Exhibit 99.1
Immersion Corporation Reports First Quarter 2007 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--May 3, 2007--Immersion
Corporation (NASDAQ:IMMR), a leading developer and licensor of touch
feedback technology, today announced its first quarter 2007 financial
results. Revenues were $6.4 million for the quarter ended March 31,
2007 compared to revenues of $6.0 million for the first quarter of
2006.
Operating income for the first quarter of 2007 was $131.0 million,
which included $134.9 million of income arising from Litigation
conclusions and patent license income as well as stock-based
compensation expense of $634,000. In the first quarter of 2006, the
operating loss was $2.5 million, which included $650,000 of income
arising from a litigation settlement and stock-based compensation
expense of $723,000.
Net income for the first quarter was $122.4 million compared to a
net loss of $2.9 million for the first quarter of 2006. Diluted
earnings per share were $4.13 for the quarter compared to $0.12 loss
per share for the first quarter of 2006.
As of March 31, 2007, Immersion had cash and cash equivalents
totaling $137.6 million compared to $32.0 million as of December 31,
2006.
During the quarter, Immersion and Sony Computer Entertainment
concluded their patent litigation at the U.S. Court of Appeals for the
Federal Circuit and entered into a new business agreement. In total,
Immersion will receive a minimum of $152.2 million through the
conclusion of the litigation and the new business agreement. Immersion
has recorded $119.9 million of this sum as Litigation conclusions and
patent license income, and $107,000 of this sum as revenue during the
quarter, and will record $29.9 million as revenue and $2.3 million as
interest income in future periods. In addition, Immersion recorded
$15.0 million as Litigation conclusions and patent license income upon
release of its long-term customer advance from Microsoft, which occurs
as a result of Immersion's determination that the conclusion of its
litigation with Sony does not trigger any payment obligation to
Microsoft under its agreements.
Immersion will be able to utilize the majority of its tax net
operating loss carryforwards against the income recorded in the
quarter. Provision for income tax expense for the quarter was $8.5
million, an effective tax rate of 6.5%.
Immersion will host a conference call with company management on
Thursday, May 3, 2007, at 5:00 p.m. Eastern time to discuss operating
results for the first quarter ended March 31, 2007. 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 6600662. The call will be archived and
available for replay until May 10, 2007, by dialing +1 800.642.1687
and entering confirmation number 6600662. 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 May 3, 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 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 and prospective
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-K, 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 and the Immersion logo 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
Ended March 31,
2007 2006
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Revenues:
Royalty and license $ 2,211 $ 1,910
Product sales 3,590 3,366
Development contracts and other 613 756
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Total revenues 6,414 6,032
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Costs and expenses:
Cost of product sales (exclusive of
amortization of intangibles shown
separately below) 1,543 1,355
Sales and marketing 2,703 3,077
Research and development 2,543 1,729
General and administrative 3,259 2,811
Amortization of intangibles 254 210
Litigation conclusions and patent
license (134,900) (650)
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Total costs and expenses (124,598) 8,532
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Operating income (loss) 131,012 (2,500)
Interest and other income (expense), net (45) (304)
----------- -------------
Income (loss) before provision for income
taxes 130,967 (2,804)
Provision for income taxes (8,534) (102)
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Net income (loss) $ 122,433 $ (2,906)
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Basic net income (loss) per share $ 4.83 $ (0.12)
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Shares used in calculating basic net
income (loss) per share 25,343 24,419
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Fully diluted net income (loss) per share $ 4.13 $ (0.12)
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Shares used in calculating fully diluted
net income (loss) per share 29,683 24,419
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Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2007 2006
(Unaudited) (1)
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ASSETS
Cash and cash equivalents $ 137,586 $ 32,012
Accounts receivable, net 3,261 5,153
Inventories, net 3,287 2,639
Deferred income taxes 4,267 -
Prepaid expenses and other current assets 1,071 1,179
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Total current assets 149,472 40,983
Property and equipment, net 1,597 1,647
Intangibles and other assets, net 8,758 7,385
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TOTAL ASSETS $ 159,827 $ 50,015
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LIABILITIES
Accounts payable $ 1,352 $ 2,334
Accrued compensation 1,673 1,526
Income taxes payable 11,035 -
Other accrued liabilities 2,134 1,750
Deferred revenue and customer advances 4,819 1,716
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Total current liabilities 21,013 7,326
Long-term debt 18,280 18,122
Long-term liabilities and deferred revenue 12,983 32,559
Long-term customer advance from Microsoft - 15,000
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Total liabilities 52,276 73,007
STOCKHOLDERS' EQUITY (DEFICIT) 107,551 (22,992)
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TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY (DEFICIT) $ 159,827 $ 50,015
=========== ============
(1) Derived from Immersion's annual audited consolidated
financial statements.
CONTACT: Immersion Corporation
Stephen Ambler, +1-408-467-1900
invest@immersion.com