Immersion Corporation Reports Second Quarter 2024 Results
GAAP Net Income Attributable to
Non-GAAP Net Income Attributable to Immersion stockholders of
Second Quarter Consolidated Financial Summary1:
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Total revenues of |
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GAAP net income attributable to |
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GAAP operating expenses of |
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Non-GAAP net income attributable to |
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Total stockholders' equity attributable to |
Second Quarter Immersion Corporation Segment Standalone Financial Summary:
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1 On
“The second quarter was very strong for the Company,” said
The ninth quarterly dividend, in the amount of
About
The Company is a leading provider of touch feedback technology, also known as haptics. The Company accelerates and scales haptic experiences by providing haptic technology 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.
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2 See Reconciliation of GAAP total stockholders’ equity attributable to Immersion Corporation Stockholders to Immersion standalone Non GAAP stockholders’ equity for more detail.
Use of Non-GAAP Financial Measures
The Company 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. The Company discloses certain non-GAAP information, such as Non-GAAP net income attributable to Immersion stockholders, Non-GAAP net income per diluted common share attributable to Immersion stockholders, Non-GAAP operating expenses, Immersion standalone Non-GAAP stockholders’ equity because it is useful in understanding the Company’s performance as it excludes certain non-cash expenses like stock-based compensation expense, depreciation and amortization of property and equipment, restructuring expense, business acquisition related costs and other nonrecurring charges 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 stockholder 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, unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate; 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 2023 as filed with the
Immersion, and the Immersion logo are trademarks of
(IMMR – C)
Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
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ASSETS |
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Current assets |
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Immersion |
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|
|
|
|
|
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Cash and cash equivalents |
$ |
28,932 |
|
|
$ |
56,071 |
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Investments - current |
|
97,614 |
|
|
|
104,291 |
|
Accounts receivable, net |
|
18,235 |
|
|
|
2,241 |
|
Prepaid expenses and other current assets |
|
8,647 |
|
|
|
9,847 |
|
|
|
153,428 |
|
|
|
172,450 |
|
|
|
|
|
|
|
|
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Cash and cash equivalents |
|
6,855 |
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|
|
— |
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Accounts receivable, net |
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122,797 |
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— |
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Merchandise inventories, net |
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353,454 |
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— |
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Textbook rental Inventories, net |
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9,288 |
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|
— |
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Prepaid expenses and other current assets |
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32,819 |
|
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|
— |
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|
525,213 |
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|
|
— |
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Total current assets |
|
678,641 |
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|
|
172,450 |
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Immersion |
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Property and equipment, net |
|
166 |
|
|
|
211 |
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Investments - noncurrent |
|
45,163 |
|
|
|
33,350 |
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Long-term deposits |
|
6,310 |
|
|
|
6,231 |
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Deferred tax assets |
|
3,343 |
|
|
|
3,343 |
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Other assets - noncurrent |
|
33,775 |
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|
|
146 |
|
|
|
88,757 |
|
|
|
43,281 |
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|
|
|
|
|
|
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Property and equipment, net |
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117,808 |
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— |
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Intangible assets, net |
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94,786 |
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|
— |
|
|
|
14,220 |
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|
|
— |
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Operating lease right-of-use assets |
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182,292 |
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|
— |
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Other assets - noncurrent |
