Immersion Corporation Reports Fourth Quarter and Full Year 2018 Results
Effective
Results for the quarter ended
Total revenues for the fourth quarter of 2018 were
Net loss for the fourth quarter of 2018 was
Non-GAAP net loss for the fourth quarter of 2018 was
Results for the year ended
Revenues for 2018 were
Net income for 2018 was
Non-GAAP net income for 2018 was
As of
Management Commentary and Business Outlook
“I am thrilled to be leading Immersion at this pivotal time for the company. I have been extremely impressed with the talent, innovative haptic solutions, product roadmap, and strength and depth of the foundational intellectual property portfolio,” said Ramzi Haidamus, Chief Executive Officer of Immersion. “We see a tremendous opportunity for Immersion to capitalize on these assets and lead the widespread adoption of touch feedback and related technologies in a much broader array of products and markets. We will work diligently to refine our strategic approach to prioritize and capitalize on the market growth in front of us while paving a path towards sustainable profitability. Over the next few quarters, we have modest expectations for our revenue as we build a more robust and valuable business for the future.”
“We are pleased with the financial results that Immersion achieved in
2018, which demonstrate the value proposition that we bring to our
customers and the market amidst the expanding adoption of haptics, as
well as the shareholder value that can be generated through our business
model,” said
Recent Business Highlights
-
Signed a license agreement with
Dongwoon Anatech Co Ltd. (Dongwoon) to make Immersion haptic patent licenses available to mobile phone and wearable OEMs through Dongwoon. Under the agreement, mobile phone and wearable OEMs that acquire certain Dongwoon haptic driver ICs will have seamless access to Immersion’s 25 years of haptic experience and portfolio. -
Filed a patent infringement lawsuit on
February 25, 2019 againstSamsung Electronics GmbH inMannheim District Court inGermany alleging that certainSamsung touchscreen phones infringe our newly issued German Patent 602008058897.1 (EP Patent 2463752), a counterpart of U.S. Patent No. 8,619,051, “Haptic Feedback System with Stored Effects,” which patent is being asserted againstSamsung Electronics America, Inc. andSamsung Electronics Co., Ltd. and was previously asserted againstApple . - Announced the addition of 500 patents in the past eight months demonstrating the commitment to continuous innovation, and the achievement of a milestone highlighting the growing impact of haptics with 3,500 haptics patents issued or pending worldwide.
- Signed a license agreement with Seoyon, a leading international supplier of automotive systems and products, providing access to Immersion’s patented haptic technology for use in Seoyon’s in-vehicle touch button panels, touch pads, and rotary switches.
- Entered into a multi-year agreement with Google under which the companies will explore opportunities to collaborate on incorporating haptics in Google’s next-generation hardware products. The agreement also provides Google with a license to Immersion’s patent portfolio for Google’s Pixel line of phones and other Google hardware.
Conference Call Information
Immersion will host a conference call with company management on
About Immersion
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 (loss) and Non-GAAP net income (loss) per share, because it is useful in understanding the company’s performance as it excludes certain non-cash expenses like stock-based compensation expense and other special charges, such as deferred tax assets valuation allowance and restructuring costs, 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
All statements, other than the statements of historical fact, are
statements that may be deemed forward-looking statements, including, but
not limited to, the company being uniquely positioned to continue to
innovate and lead in haptic technology, prioritizing and capitalizing on
the market growth in front of us which paving a path toward sustainable
profitability, demonstrating the value proposition that we bring to our
customers and the market amidst the expanding adoption of haptics, as
well as the shareholder value that can be generated through our business
