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Immersion Corporation Reports First Quarter 2022 Results

Company Continues Focus on Driving Profitability

AVENTURA, Fla.–(BUSINESS WIRE)–$IMMR #haptics–Immersion Corporation (NASDAQ: IMMR), the leading developer and provider of technologies for haptics, today reported financial results for the first quarter ended March 31, 2022.

First Quarter Financial Summary:

  • Total revenues of $7.3 million, compared to $7.2 million in the first quarter of 2021. Royalty and license revenues were $7.2 million, compared to $7.1 million in the first quarter of 2021.
  • GAAP operating expenses of $3.7 million declined 20% from $4.6 million in the first quarter of 2021. Non-GAAP operating expenses of $2.4 million declined 39% from $4.0 million in the first quarter of 2021. (See attached table for a reconciliation of GAAP to non-GAAP financial measures.)
  • GAAP net income was $5.1 million, or $0.15 per diluted share, compared to GAAP net income of $2.0 million, or $0.07 per diluted share, in the first quarter of 2021.
  • Non-GAAP net income was $6.9 million, or $0.20 per diluted share, compared to non-GAAP net income of $2.8 million, or $0.10 per diluted share in the first quarter of 2021.
  • Cash, cash equivalents and short-term investments was $146.5 million as of March 31, 2022.
  • Cash increased by $11.5 million sequentially inclusive of repurchase of $4.4 million of stock.

“Our results reflect a remarkable transformation of Immersion into a consistently profitable business with an enviable balance sheet,” said Francis Jose, CEO. “The board and management have optimized the company’s cost structure by simplifying our operating priorities and eliminating unnecessary costs. Our strong cash position provides us with considerable optionality as we pursue our strategic initiatives and work to drive long-term shareholder value.”

“We are excited about the growing opportunities in the AR/VR/metaverse market, particularly with the proliferation of dozens of devices now available in the marketplace where haptics is crucial to an immersive user experience,” added Mr. Jose. “We are laser-focused on ensuring our relevant intellectual property for the AR/VR/metaverse market is recognized, either through the execution of licenses or by proactive enforcement.”

Recent Business Highlights:

  • Expanded our license agreement with Mobase Co., Ltd., formerly Seoyon Electronics Co., Ltd., a leading international supplier of automotive systems and products, to provide access to Immersion’s patented haptic technology for use in its in-vehicle touchscreens.
  • Further progress in development of industry standards in the Internet Engineering Task Force (IETF). Immersion’s proposal to treat haptics as a top-level media type (at the same level as audio and video) for all internet media and communications, progressed to ‘Proposed Standard’ at IETF 113 in March.

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 and Non-GAAP net income 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.

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 our statement that we are laser-focused on ensuring our relevant intellectual property for the AR/VR/metaverse market is recognized.

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 2021 which is 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)

(Unaudited)

 

 

March 31, 2022

 

December 31, 2021

 

(Unaudited)

 

 

(1

)

ASSETS

 

 

 

Cash

$

62,958

 

$

51,490

 

Marketable equity securities

 

83,532

 

 

86,431

 

Accounts and other receivables

 

2,079

 

 

1,970

 

Prepaid expenses and other current assets

 

11,788

 

 

13,432

 

Total current assets

 

160,357

 

 

153,323

 

Property and equipment, net

 

405

 

 

444

 

Long-term deposits

 

4,917

 

 

9,658

 

Marketable debt securities

 

11,181

 

 

7,286

 

Other assets, net

 

4,001

 

 

4,809

 

TOTAL ASSETS

$

180,861

 

$

175,520

 

LIABILITIES

 

 

 

Accounts payable

$

53

 

$

2

 

Accrued compensation

 

567

 

 

555

 

Deferred revenue

 

4,736

 

 

4,826

 

Other current liabilities

 

15,955

 

 

11,247

 

Total current liabilities

 

21,311

 

 

16,630

 

Long-term deferred revenue

 

15,494

 

 

16,699

 

Other long-term liabilities

 

706

 

 

896

 

TOTAL LIABILITIES

 

37,511

 

 

34,225

 

STOCKHOLDERS’ EQUITY

 

143,350

 

 

141,295

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

$

180,861

 

$

175,520

 

(1) Derived from Immersion’s annual audited consolidated financial statements.

