11/12/2002 4:08:00 PM
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BOTHELL, Wash.–(BUSINESS WIRE)–Nov. 12, 2002–Microvision, Inc.
(Nasdaq:MVIS), a leader in light scanning technologies, today reported
financial results for the third quarter of 2002.
The company reported revenue of $4.2 million and a loss per share
of $.37.
Revenue for the third quarter of 2002 rose 74% to $4.2 million
when compared to $2.4 million for the same period in 2001. Revenue for
the nine months ended September 30, 2002 was $12.7 million, up 95%
when compared to $6.5 million for the same period in 2001. The
increased revenue was due primarily to higher contract revenue from
both U.S. government and commercial development contracts. The backlog
of development contracts and product orders at September 30, 2002 was
$4.0 million.
For the three months ended September 30, 2002, Microvision
reported a loss from operations of $7.5 million, a 36% improvement
when compared to a loss from operations of $11.8 million for the same
period in 2001. For the nine months ended September 30, 2002, the
company reported a loss from operations of $26.1 million, a 25%
improvement when compared to a loss from operations of $34.6 million
for the same period in 2001.
For the three months ended September 30, 2002, Microvision
reported a consolidated net loss of $5.4 million or $.37 per share
compared to a net loss of $8.2 million or $.68 per share for the same
period in 2001 and to a consolidated net loss of $6.6 million or $.49
per share for the second quarter of 2002. For the nine months ended
September 30, 2002, the company reported a consolidated net loss of
$20.3 million or $1.48 per share compared to a net loss of $27.0
million or $2.25 per share for the same period in 2001. Consolidated
results include Microvision, Inc. and the company’s subsidiary, Lumera
Corporation. For the three months and nine months ended September 30,
2002, the portion of the consolidated loss attributable to Lumera was
$235,000 or $.02 per share and $699,000 or $.05 per share,
respectively, compared to $341,000 or $.03 per share and $2.9 million
or $.24 per share for the three and nine months ended September 30,
2001, respectively.
The company, including Lumera, ended the quarter with $20.5
million in cash, cash equivalents and investment securities.
The company indicated that it expects revenue for the fourth
quarter of 2002 to be in the range of $4.5 million to $5.0 million.
While fourth quarter revenue is expected to increase from the third
quarter of 2002, product sales continue to be impacted by lingering
economic weakness, a longer-than-expected sales cycle for the Nomad
personal display and later-than-expected deliveries of the Flic bar
code scanner. The company indicated that contract revenue continues to
be stronger than expected due to increased revenue from commercial
partners. The company remains focused on its cash flow and expects to
continue lowering its operating loss and cash burn in the fourth
quarter.
“We are very pleased that year over year revenue growth continues
to be quite strong even though revenue from product sales has been
slowed by difficult market conditions and production delays,” said
Rick Rutkowski, CEO. “We have had good success in continuing to reduce
our operating losses and the focus of our business plan continues to
be on achieving positive cash flow and profitability while driving
growth with innovative and competitive products.
“We will continue to focus on growing product revenue by
developing market segments for Nomad, ramping production of Flic, and
continuing our development of new customers and channel partners for
both products. While revenue from product sales will likely continue
to show a degree of variability in the very near term, we are
encouraged by an improving outlook for the Nomad personal display
going into 2003, and a strong outlook for the Flic bar code scanner.
“We are actively working a number of potential multi-unit orders
for the Nomad display, and we believe unit sales will soon begin to
reflect the stronger market pull that has been in evidence since late
summer. Market development efforts have yielded good results with
particular focus on compelling applications in surgical navigation,
construction, precision measurement, general aviation and marine
navigation applications. Well-defined applications within these market
segments have become the central focus of our sales and marketing
efforts and are showing real promise for driving early product
growth.
“We have recently achieved engineering cost reductions and
manufacturing efficiencies that have contributed to our significantly
reducing the MSRP for the Nomad display from $12,000 to $6,995. We
believe that the dramatically reduced price will be important to
gaining momentum in penetrating our target markets and in growing
product revenue going forward.
