Immersion Corporation (“Immersion”, the “Company”, “we”, “us” or “our”) (Nasdaq: IMMR), a leading provider of technologies for haptics, today reported financial results for the second quarter ended June 30, 2024.

Second Quarter Consolidated Financial Summary1:

•

Total revenues of $99.4 million in the second quarter of 2024, compared to $7.0 million in the second quarter of 2023.

•

GAAP net income attributable to Immersion Corporation stockholders was $28.9 million, or $0.89 per diluted share in the second quarter of 2024, compared to $7.0 million, or $0.21 per diluted share, in the second quarter of 2023.

•

GAAP operating expenses of $33.2 million in the second quarter of 2024, compared to $3.9 million in the second quarter of 2023. Non-GAAP operating expenses of $25.2 million in the second quarter of 2024, compared to $2.5 million in the second quarter of 2023.

•

Non-GAAP net income attributable to Immersion Corporation stockholders was $37.0 million, or $1.14 per diluted share, in the second quarter of 2024 compared to $8.4 million, or $0.26 per diluted share, in the second quarter of 2023.

•

Total stockholders' equity attributable to Immersion Corporation stockholders was $230.3 million compared to $183.1 million as of December 31, 2023.

Second Quarter Immersion Corporation Segment Standalone Financial Summary:

•

Immersion Corporation royalty and license revenue was $52.4 million in the second quarter of 2024, compared to $7.0 million in the second quarter of 2023.

•

Immersion Corporation standalone Non-GAAP stockholders’ equity increased $53.0 million to $236.1 million as of June 30, 2024 compared to $183.1 million as of December 31, 2023.

 

 

1 On June 10, 2024, the Company closed certain transactions with Barnes Noble Education, Inc. (“Barnes Noble Education”). As part of the transactions, the Company acquired 42% of all outstanding common shares of Barnes Noble Education, as well as control over Barnes Noble Education through the five Immersion-appointed board seats. The financial information presented in the press release includes the consolidated financial information of Barnes Noble Education from the period of June 10, 2024 through June 30, 2024. The Company owns approximately 11 million shares of Barnes Noble Education's common stock upon the close of this transaction.

“The second quarter was very strong for the Company,” said Eric Singer, Chairman and CEO. “We continue to work to protect and monetize our intellectual property. We were also able to take advantage of our strong and liquid balance sheet to make an important investment in Barnes Noble Education (NYSE: BNED). Notably, Immersion standalone Non-GAAP stockholders equity has increased by more than $50 million so far in 2024 to $236.1 million as of June 30, 20242. We will continue to seek to drive long-term shareholder value from a position of strength and through thoughtful capital allocation,” added Singer.

The ninth quarterly dividend, in the amount of $0.045 per share, will be paid on October 18, 2024 to stockholders of record on October 4, 2024. Future quarterly dividends will be subject to further review and approval by the Board of Directors (the “Board”) in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews the Company’s capital allocation strategy from time-to-time.

About Immersion Corporation

Immersion Corporation (Nasdaq: IMMR) was incorporated in 1993 in California and reincorporated in Delaware in 1999.

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.

 

 

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 U.S. Securities and Exchange Commission (the “SEC”), Barnes Noble Education’s Inc.'s Annual Report on Form 10-K for its fiscal year ended April 27, 2024, as filed with the SEC, and Immersion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, as filed with the SEC. Any forward-looking statements made by us in this press release speak only as of the date of this press release, and the Company does not intend to update these forward-looking statements after the date of this press release, except as required by law.

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 use of the word “partner” or “partnership” in this press release does not mean a legal partner or legal partnership.

(IMMR – C)

Immersion Corporation

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

28,932

 

 

$

56,071

 

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

 

Barnes Noble Education

 

 

 

 

 

 

 

Cash and cash equivalents

 

6,855

 

 

 

—

 

Accounts receivable, net

 

122,797

 

 

 

—

 

Merchandise inventories, net

 

353,454

 

 

 

—

 

Textbook rental Inventories, net

 

9,288

 

 

 

—

 

Prepaid expenses and other current assets

 

32,819

 

 

 

—

 

 

 

525,213

 

 

 

—

 

Total current assets

 

678,641

 

 

 

172,450

 

 

 

 

 

 

 

 

Property and equipment, net

 

166

 

 

 

211

 

Investments - noncurrent

 

45,163

 

 

 

33,350

 

Long-term deposits

 

6,310

 

 

 

6,231

 

Deferred tax assets

 

3,343

 

 

 

3,343

 

Other assets - noncurrent

 

33,775

 

 

 

146

 

 

 

88,757

 

 

 

43,281

 

Barnes Noble Education

 

 

 

 

 

 

 

Property and equipment, net

 

117,808

 

 

 

—

 

Intangible assets, net

 

94,786

 

 

 

—

 

Goodwill

 

14,220

 

 

 

—

 

Operating lease right-of-use assets

 

182,292

 

 

 

—

 

Other assets - noncurrent

 

11,162

 

 

 

—

 

 

 

420,268

 

 

 

—

 

Total assets

$

1,187,666

 

 

$

215,731

 

