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MicroVision Announces Second Quarter 2013 Results

  MicroVision Announces Second Quarter 2013 Results

  Progress Made with Leading Electronics OEM Brand; Quarterly Year-Over-Year
                   Cash Used in Operations Down 59 Percent

Business Wire

REDMOND, Wash. -- August 8, 2013

MicroVision, Inc. (NASDAQ: MVIS), a leader in innovative ultra-miniature
projection display technology, today announced its operating and financial
results for the second quarter of 2013 and the advancement of its 2013
business objectives.

The company has continued its development activities under the agreement
announced in April with a Fortune Global 100 electronics company to
incorporate PicoP® display technology into a display engine that could enable
a variety of new products for the OEM. MicroVision and the electronics OEM
also are engaged in commercial negotiations for licensing and component supply
agreements with the expectation that such agreements would constitute the next
stage of engagement leading to the OEM’s introduction of commercial products
incorporating PicoP display technology.

In furtherance of its goal to enter into licensing agreements for patented
PicoP display technology, MicroVision also continues progress on its business
development activities to secure additional design wins. The company’s target
markets are consumer electronics and automotive as well as industrial
applications that can benefit from PicoP display technology’s distinguishing
attributes: a large, high definition image that is always in focus from a tiny
engine with outstanding brightness to power efficiency (i.e. lumen to watt
efficiency). The company also has made progress in establishing additional
supply chain partners to facilitate its “Image by PicoP®” go-to-market
strategy. MicroVision’s goal in this area is to provide OEMs with multiple
supply sources for key components including MEMs and display engines to
integrate into their products under MicroVision’s ingredient brand licensing
business model.

A reduction in the quarterly operating and net losses of 31 percent in the
second quarter of 2013 compared to the same quarter in 2012 and a 59 percent
reduction in cash used in operations for that period demonstrate that the
company has continued to manage costs and cash used in operations in line with
its goals. The company also realized an increase in revenue of 44 percent in
the second quarter of 2013 compared to the same quarter last year.

“We are very pleased with the progress we are making with the Fortune Global
100 electronics brand and our effective management of cash used in
operations,” said Alexander Tokman, president and CEO of MicroVision.

The custom development being undertaken with the Fortune Global 100 customer
exemplifies the ingredient brand licensing business model MicroVision
transitioned to last year. Under this model, vertically integrated OEMs can
benefit from MicroVision’s engineering know-how to create a display engine
solution that meets their unique requirements. For OEMs that prefer a complete
display engine to integrate into their products, MicroVision’s business model
includes partnering with design manufacturers to provide display engines based
on patented PicoP display technology.

In June of this year, Megha Saini, Research Analyst with IDC'sWorldwide Smart
Connected Device Tracker, commented on emerging mobile usage trends and how
they prescribe product innovation: “It is evident that smartphones and tablets
have successfully established a strong presence as the 'second screen', owing
to the transformation in usage patterns, device affordability, and, most of
all, the comfort of a mobile and digital lifestyle. Vendors and OEMs need to
be aware of the different usage patterns so as to drive product innovation
that suits the tangible needs of their digital consumers."

As consumers enjoy the enhanced experience of having two screens in operation
at one time, a projected display in a mobile device enabled by PicoP display
technology is an innovation that extends the growing second screen experience
to an any-time, anywhere mobile proposition.

Financial Results

The following financial results are for the three and six months ended June
30, 2013, compared to the same periods one year earlier.

  *Revenue was $1.9 million for the second quarter of 2013, compared to $1.3
    million for the second quarter of 2012, primarily from fulfillment of
    orders to Pioneer Corporation and performance under the development
    agreement announced in April. Revenue for the first half of 2013 was $3.7
    million, compared to $3.0 million for the first half of 2012.
  *Operating loss for the second quarter of 2013 was $3.4 million, compared
    to $5.0 million for the second quarter a year ago. Operating loss was $7.1
    million for the first half of 2013, compared to $14.8 million for the
    first half of 2012.
  *Net loss for the second quarter of 2013 was $3.4 million, or $0.13 per
    share, compared to $5.0 million, or $0.26 per share, for the same quarter
    a year ago. Net loss was $7.1 million, or $0.27 per share, for the first
    half of 2013 compared to $14.8 million, or $0.82 per share, for the first
    half of 2012.
  *For the second quarter of 2013, cash used in operations was $2.8 million
    compared to $6.8 million for the same period in 2012. For the six months
    ended June 30, 2013, cash used in operations was $6.3 million compared to
    $13.0 million for the same period in 2012.

As of June 30, 2013, backlog was $3.8 million and cash and cash equivalents
were $6.0 million.

Conference Call

The company will host a conference call today to discuss its second quarter
2013 results and current business operations at 8:30 a.m. ET / 5:30 a.m. PT.
Participants may join the conference call by dialing 800-446-1671 (for U.S.
participants) or +1-847-413-3362 (for international participants) ten minutes
prior to the start of the call. The conference call pass code number is
35347507. A live webcast of the call can be accessed from the company's web
site in the Investor Events Calendar section on the Investors page. A replay
of this call will be available after 8:00 a.m. PT the day of the conference
call through the same link or by calling 888-843-7419 (U.S.) or
(International) +1-630-652-3042, pass code 35347507#.

