Immersion Corporation (IMMR)
Q1 2012 Earnings Call
May 3, 2012 5:00 pm ET
Jennifer Jarman – Blue Shirt Group
Victor Viegas – Chief Executive Officer, Interim Chief Financial Officer & Director
Paul Norris – Chief Financial Officer
Jeff Schreiner – Capstone Investments
Darice Liu – National Securities
Charlie Anderson – Dougherty & Company, LLC
Mark McMahon – Raymond James
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Welcome to the Immersion Corporation first quarter 2012 earnings conference call. During today’s presentation all parties will be in a listen only mode. Following the presentation the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, May 3, 2012. I would now like to turn the conference over to Jennifer Jarman of the Blue Shirt Group.
Thank you for joining us today on Immersion’s first quarter 2012 conference call. This call is also being broadcast live over the web and can be accessed from the investor relations' section of the company’s website at
. With me on today’s call is Vic Viegas, President and CEO.
During this call we may make forward-looking statements which may include projected financial results or operating metrics, business strategies, anticipated future products, anticipated market demand or opportunities, and other forward-looking topics. These statements are subject to risk, uncertainties, and assumptions. Accordingly, actual results could differ materially.
For a listing of the risks that could cause this please see our latest Form 10K filed with the SEC as well as the factors identified in today’s press release. Additionally, please note that during this call we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available in the company’s press release issued today after market close.
With that said, I’ll turn the call over to Chief Executive Officer, Vic Viegas.
The first quarter is typically our seasonally strongest quarter and our financial performance during the period illustrates the strength of our scalable and high margin license business and the success of our partner’s products in the market with our technology. We achieved positive adjusted EBITDA of $1.6 million during the quarter based on revenues of $9.7 million. Strong royalty revenues of $9.1 million for the quarter grew 9% over the same period last year.
As you’ve seen from our recent announcements, we continue to focus on delivering innovative new product solutions to the mobile market while protecting our intellectual property and the interest of our shareholders, partners, and customers. Before I take a deeper dive into our financial results for the quarter, I wanted to call your attention to the announcement this afternoon that we have successfully completed the search for a new chief financial officer.
We are extremely pleased that Paul Norris will join Immersion as CFO. Paul brings the perfect blend of financial and legal expertise through his in depth experience with publically traded licensing and IP oriented digital media companies making him ideally suited to support our sales and legal functions while rounding out our talented executive team. We believe that he will be a tremendous asset to the company as we work to grow our licensing business while also protecting our IP.
While Paul doesn’t officially begin his role until May 14
, I’ve invited him to say a few words on the call today.
I’m very excited to be joining Immersion as CFO. To share a little bit about my background, I’ve been advising technology companies in legal and finance capacities for over 20 years in areas ranging from innovation and corporate strategy to IP enforcement and M&A. Until early 2011 I was CFO and general counsel of Sonic Solutions, a publically traded digital media software and entertainment solutions provider located here in the Bay area.
In February 2011 we sold Sonic to Rovi Corporation, a digital entertainment technology solutions and IP licensing company. Since that time I’ve served Rovi as an executive advisor and have been a partner at Accanto Partners, LLC an investment fund focusing on technology and digital media companies.
With its strong technology offerings and IP portfolio for touch based solutions, Immersion represents an exciting opportunity in a market that’s only just beginning to recognize the true value of haptics. I’m very eager to help the company shape and execute on its strategic goals during this important time in its development and I look forward to meeting many of our analysts and investors over the coming months.
With that, I’ll turn it back over to Vic.
In a few minutes I will discuss recent developments as we progress into 2012 but first I’ll provide a more detailed view of our financial results for the first quarter. Revenues in the first quarter of 2012 were $9.7 million slightly below revenues of $9.8 million in the year ago period. Revenues for the first quarter of 2012 included product sales of approximately $300,000 compared with product sales of approximately $1 million for the first quarter of 2011, consistent with our shift to a licensing model.
Revenues from royalties and licenses were $9.1 million up 9% from the first quarter of 2011. While revenue mix per segment is expected to fluctuate on a quarterly basis due to seasonality patterns, in the first quarter of 2012 a breakdown by segment as a percentage of total revenues is as follows: 42% from mobility; 37% from gaming; 13% from medical; 5% from auto; and 3% from chip and other. These percentages are based on total revenues including revenues from royalty and licensing, product sales, and development contracts.