5/9/2001
Company Expands Field Trials and Secures Product Sales of Nomad(TM) Display System, Wins Government Contract and Completes First Financing and Strategic Partnering for Lumera
BOTHELL, Wash., May 9 /PRNewswire/ — Microvision(TM), Inc. (Nasdaq: MVIS)
today reported results for the first quarter of 2001.
Quarterly results
For the three months ended March 31, 2001, Microvision reported a
consolidated net loss of $10.2 million or $0.86 per share compared to a net
loss of $5.1 million or $.48 per share for the same period in 2000.
Consolidated results include Microvision, Inc. and the company’s subsidiary,
Lumera Corporation. During the first quarter 2001, the loss attributable to
Lumera was $2.3 million or $0.19 per share. Results for the quarter also
include a charge of $1.1 million or $0.09 per share, of which $1.0 million was
non-cash, attributable to payment to the University of Washington of a
fully-paid license fee for the Halo display technology. Consolidated revenues
increased to $2.3 million from $2.1 million in the same period in 2000.
The company ended the quarter with $54.1 million in cash and investment
securities and a revenue backlog of $9.6 million.
The company indicated that there is a high probability that the release of
its Nomad display would be delayed by 10 to 12 weeks (into the fourth quarter)
as a result of a need to further optimize the scanner drive mechanism and
control software. However, the impact on total revenue and earnings may be
mostly or entirely offset by higher than expected sales of the Spectrum
display unit and an increase in contract revenue for the year.
The recently completed $24 million funding round by Lumera will result in
an allocation of Lumera’s operating losses to Microvision of approximately
$0.45 per share for 2001 which is significantly lower than the $1.00 per share
previously estimated.
“We are pleased with our progress and results this quarter,” noted
Rick Rutkowski, Microvision president and CEO. “We are meeting our operating
and financial goals and continuing to advance our marketing and sales efforts
towards product introductions. While the delay in Nomad’s release is
disappointing, we are still comfortable that 2001 revenues can be in the
neighborhood of 50 percent higher than last year. We intend to make good use
of the time by continuing to enlist new customers, and prospective application
and distribution partners for the Nomad system. We can control the timing of
many of the budgeted expenditures relating to the ramp toward Nomad release to
minimize any negative impact to net operating income.
“The Spectrum display is also being very well received. We are excited
about the market potential for our barcode scanner product, which continues to
proceed on schedule towards prototype demonstration this summer and product
launch in early 2002. With respect to Lumera, we appear to be on track with
our technical and product plan at a reduced rate of investment, and our design
fabrication facility, which has recently come on line, may in fact support
moderate levels of production. These developments could allow us to get
greater impact out of our first round funding than we originally anticipated.”
Quarterly highlights
Among the highlights of the first quarter, Stryker Leibinger (a division
of Stryker Corporation) ordered ten Nomad wearable display systems for
integration in a medical workstation. For competitive reasons, the specific
application for the Nomad system in the Stryker Navigation System will not be
publicly disclosed until product launch this fall; however, both companies
believe the application will assist in reducing surgical time and improving
patient outcomes.
The company also entered into a research agreement with the Mayo Clinic
Rochester to evaluate the Nomad system for medical applications in cardiology,
cancer treatment and anesthesiology. Nomad’s capability for displaying images
overlaid onto the patient will be tested to determine if augmented vision
capability would aid the surgeon and attendants who require an enhanced
‘inside the body’ view during such procedures as catheter stent placement,
radiation treatment of prostate tumors, brain surgery and anesthesiology
monitoring.
Lumera Corporation ( http://www.lumera.com ), Microvision’s optical
network components subsidiary, completed a $24 million round of financing led
by Cisco Systems, Inc. in March 2001. This round of financing marked the first
investment in Lumera by investors outside of Microvision, which has provided
the financing for the subsidiary since its inception. Lumera will use the
proceeds to continue its research and development activities in developing
materials for a new generation of unique active and passive components for
optical networks that are expected to deliver increased bandwidth at very
competitive costs while requiring less power than today’s devices. Lumera
expects to begin commercializing its technology as early as mid-2002.
