5/8/2003 4:04:00 PM
BOTHELL, Wash.–(BUSINESS WIRE)–May 8, 2003–Microvision, Inc.
(Nasdaq:MVIS), a leader in light scanning technologies, today reported
financial results for the first quarter of 2003.
Revenue for the first quarter of 2003 was up 11% over the fourth
quarter of 2002. Revenue for the three months ended March 31, 2003 was
$3.5 million compared to $3.8 million for the same period in 2002.
Gross profit for the three months ended March 31, 2003 was $2.1
million, a 60% gross margin, compared to $2.0 million, a 52% gross
margin for the same period last year. Revenue in the first quarter of
2003 was derived from ongoing work on development contracts with the
U.S. military, non-government development contracts, sales of the
Flic(TM) Laser Bar Code Scanner, sales of the Nomad(TM) Augmented
Vision System, and development contracts at its subsidiary, Lumera.
Revenue from non-government commercial development contracts was $2.0
million, the highest quarterly level in company history, revenue from
development contracts with U.S. government agencies was $1.4 million
and revenue from product sales was $135,000.
The net loss for the three months ended March 31, 2003 was $7.4
million or $.46 per share compared to the net loss of $8.2 million or
$.63 per share for the same period in 2002. Net cash used in operating
activities was $6.7 million for the first quarter of 2003 compared to
$8.3 million for the same period in 2002.
The company, including Lumera, ended the quarter with $19.9
million in cash, cash equivalents and investment securities and a
contract backlog of $4.4 million. Subsequent to the end of the
quarter, the company signed additional contracts and work orders
totaling $2.5 million. The company expects continued activity in 2003
on a variety of both existing and new projects relating to development
activities in the consumer electronics, automotive, medical and
defense areas.
The company indicated that it expects second quarter revenue to
increase significantly from the first quarter. The company also
expects to reduce its net loss in the second quarter.
“Our contract development work grew in the first quarter, fueled
by a record level of non-government development contracts,” said
Microvision CEO Rick Rutkowski. “Not only is this a growing source of
revenue, but it is an indication of a developing product pipeline in
which important customers are well invested. Contract work in the
first quarter included contracts from Canon, Johnson & Johnson’s
Ethicon Endosurgery unit, BMW, another European automotive company and
a world leader in automotive electronics. While contract revenue can
be uneven from quarter to quarter, we expect our overall level of
development activity to remain strong throughout the year.
“Production capacity for Flic is currently in excess of 1,500
units per week, with yields exceeding 90%. We are confident that we
can continue to ramp production capacity while improving yields. To
date, we have received orders for more than 1,600 Flic units and have
signed 14 distribution agreements, including our OEM agreement with
NCR. Our sales and marketing efforts continue to focus on rapid growth
of our distribution channel and our distribution partners, including
NCR, and they are beginning to launch their sales initiatives. We have
proposals or quotes outstanding for over 30,000 units and we expect
unit sales to begin ramping in the second quarter. The response to the
Flic product continues to be strong and positive especially in large
volume purchase opportunities where its combination of affordability,
ease of use and low total ownership costs provide compelling savings.
We have successfully demonstrated prototypes of the Flic Freedom
wireless bar code scanner and continue to target the launch of the
product in the second half of the year. Market interest in this
product has been strong.
“Early in the second quarter, we decided to consolidate our
operations in San Mateo, California, where we were conducting some
Flic development activities, to our facility in Bothell. We determined
that we could achieve the same level of productivity with lower
overall costs. We estimate that we will save approximately $1 million
over the next year as a result of the consolidation.
“We continue to make progress in developing the market for Nomad.
We recently completed some of our most successful and important field
trials to date with both military and commercial customers. Response
to the product and its benefits was favorable and strong. A major
aerospace company recently notified us of the selection of Nomad for
use in aircraft maintenance. We expect to report on this and the
results of our recent trials very soon. We believe our work on two
government contracts will result in substantial improvements to the
Nomad display. These enhancements can be the basis for important
additions to the product line. We continue to pursue a number of
potentially significant opportunities for Nomad and, based on our
evaluation of several key opportunities, believe sales of the product
can become much more significant as we move into 2004.