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11,162 |
|
|
|
— |
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|
|
420,268 |
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|
— |
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Total assets |
$ |
1,187,666 |
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$ |
215,731 |
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Condensed Consolidated Balance Sheets (Continued) (In thousands) (Unaudited) |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Immersion |
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Accounts payable |
$ |
81 |
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$ |
47 |
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Accrued compensation |
|
2,850 |
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|
|
3,127 |
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Deferred revenue - current |
|
12,082 |
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|
|
4,239 |
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Other current liabilities |
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27,605 |
|
|
|
11,900 |
|
|
|
42,618 |
|
|
|
19,313 |
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|
|
|
|
|
|
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Accounts payable |
|
217,173 |
|
|
|
— |
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Accrued liabilities |
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69,638 |
|
|
|
— |
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Deferred revenue - current |
|
8,159 |
|
|
|
— |
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Operating lease liabilities - current |
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100,221 |
|
|
|
— |
|
|
|
395,191 |
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|
|
— |
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Total current liabilities |
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437,809 |
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|
|
19,313 |
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Immersion |
|
|
|
|
|
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Deferred revenue - noncurrent |
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8,665 |
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|
|
8,390 |
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Other long-term liabilities |
|
4,959 |
|
|
|
4,926 |
|
|
|
13,624 |
|
|
|
13,316 |
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|
|
|
|
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Deferred tax liabilities - noncurrent |
|
636 |
|
|
|
— |
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Operating lease - noncurrent |
|
107,400 |
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|
— |
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Other long-term liabilities |
|
12,240 |
|
|
|
— |
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Deferred revenue - noncurrent |
|
3,393 |
|
|
|
— |
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Long-term borrowings |
|
186,644 |
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|
|
— |
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|
310,313 |
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|
|
— |
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Total liabilities |
|
761,746 |
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|
|
32,629 |
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Total stockholders' equity attributable to |
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230,272 |
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|
183,102 |
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Noncontrolling interest in consolidated subsidiaries |
|
195,648 |
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— |
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Total stockholders' equity |
|
425,920 |
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|
|
183,102 |
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Total liabilities and stockholders' equity |
$ |
1,187,666 |
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|
$ |
215,731 |
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Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended
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Six Months Ended
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2024 |
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2023 |
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2024 |
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|
2023 |
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Revenues: |
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Immersion |
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|
|
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Royalty and license |
$ |
52,403 |
|
|
$ |
6,983 |
|
|
$ |
96,250 |
|
|
$ |
14,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Product and other |
|
45,073 |
|
|
|
— |
|
|
|
45,073 |
|
|
|
— |
|
Rental income |
|
1,948 |
|
|
|
— |
|
|
|
1,948 |
|
|
|
— |
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Total revenues |
|
99,424 |
|
|
|
6,983 |
|
|
|
143,271 |
|
|
|
14,057 |
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Cost of sale (excludes depreciation and amortization expense): |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Product and other |
|
39,675 |
|
|
|
— |
|
|
|
39,675 |
|
|
|
— |
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Rental income |
|
1,131 |
|
|
|
— |
|
|
|
1,131 |
|
|
|
— |
|
|
|
40,806 |
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|
|
— |
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|
|
40,806 |
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|
— |
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Operating expenses: |
