EX-99.01 2 d810945dex9901.htm EX-99.01 EX-99.01

Exhibit 99.01

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Immersion Corporation Reports Third Quarter 2014 Results

Posts Record September Quarter Revenue and Seventh Consecutive Quarter of Profitability;

Increases Stock Repurchase Authorization

SAN JOSE, Calif., October 30, 2014 — Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of touch feedback technology, today reported financial results for the third quarter ended September 30, 2014.

Total revenues for the third quarter of 2014 were $12.1 million, an increase of 6% compared to $11.3 million for the third quarter of 2013. Royalty and license revenues of $11.7 million for the third quarter of 2014 were up 7% from the same period last year. Net income for the third quarter of 2014 was $1.1 million, or $0.04 per diluted share. This compares to net income of $599,000, or $0.02 per diluted share, for the third quarter of 2013.

Non-GAAP net income for the third quarter of 2014 was $2.2 million, or $0.08 per diluted share, compared with non-GAAP net income of $1.8 million, or $0.06 per diluted share, for the third quarter of 2013. As of September 30, 2014, Immersion’s cash, cash equivalents, and short-term investments were $63.1 million, compared to $71.1 million as of December 31, 2013. During the September quarter, the Company used $5.0 million to buy back approximately 535,000 shares of its common stock under its stock repurchase program. The Company also announced that its board of directors has increased the authorization for stock repurchases by $30 million.

Management Commentary

“We are pleased to report record September quarter revenues that grew 6% year-over-year and our seventh consecutive quarter of profitability. As we close out the year, we expect our overall 2014 revenue to increase by 7% to 14% over the prior year, which results in a projected revenue range of $51 million to $54 million and anticipated 2014 non-GAAP net income of $8 million to $12 million,” said Vic Viegas, chief executive officer of Immersion. “During the third quarter, we made strong headway in strengthening our customer engagements to reflect the increasing value of Immersion haptics, deploying our technology and unique haptic experiences in new flagship products in the mobile market and launching the first commercial tactile mobile advertisement for our emerging content business. We remain extremely optimistic regarding our long-term growth prospects as our innovations, technology and IP continue to gain momentum.”


Business Highlights

Immersion is developing innovative new software solutions to support its expanding market opportunity while continuing to empower premier OEMs with the technology to offer differentiated products and consumer experiences. Recent business developments include:

 

  The launch of the company’s TouchSense® Engage, its groundbreaking software solution for enhancing mobile video with tactile effects. In conjunction with this announcement, SHOWTIME has launched the first ever haptically-enabled ad trailer, using Immersion’s software technology, for its award winning drama series, HOMELAND, available in the SHOWTIME ANYTIME Android app.

 

  A new agreement with long-time licensee LG Electronics, Inc. for a multi-year worldwide license for Immersion’s TouchSense® software and Basic Haptics IP.

 

  Extending its license agreement with Samsung, for the use of TouchSense® and Integrator products in smartphones and other mobile devices, to the company’s printing solutions business unit.

Conference Call Information

Immersion will host a conference call with company management on Thursday, October 30, 2014 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss financial results for the third quarter ended September 30, 2014. To participate on the live call, analysts and investors should dial +1 888-378-0320 (conference ID: 6277733) at least ten minutes prior to the start of the call. A live and archived webcast of the conference call will also be available for 90 days within the investor relations section of Immersion’s corporate Web site at www.immersion.com.

About Immersion (www.immersion.com)

Founded in 1993, Immersion (NASDAQ: IMMR) is the leading innovator in haptic technology; the company’s touch feedback solutions deliver a more compelling sense of the digital world. Using Immersion’s high-fidelity haptic systems, partners can transform user experiences with unique and customizable touch feedback effects; excite the senses in games, videos and music; restore “mechanical” feel by providing intuitive and unmistakable confirmation; improve safety by overcoming distractions while driving; provide realistic touch feedback when performing robotic medical procedures and training simulations; and expand usability when audio and visual feedback are ineffective. Immersion’s TouchSense technology provides haptics in mobile phone, automotive, gaming, medical and consumer electronics products from world-class companies. With over 1,800 issued or pending patents in the U.S. and other countries, Immersion helps bring the digital universe to life. Hear what we have to say at blog.immersion.com.


Use of Non-GAAP Financial Measures

Immersion reports all financial information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Immersion discloses this non-GAAP information, such as Non-GAAP Net Income and Non-GAAP Net Income per diluted common share, because it is useful in understanding the company’s performance as it excludes certain non-cash expenses and other special charges that many investors feel may obscure the company’s true operating performance. Likewise, management uses these non-GAAP financial measures to manage and assess the profitability of its business. Investors are encouraged to review the related GAAP financial measures.