“We are also pleased with the strong response to the Flic bar code
scanner and with our continued success in developing a strong
distribution channel for the product. The market feedback we have
received since we launched the Flic bar code scanner validates our
belief that it is well positioned for rapid growth in 2003. We have
signed three distribution partners and have received initial orders.
We continue to work toward signing one or more OEM distributors. We
believe that early production issues are being quickly resolved and
that we will begin to ramp production volumes in December. We recently
demonstrated a wireless version of Flic using a bluetooth interface
and based on strong initial response from prospective customers we
expect to add this to the Flic product line in 2003.
“We recently announced that we have reduced the size of the
display module by 75% in the last nine months demonstrating that we
are gaining significant momentum in developing our scanning technology
for applications in high volume markets such as consumer electronics
and automotive. We successfully completed the first phase of an
important development contract, sponsored by a large Asian partner, to
demonstrate feasibility in a consumer product application. We are also
seeing strong interest from industry leaders for the potential use of
our displays in electronic viewfinders for digital still cameras,
which is a large and growing market. We expect to continue our efforts
in this area with growing sponsorship from both existing prospective
customers and partners. Based on discussions that are currently
underway with various potential partners for consumer microdisplays,
we are targeting shipping Microvision display engines for consumer
products as early as 2004.
“BMW recently showcased our technology in a rear projection
entertainment display inside an automobile at a major automotive
tradeshow. This was the most recent of three projects conducted for
the automaker during the last year. We expect to announce a new
contract with an additional automaker very soon and, based on our
recent success with BMW, we expect that we will continue to see
sponsorship of our automotive display efforts.
“Lumera, which earlier this summer successfully demonstrated a
polymer-based 10GHz optical modulator, is working toward extending its
contract with the government and we expect to report on that
development soon.”
Conference Call
Microvision will host a conference call to discuss its third
quarter 2002 financial results at 1:30 p.m. PT today. Participants may
join the conference call by dialing 800/309-9175 (for U.S.
participants) ten minutes prior to the start of the conference.
International participants can dial 706/634-1455. Additionally, the
call will be broadcast over the Internet and can be accessed from the
company’s web site at www.microvision.com. A telephone replay of the
call will be available through 12:00 a.m. PT November 19, 2002 and can
be accessed by dialing 800/642-1687 (for U.S. participants) or
706/645-9291 (for international participants). The conference id code
is 6257687.
About Microvision
Headquartered in Bothell, Wash., Microvision, Inc. is the
developer of the proprietary Retinal Scanning Display technology and a
world leader in micro miniature optical scanning technology for
display and imaging applications. The company’s technology has
applications in a broad range of military, medical, industrial,
professional and consumer information products. Additional information
can be found at the company’s Web site at http://www.microvision.com.
