Immersion Corporation Reports Fourth Quarter 2021 Results|||

Company Continues Focus on Driving Profitability

SAN FRANCISCO–(BUSINESS WIRE)–$IMMR #haptics–Immersion Corporation (NASDAQ: IMMR), the leading developer and provider of technologies for haptics, today reported financial results for the fourth quarter ended December 31, 2021.

Quaternary Quarter Financial Summary:

• Total revenues of $ix.7 million, compared to $ten.9 million in the 4th quarter of 2020. Royalty and license revenues were $ix.7 million, compared to $10.ix million in the quaternary quarter of 2020.
• GAAP operating expenses of $three.ix million declined 31% from $5.7 million in the fourth quarter of 2020. Non-GAAP operating expenses of $three.ii million declined 8% from $3.five one thousand thousand in the fourth quarter of 2020. (See attached table for a reconciliation of GAAP to non-GAAP fiscal measures.)
• GAAP net income was $1.3 million, or $0.04 per diluted share, compared to GAAP net income of $8.1 meg, or $0.30 per diluted share, in the fourth quarter of 2020. The reduction in GAAP net income was primarily due to the GAAP accounting treatment for income taxes related to our foreign subsidiaries.
• Non-GAAP net income was $v.viii one thousand thousand, or $0.17 per diluted share, compared to non-GAAP internet income of $8.0 million, or $0.29 per diluted share in the 4th quarter of 2020.
• Cash, cash equivalents and short-term investments was $137.9 meg as of Dec 31, 2021.

Financial Yr 2021 Financial Summary:

• Revenues for 2021 were $35.i million, compared to $xxx.5 million in 2020. Royalty and license revenues for 2021 totaled $34.seven one thousand thousand, compared to $30.ii million in 2020.
• Net income for 2021 was $12.5 meg, or $0.39 per diluted share, compared to net income of $5.4 million, or $0.nineteen per diluted share, for 2020.
• Non-GAAP net income for 2021 was $twenty.6 million, or $0.65 per diluted share, compared to not-GAAP net loss for 2020 of $ten.3 1000000, or $0.36 per diluted share.

“We are proud of Immersion’s progress in 2021. The business organisation has at present posted solid operating profitability in each of the past two years, even without large onetime litigation settlements. Importantly, our price structure and remainder sheet have been significantly improved. All of this is quite the turnaround from our prior history,” said Francis Jose, CEO. “We are currently focused on pursuing opportunities to bulldoze the adoption of our haptics intellectual belongings in the automotive industry, peculiarly in the burgeoning electrical vehicle market; establishing industry technical standards for haptics in mobility and gaming; and ensuring that our intellectual property is recognized in the emerging AR/VR/metaverse market, either through execution of licenses or by proactive enforcement.”

Contempo Business Highlights:

• Expanded footprint of licensed automotive Tier 1 suppliers by executing new agreements with Nissha and Duck-il. These new partners strengthen Immersion’s foundation of several licensed Tier ane suppliers which positions us favorably for farther growth in the automotive market.
• Executed commercial partnership with Wacom, the world’due south leading manufacturer of pen tablets, interactive pen displays, and digital interface solutions.
• Farther progress in development of industry standards in the MPEG and the Internet Engineering Task Force (IETF). MPEG formally approved the creation of a haptic media type in MPEG media files to enable commercial integration of standard compliant haptic technology in mobile, gaming and XR markets.

About Immersion

Immersion Corporation (NASDAQ: IMMR) is the leading innovator of impact feedback engineering science, as well known every bit haptics. The visitor invents, accelerates, and scales haptic experiences by providing technology solutions for mobile, automotive, gaming, and consumer electronics. Haptic technology creates immersive and realistic experiences that enhance digital interactions by engaging users’ sense of affect. Learn more at www.immersion.com.

