Exhibit 99.1
Immersion Corporation Reports Third Quarter 2005 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 7, 2005--Immersion
Corporation, (Nasdaq:IMMR), a leading developer and licensor of touch
feedback technology, today announced revenues of $5.4 million for the
quarter ended September 30, 2005 compared to revenues of $5.5 million
for the third quarter of 2004. Net loss for the third quarter of 2005
was $4.2 million, or $0.17 per share, an improvement of 39 percent
compared to a net loss of $6.9 million, or $0.29 per share, for the
third quarter of 2004.
Revenues for the nine months ended September 30, 2005 were $17.4
million compared to revenues of $16.3 million for the nine months
ended September 30, 2004. Net loss for the first nine months of fiscal
2005 was $10.1 million, or $0.42 per share, an improvement of 43
percent compared to a net loss of $17.9 million, or $0.80 per share,
for the first nine months of fiscal 2004. As of September 30, 2005,
Immersion had cash and cash equivalents totaling $28.7 million.
"In the third quarter, our Medical, Industrial, and Mobility
businesses achieved important milestones toward new growth," said Vic
Viegas, Immersion CEO. "We introduced two important new software
modules for our endovascular training simulator as part of our product
sales strategy. We signed an agreement with 3M Touch Systems to enable
them to integrate our TouchSense(R) technology and sell touchscreens
with tactile feedback to the casino gaming and bar top amusement
markets. The new Mercedes S Class sedan was launched in Europe in
September with a haptic rotary controller made by Immersion licensee
ALPS Electric Co., Ltd.
"In our mobility business, there are now six operators worldwide,
with a total of approximately 130 million subscribers, that offer
mobile phones with our VibeTonz(TM) technology. A new Samsung mobile
phone, the A820, was launched by Sprint Nextel. Additionally, Alltel
and MetroPCS now offer the Samsung n330 mobile phone to their
subscribers. More downloadable games with VibeTonz touch sensations
were released by Indiagames and I-play, two of the top mobile game
publishers in the world. Seven new games with VibeTonz technology were
released by SK Telecom, the largest mobile operator in Korea,"
concluded Viegas.
Immersion will host a conference call with company management on
Monday, November 7, 2005, at 5:00 p.m. Eastern Time to discuss
operating results for the third quarter ended September 30, 2005. 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 2696101. The call will be archived
and available for replay until November 14, 2005 by dialing +1
800.642.1687 and entering confirmation number 2696101. The call will
also be simulcast and archived through the Investor Relations section
of Immersion Corporation's Web site, www.immersion.com.
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; any statements concerning the benefits of medical
simulators or customer acceptance of medical simulators; any
statements concerning the benefits of TouchSense technology for
consumers, operators, and manufacturers of touchscreens and electronic
gaming devices; any statements concerning the breadth of and timeline
to implement force feedback technology into handset models or into
content, or any change in revenue that may occur from such
implementation; any statements regarding consumer response that may
occur as a result of having touch feedback in handsets or content; any
statements concerning consumer and market acceptance of force feedback
products in general; any statements regarding proposed products or
services; any statements regarding future economic conditions or
performance; statements of belief; and any statement 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 products or a delay in or
failure to achieve the acceptance of force feedback as a critical user
experience.
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, TouchSense, 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 Nine Months
Ended September 30, Ended September 30,
2005 2004 2005 2004
---------- -------- --------- ---------
Revenues:
Royalty and license $ 1,473 $ 1,543 $ 6,273 $ 5,273
Product sales 3,376 3,255 9,328 8,578
Development contracts and
other 538 653 1,804 2,469
---------- -------- --------- ---------
Total revenues 5,387 5,451 17,405 16,320
---------- -------- --------- ---------
Costs and expenses:
Cost of product sales
(exclusive of amortization
of intangibles shown
separately below) 1,756 1,822 4,808 4,583
Sales and marketing 2,679 2,731 8,576 8,019
Research and development 1,446 1,883 4,483 5,972
General and administrative 3,073 5,555 7,557 14,022
Amortization of intangibles 314 359 1,050 1,107
Restructuring 0 0 185 0
---------- -------- --------- ---------
Total costs and expenses 9,268 12,350 26,659 33,703
---------- -------- --------- ---------
Operating loss (3,881) (6,899) (9,254) (17,383)
Interest and other income
(expense), net (265) 36 (756) (494)
---------- -------- --------- ---------
Loss before provision for
income taxes (4,146) (6,863) (10,010) (17,877)
Provision for income taxes (12) 0 (110) 0
---------- -------- --------- ---------
Net loss $ (4,158) $(6,863) $(10,120) $(17,877)
========== ======== ========= =========
Basic and diluted net loss per
share $ (0.17) $ (0.29) $ (0.42) $ (0.80)
---------- -------- --------- ---------
Shares used in calculating
basic and diluted net loss
per share 24,132 23,329 23,950 22,443
---------- -------- --------- ---------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2005 2004
(Unaudited) (1)
-------------- -----------
ASSETS
Cash and cash equivalents $ 28,683 $ 25,538
Accounts receivable, net 5,533 5,435
Inventories 3,019 1,805
Prepaid expenses and other current
assets 865 1,280
-------------- ------------
Total current assets 38,100 34,058
Property and equipment, net 1,142 1,174
Intangibles and other assets, net 6,735 7,018
-------------- ------------
TOTAL ASSETS $ 45,977 $ 42,250
============== ============
LIABILITIES
Accounts payable $ 1,717 $ 4,038
Accrued compensation 1,148 1,499
Other accrued liabilities 2,492 2,002
Deferred revenue and customer advances 3,647 3,420
Current portion of long-term debt 8 11
-------------- ------------
Total current liabilities 9,012 10,970
Long-term debt 17,332 16,917
Long-term liabilities and deferred
revenue 19,182 5,330
Long-term customer advance from
Microsoft 15,000 15,000
-------------- ------------
Total liabilities 60,526 48,217
STOCKHOLDERS' DEFICIT (14,549) (5,967)
-------------- ------------
TOTAL LIABILITIES &
STOCKHOLDERS' DEFICIT $ 45,977 $ 42,250
============== ============
(1) Derived from the Company's annual audited financial statements.
CONTACT: Immersion Corporation
Stephen Ambler, 408-467-1900
invest@immersion.com