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Immersion Corporation Reports Second Quarter 2021 Results

Immersion Corporation Reports Second Quarter 2021 Results

Immersion Corporation (NASDAQ: IMMR), the leading developer and provider of technologies for haptics, today reported financial results for the second quarter ended June 30, 2021.

Second Quarter Financial Summary:

  • Total revenues of $11.0 million, compared to $5.7 million in the second quarter of 2020. Royalty and license revenues were $10.9 million, compared to $5.6 million in the second quarter of 2020.
  • GAAP operating expenses of $5.2 million declined 23% from $6.7 million in the second quarter of 2020. Non-GAAP operating expenses of $3.8 million declined 28% from non-GAAP operating expenses of $5.2 million in the second quarter of 2020. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)
  • GAAP net income was $5.3 million, or $0.17 per diluted share, compared to GAAP net loss of $0.7 million, or $0.03 per diluted share, in the second quarter of 2020.
  • Non-GAAP net income was $7.2 million, or $0.23 per diluted share, compared to non-GAAP net income of $0.8 million, or $0.03, in the second quarter of 2020.
  • As of June 30, 2021, cash and cash equivalents totaled $107.3 million.

“The results that we are reporting today reflect the continued success of our customers and partners in developing and shipping high performance haptic products and solutions in the automotive, gaming, and mobile market segments,” said Jared Smith, Interim CEO, Immersion.

Recent Business Highlights:

  • Expanded license agreement with Stanley Electric Co., Ltd., for the use of haptics in automotive products.
  • Strong revenue performance in mobile from channel licensing program. Immersion also expanded the program to include TITAN Haptics to make available haptic patent licenses for mobile phone and wearable OEMs.
  • Multiyear renewal license with AsusTek for use of TouchSense software and haptics technology in its mobile products.

Second Quarter Earnings Conference Call and Webcast

Immersion will host a conference call with company management today at 2:00 p.m. PT (5:00 p.m. ET) to discuss financial results for the second quarter ended June 30, 2021. To participate on the live call, analysts and investors should dial 1-866-548-4713 (conference ID: 1989215) at least ten minutes prior to the start of the call

A recorded webcast will also be available for 90 days in the "IR News and Events” page of Immersion's Investor Relations website at https://ir.immersion.com/news-and-events.

About Immersion

Immersion Corporation (NASDAQ: IMMR) is the leading innovator of touch feedback technology, also known as haptics. The company invents, accelerates, and scales haptic experiences by providing technology solutions for mobile, automotive, gaming, and consumer electronics. Haptic technology creates immersive and realistic experiences that enhance digital interactions by engaging users' sense of touch. Learn more at www.immersion.com.

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 diluted 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, depreciation 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. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. The Company has not reconciled the non-GAAP financial measures guidance to the corresponding GAAP measures on a forward-looking basis due to the uncertainty and the potential variability of many of the costs and expenses that may be incurred in the future. Accordingly, reconciliations of the Company’s forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Forward-looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements involve risks and uncertainties. Forward-looking statements are identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “places,” “estimates,” and other similar expressions. However, these words are not the only way we identify forward-looking statements. Examples of forward-looking statements include any expectations, projections, or other characterizations of future events, or circumstances, and include statements regarding the anticipated impact of the expansion of our channel licensing program, and other statements regarding the future prospects and opportunities for the Company’s business.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results could differ materially from those projected in the forward-looking statements, therefore we caution you not to place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the effects of the COVID-19 global pandemic on the Company and its business, and on the business of its suppliers and customers; unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate (especially in light of the ongoing adverse effects of the COVID-19 global pandemic); delay in or failure to achieve adoption of or commercial demand for the Company’s products or third party products incorporating the Company’s technologies; the inability of Immersion to renew existing licensing arrangements, or enter into new licensing arrangements on favorable terms; the loss of a major customer; the ability of Immersion to protect and enforce its intellectual property rights and other factors. 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 2020 and its most recent Quarterly Report on Form 10-Q which are on file with the U.S. Securities and Exchange Commission. Any forward-looking statements made by us in this press release speak only as of the date of this press release, and Immersion does not intend to update these forward-looking statements after the date of this press release, except as required by law.

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. 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, 2021

 

December 31, 2020

 

(Unaudited)

 

(1)

ASSETS

 

 

 

Cash and cash equivalents

$

107,274

 

 

$

59,522

 

Accounts and other receivables

2,912

 

 

2,218

 

Prepaid expenses and other current assets

11,942

 

 

12,610

 

Total current assets

122,128

 

 

74,350

 

Property and equipment, net

246

 

 

209

 

Long-term deposits

12,353

 

 

12,571

 

Other assets

7,222

 

 

9,000

 

TOTAL ASSETS

$

141,949

 

 

$

96,130

 

LIABILITIES

 

 

 

Accounts payable

$

144

 

 

$

149

 

Accrued compensation

1,641

 

 

1,001

 

Other current liabilities

2,972

 

 

2,457

 

Deferred revenue

5,010

 

 

5,173

 

Total current liabilities

9,767

 

 

8,780

 

Long-term deferred revenue

19,021

 

 

21,334

 

