8/9/2000
<![CDATA[
Company Achieves Technical Milestones and Forms Partnerships to Support RSD Product Introduction and Micro-Imaging Solutions
BOTHELL, Wash., Aug. 9 /PRNewswire/ — Microvision, Inc. (Nasdaq: MVIS)
today reported results for the second quarter and six months ended
June 30, 2000.
Revenue Discussion
For the second quarter 2000, the Company reported a net loss of
$6.9 million or $.60 per share compared to a net loss available for common
shareholders of $5.3 million or $.74 per share for the second quarter 1999.
For the six months, the Company reported a net loss of $12.0 million or
$1.09 per share compared to net loss available for common shareholders of
$8.4 million or $1.27 per share for the same period in 1999. Revenues
declined slightly in the second quarter 2000 to $1.2 million from $1.4 million
in the second quarter 1999 and for the six months revenues were $3.3 million
in 2000 versus $3.7 million in the same period of 1999.
“We continue to aggressively invest in the development, and marketing of
advanced display and micro-imaging product offerings,” stated Rick Rutkowski,
Microvision President and CEO. “While revenue and earnings were slightly below
the comparable period last year, during the quarter we achieved some of the
most significant technical milestones in the Company’s history, delivered beta
systems to key customers, formed important technical and marketing
relationships, and reached an unprecedented level of financial strength with
$57.8 million in cash and investment securities.
“We want to emphasize that our second quarter results do not reflect
weakness in market demand for our product and technology offerings, but rather
timing delays and revisions in contract schedules.
“Microvision continues to derive revenue and gross profit contribution
principally from development contracts awarded by the United States
government. Because the government’s fiscal year ends September 30, our new
contracts are typically negotiated and awarded during the spring, and usually
have a one year period of performance. As a result, our second quarter tends
to show seasonal weakness because it contains a hiatus period between the
completion of the prior year’s work and the commencement of work under new
contracts.
“We learned during the second quarter of 2000 that the Army wanted to
increase our contract award for the Virtual Cockpit (VCOP) program from
$7.8 million to $8.4 million in order to support the delivery of an additional
Helmet Mounted Display unit. As a result of this very positive development, we
made a decision to delay certain materials purchases originally planned for
the second quarter in order to gain more favorable pricing from the increased
order, which resulted in the deferment of certain revenues.
“Additionally, we revised our budget and schedule relating to a
$1.2 million subcontract to Boeing in order to reflect a later start date by
Boeing than we had originally anticipated. Our targeted completion date
remains the same, but the revenue recognized from this subcontract will now be
loaded towards the latter part of this year.
“The combined effect of these developments reduced revenue for the period
by several hundred thousand dollars. However, as of June 30, 2000, the
Company’s backlog of development contracts was $6.9 million, the highest
quarter end level in the Company’s history, and we continue to anticipate that
revenue for the year ending December 31, 2000 will show a strong increase over
the 1999 year.
“We also took a non-cash charge to earnings of nearly $400,000 during the
quarter, relating to the issuance of certain stock options.”
Quarterly Milestones
“We added $34.4 million in new capital during the quarter including a
$25 million dollar investment by General Electric Pension Trust and Cree, Inc.
targeted at accelerating the Company’s development of miniature displays for
the mobile internet market,” Rutkowski continued.
“Soon after, we demonstrated, for the first time a breakthrough miniature
display that uses just three microminiature Light Emitting Diode (LED) lamps
to create a full-color high-resolution video image of truly impressive
quality. We believe the integration of our scanning display into mobile
handsets and mobile headsets presents a huge opportunity to provide a winning
display solution for the rapidly emerging mobile Internet market. We have
already demonstrated the system to a handful of prospective customers and to
some members of the financial community with very favorable reactions.
“While performing a pedicle screw implant procedure, surgeons at The
Wallace Kettering Neurosciences Institute used a full color version of a
retinal scanning display to successfully validate the superior performance of
our visualization solution. Surgeons at Kettering and at Baylor College of
Medicine will continue to use the display to develop new “image-guided”
surgical procedures and applications. We also anticipate that additional
clinical sites will begin to utilize Microvision’s displays in a variety of
areas of surgical specialization.
“We continue to receive excellent reaction to the beta version of our
wearable display product from partners and customers in the medical and
commercial/industrial market segments. We delivered systems to two medical
customers and to an industrial consortium led by Siemens AG. Customer
commentary continues to focus on the critical importance of display
performance in a wearable computing environment, and on the superior
readability, safety and general utility of our see-through system as compared
with currently available offerings. Twenty units have been produced with nine
more expected by the end of August. Five units have been sold while the rest
are being used, or are scheduled for use, in a number of evaluations and field
tests to develop applications and systems configurations, and to quantify user
benefits.
