MicroVision Announces Second Quarter 2011 Results

Highlights include signing agreement for in-vehicle PicoP head-up display with major car maker and expanding SHOWWX(TM) distribution in Apple channels

REDMOND, Wash.--(BUSINESS WIRE)-- MicroVision, Inc. (NASDAQ: MVIS), the leader in innovative ultra-miniature projection display technology, today announced its operating and financial results for the second quarter of 2011.

During the quarter the company continued to execute on its three key initiatives for 2011: progressing the development of the next-generation high-definition (HD) PicoP(R) display engine with Pioneer Corporation, adding new distribution partners for the SHOWWX family of pico projectors, and significantly reducing its cash used in operations compared to last year. The company also signed a first-of-its-kind agreement with a major automobile manufacturer, offering a clear initial path toward commercialization of its PicoP head-up display technology (PicoHUD(TM)) inside a mass-production car model targeted for introduction in 2014.

"We are realizing the results from the business plan we announced and implemented in late 2010 and early 2011," stated Alexander Tokman, president and CEO of MicroVision. "While we continue to reduce cash used in operations, the team is actively engaged in expanding our distribution network for the SHOWWX product line and closing important business development opportunities."

Highlights included:

    --  Signed an agreement with a major automotive manufacturer to incorporate
        MicroVision's PicoHUD technology into its test vehicles. MicroVision,
        the manufacturer and its Tier 1 integrator have agreed to develop an
        advanced HUD prototype that includes the next-generation PicoP display
        engine based on direct green lasers. These prototypes are intended for
        installation in early test vehicles for specific models already
        identified on the manufacturer's production roadmap. It is anticipated
        that the first phase will be followed by a series of milestones that may
        result in introduction of the HUD into a production vehicle.
    --  Expanded support of the Apple ecosystem by adding Softline UK Ltd.
        (EMEA) and Synnex K.K. (Japan) to distribute the SHOWWX(TM) line of pico
        projector products to Apple customers in Europe, Middle East, Africa and
        Japan. The SHOWWX+ is the first laser pico projector to be sold in
    --  Announced the new SHOWWX+HDMI laser pico projector, offering pure
        digital connectivity to a breadth of new tablets, smartphones and
        devices offering HDMI video-out. The SHOWWX+HDMI expands compatibility
        with more of today's popular devices featuring HDMI video-out
        capabilities. In addition to being certified for use with Apple iPhone,
        iPad, iPad 2 and iPod touch, SHOWWX+HDMI works with RIM's BlackBerry
        Playbook and Windows 7 tablets, a range of compatible Android and
        Symbian smartphones, as well as Windows and Apple notebooks, netbooks
        and ultra portable HDMI-enabled devices.
    --  Delivered initial order of first-generation PicoP display engines to
        Walsin Lihwa. Walsin has integrated these engines into its new Pico
        Panda product planned for commercial release in China in the second half
        of 2011.
    --  Continued advancement with Pioneer of the light source module based on
        direct blue, green, and red laser diodes and engine subsystems for the
        next-generation HD PicoP display engine. The HD PicoP display engine is
        expected to have the high performance, small size and attractive price
        required for high-volume automotive and consumer applications. It is
        expected to serve as the foundation for Pioneer's aftermarket HUD
        product planned for introduction in 2012.

Financial Results

The following financial results are for three and six months ended June 30, 2011, compared to the same periods one year earlier.

    --  Revenue was $1.2 million for the second quarter of 2011, compared to
        $2.1 million for the second quarter of 2010, and $2.3 million for the
        first half of 2011, compared to $2.8 million for the first half one year
        ago. Backlog was $1.7 million as of June 30, 2011.
    --  Operating loss was $9.3 million for the second quarter of 2011, compared
        to $11.1 million for the same quarter a year ago, and $18.3 million for
        the first half of 2011, compared to $20.6 million for the first of 2010.
    --  Net loss was $9.2 million, or $0.09 per share for the second quarter of
        2011, compared to $11.1 million, or $0.12 per share for the same quarter
        a year ago. Net loss was $18.2 million, or $0.17 per share for the first
        half of 2011, compared to $20.2 million, or $0.23 per share for the
        first half of 2010.

For the six months ended June 30, 2011, cash used in operations was $15.5 million compared to $22.3 million for the same period in 2010, reflecting a 30% decrease from one year ago. For the second quarter of 2011, cash used in operations was $7.4 million compared to $12.7 million for the same period in 2010, reflecting a 42% decrease from one year ago. The company is aggressively managing its costs and is on target to reduce cash used in operations for the year by approximately 40% compared to 2010.

As of June 30, 2011, cash and cash equivalents were $9.3 million, which includes $2.4 million raised during the second quarter of 2011 through the company's 2010 equity financing facility.

