Exhibit 99.1
Microvision Announces Third Quarter 2006 Results
Company Continues To Hit Operating Milestones and Reports
Financial Results Consistent With Previous Guidance
REDMOND, Wash.--(BUSINESS WIRE)--Nov. 2, 2006--Microvision, Inc.
(NASDAQ:MVIS), a global leader in light scanning technologies, today
reported operating and financial results for the third quarter and
first nine months of 2006.
Operating Results
"Our operating results for the third quarter and year-to-date
include achieving several significant milestones on our roadmap to the
commercialization of high volume products based on the company's new
proprietary Integrated Photonics Module (IPM(TM)) architecture. These
milestones include winning strategic development contracts with
world-leading partners that are expected to greatly contribute to our
goal of commercializing the ultra-miniature laser projectors
(PicoP(TM)) and automotive head-up displays," said Alexander Tokman,
President and CEO of Microvision.
Significant accomplishments during the third quarter and year to
date include:
-- Entered into an agreement with a major global Tier 1
automotive supplier to develop a commercial scanned-beam
head-up display (HUD) product for automotive applications.
-- Entered into a joint development agreement with a large Asian
consumer electronics manufacturer to develop high-volume
design for manufacturing of Microvision's proprietary IPM, a
tiny display engine suitable for a variety of display
applications. Potential applications for the IPM platform
include cell phone embedded tiny projection displays,
ultra-miniature projection displays used as accessories to
various video output devices such as personal media players,
laptops, DVD players, personal color eyewear, and head-up
displays for automobiles and airplanes.
-- Awarded a $5.95 million contract by General Dynamics C4
Systems to develop and deliver full-color, daylight readable,
see-through helmet-mounted displays for the U.S. Army. This
effort includes strategic initiatives consistent with the
development of the IPM and personal color eyewear application.
-- Released software connectivity products for the Flic laser bar
code scanner to provide cost-effective solutions to the
growing mobility market. The software products allow users of
the Flic Scanner and Bluetooth enabled Flic Cordless Scanner
to capture bar code data directly into a variety of business
and consumer household applications running on Windows,
Windows Mobile handheld and BlackBerry handheld devices.
-- Announced strategic relationship with Fraunhofer Institute for
Photonic Microsystems that augments Microvision's
world-leading expertise in the design and production of small
MEMS scanning mirrors. MEMS scanners are a key component to
Microvision's IPM platform.
Financial Results
For the nine months ended September 30, 2006, the company reported
revenue of $5.2 million compared to $12.0 million for the same period
in 2005, and $823,000 for the three months ended September 30, 2006
compared to $3.3 million for the same period in 2005.
During first nine months of 2005 the Company earned $4.9 million
from work performed on a contract with Ethicon compared to $764,000
for the same period in 2006. Sales of the Nomad system in the nine
months ended September 30, 2005 included a $1.2 million one-time sale
to the US government not repeated in 2006. As of September 30, 2006,
backlog totaled $6.9 million compared to $4.9 million at September 30,
2005. With the increase in contract backlog, the company believes it
will achieve full year revenue of $8.0 million to $9.0 million as
previously announced.
The company reported an operating loss for the nine months ended
September 30, 2006 of $21.1 million compared to $18.3 million for the
same period in 2005 and $6.7 million for the three months ended
September 30, 2006 compared to $6.9 million in the same period in
2005. The operating loss for the three and nine months ended September
30, 2006 includes $81,000 and $728,000, respectively, of severance
costs and $471,000 and $1.5 million, respectively, of non cash
compensation costs associated with the adoption of FASB 123(R) that
were not included in 2005 results.
The company reported a loss available for common shareholders for
the nine months ended September 30, 2006 of $18.6 million compared to
$24.7 million for the same period in 2005 and $7.7 million for the
three months ended September 30, 2006 compared to $12.6 million for
the same period in 2005. The net loss available for common
shareholders for the nine months ended September 30, 2006 includes a
one-time $3.1 million charge associated with the conversion of the
company's preferred stock in May 2006.
Microvision ended the quarter with $14.6 million in cash, cash
equivalents and investment securities. Subsequent to the end of the
quarter, the company raised $1.9 million from the sale of 322,000
shares of Lumera common stock. The company continues to own 1,750,000
shares of Lumera common stock with a market value of approximately
$14.1 million as of November 1, 2006. The shares are pledged as
collateral for the company's notes that are scheduled to be retired in
March 2007.
For the nine months ended September 30, 2006, net loss per share
was $(0.60) compared to $(1.13) for the same period in 2005, and
$(0.20) for the three months ended September 30, 2006 compared to
$(0.56) for the same period in 2005.
Conference Call
Microvision will host a conference call to discuss its third
quarter of 2006 financial results at 4:30 p.m. ET on Thursday,
November 2, 2006. Participants may join the conference call by dialing
(800) 901-5247 (for U.S. participants) ten minutes prior to the start
of the conference. International participants can dial (617) 786-4501.
The conference pass-code number is 62217278. Additionally, the call
will be broadcast over the Internet and can be accessed from the
company's web site at www.microvision.com. The webcast and information
needed to access the telephone replay will be available through the
same link following the conference call.
