Immersion Releases 1Q 2009 Results

Immersion Corp., a company engaged in developing and licensing touch feedback technology, has reported financial results for the first quarter ended March 31.

In a release on May 4, the company noted that revenues from Continuing Operations for the first quarter of 2009 were $7.0 million, an increase of 1 percent compared to revenues from Continuing Operations of $6.9 million for the first quarter of 2008 and a decrease of 8 percent compared to revenues from Continuing Operations of $7.6 million for the fourth quarter of 2008. Total revenue generated during the first quarter of 2009 by the Company was $7.5 million, $531,000 of which was included within Gain from Discontinued Operations.

Immersion commenced the divestiture of its 3D line of business during the first quarter of 2009. Income and expenses directly attributable to the 3D business are presented as "Discontinued Operations" in the Company's statement of operations.

Net loss for the first quarter of 2009 was $(7.5) million, or $(0.27) per share, compared to net loss for the first quarter of 2008 of $(2.6) million, or $(0.08) per share and net loss of $(9.7) million, or $(0.35) per share, for the fourth quarter of 2008, which included one-time charges of $2.6 million related to the divesture of the 3D line of business.

"Demand for Immersion's proprietary TouchSense solutions was strong as we posted sequential and annual growth for this line of business during the first quarter. Touch screens in mobile phones is fueling demand for haptics in that market segment. We estimate that in 2008 our TouchSense technology shipped in 15 percent of touch screen phones worldwide. Based on our current design wins with the top three handset manufacturers globally, we expect that number to grow to approximately 25 percent of 2009 touch screen phone shipments. Separately, we have begun to generate royalty license revenue from agreements with semiconductor companies and believe that this is the beginning of an important new revenue stream for Immersion," said Immersion president and CEO Clent Richardson.

"Domestic Medical sales were lower than expected primarily due to sluggishness in the rate of capital purchases from hospitals and other facilities caused by the overall economy, as well as seasonal fluctuations. The relocation of our Medical line of business to our headquarters, combined with cost-cutting initiatives, are expected to improve the operational and financial performance of that business. Given the reduced trajectory of our revenue growth rate, we have taken aggressive and prudent actions to decrease expenses across the company to achieve cash-flow breakeven and turn the corner on sustained profitability as quickly as possible. We will begin to experience the benefits of these actions in the second quarter, though the major payoff will be realized starting in the second half of 2009 and into next year. We are sizing the company appropriately to align with current revenue forecasts, while improving operational efficiency to capitalize on an unmistakable opportunity to shape the future of the user experience in digital devices," concluded Richardson.

As of March 31, Immersion had cash, cash equivalents, and short-term investments totaling $80.9 million, compared to $85.7 million as of December 31, 2008.

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