Immersion Corporation Reports Third Quarter 2016 Results

SAN JOSE, Calif. — (BUSINESS WIRE) — November 3, 2016 — Immersion Corporation (NASDAQ: IMMR), the leading developer and licensor of touch feedback technology, today reported financial results for the third quarter ended September 30, 2016.

Total revenues for the third quarter of 2016 were $26.3 million, an increase of 84% compared to $14.3 million for the third quarter of 2015. Total revenues for the third quarter of 2016 include recognition of a non-recurring license fee from Samsung of $19.0 million, as previously disclosed. Royalty and license revenues of $26.0 million for the third quarter of 2016 were up 87% from the same period last year.

Net income for the third quarter of 2016 was $7.0 million, or $0.24 per basic and diluted share. This compares to net income of $184,000, or $0.01 per basic and diluted share, for the third quarter of 2015. Net income for the third quarter of 2016 includes a tax provision of $3.8 million that includes certain non-cash tax benefits and expenses associated with our international tax structure.

Non-GAAP net income for the third quarter of 2016 was $9.9 million, or $0.34 per diluted share, compared with non-GAAP net income of $2.2 million, or $0.08 per diluted share, for the third quarter of 2015. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)

As of September 30, 2016, Immersion’s cash, cash equivalents and short term investments were $94.9 million, up from $56.3 million as of June 30, 2016. During the September quarter, the Company used $729,000 to buy back approximately 106,000 shares of its common stock under its stock repurchase program.

Management Commentary

“We exited the quarter with a strong balance sheet and positive momentum as we expanded our customer base across the markets we serve. The opportunities in front of us continue to increase as haptics is being more broadly adopted than ever, across existing markets as well as new and emerging areas. Immersion’s foundation of innovation and the strength of our patent portfolio makes us uniquely positioned to lead and succeed in this market,” said Vic Viegas, chief executive officer of Immersion. “As we enter the fourth quarter, we continue to expect 2016 revenues to be in the range of $55 to $65 million, which we now anticipate generating bottom line results of a net loss between $11 million and $800,000 and between a non-GAAP net loss of $6 million and non-GAAP net income of $4 million.”

Recent Business Highlights

  • Announced the Haptic Ad Service, the industry’s first comprehensive service that offers advertisers the ability to add “touch effects” to premium HTML mobile video ads. Immersion’s cloud-based solution uses the industry VAST and VPAID online video ad standards to enable advertisers to design touch effects for mobile video, and serve and sync the effects with mobile ads as they run in real-time.
  • In September, the U.S. Patent and Trademark Office denied the institution of the IPR filed by Amit Agarwal, demonstrating the strength of Immersion’s patent portfolio. The Markman hearing related to the Apple litigation was completed on October 18, 2016.
  • Announced TouchSense® SDK for Mobile Apps, a new haptic solution that unifies the functionality from the TouchSense® SDK for Mobile Games and TouchSense® SDK for Mobile Video into one easy-to-use SDK for Android app developers.
  • Appointed Nancy Erba as Chief Financial Officer, effective Sept. 7, 2016. Ms. Erba was most recently Vice President of Finance, Corporate Financial Planning and Analysis at Seagate, the global leader of storage solutions. During her 22-year tenure with Seagate, she held Vice President positions in Corporate Development, Business Operations and Planning, and Finance. Ms. Erba holds a Bachelor's Degree in mathematics from Smith College and a MBA from Baylor University.

Conference Call Information

Immersion will host a conference call with company management on Thursday, November 3, 2016 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss financial results for the third quarter ended September 30, 2016. To participate on the live call, analysts and investors should dial +1 800-231-9012 (conference ID: 7233116) 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

Immersion Corporation (NASDAQ: IMMR) is the leading innovator of touch feedback technology, also known as haptics. The company provides technology solutions for creating immersive and realistic experiences that enhance digital interactions by engaging users’ sense of touch. With more than 2,300 issued or pending patents, Immersion's technology has been adopted in more than 3 billion digital devices, and provides haptics in mobile, automotive, advertising, gaming, medical and consumer electronics products. Immersion is headquartered in San Jose, California with offices worldwide. Learn more at www.immersion.com .

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