Immersion Corporation Reports Third Quarter 2011 Results

SAN JOSE, Calif. — (BUSINESS WIRE) — November 3, 2011 — Immersion Corporation (NASDAQ: IMMR), the leader in developing and licensing touch feedback technology (, today reported financial results for the third quarter and nine months ended September 30, 2011.

Total revenues for the third quarter of 2011 were $6.5 million, unchanged from the third quarter of 2010. Royalty and license revenues totaled $5.9 million for the third quarter of 2011, an increase of 14% as compared to $5.1 million for the same period last year.

Net loss for the third quarter of 2011 was $(1.4) million, or $(0.05) per share. This compares to net loss of $(1.1) million or $(0.04) per share, for the third quarter of 2010. Adjusted EBITDA for the third quarter of 2011 was $454,000, as compared to $428,000 in the third quarter of 2010.

“Third quarter revenues were weaker than anticipated due to softness in the medical and automotive lines of business,” said Immersion CEO Victor Viegas. “Licensing revenue during the quarter reflected double digit growth over the prior year. We added several new licensees and ecosystem partners and made continued progress in our engagements with the Android developer community, as well as mobile and tablet OEMs. This included achieving an important milestone with the launch of the first handset and tablet devices based on the MOTIV Development platform from a new customer.”

“We are also excited about our growing patent portfolio, which is opening up new opportunities for us,” continued Mr. Viegas. “Since the end of the second quarter, we have had thirty new patents issue, four of which are fundamental to the implementation of haptics on touchscreens. The issuance of these patents coincides with the continued proliferation of unlicensed haptic solutions, marking a yet untapped opportunity for Immersion. We look forward to updating our investors in future quarters on our efforts to monetize these patents.”

Revenues for the nine months ended September 30, 2011 were $22.9 million, as compared to $24.7 million for the nine month period ended September 30, 2010. Revenues for the nine months ended September 30, 2010 included product revenues of approximately $3 million in the medical line of business primarily related to product lines that were transferred to CAE, one of the company’s medical licensees, as well as revenue of $1 million primarily from the Gaming line of business related to true ups of royalty reports from prior periods. Net loss for the nine months ended September 30, 2011 was $(1.3) million, or $(0.05) per share, as compared to net loss of $(3.6) million, or $(0.13) per share, in the same period last year. Adjusted EBITDA for the first nine months of 2011 was $4.2 million, as compared to $2.8 million for the same period last year.

“Taking our results into account for the first nine months of the year, combined with current data from our customers, we are revising our outlook for fiscal 2011 and expect revenues to be in the range of $29.5 to $30.5 million. This is expected to result in a net loss of $(1.0) to $(2.0) million. Despite this near-term softness, we remain optimistic that the accelerating adoption of haptics by mobile OEMs and content providers, combined with the strengthening of our IP in fundamental haptic technologies, positions us well for future growth. Further underlying our confidence, we intend to more aggressively repurchase shares in the fourth quarter under our existing Stock Repurchase Program,” concluded Mr. Viegas.

As of September 30, 2011, Immersion’s cash, cash equivalents, and short-term investments were $63.5 million, compared to $61.2 million as of December 31, 2010.

Corporate Highlights

Immersion recently:

  • Saw the first devices launch in the market based on its MOTIV Development platform with new mobile licensee Fujitsu. The F-12C mobile phone and the ARROWS tablet also incorporate Immersion’s TouchSense 3000 software.
  • Secured new agreements with licensees of its technology for implementation into a wide variety of markets and applications. Licensees include Sirius XM Radio in the consumer market and MAKO Surgical in the robotic surgical market.
  • Continued to build out its network of haptics ecosystems partners, including: establishing a new partnership with Microchip; adding certified component providers including Analog Devices and Semtech; and collaborating on a reference design leveraging Texas Instrument’s driver devices for high-fidelity piezo actuators.
  • Saw additional applications designed by numerous third party developers that incorporate haptic effects by using Immersion’s MOTIV™ SDK.
  • Continued to strengthen and broaden its patent portfolio to include features that serve the foundation of today’s haptic user interfaces, including using haptics in a multitasking environment, within a touch screen GUI user interface and with expressive alerts, which associate distinct haptic effects to device alerts, such as calendar reminders or voice mail messages.

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