“We continue to meet the development milestones in our agreement
with Canon. We anticipate that in mid to late summer, we will be ready
to begin the product development phase for the electronic viewfinder
application. We are in active dialogue with a number of the leading
consumer electronics companies relating to a range of consumer
products, including electronic viewfinder for digital camcorders and
displays for gaming and entertainment applications. Each of these is a
significant market opportunity and we remain on target to achieve a
display engine that we believe uniquely meets the requirements for
high volume consumer products. We have also attracted significant
interest from well-known and highly qualified manufacturers for high
volume production of our low-cost display engine for consumer
applications. These relationships will be key to achieving dramatic
packaging and cost gains for our display engines for consumer
products.
“We’ve had a very strong start to our work in automotive displays
in 2003, building on the momentum we developed last year. We have
received work orders and contracts totaling over $1 million so far and
we believe additional contracts will be forthcoming. We have expanded
our customer base to include BMW, a second European automaker, and one
of the world’s leading Tier 1 automotive suppliers, and we are
currently in discussions with several other significant automakers and
suppliers. We have built, or have contracts to build, prototypes for a
head-up projection display, and a series of reconfigurable dash and
console instruments and controls. We believe that we are rapidly
moving to the product development phase for a number of automotive
display applications. Certain of our current and planned development
activities will also center on a design that will enable dramatic
reductions in size for our head-up display.
New Developments
“We recently reported that we had demonstrated a prototype of a
laser scanning camera based on our microscanning platform and that we
were in the process of benchmarking our results against a range of
commercial imaging products and applications. We have recently
completed our benchmarking study against a commercial 2D bar code
scanner and have documented significant advantages in usable range,
motion blur immunity and contrast. We expect to report these results
to prospective partners and relevant media soon. Our strategy is to
develop partnerships to accelerate product development for a variety
of applications that utilize miniature cameras, including 2D bar code
scanning, machine vision and medical imaging.
“We completed a demonstration, with funding from a major Asian
display manufacturer, of our microscanning technology for use in a
rear- and front- projection display for large screen televisions. The
test was very successful and has resulted in development work on other
elements of the system being conducted by our prospective partner. The
current plan is for our sponsored development work to resume at the
completion of the partner’s activities.
“We continue to develop and evaluate both wearable and handheld
product concepts for mobile and cellular communications under contract
to one of the world’s leading wireless network operators and under a
separate agreement with one of the leading manufacturers of wireless
handset and mobile data products. We are seeing renewed interest in
this product category as new portable media products emerge from a
variety of the world’s leading technology companies.
“We have recently been asked by a major Asian company to submit a
proposal for development of an engine for high-speed laser printing
applications, based on our core microscanning technology.
“We are also very excited about the new developments at Lumera.
They recently demonstrated a prototype radio frequency phase shifter
that has the ability to deliver new levels of precision and
performance for several applications, including phased array antenna
systems. Lumera has enormous long-term potential and we remain excited
about the company’s future prospects.
“We believe that we are back on track for achieving quarterly
sequential revenue increases and we are very encouraged by our results
year to date and the promising outlook for the second quarter. We are
well positioned and we believe that we are on track to achieve our
objectives for the year, which include establishing Flic as a
significant revenue contributor and introducing the Flic Freedom
wireless product, developing markets and applications for the Nomad
display product and achieving the technology development and
partnering milestones needed to bring consumer applications to
market.”
Conference Call
Microvision will host a conference call to discuss its first
quarter of 2003 financial results at 4:30 p.m. ET 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 11:00 p.m. ET May 13, 2003 and can be
accessed by dialing 800-642-1687 (for U.S. participants) or
706-645-9291 (for international participants). The conference I.D.
code is 9969287. Also, a replay of the conference call will be
available on the company’s web site.