During the quarter the company secured a new equity financing facility under which it may sell up to $40 million dollars or approximately 21 million shares of its common stock over two years.

Conference Call

The company will host a conference call today to discuss its second quarter 2011 results and current business operations at 8:30 a.m. ET / 5:30 a.m. PT. Participants may join the conference call by dialing 800-561-2601 (for U.S. participants) or 617-614-3518 (for international participants) ten minutes prior to the start of the call. The conference call pass code number is 56894455. A live webcast can be accessed from the company's web site at www.microvision.com/investors. The webcast and information needed to access the telephone replay will be available through the same link approximately one hour after the conference call concludes.

About MicroVision

MicroVision provides the PicoP(R) display technology platform designed to enable next-generation display and imaging products for pico projectors, vehicle displays and wearable displays that interface with mobile devices. The company's projection display engine uses highly efficient laser light sources which can create vivid images with high contrast and brightness. For more information, visit us on:

Our company website: microvision.com

Our corporate blog: microvision.com/displayground

Twitter: twitter.com/microvision

Facebook: facebook.com/MicrovisionInc

YouTube: youtube.com/mvisvideo

MicroVision, SHOWWX, SHOWWX+ and PicoP are trademarks of MicroVision Inc. in the United States and other countries. All other trademarks are the properties of their respective owners.

Forward-Looking Statements

Certain statements contained in this release, including those relating to future integration of PicoHUD technology into production car models or HUD products, future product development and operating results and those using words such as "anticipate", "intend," "expect," "target" and "plan" 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; our or our customers failure to perform under open purchase orders; our financial and technical resources relative to those of our competitors; 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; 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 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.

Balance Sheet

(In thousands)


                                                     June 30,       December 31,

                                                     2011           2010


Current Assets

Cash and cash equivalents                            $ 9,339        $ 19,413

Investment securities, available-for-sale              9              13

Accounts receivable, net of allowances                 684            1,116

Costs and estimated earnings in excess of              132            137
billings on uncompleted contracts

Inventory                                              5,042          6,075

Current restricted investments                         306            306

Other current assets                                   978            564

Total current assets                                   16,490         27,624

Property and equipment, net                            3,380          4,169

Restricted investments                                 1,019          1,189

Intangible assets                                      2,140          2,233

Other assets                                           30             18

Total assets                                         $ 23,059       $ 35,233

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable                                     $ 6,785        $ 7,665

Accrued liabilities                                    4,026          4,135

Billings in excess of costs and estimated              47             81
earnings on uncompleted contracts

Current portion of capital lease obligations           35             40

Current portion of long-term debt                      89             85

Total current liabilities                              10,982         12,006

Capital lease obligations, net of current portion      94             114

Long-term debt, net of current portion                 114            159

Deferred rent, net of current portion                  497            697

Other long-term liabilities                            -              424

Total liabilities                                      11,687         13,400

Commitments and contingencies                          -              -

Shareholders' Equity

Common stock at par value                              108            102

Additional paid-in capital                             408,540        400,791

Accumulated other comprehensive loss                   (34      )     (30      )

Accumulated deficit                                    (397,242 )     (379,030 )

Total shareholders' equity                             11,372         21,833

Total liabilities and shareholders' equity           $ 23,059       $ 35,233

Microvision, Inc.

Statement of Operations

(In thousands, except earnings per share data)


                        Three months ended June 30,    Six months ended June 30,

                        2011          2010             2011          2010

Contract revenue        $ 251         $ 73             $ 484         $ 371

Product revenue           904           2,015            1,790         2,385

Total revenue             1,155         2,088            2,274         2,756

Cost of contract          395           21               694           149

Cost of product           2,985         3,337            5,225         4,496

Total cost of             3,380         3,358            5,919         4,645

Gross margin              (2,225  )     (1,270  )        (3,645  )     (1,889  )

Research and              3,478         6,043            7,805         11,041
development expense

Sales, marketing,
general and               3,577         3,817            6,876         7,705

Gain on disposal of       -             -                (7      )     -
fixed assets

Total operating           7,055         9,860            14,674        18,746

Loss from operations      (9,280  )     (11,130 )        (18,319 )     (20,635 )

Interest income           12            50               27            79

Interest expense          (12     )     (16     )        (25     )     (33     )

Gain on derivative        -             34               -             429
instruments, net

Other income              105           (11     )        105           (30     )

Net loss                $ (9,175  )   $ (11,073 )      $ (18,212 )   $ (20,190 )

Net loss per share -    $ (0.09   )   $ (0.12   )      $ (0.17   )   $ (0.23   )
basic and diluted

shares outstanding -      106,176       88,767           104,446       88,730
basic and diluted

    Source: MicroVision, Inc.