Immersion Corporation Reports Record Revenue in Second Quarter 2015

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 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 statements 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, sufficiency of staffing and investment levels, China opportunities and our expectation that revenues for 2015 will be in the range of $58 million to $60 million and non-GAAP net income for 2015 will be in the range of $4 million to $8 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; the continued popularity of mobile games and wearables; potentially lengthy sales cycles and design processes; unanticipated difficulties and challenges encountered in development efforts; unexpected costs; the fact that certain target markets are still relatively nascent; risks associated with doing business internationally; failure to retain key personnel; ability to retain 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 2014 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 and TouchSense Engage are trademarks or registered 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)
 
  June 30,   December 31,
2015 2014
(Unaudited) (1)
ASSETS
Cash and cash equivalents $ 52,636 $ 14,380
Short-term investments 18,998 42,981
Accounts and other receivables, net 1,100 3,021
Deferred income taxes 12,809 9,377
Prepaid expenses and other current assets   2,134   845  
Total current assets 87,677 70,604
 
Property and equipment, net 4,929 1,207
Deferred income tax assets 17,221 25,419
Intangibles and other assets, net   3,997   291  
 
TOTAL ASSETS $ 113,824 $ 97,521  
 
LIABILITIES
Accounts payable $ 1,243 $ 669
Accrued compensation 3,183 1,906
Other current liabilities 3,216 2,225
Deferred revenue   17,767   7,779  
Total current liabilities 25,409 12,579
 
Long-term deferred revenue 5,734 7,827
Other long-term liabilities   704   512  
 
TOTAL LIABILITIES 31,847 20,918
 
STOCKHOLDERS’ EQUITY   81,977   76,603  
 
TOTAL LIABILITIES &
STOCKHOLDERS’ EQUITY $ 113,824 $ 97,521  
 
(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   Six Months
Ended June 30, Ended June 30,
2015   2014 2015   2014
Revenues:
Royalty and license $ 15,939 $ 11,602 $ 31,951 $ 26,759
Development, services, and other   284     229     559     508  
Total revenues   16,223     11,831     32,510     27,267  
 
Costs and expenses:
Cost of revenues 115 101 230 221
Sales and marketing 3,670 2,637 7,880 5,400
Research and development 3,499 3,006 7,226 6,064
General and administrative 6,719 5,950 15,012 12,471
Amortization of intangibles   3     20     15     40  
Total costs and expenses   14,006     11,714     30,363     24,196  
 
Operating Income 2,217 117 2,147 3,071
Interest and other income   46     144     21     137  
 
Income before provision for income taxes 2,263 261 2,168 3,208
 
Provision for income taxes   (668 )   (92 )   (632 )   (1,175 )
 
Net Income $ 1,595   $ 169   $ 1,536   $ 2,033  
 
Basic net income per share $ 0.06   $ 0.01   $ 0.05   $ 0.07  
Shares used in calculating basic net income per share   28,070     28,383     27,944     28,376  
 
Diluted net income per share $ 0.06   $ 0.01   $ 0.05   $ 0.07  
Shares used in calculating diluted net income per share   28,906     29,210     28,779     29,330  
 
 
Immersion Corporation
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months   Six Months
Ended June 30,

Ended June 30,

2015   2014 2015   2014
 
GAAP Net Income $ 1,595   $ 169 $

1,536

  $ 2,033
 
Stock-based compensation   1,229   1,344   2,969   2,927
 
Non-GAAP Net Income $ 2,824 $ 1,513 $ 4,505 $ 4,960
 
Non-GAAP Earnings Per Share

 

0.10

 

0.05

 

0.16

 

0.17
 
Shares used in calculating Non-GAAP Earnings per Share   28,906   29,210   28,779   29,330




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