Immersion Corporation Reports Record Revenues in First Quarter 2014

  Immersion Corporation Reports Record Revenues in First Quarter 2014  Business Wire  SAN JOSE, Calif. -- May 1, 2014  Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of touch feedback technology, today reported financial results for the first quarter ended March 31, 2014.  Results for the three months ended March 31, 2014  Total revenues for the first quarter of 2014 were$15.4 million, an increase of 11% compared to$13.9 millionfor the first quarter of 2013. Royalty and license revenues of$15.2 millionfor the first quarter of 2014 were up 11% from the same period last year. Net income for the first quarter of 2014 was $1.9 million, or $0.06 per diluted share. This compares to net income of $1.7 million, or $0.06 per diluted share, for the first quarter of 2013.  Non-GAAP net income for the first quarter of fiscal 2014 was $3.4 million, or $0.12 per diluted share, compared with non-GAAP net income of $2.7 million, or $0.10 per diluted share, for the first quarter of fiscal 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)  As ofMarch 31, 2014, Immersion's cash, cash equivalents, and short-term investments were$81.3 million, compared to$71.1 millionas ofDecember 31, 2013. During the March quarter, the Company used $6.9 million to buy back approximately 0.6 million shares of its common stock under its stock repurchase program.  Management Commentary  “We are very pleased to report record revenues during the first quarter, which contributed to strong profitability,” said Vic Viegas, chief executive officer of Immersion. “During the period, our innovative TouchSense solutions were featured in some of the mobile industry’s most popular new smartphone and wearable devices. In addition, we continued to make great progress on our initiatives in new areas such as wearables and mobile content, positioning Immersion to capitalize on exciting market opportunities and a growing market awareness that Immersion’s touch technologies can bring richness and realism to advanced user interfaces.”  "As we indicated heading into the new calendar year, based on our current outlook we expect revenues for 2014 to be in the range of $54 million to $62 million, an increase of between 14% and 31% over the prior year. Non-GAAP net income for 2014 is anticipated to be in the range of $8 million to $15 million," concluded Mr. Viegas.  Business Highlights  Recent business highlights that reinforce the value of Immersion haptic technology within key markets include:    *Samsung’s adoption of innovative new Immersion software in its most     important and strategic product launches. In its flagship Galaxy S5     smartphone, Samsung included Immersion TouchSense software as well as     Tactile Assist, a new haptic accessibility feature enabling consumers with     disabilities to enjoy visual and audio content enhanced with tactile     effects. Additionally, Samsung incorporated custom versions of TouchSense     into its groundbreaking Gear 2 and Gear Fit wearable devices.   *Immersion’s unveiling new tools, technologies and user experience concepts     at Mobile World Congress, illustrating how tactile technology enhances     next-generation mobile and wearable devices by adding realistic and     engaging touch experiences to user-created video, ads and entertainment,     wearables, mobile user interfaces, gaming and more.   *Immersion’s entry into its first content and media evaluation and testing     agreement with an advertising technology platform partner who will     integrate Immersion enablement tools into its software environment and     evaluate the performance of haptically-enhanced ads.  Conference Call Information  Immersion will host a conference call with company management on Thursday, May 1, 2014 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss financial results for the first quarter ended March 31, 2014. To participate on the live call, analysts and investors should dial +1 877-941-1427 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 1,600 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 statement regarding positioning Immersion to capitalize on exciting market opportunities and a growing market awareness that Immersion’s touch technologies can bring richness and realism to advanced user interfaces in a wide variety of emerging industries and our expectation that revenues for 2014 will be in the range of $54 million to $62 million and non-GAAP net income for 2014 will be in the range of $8 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 2013 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,                                                 2014              2013                                                 (Unaudited)       (1) ASSETS Cash and cash equivalents                       $ 24,365          $ 14,136 Short-term investments                          56,980            56,976 Accounts receivable, net                        769               598 Deferred income taxes                           7,784             7,784 Prepaid expenses and other current assets       550               690             Total current assets                90,448            80,184                                                                    Property and equipment, net                     1,154             944 Deferred income tax assets                      28,046            29,066 Intangibles and other assets, net               362               381                                                                    TOTAL ASSETS                                    $ 120,010         $ 110,575                                                                    LIABILITIES Accounts payable                                $ 1,949           $ 682 Accrued compensation                            2,198             4,680 Other current liabilities                       2,492             1,653 Deferred revenue                                23,380            8,920             Total current liabilities           30,019            15,935                                                                    Long-term deferred revenue                      11,928            13,441 Other long-term liabilities                     501               528                                                                    TOTAL LIABILITIES                               42,448            29,904                                                                    STOCKHOLDERS’ EQUITY                            77,562            80,671                                                                    TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY                            $ 120,010         $ 110,575                                                                    (1) Derived from Immersion’s annual audited consolidated financial statements.                                                                Immersion Corporation Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited)                                                     Three Months                                                    Ended March 31,                                                     2014           2013                                                                         Revenues: Royalty and license                                $ 15,157         $ 13,649 Product sales                                        0                19 Development, services, and other                    279            192          Total revenues                                 15,436         13,860                                                                       Costs and expenses:      Cost of revenues (exclusive of      amortization of      intangibles shown separately below)             120              148      Sales and marketing                             2,763            2,247      Research and development                        3,058            2,573      General and administrative                      6,521            7,178      Amortization of intangibles                    20             20           Total costs and expenses                       12,482         12,166                                                                       Operating Income                                     2,954            1,694 Interest and other income (expense)                 (7     )        10                                                                           Income before provision for income taxes             2,947            1,704                                                                      Provision for income taxes                          (1,083 )        (17    )                                                                                                                                          Net Income                                         $ 1,864         $ 1,687                                                                        Basic net income per share                         $ 0.07          $ 0.06    Shares used in calculating basic net income         28,370         27,424  per share                                                                      Diluted net income per share                       $ 0.06          $ 0.06    Shares used in calculating diluted net              29,382         28,294  income per share                                                                 Immersion Corporation Reconciliation of GAAP Net Income to Non-GAAP Net Income (In thousands, except per share amounts) (Unaudited)                                                                                                                               Three Months                                                        Ended March 31,                                                         2014       2013                                                                        GAAP Net Income                                        $ 1,864        $ 1,687                                                                        Stock-based compensation                                1,583         1,037                                                                        Non-GAAP Net Income                                    $ 3,447        $ 2,724                                                                        Non-GAAP Earnings Per Share                            $ 0.12         $ 0.10                                                                        Shares used in calculating Non-GAAP Earnings            29,382        28,294 per Share  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