Immersion Corporation

Condensed Consolidated Balance Sheets (Continued)

(In thousands)

(Unaudited)

 

June 30, 2024

 

December 31, 2023

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

81

 

 

$

47

 

Accrued compensation

 

2,850

 

 

 

3,127

 

Deferred revenue - current

 

12,082

 

 

 

4,239

 

Other current liabilities

 

27,605

 

 

 

11,900

 

 

 

42,618

 

 

 

19,313

 

Barnes Noble Education

 

 

 

 

 

 

 

Accounts payable

 

217,173

 

 

 

—

 

Accrued liabilities

 

69,638

 

 

 

—

 

Deferred revenue - current

 

8,159

 

 

 

—

 

Operating lease liabilities - current

 

100,221

 

 

 

—

 

 

 

395,191

 

 

 

—

 

Total current liabilities

 

437,809

 

 

 

19,313

 

 

 

 

 

 

 

 

Deferred revenue - noncurrent

 

8,665

 

 

 

8,390

 

Other long-term liabilities

 

4,959

 

 

 

4,926

 

 

 

13,624

 

 

 

13,316

 

Barnes Noble Education

 

 

 

 

 

 

 

Deferred tax liabilities - noncurrent

 

636

 

 

 

—

 

Operating lease - noncurrent

 

107,400

 

 

 

—

 

Other long-term liabilities

 

12,240

 

 

 

—

 

Deferred revenue - noncurrent

 

3,393

 

 

 

—

 

Long-term borrowings

 

186,644

 

 

 

—

 

 

 

310,313

 

 

 

—

 

Total liabilities

 

761,746

 

 

 

32,629

 

Total stockholders' equity attributable to Immersion Corporation stockholders

 

230,272

 

 

 

183,102

 

Noncontrolling interest in consolidated subsidiaries

 

195,648

 

 

 

—

 

Total stockholders' equity

 

425,920

 

 

 

183,102

 

Total liabilities and stockholders' equity

$

1,187,666

 

 

$

215,731

 

Immersion Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty and license

$

52,403

 

 

$

6,983

 

 

$

96,250

 

 

$

14,057

 

Barnes Noble Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and other

 

45,073

 

 

 

—

 

 

 

45,073

 

 

 

—

 

Rental income

 

1,948

 

 

 

—

 

 

 

1,948

 

 

 

—

 

Total revenues

 

99,424

 

 

 

6,983

 

 

 

143,271

 

 

 

14,057

 

Cost of sale (excludes depreciation and amortization expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barnes Noble Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and other

 

39,675

 

 

 

—

 

 

 

39,675

 

 

 

—

 

Rental income

 

1,131

 

 

 

—

 

 

 

1,131

 

 

 

—

 

 

 

40,806

 

 

 

—

 

 

 

40,806

 

 

 

—

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

14,175

 

 

 

3,870

 

 

 

41,408

 

 

 

7,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barnes Noble Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

—

 

Total operating expenses

 

33,212

 

 

 

3,870

 

 

 

60,445

 

 

 

7,685

 

Operating income

 

25,406

 

 

3,113

 

 

 

42,020

 

 

6,372

 

Interest and other income (loss), net

 

4,609

 

 

6,759

 

 

12,715

 

 

 

13,285

 

Interest expense

 

(901

)

 

 

—

 

 

 

(901

)

 

 

—

 

Income before provision for Income taxes

 

29,114

 

 

9,872

 

 

53,834

 

 

19,657

 

Provision for income taxes

 

(8,178

)

 

 

(2,844

)

 

 

(14,243

)

 

 

(4,351

)

Net income

$

20,936

 

$

7,028

 

$

39,591

 

$

15,306

 

Net loss attributable to noncontrolling interest

 

(8,009

)

 

 

—

 

 

 

(8,009

)

 

 

—

 

Net income attributable to Immersion stockholders

$

28,945

 

$

7,028

 

$

47,600

 

 

$

15,306

 

Diluted income per common share attributable to Immersion stockholders

$

0.89

 

$

0.21

 

 

$

1.47

 

 

$

0.47

 

Shares used in calculating diluted net income per share

 

32,525

 

 

 

32,810

 

 

 

32,407

 

 

 

32,839

 

Immersion Corporation

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)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

20231

 

 

 

2024

 

 

 

20231

 

GAAP net income attributable to Immersion stockholders

$

28,945

 

$

7,028

 

$

47,600

 

 

$

15,306

 

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

 

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.

Immersion Corporation

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses

(In thousands)

(Unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

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

 

Immersion Corporation

Reconciliation of GAAP Total stockholders’ equity attributable to Immersion Corporation Stockholders to

Non-GAAP Immersion standalone Non-GAAP stockholders’ equity

(In thousands)

(Unaudited)

June 30, 2024

 

December 31, 2023

Total stockholders’ equity attributable to Immersion Corporation stockholders

$

230,272

 

 

$

183,102

 

Adjusted for Barnes Noble Education's net loss attributable to Immersion stockholders

 

5,800

 

 

 

—

 

Immersion standalone Non-GAAP stockholders' equity

$

236,072

 

 

$

183,102

 

 

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