Exhibit 99.1
Immersion Corporation Reports Third Quarter 2007 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 1, 2007--Immersion
Corporation (NASDAQ:IMMR), a leading developer and licensor of touch
feedback technology, today announced its third quarter 2007 financial
results. Revenues were $9.8 million for the quarter ended September
30, 2007 or 49% higher when compared to revenues of $6.6 million for
the third quarter of 2006.
Net income for the third quarter was $493,000 compared to a net
loss of $(3.2) million for the third quarter of 2006. Diluted earnings
per share were $0.02 for the quarter compared to $(0.13) loss per
share for the third quarter of 2006.
Revenues were $24.8 million for the nine months ended September
30, 2007 compared to revenues of $19.2 million for the first nine
months of 2006. Net income for the first nine months of 2007 was
$123.1 million, or $3.93 diluted earnings per share, compared to a net
loss of $(8.4) million, or $(0.34) loss per share, for the first nine
months of 2006.
As of September 30, 2007, Immersion had cash, cash equivalents,
and short-term investments totaling $137.2 million compared to $135.5
million as of June 30, 2007.
"Immersion has now completed three consecutive profitable quarters
with very strong year-to-date revenue growth compared to the first
nine months of 2006. Revenue from our Medical business grew 22%, Touch
Interface Products 32%, and Gaming 47%. We also reached a significant
level of third-quarter revenue of $930,000 in our Mobility business,"
said Victor Viegas, Immersion CEO, president, and chairman of the
board.
"We recently completed a strategic plan for significantly growing
revenue and shareholder value, targeting growth opportunities in three
areas: medical simulators, mobile devices, and tactile feedback for
touchscreens," continued Viegas. "The plan involves product and
technology development, sales and marketing initiatives, financial
plans, and organizational changes.
"Over the past five years, the Immersion team and I have built and
defended a strong intellectual property portfolio, invested in markets
and technologies that have become long-term growth opportunities, and
steered the company to profitability. As the leading company in
haptics technology, Immersion is positioned for substantial growth as
markets increasingly recognize the value of haptics. Now is the right
time to bring in additional management strength in sales and marketing
to drive our growth initiatives while I continue to provide my
expertise in licensing, intellectual property, and business
negotiations. Therefore, the Immersion Board of Directors and I are
announcing several organizational changes," concluded Viegas.
Effective October 31, 2007, Victor Viegas, currently CEO,
president, and director of Immersion was elected chairman of the
board, and Jack Saltich, who has served on the board since January
2002, was elected lead independent director in accordance with
corporate governance best practices. Mr. Viegas continues as CEO and
president while the Immersion Board of Directors conducts an open
search for a new CEO.
In addition, the company will add a new board member to strengthen
experience in the mobile communications industry. A search has begun
for candidates with sales and marketing experience in the wireless
operator and mobile phone market.
"These changes help position Immersion for its next stage of
growth, one based on building strong businesses from its solid
foundation of intellectual property, technology, and product
solutions," said Jack Saltich, lead director. "As the company
continues to benefit from Vic's leadership and financial background as
chairman of the board, it will also benefit from a new CEO and a new
board member who will each bring additional skills, strong sales and
marketing background, and experience in one or more of our target
markets."
In a separate press release today, Immersion announced that its
board of directors authorized the repurchase of up to $50 million of
the company's common stock as part of its strategic financial plan.
Immersion will host a conference call with company management on
Thursday, November 1, 2007 at 5:00 p.m. Eastern time to discuss
operating results for the third quarter ended September 30, 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 6600963. The call will be archived
and available for replay until November 8, 2007, by dialing +1
800.642.1687 and entering confirmation number 6600963. 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 November
2, 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, profitability targets or other
financial matters; any statements of the plans, strategies, and
objectives of management for future operations; any statements
regarding an action or inaction regarding repurchase of company common
stock; any statements concerning the impact of organizational changes
or the timeline for implementing those changes; any statements
regarding consumer or market acceptance of touch 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-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 and the Immersion logo are trademarks of Immersion
Corporation in the U.S. and other countries.
Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2007 2006 2007 2006
--------- --------- ---------- --------
Revenues:
Royalty and license $ 2,904 $ 1,336 $ 7,862 $ 4,948
Product sales 5,420 4,261 14,299 11,544
Development contracts and
other 1,479 962 2,651 2,752
--------- --------- ---------- --------
Total revenues 9,803 6,559 24,812 19,244
--------- --------- ---------- --------
Costs and expenses:
Cost of product sales
(exclusive of amortization
of intangibles shown
separately below) 2,563 1,980 6,533 5,137
Sales and marketing 2,825 3,068 8,558 9,154
Research and development 2,482 1,894 7,538 5,425
General and administrative 2,781 2,463 9,162 7,570
Amortization of intangibles 243 227 739 656
Litigation conclusions and
patent license - (300) (134,900) (1,350)
--------- --------- ---------- --------
Total costs and
expenses 10,894 9,332 (102,370) 26,592
--------- --------- ---------- --------
Operating income (loss) (1,091) (2,773) 127,182 (7,348)
Interest and other income
(expense), net 1,645 (340) 3,013 (963)
--------- --------- ---------- --------
Income (loss) before provision
for income taxes 554 (3,113) 130,195 (8,311)
Provision for income taxes (61) (44) (7,093) (131)
--------- --------- ---------- --------
Net income (loss) $ 493 $ (3,157) $ 123,102 $(8,442)
========= ========= ========== ========
Basic net income (loss) per
share $ 0.02 $ (0.13) $ 4.60 $ (0.34)
--------- --------- ---------- --------
Shares used in calculating
basic net income (loss) per
share 28,630 24,590 26,768 24,519
--------- --------- ---------- --------
Fully diluted net income
(loss) per share $ 0.02 $ (0.13) $ 3.93 $ (0.34)
--------- --------- ---------- --------
Shares used in calculating
fully diluted net income
(loss) per share 31,399 24,590 31,408 24,519
--------- --------- ---------- --------
Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2007 2006
(Unaudited) (1)
-------------- --------------
ASSETS
Cash and cash equivalents $ 105,459 $ 32,012
Short-term investments 31,782 -
Accounts receivable, net 5,277 5,153
Inventories, net 3,077 2,639
Deferred income taxes 4,267 -
Prepaid expenses and other current
assets 798 1,179
-------------- --------------
Total current assets 150,660 40,983
Property and equipment, net 2,122 1,647
Intangibles and other assets, net 9,172 7,385
-------------- --------------
TOTAL ASSETS $ 161,954 $ 50,015
============== ==============
LIABILITIES
Accounts payable $ 1,511 $ 2,334
Accrued compensation 2,083 1,526
Income taxes payable 662 -
Other accrued liabilities 1,926 1,750
Deferred revenue and customer advances 5,302 1,716
-------------- --------------
Total current liabilities 11,484 7,326
Long-term debt - 18,122
Long-term liabilities and deferred
revenue 14,364 32,559
Long-term customer advance from
Microsoft - 15,000
-------------- --------------
Total liabilities 25,848 73,007
STOCKHOLDERS' EQUITY (DEFICIT) 136,106 (22,992)
-------------- --------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
(DEFICIT) $ 161,954 $ 50,015
============== ==============
(1) Derived from Immersion's annual audited consolidated financial
statements.
CONTACT: Immersion Corporation
Stephen Ambler, +1 408-467-1900
invest@immersion.com