MicroVision Announces First Quarter 2011 Results

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

"During the quarter we made solid progress on our three primary objectives for this year," stated Alexander Tokman, president and CEO. "The direct green PicoP engine development has been progressing and has not been disrupted by the recent disaster in Japan. Our ground work implemented in late 2010 on enhancing product distribution channels, introducing a new product, and simplifying operations has already paid dividends through increased revenue and lower cash usage than the fourth quarter of 2010."

Notable business developments during the quarter include:

    --  Continued advancement of the next-generation direct green laser PicoP(R)
        display engine despite the recent events in Japan. Both MicroVision and
        Pioneer have been devoting substantial resources to the joint
        development of key components of MicroVision's next-generation direct
        green laser PicoP engine. Commercial launch of a direct green PicoP
        display engine is planned for the first half of next year.
    --  Product revenue more than doubled from the fourth quarter of 2010 from
        increased sales of the SHOWWX(TM) line of pico projectors.
    --  Decreased cash used in operations by 28% compared to the fourth quarter
        of last year. This reduction is in line with the company's target of
        reducing 2011 cash used in operations by 40% from 2010. The company
        anticipates cash used in operations will continue to decrease during the
        remainder of 2011 as the impact of changes made early in the first
        quarter take full effect.
    --  The company opened a research and development center at Singapore's
        Nanyang Technological University to further innovation and as a
        cost-effective means for expanding its global research and development
        initiatives. The company chose NTU because of the breadth of science and
        technology expertise found at NTU and its centralized location in Asia.

Financial Results

The following financial results are for the three months ended March 31, 2011, compared to the same period one year earlier.

    --  Revenue was $1.1 million, compared to $668,000 a year ago, primarily
        from increased sales of the company's accessory laser pico projectors.
    --  Operating loss was $9.0 million, compared to $9.5 million for the same
        quarter a year ago.
    --  Net loss was $9.0 million, or $0.09 per share, compared to $9.1 million,
        or $0.10 per share for the same quarter a year ago.

Backlog was $1.5 million as of March 31, 2011. The OEM customer who in 2010 placed orders of $11.9 million for the PicoP display engine has delayed its product launch to the second half of 2011. This has introduced additional uncertainty about the commercialization ramp of the customer's high-end media player. Consequently, MicroVision has removed these orders from its backlog until more information regarding the timing and quantity of engine deliveries can be established.

Cash used in operations was $8.1 million during the quarter ended March 31, 2011, compared to $11.2 million for the fourth quarter of 2010. Cash and cash equivalents were $14.5 million as of March 31, 2011, which includes $3.1 million in cash raised during the first quarter through the company's 2010 equity financing facility.

Conference Call

The company will host a conference call today to discuss its first 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 866-362-4829 (for U.S. participants) or 617-597-5346 (for international participants) ten minutes prior to the start of the call. The conference call pass code number is 76869564. The call will also be broadcast over the Internet and 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: www.microvision.com

Our corporate blog: www.microvision.com/displayground

Twitter: www.twitter.com/microvision

Facebook: www.facebook.com/MicrovisionInc

YouTube: www.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 product development and operating results and those using words such as "anticipate," "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)


                                                     March 31,      December 31,

                                                     2011           2010


Current Assets

Cash and cash equivalents                            $ 14,469       $ 19,413

Investment securities, available-for-sale              12             13

Accounts receivable, net of allowances                 880            1,116

Costs and estimated earnings in excess of billings     123            137
on uncompleted contracts

Inventory                                              5,423          6,075

Current restricted investments                         306            306

Other current assets                                   477            564

Total current assets                                   21,690         27,624

Property and equipment, net                            3,843          4,169

Restricted investments                                 1,019          1,189

Intangible assets                                      2,186          2,233

Other assets                                           30             18

Total assets                                         $ 28,768       $ 35,233

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable                                     $ 6,808        $ 7,665

Accrued liabilities                                    4,305          4,135

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

Current portion of capital lease obligations           37             40

Current portion of long-term debt                      87             85

Total current liabilities                              11,284         12,006

Capital lease obligations, net of current portion      105            114

Long-term debt, net of current portion                 137            159

Deferred rent, net of current portion                  600            697

Other long-term liabilities                            330            424

Total liabilities                                      12,456         13,400

Commitments and contingencies                          -              -

Shareholders' Equity

Common stock at par value                              105            102

Additional paid-in capital                             404,305        400,791

Accumulated other comprehensive loss                   (31      )     (30      )

Accumulated deficit                                    (388,067 )     (379,030 )

Total shareholders' equity                             16,312         21,833

Total liabilities and shareholders' equity           $ 28,768       $ 35,233

Microvision, Inc.

Statement of Operations

(In thousands, except earnings per share data)


                                                  Three months ended March 31,

                                                  2011          2010

Contract revenue                                  $ 233         $ 298

Product revenue                                     886           370

Total revenue                                       1,119         668

Cost of contract revenue                            299           128

Cost of product revenue                             2,240         1,159

Total cost of revenue                               2,539         1,287

Gross margin                                        (1,420  )     (619   )

Research and development expense                    4,327         4,998

Sales, marketing, general and administrative        3,299         3,888

Gain on disposal of fixed assets                    (7      )     -

Total operating expenses                            7,619         8,886

Loss from operations                                (9,039  )     (9,505 )

Interest income                                     15            29

Interest expense                                    (13     )     (17    )

Gain on derivative instruments, net                 -             395

Other expense                                       -             (19    )

Net loss                                          $ (9,037  )   $ (9,117 )

Net loss per share - basic and diluted            $ (0.09   )   $ (0.10  )

Weighted-average shares outstanding - basic and     102,697       88,693

    Source: MicroVision, Inc.