Subsequent events
Following the end of the quarter, Microvision announced the award of an
additional $7.5 million contract extension from the U.S. Army to continue
development on the Virtual Cockpit Optimization Program (VCOP) and expand the
Aircrew Integrated Helmet System (AIHS) for use in attack and utility
helicopters.
Microvision also announced that it delivered Spectrum(TM) — its prototype
full-color display system — to the Cleveland Clinic Foundation. The delivery
represents the first of several full-color, high-resolution,
daylight-readable, see-through display prototypes that Microvision plans to
place with strategic customers this year. As Microvision’s first development
partner for Spectrum, the Cleveland Clinic will focus on developing and
evaluating clinical applications in the operating room.
Investors will have the opportunity to listen to Microvision’s conference
call regarding first quarter earnings at 8:00 a.m. PDT on May 9. Participants
may join the conference call by dialing 913-981-5522 ten minutes prior to the
start of the conference. The confirmation code is 635381. Additionally, the
conference will be broadcast over the Internet through The First News website,
located at http://www.thefirstnews.com . To participate via the Internet, go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available on The First News site shortly after the call.
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.mvis.com.
NOTE: Nomad and Microvision are trademarks of Microvision, Inc.
About Lumera
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.
Additional information can be found at Lumera’s Web site at
http://www.lumera.com.
Forward-Looking Statement
The information set forth in this release includes “forward-looking
statements” within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended, and is subject to the safe harbor created by those
sections. Certain factors that realistically could cause results to differ
materially from those projected in the company’s forward-looking statements
are set forth in the company’s Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q, as filed with the Securities and Exchange Commission.
Microvision, Inc.
Consolidated Statement of Operations
(In thousands, except earnings per share data)
Three months ended March 31,
2001 2000
(unaudited)
Revenue $2,337 $2,110
Cost of revenue 1,562 1,468
Gross margin 775 642
Research and development expense 8,067 3,596
Marketing, general and administrative expense 3,701 2,340
Non-cash compensation expense 463 154
Total operating expenses 12,231 6,090
Loss from operations (11,456) (5,448)
Interest income 706 452
Interest expense (24) (77)
Loss before minority interests (10,774) (5,073)
Minority interests in loss of consolidated
subsidiary 554 --
Net loss $(10,220) $(5,073)
Net loss per share before non-cash
compensation expense $(0.82) $(0.47)
Non-cash compensation expense (0.04) (0.01)
Net loss per share - basic and diluted $(0.86) $(0.48)
Weighted-average shares
outstanding - basic and diluted 11,917 10,469
Microvision, Inc.
Consolidated Balance Sheet
(In thousands)
March 31, December 31,
2001 2000
(unaudited)
Assets
Current Assets
Cash and cash equivalents $22,290 $7,307
Investment securities, available-for-sale 31,784 33,410
Accounts receivable, net 1,181 1,033
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,075 2,116
Current restricted investments -- 1,125
Other current assets 2,575 976
Total current assets 58,905 45,967
Long-term investment, at cost 624 624
Property and equipment, net 7,523 7,516
Restricted investments 903 951
Receivables from related parties 1,520 1,000
Other assets 2,099 114
Total assets $71,574 $56,172
Liabilities And Shareholders' Equity
Current Liabilities
Accounts payable $1,346 $1,974
Accrued liabilities 3,402 2,359
Allowance for estimated contract losses 250 295
Billings in excess of costs and estimated
earnings on uncompleted contracts 73 419
Current portion of capital lease obligations 289 317
Current portion of long-term debt 53 52
Total current liabilities 5,413 5,416
Capital lease obligations, net of current portion 118 182
Long-term debt, net of current portion 276 290
Deferred rent, net of current portion 246 242
Total liabilities 6,053 6,130
Commitments and contingencies -- --
Minority interest 20,765 --
Shareholders' Equity
Common stock 124,396 120,506
Deferred compensation (3,723) (4,378)
Subscriptions receivable from related parties (347) (403)
Accumulated other comprehensive income 787 454
Accumulated deficit (76,357) (66,137)
Total shareholders' equity 44,756 50,042
Total Liabilities, mandatorily redeemable
convertible preferred stock and
shareholders' equity $71,574 $56,172