About MicroVision

MicroVision is the creator of PicoP® display technology, an ultra-miniature
laser projection solution for mobile consumer electronics, automotive head-up
displays and other applications. MicroVision’s patented display technology
helps OEMs break down display boundaries and offer enhanced visibility to
mobile experiences. Nearly two decades of research has led MicroVision to
become an independently recognized leader in the development of intellectual
property. MicroVision’s IP portfolio has been recognized by the Patent Board
as a top 50 IP portfolio among global industrial companies and is also
included in the Ocean Tomo 300 Patent Index. The company is based in Redmond,
Wash.

For more information, visit the company’s website at www.microvision.com, on
Facebook at www.facebook.com/MicroVisionInc or follow MicroVision on Twitter
at @MicroVision.

MicroVision and PicoP are trademarks of MicroVision, Inc. in the United States
and other countries. All other trademarks are the properties of their
respective owners.

Forward-Looking Statements

Certain statements contained in this release, including those relating to
contract benefits and negotiations, strategy, expected market interest and
growth, and future product and technology development and sales, and those
containing words such as “expects,” “goal” and “believes” are forward-looking
statements that involve a number of risks and uncertainties. Factors that
could cause actual results to differ materially from those projected in the
company's forward-looking statements include the following: we may be unable
to successfully perform our obligations under the agreement, our contract
party may not perform its obligations under the agreement, our ability to
raise additional capital when needed; products incorporating our PicoP display
engine may not achieve market acceptance, commercial partners may not perform
under agreements as anticipated, we may be unsuccessful in identifying parties
interested in paying any amounts or amounts we deem desirable for the license
of IP assets, our or our customers failure to perform under open purchase
orders; our financial and technical resources relative to those of our
competitors; our ability to keep up with rapid technological change;
government regulation of our technologies; our ability to enforce our
intellectual property rights and protect our proprietary technologies; the
ability to obtain additional contract awards; the timing of commercial product
launches and delays in product development; the ability to achieve key
technical milestones in key products; dependence on third parties to develop,
manufacture, sell and market our products; potential product liability claims;
and other risk factors identified from time to time in the company's SEC
reports, including the company's Annual Report on Form 10-K filed with the
SEC. Except as expressly required by federal securities laws, we undertake no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, changes in
circumstances or any other reason.

                                                               
MicroVision, Inc.
                                                                  
Balance Sheet
(In thousands)
(Unaudited)
                                                                  
                                                   June 30,       December 31,
                                                   2013          2012
                                                                  
Assets
Current Assets
Cash and cash equivalents                          $ 6,003        $ 6,850
Accounts receivable, net of allowances               1,088          1,115
Costs and estimated earnings in excess of            12             12
billings on uncompleted contracts
Inventory                                            44             497
Other current assets                                305          1,221    
Total current assets                                 7,452          9,695
                                                                  
Property and equipment, net                          1,191          1,205
Restricted investments                               435            436
Intangible assets                                    1,501          1,580
Other assets                                        18           22       
Total assets                                       $ 10,597      $ 12,938   
                                                                  
                                                                  
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable                                   $ 2,106        $ 3,035
Accrued liabilities                                  3,253          4,007
Deferred revenue                                     28             609
Billings in excess of costs and estimated            863            98
earnings on uncompleted contracts
Liability associated with common stock warrants      3,755          -
Current portion of capital lease obligations         43             48
Current portion of long-term debt                   17           67       
Total current liabilities                            10,065         7,864
                                                                  
Capital lease obligations, net of current            -              20
portion
Deferred rent, net of current portion               330          -        
Total liabilities                                   10,395       7,884    
                                                                  
Commitments and contingencies
                                                                  
Shareholders' Equity
Common stock at par value                            28             25
Additional paid-in capital                           444,795        442,560
Accumulated deficit                                 (444,621 )    (437,531 )
Total shareholders' equity                          202          5,054    
Total liabilities and shareholders' equity         $ 10,597      $ 12,938   
                                                                  

                                                          
MicroVision, Inc.

Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
                                                                    
                     Three months ended June         Six months ended June 30,
                     30,
                     2013           2012             2013           2012
                                                                    
Product revenue      $ 917          $ 750            $ 2,136        $ 2,279
Contract revenue       73             545              355            746
Development           880          -              1,180        -       
revenue
Total revenue         1,870        1,295          3,671        3,025   
                                                                    
Cost of product        837            (281   )         1,501          3,894
revenue
Cost of contract      26           248            163          403     
revenue
Total cost of         863          (33    )        1,664        4,297   
revenue
                                                                    
Gross margin          1,007        1,328          2,007        (1,272  )
                                                                    
                                                                    
Research and
development            2,339          3,227            4,591          7,167
expense
Sales,
marketing,
general and            2,101          3,064            4,504          6,352
administrative
expense
Gain on disposal      -            (1     )        (2     )      (1      )
of fixed assets
Total operating       4,440        6,290          9,093        13,518  
expenses
                                                                    
Loss from              (3,433 )       (4,962 )         (7,086 )       (14,790 )
operations
                                                                    
Other income          (3     )      (9     )        (4     )      16      
(expense)
                                                                    
Net loss             $ (3,436 )     $ (4,971 )       $ (7,090 )     $ (14,774 )
                                                                    
Net loss per
share - basic        $ (0.13  )     $ (0.26  )       $ (0.27  )     $ (0.82   )
and diluted
                                                                    
Weighted-average
shares
outstanding -         26,493       19,167         25,870       18,097  
basic and
diluted
                                                                    

Contact:

MicroVision, Inc.
Dawn Goetter, 425-882-6629 (investors)
or
Edelman
Joani Jones, 503-471-6863 (media/PR)
 
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