Microvision Reports Third Quarter 2009 Results
Commercial Product Launch and Beginning of Shipments of SHOWWX, World's First Laser Pico Projector, Highlight Quarter
REDMOND, Wash.--(BUSINESS WIRE)-- Microvision, Inc. (NASDAQ:MVIS), a global leader in innovative ultra-miniature projection display and image capture products for mobility applications, today reported operating and financial results for the third quarter of 2009.
Operating Results
"The third quarter of 2009 was a very rewarding and in many ways historical quarter for Microvision as we reached three important corporate milestones for commercialization of our PicoP(R) technology" said Alexander Tokman, Microvision's President and CEO. "We launched our first PicoP technology based product, SHOWWXTM the world's first laser pico projector; received our first purchase order to distribute the SHOWWX; and secured our first global OEM to private label the accessory product. We began shipping SHOWWX laser pico projectors in September and our plan is to increase volume each month to meet customer demand."
Microvision's Asian distribution partner, Mint Technology, through its parent company Mint Wireless Limited (ASX: MNW), issued a press release on October 22 (see Mint press release) revealing that the global OEM that will private label Microvision's laser pico projector is Uniden Corporation of Japan. Microvision had previously announced on a no-name basis the purchase order from Mint Technology (see September 30 Microvision press release) and the purchase order for Uniden to private label Microvision's PicoP display engine-based accessory laser pico projector (see October 8 Microvision press release).
Other notable results and acknowledgements for the third quarter included:
-- Certifying the SHOWWX Laser Pico Projector as a Made for iPod(R) product
-- Signing a long-term agreement with OSRAM Opto Semiconductors GmbH for
supply of green and blue lasers to further strengthen supply chain
capabilities.
-- Receiving $1.0 million subcontract award from Lockheed Martin to support
DARPA's Urban Leader Tactical Response, Awareness & Visualization
(ULTRA-Vis) program, an advanced technology development initiative to
build a soldier worn system. This contract is important to Microvision's
long-term strategic roadmap, as it provides the opportunity to advance
the company's technology for a variety of military and commercial
full-color eyewear applications. Under the subcontract Microvision is
developing a daylight-readable, see-through, low-profile, ergonomic
eyewear display based on its ultra-miniature PicoP display engine and
proprietary thin, clear Substrate Guided Relay (SGR) Optics.
-- Identified for the first time by the Patent Board(TM) as one of the "Top
50 Movers" in the Electronics and Instruments industry. The Patent Board
is a leading business-based patent advisor to Fortune 500 companies,
emerging technology companies, law firms, investment banks, governments
and universities. The Patent Board utilizes proprietary data, tools,
analytics and technology to leverage patent-based Intellectual Property
as an asset class.
-- Identified by a Pacific Northwest business publication as one of
"Washington's Top 100 Companies to Work For in 2009"
Financial Results
For the nine months ended September 30, 2009, the company reported revenue of $2.9 million compared to $5.1 million for the same period in 2008 and for the three months ended September 30, 2009, the company reported revenue of $ 924,000 compared to $894,000 for the same period 2008. As of September 30, 2009, the backlog totaled $2.0 million compared to $647,000 at September 30, 2008. The decrease in revenue is primarily attributed to lower backlog at the beginning of 2009, which is a result of the company's strategy to focus most of its resources on commercializing PicoP products.
The company reported an operating loss for the nine months ended September 30, 2009 of $27.9 million compared to $25.3 million for the same period in 2008 and $9.3 million, for the quarter ended September 30, 2009 compared to $9.0 million for the same period in 2008.
The company reported a net loss of $30.8 million, or $0.43 per share, for the nine months ended September 30, 2009 compared to $22.7 million, or $0.38 per share for the same period in 2008 and $11.5 million, or $0.15 per share, for the quarter ended September 30, 2009 compared to $8.4 million, or $0.13 per share for the quarter ended September 30, 2008. The net loss for the three and nine months ended September 30, 2009 included a non cash loss on derivative instruments of $2.2 million and $3.0 million, respectively, compared to a gain of $585,000 and $2.0 million for the same periods in 2008. The loss on derivative instruments is due to the change in the value of the warrants to purchase the company's common stock that were issued in connection with the company's financing transactions.
