Immersion Corporation Reports Q1 2012 Results

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 for fiscal 2012 revenues to be in the range of $34 to $36 million, and the expectation as to our Adjusted EBITDA for the full year and other statements regarding future growth and our intellectual property.

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, continued disruption in the markets for Immersion’s and its licensees’ products due to the recent earthquake and tsunami in Japan; 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 transitioning to a pure IP licensing model and 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; potential restructuring charges; unexpected costs; failure to retain key personnel; potential and actual claims and proceedings, including stockholder litigation; competition; 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 2011 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, and TouchSense 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,
2012 2011
(Unaudited) (1)
Cash and cash equivalents $ 8,587 $ 7,298
Short-term investments 48,968 48,987
Accounts receivable, net 2,962 1,487
Inventories 531 423
Deferred income taxes 215 215
Prepaid expenses and other current assets   423   479  
Total current assets 61,686 58,889
Property and equipment, net 1,624 1,737
Intangibles and other assets, net   14,503   14,053  
TOTAL ASSETS $ 77,813 $ 74,679  
Accounts payable $ 1,879 $ 365
Accrued compensation 1,764 2,830
Other current liabilities 1,915 2,054
Deferred revenue and customer advances   5,996   4,120  
Total current liabilities 11,554 9,369
Long-term deferred revenue 12,450 13,229
Deferred income tax liabilities 215 215
Other long-term liabilities   588   245  
STOCKHOLDERS’ EQUITY   53,006   51,621  


$ 77,813 $ 74,679  
(1) Derived from Immersion’s annual audited consolidated financial statements.
Immersion Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months
Ended March 31,
2012 2011
Royalty and license $ 9,085 $ 8,353
Product sales 272 1,001
Development contracts and other   334     414  
Total revenues   9,691     9,768  
Costs and expenses:

Cost of revenues (exclusive of amortization and impairment of intangibles shown separately below)

315 474
Sales and marketing 1,746 1,850
Research and development 2,194 2,099
General and administrative 4,771 3,111
Amortization and impairment of intangibles   341     357  
Total costs and expenses   9,367     7,891  
Operating Income 324 1,877
Interest and other income   10     62  
Income from continuing operations before provision for income taxes 334 1,939
Provision for income taxes   (553 )   (594 )
Income (loss) from continuing operations (219 ) 1,345
Discontinued operations:
Gain on sales of discontinued operations - 43
Net Income (loss) $ (219 ) $ 1,388  
Basic net income (loss) per share
Continuing operations $ (0.01 ) $ 0.05
Discontinued operations   -     -  
Total $ (0.01 ) $ 0.05  
Shares used in calculating basic net income (loss) per share   27,941     28,249  
Diluted net income (loss) per share
Continuing operations $ (0.01 ) $ 0.05
Discontinued operations   -     -  
Total $ (0.01 ) $ 0.05  
Shares used in calculating diluted net income (loss) per share   27,941     28,960  
Immersion Corporation
Reconciliation of GAAP Net Income to Adjusted EBITDA
(In thousands)
Three Months
Ended March 31,
2012 2011
GAAP Net Income (Loss) $ (219 ) $ 1,388
Interest and other income (10 ) (62 )
Provision for income taxes 553 594
Depreciation and amortization 166 246
Amortization and impairment of intangibles 341 357
Stock-based compensation 720 784
Discontinued operations   -     (43 )
Total adjustments 1,770 1,876
Adjusted EBITDA $ 1,551   $ 3,264  

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