Immersion Corporation Reports Record Revenues in First Quarter 2013

  Immersion Corporation Reports Record Revenues in First Quarter 2013

Business Wire

SAN JOSE, Calif. -- May 2, 2013

Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of
touch feedback technology, today reported financial results for the first
quarter ended March 31, 2013.

Total revenues for the first quarter of 2013 were $13.9 million, an increase
of 43% compared to $9.7 million for the first quarter of 2012 and Immersion’s
highest total ever for a quarter. Royalty and license revenues of $13.6
million for the first quarter of 2013 were up 50% from the same period last
year. Net income for the first quarter of 2013 was $2.3 million, or $ 0.08 per
share. This compares to a net loss of $(219,000), or $(0.01) per share, for
the first quarter of 2012. Adjusted EBITDA for the first quarter of 2013 was
$4.0 million, compared to $1.6 million in the first quarter of 2012.

“I am very pleased to report record revenues in the first quarter, which
contributed to strong profitability and illustrates the scalability of our
licensing business model,” said Vic Viegas, chief executive officer of
Immersion. “With our recent successes in securing new or expanded Basic
Haptics license agreements with key customers, we are now poised to capture a
much larger share of the rapidly expanding worldwide smartphone market, with
Basic Haptics licensing acting as a pricing floor for lower cost devices, and
our more advanced technology software solutions powering premium smartphones.
During the quarter, we launched two new innovative product solutions that
expand the value proposition for advanced haptics within mobile devices. We
also continue to see meaningful interest for our technology within gaming,
automotive, medical and evolving markets.”

“As we indicated mid-quarter, based on our current outlook we expect revenues
for 2013 to be in the range of $44 million to $48 million, an increase of
between 37% and 49% over last year’s revenues of $32.2 million. Adjusted
EBITDA for 2013 is anticipated to be in the range of $12 million to $15
million,” concluded Mr. Viegas.

As of March 31, 2013, Immersion’s cash, cash equivalents, and short-term
investments were $64.2 million, compared to $43.5 million as of December 31,
2012.

Corporate Highlights

Recently:

  *Immersion entered into a multi-year license agreement with Samsung
    Electronics Co., Ltd. for its smartphones and other mobile devices.
  *Immersion terminated the International Trade Commission’s investigation of
    HTC Corporation for infringement of certain of Immersion's patents and
    instead is pursuing its action in the U.S. District Court, enabling it to
    prosecute its claim against HTC for damages immediately.
  *Leading OEMs have adopted Immersion’s TouchSense 3000 solution within
    flagship mobile devices, including Samsung’s Galaxy S4 smartphone and Note
    8.0 tablet, and LG’s Optimus G Pro smartphone.
  *Pantech has implemented Immersion’s TouchSense 5000 solution with HD
    Haptics in the VEGA No. 6 smartphone for the domestic Korea market.

Conference Call Information

Immersion will host a conference call with company management on Thursday, May
02, 2013 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss
financial results for the first quarter ended March 31, 2013. To participate
on the live call, analysts and investors should dial +1 877-941-4774 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 or performing a
medical procedure; 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 1,300 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 because it is useful in understanding the company’s
performance as it excludes non-cash 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 our expectations relating to the scalability of our
licensing business model, our expectations relating to capturing a larger
share of the rapidly expanding worldwide smartphone market and our expectation
that revenues for 2013 will be in the range of $44 million to $48 million and
adjusted EBITDA for 2013 will be in the range of $12 million to $15 million.

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 2012 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, 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)
                                                            
                                               March 31,        December 31,
                                               2013             2012
                                               (Unaudited)      (1)
ASSETS
Cash and cash equivalents                      $    30,223      $   4,558
Short-term investments                              33,994          38,988
Accounts receivable, net                            3,342           1,878
Inventories                                         76              141
Deferred income taxes                               165             165
Prepaid expenses and other current assets          523            706      
             Total current assets                   68,323          46,436
                                                                
Property and equipment, net                         1,193           1,281
Intangibles and other assets, net                  16,271         15,725   
                                                                
TOTAL ASSETS                                   $    85,787      $   63,442   
                                                                
LIABILITIES
Accounts payable                               $    1,599       $   338
Accrued compensation                                1,756           2,502
Other current liabilities                           3,246           1,022
Deferred revenue and customer advances             19,139         3,934    
             Total current liabilities              25,740          7,796
                                                                
Long-term deferred revenue                          9,581           10,221
Deferred income tax liabilities                     165             165
Other long-term liabilities                        598            619      
                                                                
TOTAL LIABILITIES                                   36,084          18,801
                                                                
STOCKHOLDERS’ EQUITY                               49,703         44,641   
                                                                
TOTAL LIABILITIES &
STOCKHOLDERS’ EQUITY                           $    85,787      $   63,442   
                                                                
(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
                                                       Ended March 31,
                                                        2013       2012   
                                                                    
Revenues:
Royalty and license                                    $ 13,649     $ 9,085
Product sales                                            19           272
Development contracts and other                         192        334    
                Total revenues                          13,860     9,691  
                                                                    
Costs and expenses:
                Cost of revenues (exclusive of
                amortization and
                abandonment of intangibles shown         148          315
                separately below)
                Sales and marketing                      2,247        1,746
                Research and development                 2,573        2,194
                General and administrative               6,138        4,771
                Amortization and abandonment of         494        341    
                intangibles
                Total costs and expenses                11,600     9,367  
                                                                    
Operating Income                                         2,260        324
Interest and other income                               10         10     
                                                                    
Income before provision for income taxes                 2,270        334
                                                                    
Provision for income taxes                              (17    )    (553   )
                                                                    
                                                                   
Net Income (loss)                                      $ 2,253     $ (219   )
                                                                    
Basic net income (loss) per share                      $ 0.08      $ (0.01  )
Shares used in calculating basic net income (loss)      27,424     27,941 
per share
                                                                    
Diluted net income (loss) per share                    $ 0.08      $ (0.01  )
Shares used in calculating diluted net income (loss)    28,294     27,941 
per share
                                                                             

Immersion Corporation
Reconciliation of GAAP Net Income to Adjusted EBITDA
(In thousands)
(Unaudited)
                                                       
                                              Three Months
                                              Ended March 31,
                                               2013     2012  
                                                          
GAAP Net Income (Loss)                        $ 2,253     $ (219  )
                                                          
Interest and other income                       (10   )     (10   )
Provision for income taxes                      17          553
Depreciation and amortization                   164         166
Amortization and abandonment of intangibles     494         341
Stock-based compensation                       1,037     720   
Total adjustments                               1,702       1,770
                                                          
Adjusted EBITDA                               $ 3,955    $ 1,551 

Contact:

Media Contact:
Edelman
Reagan Crossley, +1 650-762-2955
reagan.crossley@edelman.com
or
Investor Contact:
The Blueshirt Group
Jennifer Jarman, +1 415-217-5866
jennifer@blueshirtgroup.com
 
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