Exhibit 99.1
Immersion Corporation Reports Second Quarter 2005 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 11, 2005--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues of $6.2 million for the
quarter ended June 30, 2005 compared to revenues of $5.5 million for
the second quarter of 2004. Net loss for the second quarter of 2005
was $2.8 million, or $0.12 per share, down 42 percent compared to a
net loss of $4.8 million, or $0.21 per share, for the second quarter
of 2004.
Revenues for the six months ended June 30, 2005 were $12.0 million
compared to revenues of $10.9 million for the six months ended June
30, 2004. Net loss for the first six months of fiscal 2005 was $6.0
million, or $0.25 per share, down 46 percent compared to a net loss of
$11.0 million, or $0.50 per share, for the first six months of fiscal
2004. As of June 30, 2005, Immersion had cash and cash equivalents
totaling $29.4 million as compared to $26.9 million as of March 31,
2005.
"We are encouraged by the significant reduction in net loss as we
continue building momentum in our two key growth markets -- medical
and mobility," said Vic Viegas, Immersion CEO. "The execution of our
product sales strategy for medical training simulators has resulted in
a steady increase in medical simulation product revenue with a 53%
growth this quarter over the second of quarter 2004.
"In our mobility business, we reached several major milestones in
the second quarter. The first three Samsung phones with our VibeTonz
technology were released in April in the U.S. and Korea. Downloadable
content with VibeTonz touch sensations from licensed partners is now
available -- over 120 ringtones and 7 games. We signed our second
license agreement with a handset maker, SK Teletech, the number two
manufacturer of handsets for the Korean market. And we signed our
first license agreement with an operator, SK Telecom, the number one
operator in Korea.
"On May 17, 2005, the U.S. District Court for the Northern
District of California denied Sony's post-judgment motions in our
patent infringement suit against Sony Computer Entertainment, Inc. and
Sony Computer Entertainment of America, Inc. Sony has filed a notice
of appeal of the judgment, including the $90.7 million in interest and
past damages, with the United States Court of Appeals for the Federal
Circuit. We remain confident of our position in the anticipated
appeals process," concluded Viegas.
Immersion will host a conference call with company management on
Thursday, August 11, 2005, at 5:00 p.m. Eastern time to discuss
operating results for the second quarter ended June 30, 2005. A
question and answer session will follow. To listen to the call, dial
800-374-2366 approximately five minutes prior to the start of the call
and enter confirmation number 2696099. The call will be archived and
available for replay until August 15, 2005, by dialing 800-642-1687
and entering confirmation number 2696099. 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 August 15, 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 automotive, entertainment, medical
training, mobility, personal computing, and three-dimensional
simulation markets. Immersion's patent portfolio includes over 500
issued or pending patents in the United States and other countries.
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; any statements
regarding projections of earnings, revenues, or other cash receivables
which are contingent upon Sony's compliance with court orders;
statements regarding Immersion's ability to keep any cash received
from Sony to date after completion of the appeals process or other
judicial proceedings; statements regarding the prospects and
consequences of any negative rulings from the appeals court on the
judgment, including the damages award; 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; 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; and risks and uncertainties
associated with the ongoing litigation.
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.
Immersion, the Immersion logo, and VibeTonz are trademarks of
Immersion Corporation in the U.S. and other countries. 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,
2005 2004 2005 2004
------- ------- ------- --------
Revenues:
Royalty and license $ 2,329 $ 1,899 $ 4,800 $ 3,730
Product sales 3,257 2,879 5,952 5,323
Development contracts and
other 660 736 1,266 1,816
------- ------- ------- --------
Total revenues 6,246 5,514 12,018 10,869
------- ------- ------- --------
Costs and expenses:
Cost of product sales (exclusive
of amortization of intangibles
shown separately below) 1,663 1,540 3,052 2,761
Sales and marketing 3,078 2,826 5,897 5,288
Research and development 1,528 2,079 3,037 4,089
General and administrative 2,198 3,589 4,484 8,467
Amortization of intangibles 369 356 736 748
Restructuring 0 0 185 0
------- ------- ------- --------
Total costs and
expenses 8,836 10,390 17,391 21,353
------- ------- ------- --------
Operating loss (2,590) (4,876) (5,373) (10,484)
Interest and other income
(expense), net (206) 30 (491) (530)
------- ------- ------- --------
Loss before provision for
income taxes (2,796) (4,846) (5,864) (11,014)
Provision for income taxes (33) 0 (98) 0
------- ------- ------- --------
Net loss $(2,829) $(4,846) $(5,962) $(11,014)
======= ======= ======= ========
Basic and diluted net loss
per share $ (0.12) $ (0.21) $ (0.25) $ (0.50)
------- ------- ------- --------
Shares used in calculating basic
and diluted net loss per share 24,050 23,198 23,858 21,994
------- ------- ------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2005 2004
(Unaudited) (1)
----------- -----------
ASSETS
Cash and cash equivalents $ 29,422 $25,538
Accounts receivable, net 5,291 5,435
Inventories 2,608 1,805
Prepaid expenses and other current assets 1,312 1,280
-------- -------
Total current assets 38,633 34,058
Property and equipment, net 1,088 1,174
Intangibles and other assets, net 6,743 7,018
-------- -------
TOTAL ASSETS $ 46,464 $42,250
======== =======
LIABILITIES
Accounts payable $ 1,049 $ 4,038
Accrued compensation 1,200 1,499
Other accrued liabilities 2,246 2,002
Deferred revenue and customer advances 4,475 3,420
Current portion of long-term debt 10 11
-------- -------
Total current liabilities 8,980 10,970
Long-term debt 17,161 16,917
Long-term liabilities and deferred revenue 15,889 5,330
Long-term customer advance from Microsoft 15,000 15,000
-------- -------
Total liabilities 57,030 48,217
STOCKHOLDERS' DEFICIT (10,566) (5,967)
-------- -------
TOTAL LIABILITIES &
STOCKHOLDERS' DEFICIT $ 46,464 $42,250
======== =======
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Stephen Ambler, 408-467-1900
invest@immersion.com