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, but not limited to, the statements regarding market opportunities and market awareness and future growth and our expectation for revenues and and non-GAAP net income for 2014.

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, potential and actual claims and proceedings, including litigation involving Immersion’s intellectual property; delay in or failure to achieve commercial demand for Immersion’s or its licensees’ products; a delay in or failure to achieve the acceptance of force feedback as a critical user experience; unexpected difficulties in monetizing the patent portfolio; the commercial success of applications or devices into which Immersion’s technology is licensed; potentially lengthy sales cycles and design processes; unanticipated difficulties and challenges encountered in development efforts; unexpected costs; failure to retain key personnel; competition; the inherently uncertain nature of litigation which makes future outcomes and timing difficult to predict; the impact of global economic conditions and other factors. Many of these risks and uncertainties are beyond the control of Immersion.

For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in Immersion’s Annual Report on Form 10-K for 2013 and its most recent Quarterly Report on Form 10-Q which are 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, TouchSense, HD Haptics and Reverb are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners.

The use of the word “partner” or “partnership” in this press release does not mean a legal partner or legal partnership.

(IMMR – C)

###


Immersion Corporation

Condensed Consolidated Balance Sheets

(In thousands)

 

     September 30,
2014
(Unaudited)
     December 31,
2013
(1)
 

ASSETS

     

Cash and cash equivalents

   $ 10,139       $ 14,136   

Short-term investments

     52,989         56,976   

Accounts and other receivables, net

     2,992         598   

Deferred income taxes

     7,784         7,784   

Prepaid expenses and other current assets

     1,085         690   
  

 

 

    

 

 

 

Total current assets

     74,989         80,184   

Property and equipment, net

     1,280         944   

Deferred income tax assets

     27,527         29,066   

Intangibles and other assets, net

     299         381   
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 104,095       $ 110,575   
  

 

 

    

 

 

 

LIABILITIES

     

Accounts payable

   $ 1,019       $ 682   

Accrued compensation

     1,665         4,680   

Other current liabilities

     1,483         1,653   

Deferred revenue

     13,007         8,920   
  

 

 

    

 

 

 

Total current liabilities

     17,174         15,935   

Long-term deferred revenue

     9,018         13,441   

Other long-term liabilities

     451         528   
  

 

 

    

 

 

 

TOTAL LIABILITIES

     26,643         29,904   

STOCKHOLDERS’ EQUITY

     77,452         80,671   
  

 

 

    

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

   $ 104,095       $ 110,575   
  

 

 

    

 

 

 

 

(1) Derived from Immersion’s annual audited consolidated financial statements, as adjusted for change in accounting method.


Immersion Corporation

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

 

    

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
     2014     2013     2014     2013  

Revenues:

        

Royalty and license

   $ 11,714      $ 10,951      $ 38,473      $ 34,580   

Product sales

     0        12        0        44   

Development, services, and other

     337        379        845        779   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     12,051        11,342        39,318        35,403   
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

        

Cost of revenues

     104        111        325        386   

Sales and marketing

     2,238        2,151        7,638        6,692   

Research and development

     2,718        2,640        8,782        7,876   

General and administrative

     5,274        5,606        17,745        17,433   

Amortization of intangibles

     15        20        55        60   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     10,349        10,528        34,545        32,447   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     1,702        814        4,773        2,956   

Interest and other income (expense)

     (30     42        107        80   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for income taxes

     1,672        856        4,880        3,036   

Provision for income taxes

     (599     (257     (1,774     (284
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 1,073      $ 599      $ 3,106      $ 2,752   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per share

   $ 0.04      $ 0.02      $ 0.11      $ 0.10   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculating basic net income per share

     28,505        28,558        28,420        28,047   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per share

   $ 0.04      $ 0.02      $ 0.11      $ 0.09   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calculating diluted net income per share

     29,351        29,653        29,355        29,205   
  

 

 

   

 

 

   

 

 

   

 

 

 


Immersion Corporation

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(In thousands, except per share amounts)

(Unaudited)

 

    

Three Months

Ended September 30,

    

Nine Months

Ended September 30,

 
     2014      2013      2014      2013  

GAAP Net Income

   $ 1,073       $ 599       $ 3,106       $ 2,752   

Stock-based compensation

     1,131         1,249         4,058         3,438   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Net Income

   $ 2,204       $ 1,848       $ 7,164       $ 6,190   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Earnings Per Share

   $ 0.08       $ 0.06       $ 0.24       $ 0.21   
  

 

 

    

 

 

    

 

 

    

 

 

 

Shares used in calculating Non-GAAP Earnings per Share

     29,351         29,653         29,355         29,205