Exhibit 99.1
Immersion Corporation Reports Fourth Quarter 2006 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--March 1, 2007--Immersion
Corporation (NASDAQ:IMMR), a leading developer and licensor of touch
feedback technology, today announced its fourth quarter 2006 financial
results. Revenues were $8.6 million for the quarter ended December 31,
2006 compared to revenues of $6.9 million for the fourth quarter of
2005. Net loss on a Generally Accepted Accounting Principles (GAAP)
basis for the fourth quarter of 2006 was $2.0 million, or $0.08 loss
per share, an improvement of 33 percent compared to a net loss on a
GAAP basis of $3.0 million, or $0.12 loss per share, for the fourth
quarter of 2005. Net loss for the three months ended December 31, 2006
included stock-based compensation expense of $796,000, equal to $0.03
loss per share. Net loss for the three months ended December 31, 2005
did not include any stock-based compensation expense. As of December
31, 2006, Immersion had cash and cash equivalents totaling $32.0
million as compared to $29.0 million as of September 30, 2006.
Revenues were $27.9 million for the year ended December 31, 2006
compared to revenues of $24.3 million for the year ended December 31,
2005. Net loss on a GAAP basis for the year ended December 31, 2006
was $10.4 million, or $0.42 loss per share, an improvement of 20
percent compared to a net loss on a GAAP basis of $13.1 million, or
$0.54 loss per share, for the year ended December 31, 2005.
In a separate press release issued today, Immersion and Sony
Computer Entertainment announced that the companies have agreed to
conclude their patent litigation at the U.S. Court of Appeals for the
Federal Circuit and have entered into a new business agreement to
explore the inclusion of Immersion technology in PlayStation format
products.
"The fourth quarter and 2006 total revenues were at new record
levels for Immersion," said Immersion CEO Victor Viegas. "In our
medical business, revenue increased 62% over the fourth quarter of
2005 and 47% for the year, led by the sales of our medical simulator
products."
Immersion achieved another major milestone in its Mobility
business in December 2006 with the launch of the first commercial
phone with a VibeTonz(R)-enabled touchscreen, the Samsung SCH-W559
from China Unicom. Since that time, Samsung has released another
VibeTonz-enabled touchscreen phone in China, and in February at the
3GSM World Congress in Barcelona, announced a new VibeTonz-enabled
touchscreen model for Europe, the Samsung Ultra Smart F700. The
VibeTonz System supplies tactile feedback in response to touchscreen
presses, allowing onscreen buttons to seem as though they press and
release.
"Our VibeTonz system can act as an enabling platform for
cost-effectively improving the mobile-device user experience by
enriching music, video, messaging, games, and now touchscreens,"
concluded Viegas.
Immersion will host a conference call with company management on
Thursday, March 1, 2007, at 5:00 p.m. Eastern time to discuss
operating results for the fourth quarter and year ended December 31,
2006. 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 6600266. The call will
be archived and available for replay until March 9, 2007, by dialing
+1 800.642.1687 and entering confirmation number 6600266. 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 March
1, 2008.
About Immersion (www.immersion.com)
Founded in 1993, Immersion Corporation is a recognized leader in
developing, licensing, and marketing digital touch technology and
products. Using Immersion's advanced touch feedback technology
(www.immersion.com/corporate/products/), electronic user interfaces
can be made more productive, compelling, entertaining, or safer.
Immersion's technology is deployed across automotive, entertainment,
industrial controls, medical training, mobility, and three-dimensional
simulation markets. Immersion's patent portfolio includes over 600
issued or pending patents in the U.S. 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 possible inclusion of
vibro-tactile or force feedback technologies in peripheral devices for
consumer gaming, or sales of vibro-tactile or force feedback
peripheral devices for consumer gaming; any statements regarding
consumer response that may occur as a result of having touch feedback
in peripheral devices; any statements concerning consumer or market
acceptance of simulator products for medical training, continuing
education or evaluation; adoption and market acceptance of
touch-enabled mobile phones or consumer and market acceptance of force
feedback products in general; future development of force feedback
products; 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; 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 ongoing litigation.