(Table to follow)
About Microvision: www.microvision.com
Headquartered in Bothell, WA, Microvision Inc. is the developer of
the patented 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. Nomad is a trademark of Microvision, Inc.
About Lumera: www.microvision.com
As a subsidiary of Microvision, Inc., Lumera is a world 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.
Forward-Looking Statements Disclaimer
Certain statements contained in this release, including expected
results, projections of future revenues, plans for product development
and production volume, future development contracts and commercial
arrangements, growth in demand, future product benefits and future
operations, as well as statements containing words like
“believes,””estimate,” “expects,” “anticipates,” “target,” “plans,”
“will”, “could” 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: 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 and other
risk factors identified from time to time in the company’s SEC
reports, 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 circumstances or any other reason.
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
(Unaudited)
March December
31, 31,
2003 2002
--------- ---------
Assets
Current Assets
Cash and cash equivalents $16,911 $9,872
Investment securities, available-for-sale 3,037 5,304
Accounts receivable, net 2,013 1,315
Costs and estimated earnings in excess of
billings on
uncompleted contracts 955 1,073
Inventory, net 244 747
Other current assets 2,134 2,348
--------- ---------
Total current assets 25,294 20,659
Property and equipment, net 7,077 7,672
Restricted investments 1,297 1,356
Receivables from related parties, net 1,843 2,043
Other assets 392 537
--------- ---------
Total assets $35,903 $32,267
========= =========
Liabilities, Minority Interests and Shareholders'
Equity
Current Liabilities
Accounts payable $1,576 $1,462
Accrued liabilities 5,011 4,309
Billings in excess of costs and estimated
earnings on uncompleted contracts 184 230
Current portion of capital lease obligations 79 84
Current portion of long-term debt 65 63
--------- ---------
Total current liabilities 6,915 6,148
Research liability 1,477 1,025
Capital lease obligations, net of current portion 73 94
Long-term debt, net of current portion 152 169
Deferred rent, net of current portion 170 192
--------- ---------
Total liabilities 8,787 7,628
--------- ---------
Commitments and Contingencies - -
Minority Interests 5,334 7,223
--------- ---------
Shareholders' Equity
Common stock and paid-in capital 158,644 147,058
Deferred compensation (1,273) (1,490)
Subscriptions receivable from related parties (166) (166)
Accumulated other comprehensive income 80 121
Accumulated deficit (135,503) (128,107)
--------- ---------
Total shareholders' equity 21,782 17,416
--------- ---------
Total liabilities, minority interests and
shareholders' equity $35,903 $32,267
========= =========
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended
March 31,
--------------------
2003 2002
--------------------
Revenue $3,537 $3,804
Cost of revenue 1,409 1,811
--------------------
Gross margin 2,128 1,993
--------------------
Research and development expense 6,800 7,369
Marketing, general and administrative expense 4,285 4,509
Non-cash compensation expense 465 515
--------------------
Total operating expenses 11,550 12,393
--------------------
Loss from operations (9,422) (10,400)
Interest income 123 338
Interest expense (14) (18)
Realized gain on sale of investment securities 27 -
--------------------
Loss before minority interests (9,286) (10,080)
Minority interests in loss of consolidated
subsidiary 1,890 1,854
--------------------
Net loss $(7,396) $(8,226)
====================
Net loss per share before non-cash compensation
expense $(0.43) $(0.59)
Non-cash compensation expense (0.03) (0.04)
--------------------
Net loss per share - basic and diluted $(0.46) $(0.63)
====================
Weighted-average shares outstanding -
basic and diluted 15,948 13,042
====================
CONTACT:
Microvision
Brian Heagler (investors), 425/415-6794
Matt Nichols (media), 425/415-6657
SOURCE: Microvision, Inc.