Other long-term liabilities

1,435

 

 

2,035

 

TOTAL LIABILITIES

30,223

 

 

32,149

 

STOCKHOLDERS’ EQUITY

111,726

 

 

63,981

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

$

141,949

 

 

$

96,130

 

 

 

 

 

(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 Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Royalty and license

$

10,881

 

 

$

5,593

 

 

$

17,949

 

 

$

11,775

 

Development, services, and other

129

 

 

75

 

 

220

 

 

150

 

Total revenues

11,010

 

 

5,668

 

 

18,169

 

 

11,925

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenues

41

 

 

62

 

 

70

 

 

106

 

Sales and marketing

1,194

 

 

1,255

 

 

2,300

 

 

2,971

 

Research and development

1,332

 

 

1,323

 

 

2,639

 

 

3,012

 

General and administrative

2,636

 

 

4,087

 

 

4,860

 

 

11,443

 

Total costs and expenses

5,203

 

 

6,727

 

 

9,869

 

 

17,532

 

Operating income (loss)

5,807

 

 

(1,059)

 

 

8,300

 

 

(5,607)

 

Interest and other income (loss), net

40

 

 

388

 

 

(276)

 

 

160

 

Income (loss) before provision for income taxes

5,847

 

 

(671)

 

 

8,024

 

 

(5,447)

 

Provision for income taxes

(506)

 

 

(41)

 

 

(647)

 

 

(93)

 

Net income (loss)

$

5,341

 

 

$

(712)

 

 

$

7,377

 

 

$

(5,540)

 

Basic net income (loss) per share

$

0.17

 

 

$

(0.03)

 

 

$

0.25

 

 

$

(0.19)

 

Shares used in calculating basic net income (loss) per share

30,982

 

 

27,634

 

 

29,787

 

 

29,320

 

Diluted net income (loss) per share

$

0.17

 

 

$

(0.03)

 

 

$

0.24

 

 

$

(0.19)

 

Shares used in calculating diluted net income (loss) per share

31,247

 

 

27,634

 

 

30,253

 

 

29,320

 

Immersion Corporation

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)

(In thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income (loss)

$

5,341

 

 

$

(712)

 

 

$

7,377

 

 

$

(5,540)

 

Add: Provision for income taxes

506

 

 

41

 

 

647

 

 

93

 

Less: Non-GAAP provision for income taxes

(15)

 

 

(5)

 

 

(44)

 

 

(47)

 

Add: Stock-based compensation

1,051

 

 

1,365

 

 

1,582

 

 

2,094

 

Add: Restructuring expense

325

 

 

66

 

 

426

 

 

590

 

Add: Depreciation and amortization of property and equipment

$

26

 

 

$

40

 

 

50

 

 

1,003

 

Non-GAAP net income (loss)

$

7,234

 

 

$

795

 

 

$

10,038

 

 

$

(1,807)

 

Non-GAAP net income (loss) per diluted share

$

0.23

 

 

$

0.03

 

 

$

0.33

 

 

$

(0.06)

 

Dilutive shares used in calculating Non-GAAP net income (loss) per share

31,247

 

 

27,634

 

 

30,253

 

 

29,320

 

Immersion Corporation

Disaggregated Revenue Information

(In thousands)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Fixed fee license revenue

$

1,824

 

 

$

1,292

 

 

$

3,099

 

 

$

2,578

 

Per-unit royalty revenue

9,057

 

 

4,301

 

 

14,850

 

 

9,197

 

Total royalty and license revenue

10,881

 

 

5,593

 

 

17,949

 

 

11,775

 

Development, services, and other revenue

129

 

 

75

 

 

220

 

 

150

 

Total revenue

$

11,010

 

 

$

5,668

 

 

$

18,169

 

 

$

11,925

 

Immersion Corporation

Revenue by Line of Business

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Mobility

61

%

 

79

%

 

64

%

 

78

%

Gaming

21

%

 

10

%

 

15

%

 

10

%

Automotive

18

%

 

8

%

 

20

%

 

11

%

Other

%

 

3

%

 

1

%

 

1

%

Total

100

%

 

100

%

 

100

%

 

100

%

Immersion Corporation

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses

(In thousands)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

GAAP operating expenses

$

5,162

 

 

$

6,665

 

 

9,799

 

 

17,426

 

Adjustments to non-GAAP operating expenses:

 

 

 

 

 

 

 

Stock-based compensation expense - S&M

(313)

 

 

(343)

 

 

(537)

 

 

(388)

 

Stock-based compensation expense - R&D

(217)

 

 

(251)

 

 

(535)

 

 

(420)

 

Stock-based compensation expense - G&A

(521)

 

 

(771)

 

 

(510)

 

 

(1,286)

 

Restructuring expense

(325)

 

 

(66)

 

 

(426)

 

 

(590)

 

Depreciation and amortization of property and equipment

(26)

 

 

(40)

 

0

(50)

 

0

(1,003)

 

Non-GAAP operating expenses

$

3,760

 

 

$

5,194

 

 

7,741

 

 

13,739

 

 

Investor Contact:
Aaron Akerman
Immersion Corporation
514-987-9800 ext. 5110
aakerman@immersion.com

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