Exhibit 99.1
Immersion Corporation Reports Third Quarter 2004 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 25, 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 September 30, 2004 compared to revenues of $4.1 million
for the third quarter of 2003. Net loss on a Generally Accepted
Accounting Principles (GAAP) basis for the third quarter of 2004 was
$6.9 million, or $0.29 per share, compared to a net loss of $5.2
million, or $0.26 per share, for the third quarter of 2003. As of
September 30, 2004, Immersion had cash and cash equivalents totaling
$11.9 million as compared to $18.2 million as of June 30, 2004.
Revenues for the nine months ended September 30, 2004 were $16.3
million compared to revenues of $11.9 million for the nine months
ended September 30, 2003. Net loss for the first nine months of fiscal
2004 was $17.9 million, or $0.80 per share, compared to a net loss of
$13.3 million, or $0.66 per share, for the first nine months of fiscal
2003.
"This quarter's revenue growth of 34 percent over the same quarter
last year was driven by increased product sales and greater
contributions from royalties and licensing. In particular, medical
product sales increased 30 percent sequentially and more than doubled
year-over-year," said Immersion CEO Vic Viegas.
"The year-over-year increase in our quarterly loss was due
substantially to Sony trial litigation expenses of $3.8 million in the
third quarter of this year versus $2.2 million for third quarter last
year. In addition, sales and marketing expenses were higher,
reflecting the investments we have made to increase medical product
sales and expand business development efforts in the mobile phone
market.
"Yesterday we announced an important agreement with QUALCOMM and
our VibeTonz(TM) System products for the mobility market. We have made
significant progress in establishing an initial ecosystem around the
Samsung phone we expect to be released before the end of the year.
"As we announced on September 21, 2004, the jury returned a
verdict favorable to Immersion in our patent infringement suit against
Sony Computer Entertainment, Inc. and Sony Computer Entertainment of
America, Inc. We are pleased the jury found our patents valid and
infringed and awarded Immersion damages in the amount of $82.0
million. We continue to evaluate the possible infringement of these
and additional patents by companies across all of our businesses,"
concluded Viegas.
Immersion will host a conference call with company management on
Monday, October 25, 2004, at 5:00 p.m. EDT to discuss operating
results for the third quarter ended September 30, 2004. A question and
answer session will follow. To listen to the call, dial +1
800.374.2366 approximately five minutes prior to the start of the call
and enter confirmation number 4572190. The call will be archived and
available for replay until October 29, 2004, by dialing +1
800.642.1687, and entering confirmation 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 www.immersion.com for replay until October
25, 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
240 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 Nine Months
Ended Sept. 30, Ended Sept. 30,
2004 2003 2004 2003
Revenues:
Royalty and license $ 1,543 $ 905 $ 5,273 $ 2,542
Product sales 3,255 2,080 8,578 6,693
Development contracts and
other 653 1,076 2,469 2,704
------- ------- -------- --------
Total revenues 5,451 4,061 16,320 11,939
------- ------- -------- --------
Costs and expenses:
Cost of product sales
(exclusive of amortization
of intangibles shown
separately below) 1,822 1,161 4,583 3,729
Sales and marketing 2,730 1,761 8,018 5,437
Research and development 1,881 1,799 5,847 5,227
General and administrative 5,555 3,579 14,022 8,595
Amortization of intangibles
and deferred stock
compensation 362 609 1,233 1,869
------- ------- -------- --------
Total costs and
expenses 12,350 8,909 33,703 24,857
------- ------- -------- --------
Operating loss (6,899) (4,848) (17,383) (12,918)
Interest and other income
(expense), net 36 (369) (494) (400)
------- ------- -------- -------
Net loss $(6,863)$ (5,217) $(17,877) $(13,318)
======= ======= ======== ========
Basic and diluted net loss per
share $ (0.29)$ (0.26) $ (0.80) $ (0.66)
------- ------- -------- --------
Shares used in calculating basic
and diluted net loss per share 23,329 20,384 22,443 20,237
------- ------- -------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, Dec. 31,
2004 2003 (1)
(Unaudited)
ASSETS
Cash and cash equivalents $11,943 $21,738
Accounts receivable, net 3,659 4,927
Inventories 1,889 2,099
Prepaid expenses and other current assets 546 1,099
------ ------
Total current assets 18,037 29,863
Property and equipment, net 1,221 1,454
Intangibles and other assets, net 6,958 6,596
------ ------
TOTAL ASSETS $26,216 $37,913
====== ======
LIABILITIES
Accounts payable $ 3,672 $ 1,752
Accrued compensation 1,360 864
Other accrued liabilities 1,705 2,066
Deferred revenue and customer advances 2,699 3,116
Current portion of long-term debt 14 33
------ ------
Total current liabilities 9,450 7,831
Long-term debt 8 16
Long-term liabilities and deferred revenue 6,904 4,235
Long-term customer advance from Microsoft 15,000 27,050
------ ------
Total liabilities 31,362 39,132
STOCKHOLDERS' DEFICIENCY (5,146) (1,219)
------ ------
TOTAL LIABILITIES &
STOCKHOLDERS' DEFICIENCY $26,216 $37,913
====== ======
(1) Derived from the Company's annual audited
financial statements.
CONTACT: Immersion Corporation
Gayle Schaffer, 408-467-1900
invest@immersion.com