EX-99.1 2 a4871708-ex991.txt IMMERSION CORPORATION -- PRESS RELEASE EXHIBIT 99.1 Immersion Corporation Reports First Quarter 2005 Financial Results SAN JOSE, Calif.--(BUSINESS WIRE)--April 25, 2005--Immersion Corporation (Nasdaq:IMMR), a leading developer and licensor of touch feedback technology, today announced revenues of $5.8 million for the quarter ended March 31, 2005 compared to revenues of $5.4 million for the first quarter of 2004. Net loss on a Generally Accepted Accounting Principles (GAAP) basis for the first quarter of 2005 was $3.1 million, or $0.13 per share, compared to a net loss of $6.2 million, or $0.30 per share, for the first quarter of 2004. As of March 31, 2005, Immersion had cash and cash equivalents totaling $26.9 million as compared to $25.5 million as of December 31, 2004. "In April, we reached a major milestone in our mobility business," said Vic Viegas, Immersion CEO. "Verizon Wireless and the two leading mobile service operators in Korea, SK Telecom and KTF, released Samsung mobile phones with Immersion's VibeTonz(TM) technology. We also announced content relationships with American Greetings Interactive, Indiagames, and Pulse Interactive. All of these companies develop content for multiple mobile phone platforms and distribute it to many of the world's largest mobile service operators. All have produced VibeTonz-enabled downloadable ringtones or games soon to be available on Verizon's Get It Now service. "On March 24, 2005, the U.S. District Court for the Northern District of California entered a judgment in favor of Immersion in our patent infringement suit against Sony Computer Entertainment, Inc. and Sony Computer Entertainment of America, Inc. (Sony). This judgment awarded Immersion $82.0 million in past damages plus pre-judgment interest in the amount of $8.7 million, for a total of $90.7 million. We remain confident of our position in the anticipated appeals process. Our cash balance puts us in a stable position for both defending our intellectual property and investing in new growth opportunities," concluded Viegas. Immersion will host a conference call with company management on Monday, April 25, 2005, at 5:00 p.m. EDT to discuss operating results for the first quarter ended March 31, 2005. A question and answer session will follow. To listen to the call, dial 800-374-2366 approximately five minutes prior to the start of the call and enter confirmation number 2696092. The call will be archived and available for replay until April 29, 2005, by dialing 800-642-1687 and entering confirmation number 2696092. 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 April 29, 2006. 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 and its wholly-owned subsidiaries hold more than 270 issued patents worldwide. 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; 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 or 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. 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-K, 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, 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 Ended March 31, 2005 2004 -------- -------- Revenues: Royalty and license $2,471 $1,831 Product sales 2,695 2,444 Development contracts and other 606 1,080 -------- -------- Total revenues 5,772 5,355 -------- -------- Costs and expenses: Cost of product sales (exclusive of amortization of intangibles shown separately below) 1,389 1,221 Sales and marketing 2,819 2,462 Research and development 1,507 1,889 General and administrative 2,286 4,878 Amortization of intangibles and deferred stock compensation 369 513 Restructuring 185 0 -------- -------- Total costs and expenses 8,555 10,963 -------- -------- Operating loss (2,783) (5,608) Interest and other income (expense), net (285) (560) -------- -------- Loss before provision for income taxes (3,068) (6,168) Provision for income taxes (65) 0 -------- -------- Net loss ($3,133) ($6,168) ======== ======== Basic and diluted net loss per share ($0.13) ($0.30) -------- -------- Shares used in calculating basic and diluted net loss per share 23,663 20,791 -------- -------- Immersion Corporation Condensed Consolidated Balance Sheets (In thousands) March 31, December 31, 2005 2004 (Unaudited) (1) ---------- ---------- ASSETS Cash and cash equivalents $ 26,913 $ 25,538 Accounts receivable, net 5,426 5,435 Inventories 1,935 1,805 Prepaid expenses and other current assets 1,667 1,280 ---------- ---------- Total current assets 35,941 34,058 Property and equipment, net 1,062 1,174 Intangibles and other assets, net 6,896 7,018 ---------- ---------- TOTAL ASSETS $ 43,899 $ 42,250 =========== ============ LIABILITIES Accounts payable $ 1,209 $ 4,038 Accrued compensation 1,528 1,499 Other accrued liabilities 1,770 2,002 Deferred revenue and customer advances 4,287 3,420 Current portion of long-term debt 11 11 ---------- ---------- Total current liabilities 8,805 10,970 Long-term debt 16,980 16,917 Long-term liabilities and deferred revenue 10,999 5,330 Long-term customer advance from Microsoft 15,000 15,000 ---------- ---------- Total liabilities 51,784 48,217 STOCKHOLDERS' EQUITY/(DEFICIENCY) (7,885) (5,967) ---------- ---------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY/(DEFICIENCY) $ 43,899 $ 42,250 =========== ============ (1) Derived from the Company's annual audited financial statements. CONTACT: Immersion Corporation Stephen Ambler, 408-467-1900 invest@immersion.com