Immersion Corporation Reports Results for Second Quarter and Six Months Ended June 30, 2018
- First half 2018 revenues of
$91.6 million - First half 2018 operating expenses down 33% over same period last year
- Strong cash, cash equivalents, and short-term investment position
of
$137 million - Maintaining Annual Revenue Guidance
Effective
Six Months Ended
Total revenues for the six months ended
Net income for the six months ended
Non-GAAP net income for the six months ended
Second Quarter 2018 Financial Highlights
Total revenues for the second quarter of 2018 were
Net loss for the second quarter of 2018 was
Non-GAAP net loss for the second quarter of 2018 was
As of
Management Commentary and Business Outlook
“We are very pleased with the progress we continued to make in the
second quarter along both customer and technology fronts, positioning
the company well for the remainder of 2018 and into next year,” said
“Taking into account results for the first half of 2018 and our recently
announced settlement with
Recent Business Highlights
-
Signed a license agreement with
Stanley Electric , a leading supplier of lighting products and electronic components including control panels for printers, providing access to Immersion’s patented haptics IP within its electronic printer equipment. - Signed a license agreement with Toyodenso, a global automotive, motorcycle and power product components manufacturer, providing access to Immersion’s patented haptics technology for use in its automotive solutions.
-
Reached a settlement and license agreement with
Fitbit . -
Signed a license agreement with
Calsonic Kansei , a leading supplier of automotive components including cockpit systems, thermal systems, exhaust systems and advanced electronic products, providing access to Immersion’s patented haptic technology for its automotive solutions. - Reached 3,000 haptics patents issued or pending worldwide.
Conference Call and Audio Webcast 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 more closely reflects its expected long-term effective tax rates and excludes certain non-cash expenses 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, our expectation that revenues for 2018 will be in the
range of
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; the impact of litigation developments on existing and potential customers; delay in or failure to achieve commercial demand for Immersion’s or its licensees’ products; the impact of new accounting standards that will affect key items such as revenue recognition and sales commissions; 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; litigation costs in any current or future litigation; 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 foreign currency exchange rates 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 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) | |||||||
June 30, 2018 | December 31, 2017 | ||||||
(Unaudited) | (1) | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 116,437 | $ | 24,622 | |||
Short-term investments | 20,245 | 21,916 | |||||
Accounts and other receivables | 1,026 | 806 | |||||
Prepaid expenses and other current assets | 5,821 | 736 | |||||
Total current assets | 143,529 | 48,080 | |||||
Property and equipment, net | 2,716 | 3,150 | |||||
Deferred income tax assets | 371 | 401 | |||||
Other assets | 4,421 | 344 | |||||
TOTAL ASSETS | $ | 151,037 | $ | 51,975 | |||
LIABILITIES | |||||||
Accounts payable | $ | 3,359 | $ | 6,647 | |||
Accrued compensation | 3,180 | 4,133 | |||||
Other current liabilities | 4,046 | 3,896 | |||||
Deferred revenue | 4,769 | 4,424 | |||||
Total current liabilities | 15,354 | 19,100 | |||||
Long-term deferred revenue | 32,536 | 22,303 | |||||
Other long-term liabilities | 1,190 | 915 | |||||
TOTAL LIABILITIES | 49,080 | 42,318 | |||||
STOCKHOLDERS’ EQUITY | 101,957 | 9,657 | |||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 151,037 | $ | 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) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months | Six Months | ||||||||||||||||
Ended June 30, | Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Revenues: | |||||||||||||||||
Royalty and license | $ | 5,992 | $ | 6,785 | $ | 91,327 | $ | 15,791 | |||||||||
Development, services, and other | 152 | 245 | 233 | 463 | |||||||||||||
Total revenues | 6,144 | 7,030 | 91,560 | 16,254 | |||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of revenues | 94 | 54 | 129 | 97 | |||||||||||||
Sales and marketing | 1,570 | 3,461 | 2,790 | 6,766 | |||||||||||||
Research and development | 2,222 | 2,826 | 5,042 | 6,022 | |||||||||||||
General and administrative | 10,553 | 15,600 | 21,789 | 31,132 | |||||||||||||
Total costs and expenses | 14,439 | 21,941 | 29,750 | 44,017 | |||||||||||||
Operating income (loss) | (8,295 | ) | (14,911 | ) | 61,810 | (27,763 | ) | ||||||||||
Interest and other income | 375 | 165 | 606 | 304 | |||||||||||||
Income (loss) before benefit (provision) for income taxes | (7,920 | ) | (14,746 | ) | 62,416 | (27,459 | ) | ||||||||||
Benefit (provision) for income taxes | 162 | (99 | ) | (291 | ) | (251 | ) | ||||||||||