model, our revenue outlook for 2019 anticipated to be in the range of
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 2017 and its most recent Quarterly Report on Form 10-Q which are on
file with the
Immersion, the Immersion logo and TouchSense are trademarks or
registered trademarks of
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) | ||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
(1) | (1) | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 110,988 | $ | 24,622 | ||||
Short-term investments | 13,930 | 21,916 | ||||||
Accounts and other receivables | 1,051 | 806 | ||||||
Prepaid expenses and other current assets | 9,856 | 736 | ||||||
Total current assets | 135,825 | 48,080 | ||||||
Property and equipment, net | 2,343 | 3,150 | ||||||
Deferred income tax assets | 295 | 401 | ||||||
Other assets | 7,532 | 344 | ||||||
TOTAL ASSETS | $ | 145,995 | $ | 51,975 | ||||
LIABILITIES | ||||||||
Accounts payable | $ | 3,612 | $ | 6,647 | ||||
Accrued compensation | 3,948 | 4,133 | ||||||
Other current liabilities | 3,194 | 3,896 | ||||||
Deferred revenue | 4,591 | 4,424 | ||||||
Total current liabilities | 15,345 | 19,100 | ||||||
Long-term deferred revenue | 30,203 | 22,303 | ||||||
Other long-term liabilities | 787 | 915 | ||||||
TOTAL LIABILITIES | 46,335 | 42,318 | ||||||
STOCKHOLDERS’ EQUITY | 99,660 | 9,657 | ||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 145,995 | $ | 51,975 | ||||
(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 | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(1) | (1) | (2) | (2) | |||||||||||||
Revenues: | ||||||||||||||||
Royalty and license | $ | 10,768 | $ | 6,662 | $ | 110,557 | $ | 34,089 | ||||||||
Development, services, and other | 99 | 234 | 422 | 924 | ||||||||||||
Total revenues | 10,867 | 6,896 | 110,979 | 35,013 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 28 | 39 | 218 | 197 | ||||||||||||
Sales and marketing | 1,664 | 3,374 | 6,118 | 13,516 | ||||||||||||
Research and development | 2,575 | 2,621 | 9,727 | 11,759 | ||||||||||||
General and administrative | 10,146 | 11,458 | 41,815 | 53,343 | ||||||||||||
Restructuring Costs | - | 1,620 | - | 1,620 | ||||||||||||
Total costs and expenses | 14,413 | 19,112 | 57,878 | 80,435 | ||||||||||||
Operating income (loss) | (3,546 | ) | (12,216 | ) | 53,101 | (45,422 | ) | |||||||||
Interest and other income | 483 | 107 | 1,634 | 611 | ||||||||||||
Income (loss) before provision for income taxes | (3,063 | ) | (12,109 | ) | 54,735 | (44,811 | ) | |||||||||
Provision for income taxes | (79 | ) | (185 | ) | (392 | ) | (480 | ) | ||||||||
Net income (loss) | $ | (3,142 | ) | $ | (12,294 | ) | $ | 54,343 | $ | (45,291 | ) | |||||
Basic net income (loss) per share | $ | (0.10 | ) | $ | (0.42 | ) | $ | 1.78 | $ | (1.55 | ) | |||||
Shares used in calculating basic net income (loss) per share | 30,814 | 29,250 | 30,459 | 29,179 | ||||||||||||
Diluted net income (loss) per share | $ | (0.10 | ) | $ | (0.42 | ) | $ | 1.73 | $ | (1.55 | ) | |||||
Shares used in calculating diluted net income (loss) per share | 30,814 | 29,250 | 31,407 | 29,179 | ||||||||||||
(1): Unaudited quarterly financial data | ||||||||||||||||
(2): 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 December 31, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
As Reported |
Adjustments* | ASC 605* |
As Reported |
|||||||||||||
(1) | (1) | (1) | (1) | |||||||||||||
Revenues: | ||||||||||||||||
Fixed fee license revenue | $ | 1,618 | $ | 2,315 | $ | 3,933 | $ | 1,419 | ||||||||
Per-unit royalty revenue | 9,150 | (4,208 | ) | 4,942 | 5,243 | |||||||||||
Total royalty and license revenue | 10,768 | (1,893 | ) | 8,875 | 6,662 | |||||||||||
Development, services, and other | 99 | - | 99 | 234 | ||||||||||||
Total revenues | 10,867 | (1,893 | ) | 8,974 | 6,896 | |||||||||||
Total costs and operating expenses | 14,413 | - | 14,413 | 19,112 | ||||||||||||
Operating loss | (3,546 | ) | (1,893 | ) | (5,439 | ) | (12,216 | ) | ||||||||
Interest and other income | 483 | - | 483 | 107 | ||||||||||||
Loss before provision for income taxes | (3,063 | ) | (1,893 | ) | (4,956 | ) | (12,109 | ) | ||||||||
Provisions for income taxes | (79 | ) | - | (79 | ) | (185 | ) | |||||||||
Net loss | $ | (3,142 | ) | $ | (1,893 | ) | $ | (5,035 | ) | $ | (12,294 | ) | ||||
