Immersion Corporation Reports Third Quarter 2017 Results
Results for the quarter ended
Total revenues for the third quarter of 2017 were
Net loss for the third quarter of 2017 was
Non-GAAP net loss for the third quarter of 2017 was
As of
Management Commentary
Chief Executive Officer
"We are updating our outlook for revenues for the year to be in the
range of
Recent Business Highlights
- Licensed Tencent to use Immersion's TouchSense technology to deliver next-generation interactive experiences to its mobile QQ and NOW applications. Additionally, Tencent has also licensed Immersion technology to incorporate haptics into its Super NBA game.
-
Extended TouchSense® Force solution to game developers building on the
Unity Technologies (Unity) engine. With the
TouchSense Force Haptic Lab , developers can easily design and integrate high-quality touch effects into their games to leverage the advanced capabilities of newer gaming consoles, including those for the Nintendo Switch™ system. -
Renewed licensing agreement with
Perfect World , a top Chinese game developer/publisher. Immersion expectsPerfect World will expand adoption of Immersion's tactile feedback technology in the mobile version of its well-known action role-playing game, Torchlight. - Expanded license agreement with LG Electronics, Inc., one of the world's largest providers of mobile devices, for use of Immersion's TouchSense® technology for high-definition haptics in LG Electronics' premier mobile phones including the LG V30, its next flagship smartphone.
Update on Apple Litigations
On
Additionally, Immersion today announces that it has filed a patent
infringement lawsuit in the
Conference Call Information
Immersion will host a conference call with company management at
About Immersion
Immersion, and the Immersion logo are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners.
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 loss and Non-GAAP net 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, 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 2017 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; 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 2016 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)
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Condensed Consolidated Balance Sheets | |||||||||
(In thousands) | |||||||||
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2017 | 2016 | ||||||||
(Unaudited) | (1) | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 19,263 | $ | 56,865 | |||||
Short-term investments | 28,860 | 32,907 | |||||||
Accounts receivable, net | 6,478 | 1,382 | |||||||
Prepaid expenses and other current assets | 978 | 2,876 | |||||||
Total current assets | 55,579 | 94,030 | |||||||
Property and equipment, net | 3,405 | 4,016 | |||||||
Deferred income tax assets | 437 | 359 | |||||||
Prepaid income taxes | - | 4,997 | |||||||
Intangibles and other assets, net | 351 | 365 | |||||||
TOTAL ASSETS | $ | 59,772 | $ | 103,767 | |||||
LIABILITIES | |||||||||
Accounts payable | $ | 4,835 | $ | 5,951 | |||||
Accrued compensation | 1,916 | 4,753 | |||||||
Other current liabilities | 4,015 | 4,409 | |||||||
Deferred revenue | 4,885 | 5,909 | |||||||
Total current liabilities | 15,651 | 21,022 | |||||||
Long-term deferred revenue | 23,335 | 26,393 | |||||||
Other long-term liabilities | 937 | 1,012 | |||||||
TOTAL LIABILITIES | 39,923 | 48,427 | |||||||
STOCKHOLDERS' EQUITY | 19,849 | 55,340 | |||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ | 59,772 | $ | 103,767 | |||||
(1) Derived from Immersion's annual audited consolidated financial statements. | |||||||||
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Condensed Consolidated Statements of Operations | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||
Ended |
Ended |
||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Revenues: | |||||||||||||||||||||
Royalty and license | $ | 11,636 | $ | 26,049 | $ | 27,427 | $ | 47,112 | |||||||||||||
Development, services, and other | 227 | 257 | 690 | 681 | |||||||||||||||||
Total revenues | 11,863 | 26,306 | 28,117 | 47,793 | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||
Cost of revenues | 61 | 52 | 158 | 139 | |||||||||||||||||
Sales and marketing | 3,376 | 3,535 | 10,142 | 10,735 | |||||||||||||||||
Research and development | 3,116 | 2,951 | 9,138 | 10,229 | |||||||||||||||||
General and administrative | 10,753 | 9,654 | 41,885 | 30,745 | |||||||||||||||||
Total costs and expenses | 17,306 | 16,192 | 61,323 | 51,848 | |||||||||||||||||
Operating income (loss) | (5,443 | ) | 10,114 | (33,206 | ) | (4,055 | ) | ||||||||||||||
Interest and other income | 200 | 664 | 504 | 909 | |||||||||||||||||
Income (loss) from continuing operations before benefit (provision) for income taxes | (5,243 | ) | 10,778 | (32,702 | ) | (3,146 | ) | ||||||||||||||
Benefit (provision) for income taxes | (44 | ) | (3,760 | ) | (295 | ) | 1,264 | ||||||||||||||
Income (loss) from continuing operations | (5,287 | ) | 7,018 | (32,997 | ) | (1,882 | ) | ||||||||||||||
Income from discontinued operations | - | - | - | 649 | |||||||||||||||||
Net income (loss) | $ | (5,287 | ) | $ | 7,018 | $ | (32,997 | ) | $ | (1,233 | ) | ||||||||||
Basic net income (loss) per share | |||||||||||||||||||||
Continuing operations | $ | (0.18 | ) | $ | 0.24 | $ | (1.13 | ) | $ | (0.07 | ) | ||||||||||
Discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.02 | |||||||||||||
Total | $ | (0.18 | ) | $ | 0.24 | $ | (1.13 | ) | $ | (0.05 | ) | ||||||||||
Shares used in calculating basic net income (loss) per share | 29,245 | 28,849 | 29,155 | 28,726 | |||||||||||||||||
Diluted net income (loss) per share | |||||||||||||||||||||
Continuing operations | $ | (0.18 | ) | $ | 0.24 | $ | (1.13 | ) | $ | (0.07 | ) | ||||||||||
Discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.02 | |||||||||||||
Total | $ | (0.18 | ) | $ | 0.24 | $ | (1.13 | ) | $ | (0.05 | ) | ||||||||||
Shares used in calculating diluted net income (loss) per share | 29,245 | 29,298 | 29,155 | 28,726 | |||||||||||||||||
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Reconciliation of GAAP Net Income (loss) to Non-GAAP Net Income (loss) | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||
Ended |
Ended |
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2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
GAAP net income (loss) | $ | (5,287 | ) | $ | 7,018 | $ | (32,997 | ) | $ | (1,233 | ) | ||||||||||
Add: Stock-based compensation | 1,338 | 1,214 | 4,073 | 4,803 | |||||||||||||||||
Add: Provision (benefit) for income taxes | 44 | 3,760 | 295 | (1,264 | ) | ||||||||||||||||
Less: Non-GAAP benefit (provision) for income taxes on continuing operations (at 19%) | 996 | (2,048 | ) | 6,213 | 598 | ||||||||||||||||
Non-GAAP net (income) loss | $ | (2,909 | ) | $ | 9,944 | $ | (22,416 | ) | $ | 2,904 | |||||||||||
Non-GAAP earnings (loss) per share | $ | (0.10 | ) | $ | 0.34 | $ | (0.77 | ) | $ | 0.10 | |||||||||||
Shares used in calculating Non-GAAP earnings (loss) per share | 29,245 | 29,298 | 29,155 | 28,726 |
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