|
|
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|
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|
|
|
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Immersion |
|
|
|
|
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|
|
|
|
|
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|
|
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Selling and administrative expenses |
|
14,175 |
|
|
|
3,870 |
|
|
|
41,408 |
|
|
|
7,685 |
|
|
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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Selling and administrative expenses |
|
14,519 |
|
|
|
— |
|
|
|
14,519 |
|
|
|
— |
|
Depreciation and amortization expense |
|
2,140 |
|
|
|
— |
|
|
|
2,140 |
|
|
|
|
|
Restructuring and other charges |
|
2,378 |
|
|
|
— |
|
|
|
2,378 |
|
|
|
— |
|
|
|
19,037 |
|
|
|
— |
|
|
|
19,037 |
|
|
|
— |
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Total operating expenses |
|
33,212 |
|
|
|
3,870 |
|
|
|
60,445 |
|
|
|
7,685 |
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Operating income |
|
25,406 |
|
|
3,113 |
|
|
|
42,020 |
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|
6,372 |
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Interest and other income (loss), net |
|
4,609 |
|
|
6,759 |
|
|
12,715 |
|
|
|
13,285 |
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Interest expense |
|
(901 |
) |
|
|
— |
|
|
|
(901 |
) |
|
|
— |
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Income before provision for income taxes |
|
29,114 |
|
|
9,872 |
|
|
53,834 |
|
|
19,657 |
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Provision for income taxes |
|
(8,178 |
) |
|
|
(2,844 |
) |
|
|
(14,243 |
) |
|
|
(4,351 |
) |
Net income |
$ |
20,936 |
|
$ |
7,028 |
|
$ |
39,591 |
|
$ |
15,306 |
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Net loss attributable to noncontrolling interest |
|
(8,009 |
) |
|
|
— |
|
|
|
(8,009 |
) |
|
|
— |
|
Net income attributable to Immersion stockholders |
$ |
28,945 |
|
$ |
7,028 |
|
$ |
47,600 |
|
|
$ |
15,306 |
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Diluted income per common share attributable to Immersion stockholders |
$ |
0.89 |
|
$ |
0.21 |
|
|
$ |
1.47 |
|
|
$ |
0.47 |
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Shares used in calculating diluted net income per share |
|
32,525 |
|
|
|
32,810 |
|
|
|
32,407 |
|
|
|
32,839 |
|
Reconciliation of GAAP net income attributable to Immersion stockholders to Non-GAAP net income attributable to Immersion stockholders (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended
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Six Months Ended
|
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2024 |
|
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|
20231 |
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|
2024 |
|
|
|
20231 |
|
GAAP net income attributable to Immersion stockholders |
$ |
28,945 |
|
$ |
7,028 |
|
$ |
47,600 |
|
|
$ |
15,306 |
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Add: Stock-based compensation |
|
1,192 |
|
|
|
760 |
|
|
2,268 |
|
|
|
1,707 |
|
|
Depreciation and amortization of property and equipment |
|
2,155 |
|
|
|
21 |
|
|
|
2,173 |
|
|
|
42 |
|
Restructuring expense and other charges |
|
2,407 |
|
|
|
125 |
|
|
|
2,438 |
|
|
|
312 |
|
Business acquisition related costs |
|
2,283 |
|
|
|
— |
|
|
|
2,283 |
|
|
|
— |
|
Other nonrecurring charges |
|
10 |
|
|
|
481 |
|
|
|
53 |
|
|
|
560 |
|
Non-GAAP net income attributable to Immersion stockholders |
$ |
36,992 |
|
|
$ |
8,415 |
|
$ |
56,815 |
|
|
$ |
17,927 |
|
|
Non-GAAP net income per diluted common share attributable to Immersion stockholder |
$ |
1.14 |
|
|
$ |
0.26 |
|
$ |
1.75 |
|
|
$ |
0.55 |
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|
Shares used in calculating Non-GAAP net income per diluted share attributable to Immersion stockholder |
|
32,525 |
|
|
|
32,810 |
|
|
|
32,407 |
|
|
|
32,839 |
|
1 In order to provide for better comparability between periods and a better understanding of underlying trends. The Non-GAAP information above includes an updated presentation of the prior year 2023.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (In thousands) (Unaudited) |
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Three Months Ended
|
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Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
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|
2024 |
|
|
|
2023 |
|
GAAP operating expenses |
$ |
33,212 |
|
|
$ |
3,870 |
|
|
$ |
60,445 |
|
|
$ |
7,685 |
|
Adjustments to GAAP operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
(1,192 |
) |
|
|
(760 |
) |
|
|
(2,268 |
) |
|
|
(1,707 |
) |
Depreciation and amortization expense of property and equipment |
|
(2,155 |
) |
|
|
(21 |
) |
|
|
(2,173 |
) |
|
|
(42 |
) |
Restructuring expense charges |
|
(2,407 |
) |
|
|
(125 |
) |
|
|
(2,438 |
) |
|
|
(312 |
) |
Business acquisition related costs |
|
(2,283 |
) |
|
|
— |
|
|
(2,283 |
) |
|
|
— |
||
Other nonrecurring charges |
|
(10 |
) |
|
|
(481 |
) |
|
|
(53 |
) |
|
|
(560 |
) |
Non-GAAP operating expenses |
$ |
25,165 |
|
$ |
2,483 |
|
|
$ |
51,230 |
|
|
$ |
5,064 |
|
Reconciliation of GAAP Total stockholders’ equity attributable to Immersion Corporation Stockholders to Non-GAAP Immersion standalone Non-GAAP stockholders’ equity (In thousands) (Unaudited) |
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Total stockholders’ equity attributable to |
$ |
230,272 |
|
|
$ |
183,102 |
|
Adjusted for |
|
5,800 |
|
|
|
— |
|
Immersion standalone Non-GAAP stockholders' equity |
$ |
236,072 |
|
|
$ |
183,102 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240820975596/en/
Investor Contact:
mdodson@immersion.com
Source: