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Immersion Corporation CEO Discusses Q4 2011 Results - Earnings Call Transcript

As a percentage of total revenue in the fourth quarter, 41% came from Mobility, 32% from Gaming, 16% from Medical, 7% from Auto and 4% from Chip and Other. Revenues from royalties and licenses were $6.8 million, up 26% from royalty revenues of $5.4 million in the fourth quarter of 2010 primarily reflecting strong demand in the Gaming and Mobility lines of business.

Revenues from the sale of products was $691,000 compared to $768,000 in the same quarter last year and revenues from development contracts were $193,000 compared to $223,000 in the year ago period. As I mentioned previously, revenues for the full year were $30.6 million, down 2% from revenues of $31.1 million for fiscal 2010.

As a reminder, the prior year included revenue from medical product lines that have been transferred to CAE or discontinued and some true-up adjustments for the Gaming line of business. Excluding these items, revenue for 2010 from ongoing business was $26.4 million.

License and royalty revenues for fiscal 2011 were $26.9 million, up 16% from $23.3 million in 2010. Revenues from products and development contracts were $2.6 million and $1.1 million respectively, compared to revenues of $6.8 million and $1.1 million respectively in 2010.

Cost of product sales in the fourth quarter of 2011 was $342,000, compared to $314,000 in the fourth quarter of 2010. Gross profit in the fourth quarter of 2011 was $7.3 million or 96% of revenues, compared to gross profit of $6.1 million or 95% of revenues in the same period last year.

Gross profit for the year was $29.4 million or 96% of revenues compared to gross profit margin of $28.2 million or 91% of revenues in 2010. The increase in gross profit as a percentage of revenues from year to year was primarily driven by the higher mix of revenues from royalties and licenses, which generated higher gross margins than gross margins from revenues related to product sales.

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