--July 26, 2004--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues of $5.5 million for the
quarter ended June 30, 2004 compared to revenues of $4.1 million in
the second quarter of 2003. Net loss on a Generally Accepted
Accounting Principles (GAAP) basis for the second quarter of 2004 was
$4.8 million, or $0.21 per share, compared to a net loss of $4.4
million, or $0.22 per share, for the second quarter of 2003.
Revenues for the six months ended June 30, 2004 were $10.9 million
compared to revenues of $7.9 million for the six months ended June 30,
2003. Net loss for the first six months of fiscal 2004 was $11.0
million, or $0.50 per share, compared to a net loss of $8.1 million,
or $0.40 per share, for the first six months of fiscal 2003. As of
June 30, 2004, Immersion had cash and cash equivalents totaling $18.2
million as compared to $18.8 million as of March 31, 2004.
Vic Viegas, Immersion's CEO said, "This quarter's revenues grew 33
percent over the same quarter last year and were higher across each of
our businesses for the second consecutive quarter. Gross margins were
72 percent in the second quarter of 2004 compared to 65 percent for
the second quarter of 2003 due to a higher contribution from royalties
in the revenue mix. This increase was driven by licensing royalties
from the sales, by our licensees, of both console and PC gaming
peripherals. We expect continued revenue growth from all of our
businesses for the full year 2004 and therefore expect 2004 revenues
will be higher than the $20 million recorded in 2003."
Viegas concluded, "The year-over-year increase in our quarterly
loss was due to higher litigation expense associated with the Sony
lawsuit and higher sales and marketing costs. Our investment in sales
and marketing is focused on increasing medical product sales and
developing business in the mobile phone market."
Immersion will host a conference call with company management on
Monday, July 26, 2004, at 5:00 p.m. EDT to discuss operating results
for the second quarter ended June 30, 2004. A question and answer
session will follow. To listen to the call, dial 800-374-2366,
reservation number 4572185. The call will be archived and available
for replay until July 30, 2004, by dialing 800-642-1687, reservation
number 4572185. 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 July 26, 2005.
About Immersion (www.immersion.com)
Founded in 1993, Immersion Corporation is a recognized leader in
developing, licensing and marketing digital touch technology and
products. Bringing value to markets where man-machine interaction
needs to be made more compelling, safer, or productive, Immersion
helps its partners broaden market reach by making the use of touch
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 more than
230 issued patents worldwide.
Forward-Looking Statements
This press release contains "forward-looking statements" that
involve risks and uncertainties, as well as assumptions that, if they
never materialize or prove incorrect, could cause the results of
Immersion Corporation and its consolidated subsidiaries to differ
materially from those expressed or implied by such forward-looking
statements.
All statements, other than the statements of historical fact, are
statements that may be deemed forward-looking statements, including
any projections of earnings, revenues, or other financial matters; any
statements of the plans, strategies, and objectives of management for
future operations; proposed products or services; any statements
regarding future economic conditions or performance; and statements of
belief or assumptions underlying any of the foregoing. 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 which include, but are not
limited to, delay in or failure to achieve commercial demand for
Immersion's expanded technology offerings or a delay in or failure to
achieve the acceptance of force feedback as a critical user experience
in new and existing markets for our business segments.
For a more detailed discussion of these factors, and other factors
that could cause the Company's actual results to vary materially,
interested parties should review the risk factors listed in the
Company's most current Form 10-Q, which is on file with the U.S.
Securities and Exchange Commission. The forward-looking statements in
this press release reflect the Company's beliefs and predictions as of
the date of this release. The Company disclaims any obligation to
update these forward-looking statements as a result of financial,
business, or any other developments occurring after the date of this
release.
The Immersion logo is a trademark of Immersion Corporation. All
other trademarks are the property of their respective owners.
Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
-------- -------- --------- --------
Revenues:
Royalty and license $ 1,899 $ 804 $ 3,730 $ 1,637
Product sales 2,879 2,465 5,323 4,613
Development contracts and other 736 873 1,816 1,628
-------- -------- --------- --------
Total revenues 5,514 4,142 10,869 7,878
-------- -------- --------- --------
Costs and expenses:
Cost of product sales
(exclusive of amortization
intangibles shown separately
below) 1,540 1,462 2,761 2,568
Sales and marketing 2,826 1,885 5,288 3,676
Research and development 2,077 1,739 3,966 3,428
General and administrative 3,589 2,860 8,467 5,016
Amortization of intangibles and
deferred stock compensation 358 611 871 1,260
-------- -------- --------- --------
Total costs and expenses 10,390 8,557 21,353 15,948
-------- -------- --------- --------
Operating loss (4,876) (4,415) (10,484) (8,070)
Interest and other income
(expense), net 30 (29) (530) (31)
-------- -------- --------- --------
Net loss $(4,846) $(4,444) $(11,014) $(8,101)
======== ======== ========= ========
Basic and diluted net loss per
share $ (0.21) $ (0.22) $ (0.50) $ (0.40)
-------- -------- --------- --------
Shares used in calculating basic
and diluted net loss per share 23,198 20,179 21,994 20,162
-------- -------- --------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2004 2003 (1)
(Unaudited)
------------ ------------
ASSETS
Cash and cash equivalents $18,214 $ 21,738
Accounts receivable, net 2,728 4,927
Inventories 2,242 2,099
Prepaid expenses and other current assets 710 1,099
------------ ------------
Total current assets 23,894 29,863
Property and equipment, net 1,294 1,454
Intangibles and other assets, net 6,847 6,596
------------ ------------
TOTAL ASSETS $32,035 $ 37,913
============ ============
LIABILITIES
Accounts payable $ 2,673 $ 1,752
Accrued compensation 1,263 864
Other accrued liabilities 1,429 2,066
Deferred revenue and customer advances 2,705 3,116
Current portion of long-term debt 21 33
------------ ------------
Total current liabilities 8,091 7,831
Long-term debt 11 16
Long-term liabilities and deferred revenue 7,351 4,235
Long-term customer advance from Microsoft 15,069 27,050
------------ ------------
Total liabilities 30,522 39,132
STOCKHOLDERS' EQUITY (DEFICIENCY) 1,513 (1,219)
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
(DEFICIENCY) $32,035 $ 37,913
============ ============
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Mike Zuckerman, 408-467-1900
Invest@immersion.com