Immersion Corporation Reports Second Quarter 2011 Results

SAN JOSE, Calif. — (BUSINESS WIRE) — August 4, 2011 — Immersion Corporation (NASDAQ: IMMR), the leader in developing and licensing touch feedback technology ( http://www.immersion.com/corporate/), today reported financial results for the second quarter and six months ended June 30, 2011.

Total revenues for the second quarter of 2011 were $6.7 million, as compared to $8.5 million for the second quarter of 2010. Revenues in the second quarter of 2010 included product revenues of approximately $1 million in the medical segment, primarily related to product lines that were transferred to the Company’s medical licensee CAE, as well as an increase in revenue of approximately $1 million, mainly in the gaming segment and primarily related to corrections and true ups to royalty reports from prior periods. Royalty and license revenues totaled $5.9 million for the second quarter of 2011, as compared to $6.3 million for the same period last year.

Net loss for the second quarter of 2011 was $(1.3) million, or $(0.05) per share. This compares to net income of $180,000 or $0.01 per share, for the second quarter of 2010. Adjusted EBITDA for the second quarter of 2011 was $442,000, as compared to $2.0 million in the second quarter of 2010.

“While we expected the second quarter to be seasonally weaker than the immediately preceding quarter, revenues were softer than anticipated due to specific customer issues in the medical segment, as well as disruption in the automotive market as a result of the earthquake in Japan,” said Immersion CEO Victor Viegas. “Leading indicators for our business remain positive, however, as the level of design engagements has increased dramatically as compared to this time last year. We continue to gain traction with the addition of new licensees and new devices leveraging Immersion technology across a variety of markets, while continuing to strengthen and broaden our powerful patent portfolio as the demand for haptics continues to develop.”

Revenues for the six months ended June 30, 2011 were $16.5 million, as compared to $18.2 million for the six month period ended June 30, 2010. Revenues for the six months ended June 30, 2010 included product revenues of approximately $3 million in the medical segment primarily related to product lines that were transferred to the Company’s medical licensee CAE. Net income for the six months ended June 30, 2011 was $78,000, or $0.00 per share, as compared to net loss of $(2.5) million, or $(0.09) per share, in the same period last year. Adjusted EBITDA for the first half of 2011 was $3.7 million, as compared to $2.3 million for the same period last year.

“Based on our current outlook and our financial performance for the first half of the year, we are reiterating our expectations for fiscal 2011 revenues to be in the range of $31 to $33 million and to generate net income for the full year,” concluded Mr. Viegas.

As of June 30, 2011, Immersion’s cash, cash equivalents, and short-term investments were $64.9 million, compared to $61.2 million as of December 31, 2010.

Corporate Highlights

Immersion recently:

  • Saw the release of a number of new mobile devices featuring Immersion technology, including the Toshiba Thrive 10” tablet and new handset models including the LG Optimus 2, Optimus 3D and Optimus Black; the Nokia N9 and Samsung’s Galaxy S2.
  • Secured new agreements with licensees of its technology for implementation into a wide variety of markets and applications. Licensees include GoodBetterBest in the gaming peripherals market, National Research Council of Canada (NRC) in the medical simulation market and Valeo in the automotive market.
  • Announced the first applications designed by numerous third party developers that incorporate haptic effects by using Immersion’s MOTIV™ SDK and are currently available on the Android Market.
  • Marked a patent milestone with over 600 patents issued in its world-wide portfolio of over 1200 granted and pending patents. The growth of the patent portfolio builds upon nearly 20 years of innovation in the field of haptics, allowing Immersion to offer its customers compelling haptic experiences that are relevant to today’s GUI-driven touchscreen interfaces.

Conference Call Information

Immersion will host a conference call with company management on Thursday, August 4, 2011 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss financial results for the second quarter ended June 30, 2011. To participate on the live call, analysts and investors should dial +1 877-941-4774 at least ten minutes prior to the start of the call. A replay of the call will be available until 11:59 p.m. Pacific time on August 11, 2011 by dialing +1 800-406-7325 and entering the passcode 4456411#. A live and archived webcast of the conference call will also be available for 90 days within the investor relations section of Immersion’s corporate Web site at www.immersion.com .

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