About Microvision: www.microvision.com
Headquartered in Redmond, Wash., Microvision Inc. is the world
leader in the development of high-resolution displays and imaging
systems based on the company's proprietary silicon micro-mirror
technology. The company's technology has applications in a broad range
of military, medical, industrial, professional and consumer products.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including those
relating to expected results, projections of future revenues, plans
for product development and commercialization, future commercial
arrangements, growth in demand, future product applications and
benefits, as well as statements containing words like "believes,"
"expects," "anticipates," and other similar expressions, are
forward-looking statements that involve a number of risks and
uncertainties. Factors that could cause actual results to differ
materially from those projected in the company's forward-looking
statements include the following: our ability to raise additional
capital when needed; risks related to Lumera's business and the market
for its equity, market acceptance of our technologies and products;
our financial and technical resources relative to those of our
competitors; our ability to keep up with rapid technological change;
our dependence on the defense industry and a limited number of
government development contracts; government regulation of our
technologies; our ability to enforce our intellectual property rights
and protect our proprietary technologies; the ability to obtain
additional contract awards; the timing of commercial product launches
and delays in product development; the ability to achieve key
technical milestones in key products; dependence on third parties to
develop, manufacture, sell and market our products; potential product
liability claims and other risk factors identified from time to time
in the company's SEC reports, including the Company's Annual Report on
Form 10-K filed with the SEC. Except as expressly required by the
federal securities laws, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, changes in circumstances or any other
reason.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
(Unaudited)
September 30, December 31,
2006 2005
-------------- -------------
Assets
Current Assets
Cash and cash equivalents $14,026 $6,860
Investment securities, available-for-
sale 560 -
Accounts receivable, net of allowances 777 1,380
Costs and estimated earnings in excess
of billings on uncompleted contracts 719 1,204
Inventory 1,030 759
Current restricted investments 3,045 1,856
Other current assets 1,556 1,512
-------------- -------------
Total current assets 21,713 13,571
Investment in Lumera - 3,582
Property and equipment, net 3,964 2,902
Restricted investments 1,268 1,000
Restricted investment in Lumera - 2,184
Other assets 43 124
-------------- -------------
Total assets $26,988 $23,363
============== =============
Liabilities, Mandatorily Redeemable
Convertible Preferred Stock and
Shareholders' Equity (Deficit)
Current Liabilities
Accounts payable $705 $2,328
Accrued liabilities 3,917 4,513
Billings in excess of costs and
estimated earnings on uncompleted
contracts 168 51
Liability associated with common stock
warrants 594 3,452
Current portion of notes payable 4,732 7,896
Current portion of capital lease
obligations 46 32
Current portion of long-term debt 58 22
-------------- -------------
Total current liabilities 10,220 18,294
Notes payable, net of current portion - 1,447
Liability associated with embedded
derivative feature - 1,368
Capital lease obligations, net of current
portion 143 105
Long-term debt, net of current portion 474 -
Deferred rent, net of current portion 1,631 1,492
-------------- -------------
Total liabilities 12,468 22,706
-------------- -------------
Commitments and contingencies - -
Mandatorily redeemable convertible
preferred stock - 4,166
-------------- -------------
Shareholders' Equity (Deficit)
Common stock at par value 40 25
Additional paid-in capital 245,075 212,993
Deferred compensation - (85)
Receivables from related parties, net (792) (792)
Accumulated other comprehensive
income 1,150 -
Accumulated deficit (230,953) (215,650)
-------------- -------------
Total shareholders' equity
(deficit) 14,520 (3,509)
-------------- -------------
Total liabilities, mandatorily
redeemable convertible preferred
stock and shareholders' equity
(deficit) $26,988 $23,363
============== =============
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
----------------------------------------
2006 2005 2006 2005
---------- --------- --------- ---------
Contract revenue $541 $2,180 $3,657 $9,244
Product revenue 282 1,150 1,544 2,793
---------- --------- --------- ---------
Total revenue 823 3,330 5,201 12,037
---------- --------- --------- ---------
Cost of contract revenue 343 1,647 2,493 5,143
Cost of product revenue 675 2,117 3,650 5,484
---------- --------- --------- ---------
Total cost of revenue 1,018 3,764 6,143 10,627
---------- --------- --------- ---------
Gross margin (195) (434) (942) 1,410
---------- --------- --------- ---------
Research and development
expense 2,855 1,963 7,316 5,884
Sales, marketing, general and
administrative expense 3,652 4,523 13,066 13,830
Gain on disposal of fixed
assets - - (198) -
---------- --------- --------- ---------
Total operating
expenses 6,507 6,486 20,184 19,714
---------- --------- --------- ---------
Loss from operations (6,702) (6,920) (21,126) (18,304)
Interest income 236 61 484 186
Interest expense (1,346) (997) (4,804) (2,067)
Gain on derivative
instruments, net 125 611 3,179 1,669
Loss on debt extinguishment - (3,313) - (3,313)
Other expense (5) (14) (16) (17)
---------- --------- --------- ---------
Net loss before equity
subsidiary transactions (7,692) (10,572) (22,283) (21,846)
Loss on investment in equity
subsidiary - (610) (290) (2,488)
Gain on sale of securities of
equity subsidiary - - 7,270 1,570
---------- --------- --------- ---------
Net loss (7,692) (11,182) (15,303) (22,764)
Less: Stated dividend on
mandatorily redeemable
convertible preferred stock - (62) (59) (236)
Accretion to par value
of preferred stock - (143) (138) (534)
Inducement for
conversion of
preferred stock - (1,184) (3,076) (1,184)
---------- --------- --------- ---------
Net loss available for common
shareholders $(7,692) $(12,571) $(18,576) $(24,718)
========== ========= ========= =========
Net loss per share - basic $(0.20) $(0.56) $(0.60) $(1.13)
========== ========= ========= =========
Weighted-average shares
outstanding - basic 38,437 22,637 30,997 21,875
========== ========= ========= =========
CONTACT: Microvision, Inc., Redmond
Jeff Wilson (investors), 425-882-6625
Matt Nichols (media), 425-882-6657