Apply of Non-GAAP Fiscal Measures

Immersion reports all financial information required in accordance with generally accepted bookkeeping principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to empathise if limited to reviewing but GAAP financial measures. Immersion discloses this non-GAAP data, such as Non-GAAP cyberspace income and Non-GAAP cyberspace income per diluted share considering it is useful in understanding the company’s performance equally information technology excludes sure non-cash expenses like stock-based compensation expense and other special charges, such as deferred tax assets valuation assart, depreciation and restructuring costs, that many investors feel may obscure the company’due south true operating functioning. Likewise, management uses these not-GAAP financial measures to manage and assess the profitability of its business concern. Non-GAAP fiscal measures should be viewed in addition to, and not equally an alternative for, the Company’s reported results nether GAAP. The non-GAAP fiscal measures are non intended to be considered in isolation or every bit a substitute for results prepared in accordance with GAAP. Such not-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release.

Forrad-looking Statements

This printing release includes frontward-looking statements within the pregnant of Section 27A of the Securities Act of 1933, every bit amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Human action”). The frontward-looking statements involve risks and uncertainties. Forward-looking statements are identified past words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “can,” “will,” “places,” “estimates,” and other similar expressions. However, these words are not the but mode we place forward-looking statements. Examples of forrad-looking statements include whatsoever expectations, projections, or other characterizations of futurity events, or circumstances, and include statements regarding our focus on pursuing opportunities to drive the adoption of our haptics intellectual property in the automotive industry, especially in the burgeoning electric vehicle market; establishing industry technical standards for haptics in mobility and gaming; and ensuring that our intellectual property is recognized in the emerging AR/VR/metaverse market, either through execution of licenses or by proactive enforcement, and new partners strengthening our foundation of several licensed Tier 1 suppliers which positions us favorably for farther growth in the automotive market.

Because frontwards-looking statements relate to the hereafter, they are bailiwick to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Bodily results could differ materially from those projected in the forward-looking statements, therefore we caution you lot non to place undue reliance on these forward-looking statements. Of import factors that could cause our actual results and fiscal condition to differ materially from those indicated in the forward-looking statements include, amongst others, the following: the effects of the COVID-nineteen global pandemic on the Company and its business, and on the business concern of its suppliers and customers; unanticipated changes in the markets in which the Visitor operates; the effects of the current macroeconomic climate (specially in light of the ongoing adverse effects of the COVID-nineteen global pandemic); delay in or failure to reach adoption of or commercial demand for the Company’s products or tertiary party products incorporating the Visitor’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 client; the ability of Immersion to protect and enforce its intellectual property rights and other factors. For a more detailed word of these factors, and other factors that could cause actual results to vary materially, interested parties should review the take a chance factors listed in Immersion’s Almanac Written report on Grade 10-K for 2020 and its most recent Quarterly Report on Class 10-Q which are on file with the U.S. Securities and Substitution Commission. Any forrard-looking statements made by us in this press release speak only as of the appointment of this press release, and Immersion does non intend to update these forward-looking statements subsequently the date of this press release, except as required by constabulary.

Immersion, and the Immersion logo are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners. The utilise of the word “partner” or “partnership” in this press release does not hateful a legal partner or legal partnership.

(IMMR – C)

Immersion Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
		Dec 31, 2021				December 31, 2020
Avails		(1)				(1)
Cash and greenbacks equivalents		$	51,490			$	59,522
Marketable securities			86,431				—
Accounts and other receivables			1,970				2,218
Prepaid expenses and other current avails			13,432				12,610
Total current avails			153,323				74,350
Property and equipment, net			444				209
Long-term deposits			ix,658				12,571
Other assets, net			12,095				ix,000
Total Avails		$	175,520			$	96,130
LIABILITIES
Accounts payable		$	ii			$	149
Accrued compensation			555				1,001
Other current liabilities			11,247				2,457
Deferred acquirement			4,826				5,173
Total current liabilities			sixteen,630				8,780
Long-term deferred revenue			16,699				21,334
Other long-term liabilities			896				ii,035
TOTAL LIABILITIES			34,225				32,149
STOCKHOLDERS’ Equity			141,295				63,981
Total LIABILITIES & STOCKHOLDERS’ EQUITY		$	175,520			$	96,130
(ane) Derived from Immersion’due south almanac audited consolidated financial statements.