For a more detailed discussion of these factors and other factors
that could cause Immersion's actual results to vary materially,
interested parties should review the risk factors listed in
Immersion'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 Immersion's beliefs and predictions as of
the date of this release. Immersion 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 Balance Sheets
(In thousands)
December 31, December 31,
2006 2005
(Unaudited) (1)
------------ ------------
ASSETS
Cash and cash equivalents $32,012 $28,171
Accounts receivable, net 5,153 4,650
Inventories, net 2,639 2,655
Prepaid expenses and other current assets 1,179 1,131
------------ ------------
Total current assets 40,983 36,607
Property and equipment, net 1,647 1,366
Intangibles and other assets, net 7,385 6,787
------------ ------------
TOTAL ASSETS $50,015 $44,760
============ ============
LIABILITIES
Accounts payable $2,334 $2,179
Accrued compensation 1,526 1,193
Other accrued liabilities 1,750 1,604
Deferred revenue and customer advances 1,716 2,741
Current portion of long-term debt - 5
------------ ------------
Total current liabilities 7,326 7,722
Long-term debt 18,122 17,490
Long-term liabilities and deferred revenue 32,559 21,343
Long-term customer advance from Microsoft 15,000 15,000
------------ ------------
Total liabilities 73,007 61,555
STOCKHOLDERS' DEFICIT (22,992) (16,795)
------------ ------------
TOTAL LIABILITIES &
STOCKHOLDERS' DEFICIT $50,015 $44,760
============ ============
(1) Derived from Immersion's annual audited consolidated financial
statements.
Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Years
Ended December 31, Ended December 31,
2006 2005 2006 2005
--------- -------- --------- ---------
Revenues:
Royalty and license $2,356 $2,615 $7,304 $8,888
Product sales 5,539 3,434 17,083 12,762
Development contracts and
other 714 823 3,466 2,627
--------- -------- --------- ---------
Total revenues 8,609 6,872 27,853 24,277
--------- -------- --------- ---------
Costs and expenses:
Cost of product sales
(exclusive of amortization
of intangibles shown
separately below) 2,056 1,638 7,193 6,446
Sales and marketing 3,455 3,073 12,609 11,649
Research and development 2,184 1,520 7,609 6,003
General and administrative 2,506 3,081 10,076 10,638
Amortization of intangibles 313 206 969 1,256
Litigation settlement (300) - (1,650) -
Restructuring - - - 185
------------------ --------- ---------
Total costs and
expenses 10,214 9,518 36,806 36,177
--------- -------- --------- ---------
Operating loss (1,605) (2,646) (8,953) (11,900)
Interest and other income
(expense), net (364) (271) (1,327) (1,027)
--------- -------- --------- ---------
Loss before provision for income
taxes (1,969) (2,917) (10,280) (12,927)
Provision for income taxes (13) (48) (144) (158)
--------- -------- --------- ---------
Net loss $(1,982) $(2,965) $(10,424) $(13,085)
========= ======== ========= =========
Basic and diluted net loss per
share $(0.08) $(0.12) $(0.42) $(0.54)
--------- -------- --------- ---------
Shares used in calculating basic
and diluted net loss per share 24,662 24,244 24,556 24,027
--------- -------- --------- ---------
Immersion Corporation
Additional Financial Information
Effect of Non Cash Stock-Based Compensation included within Condensed
Consolidated Statement of Operations
(In thousands)
(Unaudited)
Three Months
ended
Non Cash December 31,
Three Months Stock-Based 2006, Three Months
ended Compensation exclusive of ended
December 31, included Non Cash December 31,
2006, as within Stock-Based 2005, as
reported expense Compensation reported
------------ ------------ ------------- ------------
Costs and expenses
Cost of product
sales $2,056 $16 $2,040 $1,638
Sales and
marketing 3,455 343 3,112 3,073
Research and
development 2,184 120 2,064 1,520
General and
administrative 2,506 317 2,189 3,081
Other, net 13 - 13 206
------------ ------------ ------------- ------------
Total costs and
expenses $10,214 $796 $9,418 $9,518
============ ============ ============= ============
Year
ended
Non Cash December 31,
Year Stock-Based 2006, Year
ended Compensation exclusive of ended
December 31, included Non Cash December 31,
2006, as within Stock-Based 2005, as
reported expense Compensation reported
------------ ------------ ------------- ------------
Costs and expenses
Cost of product
sales $7,193 $70 $7,123 $6,446
Sales and
marketing 12,609 1,230 11,379 11,649
Research and
development 7,609 492 7,117 6,003
General and
administrative 10,076 1,145 8,931 10,638
Other, net (681) - (681) 1,441
------------ ------------ ------------- ------------
Total costs and
expenses $36,806 $2,937 $33,869 $36,177
============ ============ ============= ============
We adopted Statement of Financial Accounting Standards No. 123R
"Share-Based Payment" effective January 1, 2006 and are required to
recognize expense on our share-based payments from January 1, 2006.
Our Consolidated Statement of Operations prior to January 1, 2006
does not include expense associated with share-based payments. We
have included the above information to assist in comparing our
operating expenses to prior periods.
CONTACT: Immersion Corporation
Stephen Ambler, +1 408-467-1900
invest@immersion.com