Exhibit 99.1
Immersion Corporation Reports Fourth Quarter 2004 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 7, 2005--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues of $7.4 million for the
quarter ended December 31, 2004 compared to revenues of $8.3 million
for the fourth quarter of 2003. Revenues in the fourth quarter of 2003
included $2.9 million of licensing and development contract revenue
associated with certain medical contracts, the majority of which was
previously deferred revenue. Net loss on a Generally Accepted
Accounting Principles (GAAP) basis for the fourth quarter of 2004 was
$2.9 million, or $0.12 per share, compared to a net loss of $3.7
million, or $0.18 per share, for the fourth quarter of 2003. As of
December 31, 2004, Immersion had cash and cash equivalents totaling
$25.5 million as compared to $11.9 million as of September 30, 2004.
Revenues for the year ended December 31, 2004 were $23.8 million
compared to revenues of $20.2 million for the year ended December 31,
2003. Net loss for the year ended December 31, 2004 was $20.7 million,
or $0.91 per share, compared to a net loss of $17.0 million, or $0.83
per share, for the year ended December 31, 2003.
"We are focused on our mission to achieve profitability," said
Immersion CEO Vic Viegas. "Our year-over-year revenue growth of 18
percent, including 69 percent growth in gaming revenue and 40 percent
growth in medical product sales, indicates that our investment in a
strengthened sales and marketing effort across our businesses is
paying off. We have implemented expense reductions and believe that
most of the Sony litigation expenses are behind us as well. For
example, litigation fees in the fourth quarter decreased to $1.1
million from third quarter's $3.8 million and from $2.3 million in
fourth quarter of 2003. In total the Microsoft and Sony litigation
fees are in excess of $18.7 million, $10.1 million of which was
incurred in 2004 and represents approximately half of our loss for the
year. The $20 million private convertible debenture financing
completed in December 2004 allows us to carefully invest in our best
opportunities for fueling growth. At the same time, we are controlling
operating costs and executing sales and marketing plans in our
existing businesses to increase revenue.
"Regarding the litigation with Sony Computer Entertainment and
Sony Computer Entertainment of America, Inc., court rulings on
post-trial motions and other matters during December 2004 and January
2005 have been very positive for Immersion including the award of
pre-judgment interest and a compulsory license until judgment is
entered in the case. At the end of the fourth quarter we had more than
270 issued patents and 280 pending patent applications. We remain
committed to the protection and defense of our extensive intellectual
property portfolio across all of our businesses," concluded Viegas.
Immersion will host a conference call with company management on
Monday, February 7, 2005, at 5:00 p.m. EDT to discuss operating
results for the fourth quarter and the year ended December 31, 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 2695967. The call will be archived
and available for replay until February 11, 2005, by dialing +1
800.642.1687 and entering confirmation number 2695967. 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 February
7, 2006.
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, mobility, and three-dimensional
simulation markets. Immersion and its wholly-owned subsidiaries hold
more than 270 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 Years
Ended December 31, Ended December 31,
2004 2003 2004 2003
-------- -------- --------- ---------
Revenues:
Royalty and license $ 3,505 $ 3,546 $ 8,778 $ 6,088
Product sales 3,066 2,762 11,644 9,455
Development contracts
and other 872 1,976 3,341 4,680
-------- -------- --------- ---------
Total revenues 7,443 8,284 23,763 20,223
-------- -------- --------- ---------
Costs and expenses:
Cost of product sales
(exclusive of
amortization of
intangibles shown
separately below) 1,672 1,547 6,255 5,276
Sales and marketing 3,293 2,327 11,311 7,764
Research and development 2,011 1,818 7,858 7,045
General and
administrative 3,111 3,913 17,133 12,508
Amortization of
intangibles and
deferred stock
compensation 365 611 1,598 2,480
-------- -------- --------- ---------
Total costs and
expenses 10,452 10,216 44,155 35,073
-------- -------- --------- ---------
Operating loss (3,009) (1,932) (20,392) (14,850)
Interest and other
income (expense), net (3) (1,570) (497) (1,970)
-------- -------- --------- ---------
Loss before provision
for income taxes (3,012) (3,502) (20,889) (16,820)
Benefit (provision) for
income taxes 151 (154) 151 (154)
-------- -------- --------- ---------
Net loss ($2,861) ($3,656) ($20,738) ($16,974)
======== ======== ========= =========
Basic and diluted net
loss per share ($0.12) ($0.18) ($0.91) ($0.83)
-------- -------- --------- ---------
Shares used in calculating
basic and diluted net loss
per share 23,428 20,619 22,698 20,334
-------- -------- --------- ---------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2004 2003
(Unaudited) (1)
----------- -----------
ASSETS
Cash and cash equivalents $25,538 $21,738
Accounts receivable, net 5,435 4,927
Inventories 1,805 2,099
Prepaid expenses and other current assets 1,280 1,099
------- -------
Total current assets 34,058 29,863
Property and equipment, net 1,174 1,454
Intangibles and other assets, net 7,018 6,596
------- -------
TOTAL ASSETS $42,250 $37,913
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LIABILITIES
Accounts payable $ 4,038 $ 1,752
Accrued compensation 1,499 864
Other accrued liabilities 2,002 2,066
Deferred revenue and customer advances 3,420 3,116
Current portion of long-term debt 11 33
------- -------
Total current liabilities 10,970 7,831
Long-term debt 16,917 16
Long-term liabilities and deferred revenue 5,330 4,235
Long-term customer advance from Microsoft 15,000 27,050
------- -------
Total liabilities 48,217 39,132
STOCKHOLDERS' EQUITY/(DEFICIENCY) (5,967) (1,219)
------- -------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY/(DEFICIENCY) $42,250 $37,913
======= =======
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Gayle Schaeffer, 408-467-1900
invest@immersion.com