Immersion Corporation
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended December 31,								Year Concluded Dec 31,
		2021				2020				2021				2020
		(1)				(one)				(2)				(2)
Revenues:
Royalty and license		$	nine,672			$	x,870			$	34,689			$	30,176
Development, services, and other			75				65				400				280
Total revenues			9,747				x,935				35,089				thirty,456
Costs and expenses:
Cost of revenues			10				30				88				168
Sales and marketing			498				932				iii,241				four,999
Enquiry and development			708				i,082				4,150				v,014
General and administrative			2,729				3,649				9,835				18,055
Total costs and expenses			iii,945				5,693				17,314				28,236
Operating Income			5,802				5,242				17,775				ii,220
Interest and other income (loss)			(647	)			605				(485	)			939
Income earlier benefit from (provision for) income taxes			5,155				v,847				17,290				3,159
Do good from (provision for) income taxes			(3,819	)			2,239				(4,806	)			two,242
Cyberspace Income		$	1,336			$	eight,086			$	12,484			$	five,401
Basic net income per share		$	0.04			$	0.xxx			$	0.40			$	0.19
Shares used in calculating basic net income per share			33,735				26,959				31,459				28,117
Diluted net income per share		$	0.04			$	0.xxx			$	0.39			$	0.19
Shares used in computing diluted internet income per share			33,851				27,321				31,769				28,477
(i) unaudited quarterly financial data
(2) Derived from audited annual consolidated fiscal statements

Immersion Corporation
Reconciliation of GAAP Net Income to Non-GAAP Cyberspace Income
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended Dec 31,								Year Ended December 31,
		2021				2020				2021				2020
GAAP net income		$	1,336			$	eight,086			$	12,484			$	v,401
Add: Provision for (benefit from) income taxes			3,819				(2,239	)			4,806				(ii,242	)
Less: Non-GAAP provision for income taxes			(66	)			(26	)			(205	)			(129	)
Add: Stock-based compensation			341				i,323				2,338				4,756
Add: Restructuring expense			78				827				690				i,446
Add together: Depreciation and amortization of belongings and equipment			24				23				99				1,052
Other non recurring accuse			269				—				369				—
Non-GAAP internet income		$	5,801			$	seven,994			$	20,581			$	10,284
Non-GAAP net income per diluted share		$	0.17			$	0.29			$	0.65			$	0.36
Shares used in calculating Not-GAAP net income per diluted share			33,851				27,321				31,769				28,477

Immersion Corporation
Disaggregated Revenue Information
(In thousands)
(Unaudited)
		Iii Months Ended December 31,						Years Concluded Dec 31,
		2021			2020			2021			2020
Fixed fee license revenue		$	one,497		$	i,651		$	five,843		$	v,472
Per-Unit of measurement royalty revenue			8,175			9,219			28,846			24,704
Total royalty and license revenue			ix,672			ten,870			34,689			30,176
Development, services, and other revenue			75			65			400			280
Total revenues		$	9,747		$	10,935		$	35,089		$	30,456

Immersion Corporation
Revenue by Line of Business
(Unaudited)
		Iii Months Concluded December 31,						Years Ended December 31,
		2021			2020			2021			2020
Mobility		50	%		57	%		60	%		69	%
Automotive		32	%		24	%		xix	%		xv	%
Gaming		xviii	%		19	%		21	%		fifteen	%
Other		—	%		—	%		—	%		one	%
		100	%		100	%		100	%		100	%

Immersion Corporation
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses
(In thousands)
(Unaudited)
		Three Months Ended December 31,								Years Ended December 31,
		2021				2020				2021				2020
GAAP operating expenses		$	3,935			$	v,663			$	17,226			$	28,068
Adjustments to GAAP operating expenses:
Stock-based compensation expense – Due south&Thousand			(67	)			(254	)			(745	)			(846	)
Stock-based bounty expense – R&D			(89	)			(216	)			(742	)			(870	)
Stock-based bounty expense – K&A			(185	)			(853	)			(851	)			(3,040	)
Restructuring expense			(78	)			(827	)			(690	)			(1,446	)
Depreciation and amortization expense of property and equipment			(24	)			(23	)			(99	)			(one,052	)
Other not recurring charges			(269	)			—				(369	)			—
Non-GAAP operating expenses		$	3,223			$	3,490			$	xiii,730			$	20,814

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