Immersion Corporation Reports Fourth Quarter 2002 Financial Results
Net loss for the fourth quarter of 2002 was $6.4 million, or $0.32 per share, compared to a net loss of $3.0 million, or $0.16 per share, for the fourth quarter of 2001. Current quarter net loss includes the write off of $3.8 million of goodwill associated with certain prior year business acquisitions. The net loss increased as a result of the goodwill write-off, partially offset by reduced interest expense on long-term debt and revenue growth year-over-year. The pro forma net loss, which is the net loss excluding amortization of intangibles and deferred stock compensation, acquisition related and other charges, and the write off of goodwill, was $1.9 million, or $0.09 per share, for the fourth quarter of 2002 compared to a pro forma net loss of $1.7 million, or $0.09 per share, for the fourth quarter of 2001.
For fiscal 2002, revenues increased to $20.2 million over revenues of $19.2 million in fiscal 2001. Net loss for the twelve months ended December 31, 2002 was $16.5 million, or $0.83 per share, compared to a net loss of $21.7 million, or $1.16 per share, for the twelve months ended December 31, 2001. The pro forma net loss for the twelve months ended December 31, 2002 was $9.3 million, or $0.47 per share, compared to the pro forma net loss of $16.3 million, or $0.87 per share, for the same period a year ago.
The Company also announced that Robert O'Malley has resigned as Chairman of the Board to pursue other interests and that the Company has no immediate plans to name a replacement. Vic Viegas, Immersion's CEO, said "We at Immersion appreciate the guidance and vision Bob provided to the Company, in particular his leadership in our medical business, which experienced revenue growth of 58 percent during 2002."
Viegas continued, "Longer sales cycles and delayed shipments by some licensees, continue to make 2003 a challenge and forecasting difficult. As a result, we will not be providing quarterly revenue or earnings guidance until our visibility on market or customer conditions improves. We currently believe that revenue for the full year of 2003 will be approximately $23 million to $25 million."
About Immersion Corporation (www.immersion.com)
Founded in 1993, Immersion Corporation is a recognized leader in developing, licensing and marketing haptic technology and products. Bringing value to markets where user/product interaction needs to be made more compelling, safe or productive, Immersion helps its partners develop and increase competitive advantage and broaden market reach by making the use of touch sense feedback as critical a user experience as sight and sound. Immersion's technology is deployed across personal computing, entertainment, medical training, automotive and three-dimensional simulation markets. Immersion and its wholly owned subsidiaries hold over 186 issued patents worldwide.
Immersion will host a conference call with live Internet broadcast on Monday, February 10, 2003, at 5:00 p.m. EST. Immersion is scheduled to discuss operating results for the fourth quarter ended December 31, 2002. A question and answer session will follow. To listen to the call, dial (800) 365-3378, reservation number 20977309. To listen to the web cast, log on to the Internet at http://www.immersion.com. The call will be archived and available for replay until February 14, 2003, by dialing (800) 633-8284, reservation number 20977309.
Note to Editors: Additional background information on Immersion Corporation is available through our Web Site at http://www.immersion.com.
Statements made in this press release, other than statements of historical fact are forward-looking statements including those that reflect management's current forecast of Immersion's future revenue and operating results, customer demand for medical and force feedback products, the effect of changes in management and the effect of the economic downturn. Forward looking statements made in this press release are based on current information, which management has assessed but which by its nature is dynamic and subject to rapid and even abrupt changes. 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.
Risks and uncertainties related to Immersion's business are further outlined in Immersion's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. These reports are filed with the Securities and Exchange Commission. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. Immersion is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
Immersion Corporation Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Twelve Months Ended Dec. 31, Ended Dec. 31, 2002 2001 2002 2001 Revenues: Royalty revenue $ 1,486 $ 1,977 $ 5,231 $ 5,362 Product sales 2,892 2,287 10,723 10,360 Development contracts and other 1,114 900 4,281 3,510 - - - - Total revenues 5,492 5,164 20,235 19,232 - - - - Costs and expenses: Cost of product sales 1,494 1,273 5,881 6,074 Sales and marketing 2,033 1,939 7,566 9,868 Research and development 1,648 1,628 6,496 7,548 General and administrative 2,211 1,777 8,064 7,694 Amortization of intangibles and deferred stock compensation 734 1,299 3,108 5,252 Impairment of goodwill 3,758 -- 3,758 -- Acquisition related and other charges -- (1) 397 224 Total costs and expenses 11,878 7,915 35,270 36,660 - - - - Operating loss (6,386) (2,751) (15,035) (17,428) Interest and other income (expense), net 13 (217) (1,495) (4,318) - - - - Net loss $ (6,373) $ (2,968) $(16,530) $(21,746) Basic and diluted net loss per share $ (0.32) $ (0.16) $ (0.83) $ (1.16) Shares used in calculating basic and diluted net loss per share 20,134 18,951 19,906 18,702 Immersion Corporation Condensed Consolidated Balance Sheets (In thousands) Dec. 31, Dec. 31, 2002 2001(1) (Unaudited) (Audited) ASSETS Cash and cash equivalents $ 8,717 $10,381 Short-term investments -- 2,545 Accounts receivable, net 3,645 3,779 Inventories 2,128 1,965 Prepaid expenses and other current assets 1,151 1,179 Total current assets 15,641 19,849 Property and equipment, net 2,044 2,918 Purchased intangibles and other assets, net 6,616 12,058 Other investments 1,000 2,200 TOTAL ASSETS $25,301 $37,025 ======== ======== LIABILITIES Accounts payable $ 1,160 $ 722 Accrued compensation 671 1,158 Other accrued liabilities 1,311 587 Deferred revenue and customer advances 3,515 953 Current portion of long-term debt 86 4,541 Total current liabilities 6,743 7,961 Long-term debt 51 250 Long-term portion of deferred revenue 4,559 -- Total liabilities 11,353 8,211 STOCKHOLDERS' EQUITY 13,948 28,814 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $25,301 $37,025 ======== ======== (1) Derived from the Company's annual audited financial statements. Immersion Corporation Reconciliation of Net Loss to Pro Forma Net Loss (In thousands) (Unaudited) Three Months Twelve Months Ended Dec. 31, Ended Dec. 31, 2002 2001 2002 2001 Net loss $ (6,373) $ (2,968) $(16,530) $(21,746) Pro forma adjustments: Amortization of intangibles and deferred stock compensation 734 1,299 3,108 5,252 Impairment of goodwill 3,758 -- 3,758 -- Acquisition related and other charges -- (1) 397 224 - - - - Pro forma net loss $ (1,881) $ (1,670) $ (9,267) $(16,270)