About Lumera
As a subsidiary of Microvision, Inc., Lumera is a leader in the
development of electro-optic devices based on proprietary optical
polymers. The company plans to deliver superior and unique component
solutions to optical systems suppliers. Lumera plans to supply
standard and custom components to systems providers in multiple
high-growth product categories. Additional information can be found at
Lumera’s Web site at http://www.lumera.com.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including
projections of revenues, expenses and losses, plans for product
development, sales, customers and channel partners, reductions in
sales cycle, signing of contracts, future operations and shipping of
products, as well as statements containing words like “believe,”
“anticipate,” “estimate,” “intend,” “seek,” “expect,” and other
similar expressions, are forward-looking statements that involve a
number of risks and uncertainties. Factors that could cause actual
results to differ materially from those projected in the company’s
forward-looking statements include the following: market acceptance of
our technologies and products; our financial and technical resources
relative to those of our competitors; our ability to obtain financing,
our ability to keep up with rapid technological change; government
regulation of our technologies; our ability to enforce our
intellectual property rights and protect our proprietary technologies;
the ability to obtain additional contract awards and to develop
partnership opportunities; the timing of commercial product launches;
the ability to achieve key technical milestones in key products;
dependency on advances by third parties in certain technology used by
us and other risk factors identified from time to time in the
company’s SEC reports, including in its Annual Report on 10-K for the
year ended December 31, 2001 and its Quarterly Reports on Form 10-Q.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
September 30, December 31,
2002 2001
-------------- -------------
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $10,763 $15,587
Investment securities, available-for-
sale 9,719 18,065
Accounts receivable, net 2,703 1,712
Costs and estimated earnings in excess
of billings on uncompleted contracts 1,797 1,584
Inventory, net 994 99
Current restricted investments 11 102
Other current assets 3,096 2,302
-------------- -------------
Total current assets 29,083 39,451
Long-term investment, at cost - 624
Property and equipment, net 8,027 8,960
Restricted investments 1,356 1,434
Receivables from related parties, net 2,243 2,252
Other assets 568 1,334
-------------- -------------
Total assets $41,277 $54,055
============== =============
Liabilities, Minority Interests and
Shareholders' Equity
Current Liabilities
Accounts payable $1,942 $1,613
Accrued liabilities 4,893 4,298
Allowance for estimated contract
losses 155 155
Billings in excess of costs and estimated
earnings on uncompleted contracts 179 60
Current portion of capital lease
obligations 91 170
Current portion of long-term debt 62 57
-------------- -------------
Total current liabilities 7,322 6,353
Capital lease obligations, net of current
portion 97 61
Long-term debt, net of current portion 185 232
Deferred rent, net of current portion 271 259
-------------- -------------
Total liabilities 7,875 6,905
-------------- -------------
Commitments and Contingencies - -
Minority Interests 9,176 14,824
-------------- -------------
Shareholders' Equity
Common stock and paid-in capital 147,042 135,954
Deferred compensation (1,693) (2,803)
Subscriptions receivable from related
parties (183) (321)
Accumulated other comprehensive
income 266 427
Accumulated deficit (121,206) (100,931)
-------------- -------------
Total shareholders' equity 24,226 32,326
-------------- -------------
Total liabilities, minority
interests and shareholders' equity $41,277 $54,055
============== =============
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- --------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Revenue $4,186 $2,402 $12,724 $6,511
Cost of revenue 1,919 1,338 5,925 3,981
--------- --------- --------- ---------
Gross margin 2,267 1,064 6,799 2,530
--------- --------- --------- ---------
Research and development
expense 5,433 8,479 18,762 24,489
Marketing, general and
administrative expense 3,904 3,816 12,786 10,820
Non-cash compensation expense 450 551 1,363 1,869
--------- --------- --------- ---------
Total operating
expenses 9,787 12,846 32,911 37,178
--------- --------- --------- ---------
Loss from operations (7,520) (11,782) (26,112) (34,648)
Interest income 235 553 854 1,982
Interest expense (16) (25) (45) (70)
Realized gain on sale of
investment securities - 295 - 295
Loss due to impairment of
long-term investment - - (624) -
--------- --------- --------- ---------
Loss before minority
interests (7,301) (10,959) (25,927) (32,441)
Minority interests in loss of
consolidated subsidiary 1,900 2,761 5,652 5,457
--------- --------- --------- ---------
Net loss $(5,401) $(8,198) $(20,275) $(26,984)
========= ========= ========= =========
Net loss per share before
non-cash compensation
expense $(0.34) $(0.63) $(1.38) $(2.09)
Non-cash compensation expense (0.03) (0.05) (0.10) (0.16)
--------- --------- --------- ---------
Net loss per share - basic
and diluted $(0.37) $(0.68) $(1.48) $(2.25)
========= ========= ========= =========
Weighted-average shares
outstanding -
basic and diluted 14,512 12,010 13,700 11,967
========= ========= ========= =========
CONTACT:
Microvision, Inc.
Brian Heagler (investors), 425/415-6794
Matt Nichols (media), 425/415-6657