MicroVision's CEO Discusses Q2 2012 Results - Earnings Call Transcript

MicroVision, Inc. (MVIS)

Q2 2012 Earnings Call

August 2, 2012 8:30 AM ET


Jeff Wilson – CFO

Alexander Tokman – President and CEO


Ryan MacDonald – Northland Securities

Randy Hough – ProEquities

Joel Achramowicz – Merriman Capital

Jeff Harvil – Janney Montgomerry Scott

Mike Scott – Stephens



Welcome to the Q2 2012 MicroVision, Incorporated Conference Call. My name is Paulette, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Jeff Wilson, Chief Financial Officer. Please go ahead.

Jeff Wilson

Thank you. I’d like to welcome everyone to MicroVision’s Second Quarter 2012 Financial and Operating Results Conference Call. In addition to myself, participants on today’s call include Alexander Tokman, President and Chief Executive Officer.

The information in today’s call may include forward-looking statements, including statements regarding projections of future operations and financial results, product development, applications and benefits, availability and supply of product and key components, business partnering expectations, market opportunities and growth in demand, as well as statements containing words like believes, estimate, expects, anticipates, target, plan, will, could and would, and other similar expressions.

These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements, are included in our most recent Annual Report on Form 10-K filed with the Securities Exchange Commission, under the heading Risk Factors relating to company’s business, and our other reports filed with the Commission from time-to-time.

Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in circumstances or any other any reason.

The agenda for today’s call will be as follows: Alex will first give a business update, then I will report on the financial results. There will be question-and-answer session, and then Alex will conclude with some final remarks.

I would now like to turn the call over to Alexander Tokman. Alex?

Alexander Tokman

Thank you, Jeff. Thanks, everyone, for joining us this morning. In Q2, we accomplished several strategic milestones that we believe should significantly strengthen our fundamentals and provide platform for future growth. These include receiving a purchase order totaling $5.8 million from Pioneer for the launch of Pioneer’s new HUD system. It’s called Cyber Navi.

We strengthened the balanced sheet by raising just under $15 million from two equity offerings. And finally, we completed a business realignment and restructuring around Image by PicoP license and business model that is expected to yield approximately 50% reduction in operating cash requirements starting second half of this year.

The business update portion that I’m about to cover focuses on Pioneer, new business opportunities and touches on operations. And obviously, Jeff will provide more information as well as financials.

I would like to begin Pioneer portion of this call with two wonderful news. First of all, Pioneer has begun shipments of its Cyber Navi HUD system in July as was originally planned. And second, we just received in July a follow-on order of $1.4 million for the key components of the PicoP Gen2 display technology, in support of this launch. This brings the total current order from Pioneer to approximately $5.8 million because recall that earlier, in the second quarter, we received and announced a purchase order of $4.4 million for the key components of the PicoP Gen2 display engine.

A couple of notable points surrounding this activity with Pioneer. First, let’s talk about Pioneer’s (inaudible) related activities. Pioneer has conducted a free-market study to assess the interest in this revolutionary product, and majority of the people polled and looked indicated that they liked the features and functions and were very impressed. So, this is good news for us, at least as far as pre-market information goes.

Second, the HUD system, which is again called Cyber Navi, is permanently displayed on the first pages of Pioneer’s 2012 audio and visual navigation products catalog, which means that they are putting a lot of sales and marketing effort to ensure that this new revolutionary technology is acknowledged and marketed.

Finally, NTT DOCOMO is a part of Pioneer’s go-to market strategy, offering wireless services and information to the system. As many of you know, large mobile operators are main drivers and beneficiaries of mobile device adoption. And they continually looking for new services that increase subscription rates and average revenue per user. And NTT DOCOMO happens to be the largest mobile operator in Japan.

As far as MicroVision is concerned, there are several firsts for us here as well. Pioneer’s HUD system is the first OEM product that is based on PicoP Gen2 display technology that is built around direct green laser.

Also, it’s the first offering that is branded and marketed and distributed under the Image by PicoP ingredient brand license and model. We began components deliveries in late Q2 and expect to see increasing delivery volumes and revenue over the next six to nine months.

To cap the session – this section, last but not the least, this launch is consistent with our guidance and goal to commercially introduce the PicoP Gen2 display technology starting mid-2012.

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