“In order to develop the marketing channel for our product introduction
planned for spring of 2001, we have initiated market development relationships
with partners who are also focused on providing mobile and wearable computing
solutions to commercial/industrial customers. Earlier this year we announced
such a relationship with Xybernaut, a leading developer of wearable computers.
During the second quarter we established a co-marketing relationship with WRQ,
a world leader in PC software connectivity, and we are looking forward to more
positive outcomes in channel development.
“We have also made an auspicious beginning for our imaging solutions
group. We have seen very strong interest in our silicon micromirror technology
for web-enabled scanning readers, and for a variety of image capture
applications. Microvision’s scanning technology is only beginning to attract
the attention of key companies and research sponsors focused on a range of
digital imaging applications.
“On the intellectual property front, our patent position now includes 28
issued patents and 65 pending patent applications, and we continue to capture
significant and valuable intellectual property relating to our micro-scanning
and display and imaging systems.”
Investors will have the opportunity to listen to Microvision’s conference
call regarding Second Quarter 2000 Earnings at 8:00 am PT over the Internet
through Investor Broadcast Networks’ Vcall website, located at
http://www.vcall.com . To listen to the live call, please 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 Vcall site shortly after the call.
About Microvision
Headquartered in Bothell, Wash., 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 application 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.
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 OperationsThree months ended Six months ended,
June 30, June 30
2000 1999 2000 1999
(unaudited) (unaudited)Contract revenue $1,176,000 $1,392,900 $3,285,500 $3,694,500
Cost of revenue 883,900 1,539,500 2,351,400 3,249,100
Gross margin 292,100 (146,600) 934,100 445,400Research and
development expense 4,524,900 2,590,900 8,124,300 3,472,700
Marketing, general
and administrative
expense 3,512,100 2,513,700 6,003,000 4,235,400
Total operating
expenses 8,037,000 5,104,600 14,127,300 7,708,100Loss from operations (7,744,900) (5,251,200)(13,193,200) (7,262,700)
Interest income 843,800 142,500 1,295,700 188,900
Interest expense (31,300) (70,000) (108,100) (106,900)Net loss (6,932,400) (5,178,700)(12,005,600) (7,180,700)
Less: Preferred dividend -- (73,400) -- (73,400)
Noncash beneficial
conversion feature
of Series B
Preferred Stock -- -- -- (1,148,000)Net loss
available for
common shareholders $(6,932,400)$(5,252,100)$(12,005,600)$(8,402,100)Net loss per share
available for
common shareholders
- basic and diluted $(0.60) $(0.74) $(1.09) $(1.27)Weighted-average
shares outstanding
- basic and diluted 11,530,800 7,073,800 11,000,000 6,596,400Microvision, Inc.
Consolidated Balance SheetJune 30, December 31,
2000 1999
(unaudited)
Assets
Current Assets
Cash and cash equivalents $13,277,200 $2,798,000
Investment securities
available-for-sale 41,116,900 29,369,400
Accounts receivable, net 886,800 1,024,500
Costs and estimated earnings
in excess of billings
on uncompleted contracts 860,000 2,000,400
Current restricted investments 3,375,000 650,000
Other current assets 1,790,000 847,700
Total current assets 61,305,900 36,690,000Long-term investment, at cost 623,600 623,600
Property and equipment, net 3,798,300 3,054,700
Restricted investments 951,000 1,100,000
Other assets 101,400 150,700
Total assets $66,780,200 $41,619,000Liabilities, Mandatorily Redeemable
Convertible Preferred Stock And Shareholders' Equity
Current Liabilities
Accounts payable $820,500 $1,453,100
Accrued liabilities 2,286,300 2,000,100
Billings in excess of costs
and estimated earnings
on uncompleted contracts 177,000 167,000
Current portion
of capital lease obligations 326,600 220,800
Current portion of long-term debt 49,300 46,900
Total current liabilities 3,659,700 3,887,900Capital lease obligations,
net of current portion 293,000 279,400
Long-term debt, net of current portion 316,200 341,500
Deferred rent, net of current portion 233,900 214,800
Total liabilities 4,502,800 4,723,600Commitments and contingencies -- --
Mandatorily redeemable
convertible preferred stock -- 1,536,000Shareholders' Equity
Common stock 115,954,100 75,518,300
Deferred compensation (1,415,500) (213,100)
Subscriptions receivable
from related parties (689,200) (349,100)
Accumulated other comprehensive loss (30,300) (60,600)
Accumulated deficit (51,541,700) (39,536,100)
Total shareholders' equity 62,277,400 35,359,400
Liabilities, mandatorily
redeemable convertible preferred
stock and shareholders' equity $66,780,200 $41,619,000