GAAP Net Income of $8.3 million or $0.25 per
diluted share
Non-GAAP Net Income of $11.0 million or
$0.33 per diluted share
Declares Third Consecutive Quarterly
Dividend
Immersion Corporation (NASDAQ: IMMR), a leading developer and
provider of technologies for haptics, today reported financial
results for the first quarter ended March 31, 2023.
First Quarter Financial Summary:
- Total revenues of $7.1 million, compared to $7.3 million in the
first quarter of 2022. Royalty and license revenues were $7.0
million, compared to $7.2 million in the first quarter of
2022.
- GAAP net income was $8.3 million, or $0.25 per diluted share,
compared to GAAP net income of $5.1 million, or $0.15 per diluted
share, in the first quarter of 2022.
- GAAP operating expenses of $3.8 million increased 3% from $3.7
million in the first quarter of 2022. Non-GAAP operating expenses
of $2.6 million increased 6% from $2.4 million in the first quarter
of 2022. (See attached table for a reconciliation of GAAP to
non-GAAP financial measures.)
- Non-GAAP net income was $11.0 million, or $0.33 per diluted
share, compared to non-GAAP net income of $6.9 million, or $0.20
per diluted share in the first quarter of 2022.
“We had a strong quarter of profitability despite macro
pressures negatively impacting the volumes of our licensees,” said
Eric Singer, Chairman & CEO. “During the first quarter, we also
filed multiple lawsuits, alleging infringement of our patents
covering haptic effects in smartphones, against several companies
of the Xiaomi-Group in Germany, France and India.”
“We are also pleased to announce our third consecutive quarterly
dividend of $0.03 per share, and in January we announced a $0.10
per share special dividend as well as a new $50 million stock
repurchase program,” said Singer.
“As of March 31st, 2023, our stockholders’ equity is over $165
million, or $5.08 per share, representing a sequential improvement
of more than $8 million. Compared to last year, our stockholders’
equity has increased more than $22 million, even after more than $8
million in stock buybacks and $5 million in regular and special
dividends. Our strong balance sheet provides us with considerable
optionality as we work to drive long-term shareholder value,”
Singer added.
The third quarterly dividend will be paid on July 28, 2023 to
shareholders of record on July 13, 2023. Future quarterly dividends
will be subject to further review and approval by the Board of
Directors (the “Board”) in accordance with applicable law. The
Board reserves the right to adjust or withdraw the quarterly
dividend in future periods as it reviews the Company’s capital
allocation strategy from time-to-time. In addition, the Company’s
current stock repurchase program allows for the repurchase of
shares with an aggregate value of up to $50 million.
Recent Business Highlights:
- In April, we announced a multi-year license agreement with
Motrex Co., LTD, a manufacturer and developer of automotive
solutions.
- In March, we announced patent infringement lawsuits against
several companies of the Xiaomi-Group in Germany, France and India.
The complaints allege that Xiaomi’s smartphones, including the
Xiaomi 12, infringe Immersion’s patents that cover various uses of
haptic effects in connection with such smartphones. Immersion is
seeking injunctions that would allow Immersion to prohibit Xiaomi
from selling the infringing smartphones in Germany, France and
India, as well as costs and damages as compensation for such
infringement.
About Immersion
Immersion Corporation (NASDAQ: IMMR) is a 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, Non-GAAP operating expenses 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, including but not limited to
statements about the Company’s focus on protecting its intellectual
property, either through the execution of new or renewal license
agreements or by proactive enforcement continuing to pursue
thoughtful capital allocation to increase long-term shareholder
value, and the timing of any dividend payments.
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 inability to predict the outcome of any litigation,
the costs associated with any litigation and the risks related to
our business, both direct and indirect, of initiating litigation,
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 2022 and in 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)
March 31, 2023
December 31, 2022
Unaudited
(1)
ASSETS
Cash and cash equivalents
$
27,484
$
48,820
Investments - current
120,920
100,918
Accounts and other receivables
1,736
1,235
Prepaid expenses and other current
assets
8,925
9,347
Total current assets
159,065
160,320
Property and equipment, net
272
293
Investments - noncurrent
25,604
17,040
Long-term deposits
4,306
4,324
Deferred tax assets
7,217
7,217
Other assets
654
916
TOTAL ASSETS
$
197,118
$
190,110
LIABILITIES
Accounts payable
$
22
$
86
Accrued compensation
770
2,029
Deferred revenue - current
4,766
4,766
Other current liabilities
14,046
12,465
Total current liabilities
19,604
19,346
Deferred revenue - noncurrent
11,440
12,629
Other long-term liabilities
345
435
Total liabilities
31,389
32,410
STOCKHOLDERS’ EQUITY
165,729
157,700
TOTAL LIABILITIES & STOCKHOLDERS’
EQUITY
$
197,118
$
190,110
(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,
2023
2022
Revenues:
Royalty and license
$
7,009
$
7,230
Development, services, and other
65
78
Total revenues
7,074
7,308
Operating expenses:
Sales and marketing
96
486
Research and development
130
513
General and administrative
3,589
2,706
Total operating expenses
3,815
3,705
Operating income
3,259
3,603
Interest and other income (loss), net
6,526
2,034
Income before provision for income
taxes
9,785
5,637
Provision for income taxes
(1,507
)
(561
)
Net income
$
8,278
$
5,076
Basic net income per share
$
0.25
$
0.15
Shares used in calculating basic net
income per share
32,603
33,996
Diluted net income per share
$
0.25
$
0.15
Shares used in calculating diluted net
income per share
33,085
34,268
Immersion Corporation
Reconciliation of GAAP Net
Income to Non-GAAP Net Income
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
March 31,
2023
2022
GAAP net income
$
8,278
$
5,076
Add: Provision for income taxes
1,507
561
Less: Non-GAAP provision for income
taxes
(19
)
(31
)
Add: Stock-based compensation
946
1,141
Add: Restructuring expense
187
—
Add: Depreciation and amortization of
property and equipment
21
35
Other nonrecurring charges
79
93
Non-GAAP net income
$
10,999
$
6,875
Non-GAAP net income per diluted share
$
0.33
$
0.20
Shares used in calculating Non-GAAP net
income per diluted share
33,085
34,268
Immersion Corporation
Disaggregated Revenue
Information
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Per-unit royalty revenue
$
5,795
$
5,485
Fixed fee license revenue
1,214
1,745
Total royalty and license revenue
7,009
7,230
Development, services, and other
revenue
65
78
Total revenues
$
7,074
$
7,308
Immersion Corporation
Revenue by Line of
Business
(Unaudited)
Three Months Ended
March 31,
2023
2022
Mobility
52
%
60
%
Gaming
34
%
23
%
Automotive
9
%
16
%
Other
5
%
1
%
Total revenues
100
%
100
%
Immersion Corporation
Reconciliation of GAAP
Operating Expenses to Non-GAAP Operating Expenses
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2023
2022
GAAP operating expenses
$
3,815
$
3,705
Adjustments to GAAP operating
expenses:
Stock-based compensation expense -
S&M
99
(90
)
Stock-based compensation expense -
R&D
74
(107
)
Stock-based compensation expense -
G&A
(1,119
)
(944
)
Restructuring expense
(187
)
—
Depreciation and amortization expense of
property and equipment
(21
)
(35
)
Other nonrecurring charges
(79
)
(93
)
Non-GAAP operating expenses
$
2,582
$
2,436
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510005297/en/
Investor Contact: Aaron Akerman Immersion Corporation
514-987-9800 ext. 5110 aakerman@immersion.com
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