Immersion Corporation Reports Fourth Quarter and Fiscal 2011 Results

SAN JOSE, Calif. — (BUSINESS WIRE) — March 1, 2012 — Immersion Corporation (NASDAQ: IMMR), the leader in developing and licensing touch feedback technology (, today reported financial results for the fourth quarter and year ended December 31, 2011.

Total revenues for the fourth quarter of 2011 were $7.7 million, an increase of 20% as compared to $6.4 million for the fourth quarter of 2010. Royalty and license revenues totaled $6.8 million for the fourth quarter of 2011, an increase of 26% as compared to $5.4 million for the same period last year. Net loss for the fourth quarter of 2011 was $(270,000), or $(0.01) per share. This compares to net loss of $(2.3) million or $(0.08) per share, for the fourth quarter of 2010. Adjusted EBITDA for the fourth quarter of 2011 was $1.9 million, as compared to $(144,000) in the fourth quarter of 2010.

Revenues for fiscal 2011 were $30.6 million, as compared to $31.1 million for fiscal 2010. Revenues for the twelve months ended December 31, 2010 included product revenues of approximately $4 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 approximately $1 million primarily from the Gaming line of business related to true ups of royalty reports. Royalty and license revenue for fiscal 2011 totaled $26.9 million, an increase of 16% over $23.3 million for fiscal 2010. Net loss for fiscal 2011 was $(1.6) million, or $(0.06) per share as compared to net loss of $(5.9) million, or $(0.21) per share, for fiscal 2010. Adjusted EBITDA for fiscal 2011 was $6.0 million, an increase of $3.4 million over $2.6 million in fiscal 2010.

“2011 was a productive year for Immersion as we successfully transitioned to a scalable licensing model, with royalty and licensing revenues growing 16% year-over-year and reaching 88% of total revenues,” said Immersion CEO Victor Viegas. “Our Integrator product for OEMs and our SDK for third party developers has been well-received, culminating in the recent launch of the first high-definition haptic device, as well as growing momentum for the design of haptic effects within mobile applications. During the year we enjoyed a broadening of our patent portfolio, while also seeing haptics achieve more widespread adoption in the mobile market. In addition to working to deliver compelling new solutions to customers, we are intently focused on monetizing and protecting our IP relative to the implementation of basic haptics within touchscreens and recently filed a complaint for patent infringement against Motorola Mobility with the ITC.”

As of December 31, 2011, Immersion’s cash, cash equivalents, and short-term investments were $56.3 million, compared to $61.2 million as of December 31, 2010. During 2011, the Company used $6.5 million to buy back approximately 1.1 million shares of its common stock under its stock repurchase program.

Business Outlook

“As we look at 2012, we believe Immersion is at the center of a growing opportunity for haptics in multiple markets including mobile, gaming and automotive. We remain focused on building upon our position as the premier partner and leading innovator in the haptic space. Based on our current outlook, we expect revenues for 2012 to be in the range of $34 million to $36 million, an increase of 11% to 18% from the prior year. While we anticipate increased spending related to our efforts to defend and monetize our IP, we expect Adjusted EBITDA to be positive for the year,” concluded Mr. Viegas.

Corporate Highlights

Immersion recently:

  • Announced HD Integrator, a new OEM build-time tool for Android mobile devices that allows OEMs to use high fidelity haptics to provide meaningful information and communicate more clearly with users via the sense of touch.
  • Saw the first tablet launch with a high-definition haptic experience in the Pantech Element. Utilizing Immersion's piezo reference design, the tablet combines a single piezo actuator from Samsung Electro-Mechanics Corp and the DRV-8662 haptic piezo driver from Texas Instruments with Immersion's TouchSense® 5000 control software and Integrator tools to produce cutting-edge touch feedback effects throughout the user interface and applications.
  • Filed a complaint with the U.S. International Trade Commission ("ITC") against Motorola Mobility. The complaint alleges that certain Motorola Mobility Android-based smartphones infringe six Immersion patents that cover various uses of haptic effects in connection with touchscreens. Immersion has also filed a patent infringement complaint against Motorola Mobility in the U.S. District Court for the District of Delaware.
  • Saw additional applications designed by numerous third party developers that incorporate haptic effects by using Immersion’s SDK.
  • Signed a licensing agreement for its TouchSense® 1000 software with Sanyo Automedia Sdn. Bhd., a leading supplier of innovative factory installed automotive systems, such as integrated center stacks.

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