Immersion Corporation Reports Second Quarter 2014 Results

Posts Record June Quarter Revenue

SAN JOSE, Calif. — (BUSINESS WIRE) — July 31, 2014 — Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of touch feedback technology, today reported financial results for the second quarter ended June 30, 2014.

Results for the three months ended June 30, 2014

Total revenues for the second quarter of 2014 were $11.8 million, an increase of 16% compared to $10.2 million for the second quarter of 2013. Royalty and license revenues of $11.6 million for the second quarter of 2014 were up 16% from the same period last year. Net income for the second quarter of 2014 was $169,000, or $0.01 per diluted share. This compares to net income of $466,000, or $0.02 per diluted share, for the second quarter of 2013.

Non-GAAP net income for the second quarter of 2014 was $1.5 million, or $0.05 per diluted share, compared with non-GAAP net income of $1.6 million, or $0.06 per diluted share, for the second quarter of 2013. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

As of June 30, 2014, Immersion’s cash, cash equivalents, and short-term investments were $74.2 million, compared to $71.1 million as of December 31, 2013. During the June quarter, the Company used $109 thousand to buy back approximately 11 thousand shares of its common stock under its stock repurchase program.

Management Commentary

“We are pleased to report record June quarter revenues and our sixth consecutive quarter of profitability,” said Vic Viegas, chief executive officer of Immersion. “During the period, we continued to make great progress in executing across our key initiatives with both our OEM customers and our content business. This includes the launch of our new official business entity in Shanghai as well as our entering into a new multi-year licensing agreement with Huawei, one of the largest smartphone makers in the world.”

“We are very optimistic regarding the opportunities in front of us given the headway we have made to date and our prospects for growth in the future. However, due to the timing of new agreements and the pace of certain negotiations, including our renewal negotiations with LG Electronics, we are revising our 2014 financial outlook. We now expect revenues for 2014 to be in the range of $51 million to $56 million, an increase of between 7% and 18% over the prior year. Non-GAAP net income for 2014 is anticipated to be in the range of $6 million to $12 million,” concluded Mr. Viegas.

Business Highlights

Recent business highlights demonstrate continued progress across Immersion’s strategic initiatives, including:

  • The addition of new mobile licensee Huawei Device (Dongguan) Co., Ltd., the third largest global supplier of smartphones according to IDC. This first direct license agreement with Huawei for Immersion’s haptic software, TouchSense 3000, enables Huawei to add tactile feedback to certain Huawei branded devices to create rich, multi-dimensional user experiences.
  • The expansion of Immersion’s haptic business in China with the opening of an official business entity. Immersion (Shanghai) Science & Technology Company, Ltd., a wholly owned subsidiary in China, expands the Company’s sales and support activities as it continues to grow its customer base in China, broadens its engagement with the Chinese mobile ecosystem, and establishes a new technology center and base of operations in the region.
  • Immersion’s entry into a content and media evaluation license agreement with a second significant mobile ad network, setting the stage for additional testing and integration work as the Company moves toward commercial launches of haptically-enhanced ads as early as this calendar year.

Conference Call Information

Immersion will host a conference call with company management on Thursday, July 31, 2014 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss financial results for the second quarter ended June 30, 2014. To participate on the live call, analysts and investors should dial +1 888-455-2260 (conference ID: 2161690) 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 1,700 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 .

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