5/11/2006 6:30:00 AM
REDMOND, Wash.–(BUSINESS WIRE)–May 11, 2006–Microvision, Inc.
(Nasdaq:MVIS), a leader in light scanning technologies, today
announced consolidated financial results for the first quarter of
2006. Revenues for the first quarter of 2006 were $2.5 million, down
38% from $4.0 million reported for the first quarter of the prior
year. Revenues were lower due to lower contract revenue resulted from
the completion of several contract development efforts in 2005 The
operating loss for the first quarter increased 20% to $6.7 million
compared to $5.5 million in the first quarter of 2005, however the
2006 number included $493,000 in severance costs relating to the
company’s restructuring plan and $416,000 of non-cash compensation
expense associated with the company’s adoption of FASB 123(R), Share
Based Payment, on January 1, 2006. The company reported net income
available for common shareholders of $331,000, or $.01 per share,
compared to a net loss available for common shareholders of $7.2
million, or ($.33) per share for the first quarter of 2005. Income in
the first quarter of 2006 includes a $7.3 million gain on investments
from the sale of 2.55 million shares of the company’s holdings in
Lumera Corporation.
The company ended the quarter with $7.0 million in cash. At March
31, 2006 the company had a backlog of $1.4 million which was comprised
of $1.3 million related to development contracts and $92,000 related
to product sales.
Highlights
— Record quarter for unit shipments of the Flic bar code
scanner; first quarter shipments of 9,300 units equaled almost
half of the total volume shipped for the full year of 2005;
— Improved cash position by raising $10.3 million through the
sale of 2.55 million shares of its Lumera Corporation common
stock that resulted in a $7.3 million gain being recognized in
income for the first quarter;
— Completed an organizational restructuring and realignment as
part of its 2006 turnaround;
— Completed the transformation of the management team and began
the reconstitution of its Board of Directors;
— Defined and began executing a new financing strategy
consistent with its new operating strategy; and
— Made demonstrable progress in defining the development of
requirements for the Integrated Photonics Module (“IPM”) – an
embedded engine to fuel high volume display and imaging
applications.
“Our first quarter efforts have been focused on implementing
several key organizational initiatives aimed at beginning to turn
around the company and position it for long term, sustainable growth,”
said Alexander Tokman, Microvision President and CEO. “We’ve completed
an organizational realignment consistent with the new business
strategy and added new talent to lead the critical business functions.
We’ve also implemented a new reward and recognition system for
employees aimed at promoting professional excellence.
“Despite a relatively short time period for implementing changes,
we are already seeing important signs of turnaround, specifically
relating to growth of product sales. Flic had a record first quarter
for unit shipments equaling nearly half of the total volume shipped
for the entire year of 2005, positioning the product for what we
believe will be a strong year. Growing our contract revenue funnel is
of top priority and we continue to work towards the goal of signing a
strategic Tier 1 and OEM partners for the development and
commercialization of automotive head-up display and embedded personal
projection display products.”
About Microvision: www.microvision.com.