Net income (loss) | $ | (7,758 | ) | $ | (14,845 | ) | $ | 62,125 | $ | (27,710 | ) | ||||||
Basic net income (loss) per share | $ | (0.25 | ) | $ | (0.51 | ) | $ | 2.06 | $ | (0.95 | ) | ||||||
Shares used in calculating basic net income (loss) per share | 30,527 | 29,193 | 30,116 | 29,109 | |||||||||||||
Diluted net income (loss) per share | $ | (0.25 | ) | $ | (0.51 | ) | $ | 2.00 | $ | (0.95 | ) | ||||||
Shares used in calculating diluted net income (loss) per share | 30,527 | 29,193 | 31,074 | 29,109 |
Immersion Corporation | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
As Reported |
Adjustments* | ASC 605* |
As Reported |
|||||||||||||||
Revenues: | ||||||||||||||||||
Fixed fee license revenue | $ | 1,881 | $ | 2,431 | $ | 4,312 | $ | 1,765 | ||||||||||
Per-unit royalty revenue | 4,111 | 94 | 4,205 | 5,020 | ||||||||||||||
Total royalty and license revenue | 5,992 | 2,525 | 8,517 | 6,785 | ||||||||||||||
Development, services, and other revenue | 152 | - | 152 | 245 | ||||||||||||||
Total revenues | $ | 6,144 | $ | 2,525 | $ | 8,669 | $ | 7,030 | ||||||||||
Operating expenses | 14,439 | - | 14,439 | 21,941 | ||||||||||||||
Operating income (loss) | (8,295 | ) | 2,525 | (5,770 | ) | (14,911 | ) | |||||||||||
Interest and other income | 375 | - | 375 | 165 | ||||||||||||||
Income (loss) before benefit (provision) for income taxes | (7,920 | ) | 2,525 | (5,395 | ) | (14,746 | ) | |||||||||||
Income tax benefit (provision) | 162 | - | 162 | (99 | ) | |||||||||||||
Net income (loss) | $ | (7,758 | ) | $ | 2,525 | $ | (5,233 | ) | $ | (14,845 | ) | |||||||
Basic net income (loss) per share | $ | (0.25 | ) | $ | 0.08 | $ | (0.17 | ) | $ | (0.51 | ) | |||||||
Diluted net income (loss) per share | $ | (0.25 | ) | $ | 0.08 | $ | (0.17 | ) | $ | (0.51 | ) | |||||||
Six Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
As Reported |
Adjustments* | ASC 605* |
As Reported |
|||||||||||||||
Revenues: | ||||||||||||||||||
Fixed fee license revenue | $ | 77,637 | $ | (69,909 | ) | $ | 7,728 | $ | 4,275 | |||||||||
Per-unit royalty revenue | 13,690 | (4,257 | ) | 9,433 | 11,516 | |||||||||||||
Total royalty and license revenue | 91,327 | (74,166 | ) | 17,161 | 15,791 | |||||||||||||
Development, services, and other revenue | 233 | - | 233 | 463 | ||||||||||||||
Total revenues | $ | 91,560 | $ | (74,166 | ) | $ | 17,394 | $ | 16,254 | |||||||||
Operating expenses | 29,750 | - | 29,750 | 44,017 | ||||||||||||||
Operating income (loss) | 61,810 | (74,166 | ) | (12,356 | ) | (27,763 | ) | |||||||||||
Interest and other income | 606 | - | 606 | 304 | ||||||||||||||
Income (loss) before provision for income taxes | 62,416 | (74,166 | ) | (11,750 | ) | (27,459 | ) | |||||||||||
Income tax provision | (291 | ) | - | (291 | ) | (251 | ) | |||||||||||
Net income (loss) | $ | 62,125 | $ | (74,166 | ) | $ | (12,041 | ) | $ | (27,710 | ) | |||||||
Basic net income (loss) per share | $ | 2.06 | $ | (2.46 | ) | $ | (0.40 | ) | $ | (0.95 | ) | |||||||
Diluted net income (loss) per share | $ | 2.00 | $ | (2.46 | ) | $ | (0.40 | ) | $ | (0.95 | ) | |||||||
*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.
Immersion Corporation | ||||||||||||||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) | $ | (7,758 | ) | $ | (14,845 | ) | $ | 62,125 | $ | (27,710 | ) | |||||
Add: Benefit (provision) for income taxes | (162 | ) | 99 | 291 | 251 | |||||||||||
Less: Non-GAAP benefit (provision) for income taxes | 2 | (99 | ) | (98 | ) | (171 | ) | |||||||||
Add: Stock-based compensation | 2,530 | 1,178 | 3,752 | 2,735 | ||||||||||||
Non-GAAP net income (loss) | $ | (5,388 | ) | $ | (13,667 | ) | $ | 66,070 | $ | (24,895 | ) | |||||
Non-GAAP net income (loss) per share | $ | (0.18 | ) | $ | (0.47 | ) | $ | 2.13 | $ | (0.86 | ) | |||||
Dilutive shares used in calculating Non-GAAP net income (loss) per share |
30,527 | 29,193 | 31,074 | 29,109 |
Immersion Corporation | ||||||||
Revenue by Line of Business | ||||||||
(Unaudited) | ||||||||
Three Months | Three Months | |||||||
Ended June 30, | Ended March 31, | |||||||
2018 | 2017 | 2018 | 2017 | |||||
Mobility | 45% | 44% | 90% | 32% | ||||
Gaming | 27% | 25% | 2% | 47% | ||||
Automotive | 27% | 22% | 8% | 12% | ||||
Medical | 1% | 9% | 0% | 9% |
Immersion Corporation | ||||||||||||||||
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses | ||||||||||||||||
(In thousand) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP operating expenses | $ | 14,345 | $ | 21,887 | $ | 29,621 | $ | 43,920 | ||||||||
Adjustments to non-GAAP operating expenses: | ||||||||||||||||
Stock-based compensation expense - R&D | (564 | ) | (213 | ) | (820 | ) |
(549 |
) | ||||||||
Stock-based compensation expense - S&M | (366 | ) | (281 | ) | (299 | ) |
(491 |
) | ||||||||
Stock-based compensation expense - G&A | (1,600 | ) | (684 | ) | (2,633 | ) | (1,695 | ) | ||||||||
Depreciation and amortization expense | (212 | ) | (237 | ) | (439 | ) | (469 | ) | ||||||||
Non-GAAP operating expense | $ | 11,603 | $ | 20,472 | $ | 25,430 | $ | 40,716 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180802005930/en/
Source:
Investor Contact:
The Blueshirt Group
Jennifer Jarman,
+1 415-217-5866
jennifer@blueshirtgroup.com