Immersion Corporation

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

Royalty and license

$

7,230

 

 

$

7,068

 

Development, services, and other

 

78

 

 

 

91

 

Total revenues

 

7,308

 

 

 

7,159

 

Costs and expenses:

 

 

 

Cost of revenues

 

4

 

 

 

29

 

Sales and marketing

 

486

 

 

 

1,106

 

Research and development

 

509

 

 

 

1,307

 

General and administrative

 

2,706

 

 

 

2,224

 

Total costs and expenses

 

3,705

 

 

 

4,666

 

Operating Income

 

3,603

 

 

 

2,493

 

Interest and other income (loss), net

 

2,034

 

 

 

(316

)

Income before provision for income taxes

 

5,637

 

 

 

2,177

 

Provision for income taxes

 

(561

)

 

 

(141

)

Net Income

$

5,076

 

 

$

2,036

 

Basic net income per share

$

0.15

 

 

$

0.07

 

Shares used in calculating basic net income per share

 

33,996

 

 

 

28,579

 

Diluted net income per share

$

0.15

 

 

$

0.07

 

Shares used in calculating diluted net income per share

 

34,268

 

 

 

29,180

 

 

 

 

 

Immersion Corporation

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

GAAP net income

$

5,076

 

 

$

2,036

 

Add: Provision for income taxes

 

561

 

 

 

141

 

Less: Non-GAAP provision for income taxes

 

(31

)

 

 

(29

)

Add: Stock-based compensation

 

1,141

 

 

 

531

 

Add: Restructuring expense

 

 

 

 

101

 

Add: Depreciation and amortization of property and equipment

 

35

 

 

 

24

 

Other nonrecurring charges

$

93

 

 

$

 

Non-GAAP net income

$

6,875

 

 

$

2,804

 

Non-GAAP net income per diluted share

$

0.20

 

 

$

0.10

 

Shares used in calculating Non-GAAP net income per diluted share

 

34,268

 

 

 

29,180

 

Immersion Corporation

Disaggregated Revenue Information

(In thousands)

(Unaudited)

 

 

Three Months Ended

March 31,

 

2022

 

2021

Fixed fee license revenue

$

1,745

 

$

1,275

Per-Unit royalty revenue

 

5,485

 

 

5,793

Total royalty and license revenue

 

7,230

 

 

7,068

Development, services, and other revenue

 

78

 

 

91

Total revenues

$

7,308

 

$

7,159

Immersion Corporation

Revenue by Line of Business

(Unaudited)

 

 

Three Months Ended

March 31,

 

2022

 

2021

Mobility

60

%

 

68

%

Gaming

23

%

 

19

%

Automotive

16

%

 

12

%

Other

1

%

 

1

%

 

100

%

 

100

%

Immersion Corporation

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses

(In thousands)

(Unaudited)

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

GAAP operating expenses

$

3,701

 

 

$

4,637

 

Adjustments to GAAP operating expenses:

 

 

 

Stock-based compensation expense – S&M

 

(90

)

 

 

(224

)

Stock-based compensation expense – R&D

 

(107

)

 

 

(318

)

Stock-based compensation expense – G&A

 

(944

)

 

 

11

 

Restructuring expense

 

 

 

 

(101

)

Depreciation and amortization expense of property and equipment

 

(35

)

 

 

(24

)

Other nonrecurring charges

 

(93

)

 

 

Non-GAAP operating expenses

$

2,432

 

$

3,981

 

 

Contacts

Investor Contact:
Aaron Akerman

Immersion Corporation

514-987-9800 ext. 5110

aakerman@immersion.com

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