Basic net loss per share | $ | (0.10 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.42 | ) | ||||
Diluted net loss per share | $ | (0.10 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.42 | ) | ||||
Year Ended December 31, | ||||||||||||||||
2018 |
2017 | |||||||||||||||
As Reported |
Adjustments* | ASC 605* |
As Reported |
|||||||||||||
(2) | (2) | (2) | (2) | |||||||||||||
Revenues: | ||||||||||||||||
Fixed fee license revenue | $ | 83,573 | $ | (68,094 | ) | $ | 15,479 | $ | 12,575 | |||||||
Per-unit royalty revenue | 26,984 | (8,482 | ) | 18,502 | 21,514 | |||||||||||
Total royalty and license revenue | 110,557 | (76,576 | ) | 33,981 | 34,089 | |||||||||||
Development, services, and other | 422 | - | 422 | 924 | ||||||||||||
Total revenues | 110,979 | (76,576 | ) | 34,403 | 35,013 | |||||||||||
Total costs and operating expenses | 57,878 | - | 57,878 | 80,435 | ||||||||||||
Operating income (loss) | 53,101 | (76,576 | ) | (23,475 | ) | (45,422 | ) | |||||||||
Interest and other income | 1,634 | - | 1,634 | 611 | ||||||||||||
Income (loss) before provision for income taxes | 54,735 | (76,576 | ) | (21,841 | ) | (44,811 | ) | |||||||||
Provisions for income taxes | (392 | ) | - | (392 | ) | (480 | ) | |||||||||
Net income (loss) | $ | 54,343 | $ | (76,576 | ) | $ | (22,233 | ) | $ | (45,291 | ) | |||||
Basic net income (loss) per share | $ | 1.78 | $ | (2.51 | ) | $ | (0.73 | ) | $ | (1.55 | ) | |||||
Diluted net income (loss) per share | $ | 1.73 | $ | (2.51 | ) | $ | (0.73 | ) | $ | (1.55 | ) | |||||
*The Company is presenting the ASC 606 results together with the adjustments made to reconcile the ASC 606 presentation to the results that would have been applicable under ASC 605. The ASC 605 information should be considered in addition to, not as a substitute for, nor superior to or in isolation from, the financial information prepared in accordance with ASC 606. | ||||||||||||||||
(1): Unaudited quarterly financial data | ||||||||||||||||
(2): Derived from Immersion’s annual audited consolidated financial statements and notes. | ||||||||||||||||
Immersion Corporation | ||||||||||||||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) | $ | (3,142 | ) | $ | (12,294 | ) | $ | 54,343 | $ | (45,291 | ) | |||||
Add: Provision for income taxes | 79 | 185 | 392 | 480 | ||||||||||||
Less: Non-GAAP provision for income taxes | (35 | ) | (71 | ) | (213 | ) | (268 | ) | ||||||||
Add: Restructure Costs | - | 1,620 | - | 1,620 | ||||||||||||
Add: Stock-based compensation | 2,420 | 2,029 | 8,686 | 6,102 | ||||||||||||
Non-GAAP net income (loss) | $ | (678 | ) | $ | (8,531 | ) | $ | 63,208 | $ | (37,357 | ) | |||||
Non-GAAP net income (loss) per share | $ | (0.02 | ) | $ | (0.29 | ) | $ | 2.01 | $ | (1.28 | ) | |||||
Dilutive shares used in calculating Non-GAAP net income (loss) per share | 30,814 | 29,250 | 31,407 | 29,179 | ||||||||||||
Immersion Corporation | ||||||||||||||||||||
Revenue by Line of Business | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Q1'17 | Q2'17 | Q3'17 | Q4'17 | Q1'18 | Q2'18 | Q3'18 | Q4'18 | FY'17 | FY'18 | |||||||||||
Mobility | 32% | 44% | 71% | 39% | 90% | 45% | 66% | 45% | 48% | 81% | ||||||||||
Gaming | 47% | 25% | 17% | 37% | 2% | 27% | 15% | 14% | 31% | 5% | ||||||||||
Automotive | 12% | 22% | 9% | 22% | 8% | 27% | 17% | 36% | 15% | 13% | ||||||||||
Medical | 9% | 9% | 3% | 2% | 0% | 1% | 2% | 5% | 6% | 1% | ||||||||||
Immersion Corporation | ||||||||||||||||
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||||||||||
(In thousand) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP operating expenses | $ | 14,385 | $ | 19,073 | $ | 57,660 | $ | 80,238 | ||||||||
Adjustments to non-GAAP operating expenses: | ||||||||||||||||
Stock-based compensation expense - S&M | (271 | ) | (217 | ) | (946 | ) | (1,025 | ) | ||||||||
Stock-based compensation expense - R&D | (566 | ) | (201 | ) | (1,948 | ) | (981 | ) | ||||||||
Stock-based compensation expense - G&A | (1,583 | ) | (1,611 | ) | (5,792 | ) | (4,096 | ) | ||||||||
Depreciation and amortization expense | (208 | ) | (239 | ) | (855 | ) | (968 | ) | ||||||||
Non-GAAP operating expense | $ | 11,757 | $ | 16,805 | $ | 48,119 | $ | 73,168 |
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Source:
Investor Contact:
The Blueshirt Group
Jennifer Jarman
+1
415.217.5866
jennifer@blueshirtgroup.com