Headquartered in Redmond, Wash., Microvision, Inc. is the world
leader in the development of high-resolution displays and imaging
systems based on the company’s proprietary silicon micro-mirror
technology. The company’s technology has applications in a broad range
of industrial, consumer, military and medical applications.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including proposed
financing, business turnaround, future product sales, signing
strategic agreements and product applications, as well as statements
containing words like “expects,” “anticipates,” “plans,” “could,”
“believes” 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: capital market risks, our ability to raise additional
capital when needed; market acceptance of our technologies and
products; our financial and technical resources relative to those of
our competitors; our ability to keep up with rapid technological
change; our dependence on the defense industry and a limited number of
government development contracts; 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; the timing of commercial product launches
and delays in product development; the ability to achieve key
technical milestones in key products; dependence on third parties to
develop, manufacture, sell and market our products; potential product
liability claims, risks related to the business of Lumera Corporation
and the market for its equity, which impacts our existing investment
in Lumera corporation; and other risk factors identified from time to
time in the company’s SEC reports and other filings, including the
Company’s Annual Report on Form 10-K filed with the SEC. 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 reason.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
(Unaudited)
March 31, December 31,
2006 2005
----------- ------------
Assets
Current Assets
Cash and cash equivalents $ 7,035 $ 6,860
Investment securities, available-for-sale 1,304 -
Accounts receivable, net of allowances 1,407 1,380
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,145 1,204
Inventory 762 759
Current restricted investments 8,109 1,856
Other current assets 2,834 1,512
----------- ------------
Total current assets 22,596 13,571
Investment in Lumera - 3,582
Property and equipment, net 4,152 2,902
Restricted investments 1,000 1,000
Restricted investment in Lumera - 2,184
Other assets 60 124
----------- ------------
Total assets $ 27,808 $ 23,363
=========== ============
Liabilities, Mandatorily Redeemable
Convertible Preferred Stock and
Shareholders' Equity (Deficit)
Current Liabilities
Accounts payable $ 1,757 $ 2,328
Accrued liabilities 4,493 4,513
Billings in excess of costs and estimated
earnings on uncompleted contracts 50 51
Liability associated with common stock
warrants 2,428 3,452
Current portion of notes payable 7,959 7,896
Current portion of capital lease
obligations 32 32
Current portion of long-term debt 55 22
----------- ------------
Total current liabilities 16,774 18,294
Notes payable, net of current portion - 1,447
Liability associated with embedded
derivative feature 422 1,368
Capital lease obligations, net of current
portion 97 105
Long-term debt, net of current portion 483 -
Deferred rent, net of current portion 1,770 1,492
----------- ------------
Total liabilities 19,546 22,706
----------- ------------
Commitments and contingencies - -
Mandatorily redeemable convertible
preferred stock 4,267 4,166
----------- ------------
Shareholders' (Deficit) Equity
Common stock at par value 25 25
Additional paid-in capital 214,000 212,993
Deferred compensation - (85)
Receivables from related parties, net (792) (792)
Accumulated other comprehensive income 5,937 -
Accumulated deficit (215,175) (215,650)
----------- ------------
Total shareholders' equity (deficit) 3,995 (3,509)
----------- ------------
Total liabilities, mandatorily
redeemable convertible preferred
stock and shareholders' equity $ 27,808 $ 23,363
=========== ============
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months
ended March 31,
-----------------
2006 2005
------- --------
Contract revenue $ 1,781 $ 3,382
Product revenue 691 600
------- --------
Total revenue 2,472 3,982
------- --------
Cost of contract revenue 1,151 1,828
Cost of product revenue 1,294 1,150
------- --------
Total cost of revenue 2,445 2,978
------- --------
Gross margin 27 1,004
------- --------
Research and development expense 2,154 1,884
Sales, marketing, general and administrative
expense 4,739 4,666
Gain on disposal of fixed assets (198) -
------- --------
Total operating expenses 6,695 6,550
------- --------
Loss from operations (6,668) (5,546)
Interest income 129 57
Interest expense (1,822) (191)
Gain (loss) on derivative instruments 1,867 (285)
Other (expense) income (11) 9
------- --------
Net loss before equity subsidiary transactions (6,505) (5,956)
Loss on investment in equity subsidiary (290) (944)
Gain on sale of securities of equity subsidiary 7,270 -
------- --------
Net income (loss) 475 (6,900)
Less: Stated dividend on mandatorily redeemable
convertible preferred stock (43) (86)
Accretion to par value of preferred stock (101) (193)
------- --------
Net income (loss) available for common shareholders $ 331 $ (7,179)
======= ========
Net income (loss) per share - basic $ 0.01 $ (0.33)
======= ========
Net income (loss) per share - diluted $ 0.01 $ (0.33)
======= ========
Weighted-average shares outstanding - basic 25,218 21,495
======= ========
Weighted-average shares outstanding - diluted 28,492 21,495
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CONTACT: Microvision, Inc.
Jeff Wilson, 425-936-6847 (Investors)
or
Matt Nichols, 425-882-6657 (Media)
SOURCE: Microvision, Inc.