Net cash used in operating activities was $23.4 million for the nine months ended September 30, 2009 compared to $22.3 million for the same period in 2008. Net cash used in operating activities was $7.1 million for the quarter ended September 30, 2009 compared to $7.6 million for the second quarter of 2009. The reduction in the quarterly cash burn was primarily a result of cost reduction efforts the company implemented in the first quarter of 2009. The net cash burn for the third quarter was partially offset by the receipt of $1.5 million for the exercise of investor warrants, and $300,000 for other investing and financing activities resulting in a net cash usage of $5.9 million for the third quarter of 2009. The company ended the quarter with $20.5 million in cash, cash equivalents, and investment securities.
Conference Call
Microvision will host a conference call to discuss its third quarter 2009 results and current business operations at 4:30 p.m. ET on October 22, 2009. Participants may join the conference call by dialing (800) 299-0148 (for U.S. participants) or (617) 801-9711 (for International participants) ten minutes prior to the start of the conference. The conference pass-code number is 46236246. Additionally, the call will be broadcast over the Internet and can be accessed from the company's web site at www.microvision.com/investors. The web cast and information needed to access the telephone replay will be available through the same link following the conference call.
About Microvision
Microvision provides the PicoP 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 our website (www.microvision.com) and corporate blog (www.microvision.com/displayground).
Forward Looking Statement
Certain statements contained in this release, including those relating to availability and supply of key components, including green lasers, ramp of production, applications, business partnering expectations, sales, growth, business prospects and impact of cost reductions, as well as statements containing words like "expect," "plan," 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; the risk of market acceptance of our technology and products, our financial and technical resources relative to those of our competitors; our planned future products dependence on advances in technology by other companies, our ability to keep up with rapid technological change; our ability to enforce our intellectual property rights and protect our proprietary technologies; the timing of commercial product launches and delays in product development; the ability to achieve key technical milestones in key products; our ability to secure needed third party manufacturing and sales resources, 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 in circumstances or any other reason.
Microvision, Inc.
Balance Sheet
(In thousands)
(Unaudited)
September 30, December 31,
2009 2008
Assets
Current Assets
Cash and cash equivalents $ 17,759 $ 25,533
Investment securities, available-for-sale 2,716 2,705
Accounts receivable, net of allowances 545 537
Costs and estimated earnings in excess of billings 242 695
on uncompleted contracts
Inventory 642 1,525
Other current assets 568 889
Total current assets 22,472 31,884
Property and equipment, net 3,895 3,701
Restricted investments 1,332 1,332
Other assets 53 47
Total assets $ 27,752 $ 36,964
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 3,390 $ 3,487
Accrued liabilities 3,289 3,545
Billings in excess of costs and estimated earnings 47 62
on uncompleted contracts
Liability associated with common stock warrants 3,379 331
Current portion of capital lease obligations 71 41
Current portion of long-term debt 76 71
Total current liabilities 10,252 7,537
Capital lease obligations, net of current portion 165 45
Long-term debt, net of current portion 264 322
Deferred rent, net of current portion 1,156 1,409
Total liabilities 11,837 9,313
Commitments and contingencies - -
Shareholders' Equity
Common stock at par value 77 68
Additional paid-in capital 338,690 319,662
Accumulated other comprehensive loss (27 ) (38 )
Accumulated deficit (322,825 ) (292,041 )
Total shareholders' equity 15,915 27,651
Total liabilities and shareholders' equity $ 27,752 $ 36,964
Microvision, Inc.
Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)
Three months ended September Nine months ended September
30, 30,
2009 2008 2009 2008
Contract revenue $ 817 $ 480 $ 2,342 $ 3,767
Product revenue 107 414 520 1,319
Total revenue 924 894 2,862 5,086
Cost of contract 379 253 1,289 1,389
revenue
Cost of product 720 356 1,504 1,224
revenue
Total cost of 1,099 609 2,793 2,613
revenue
Gross margin (175 ) 285 69 2,473
Research and
development 5,839 5,804 17,165 16,111
expense
Sales, marketing,
general and 3,283 3,456 10,764 11,694
administrative
expense
Total operating 9,122 9,260 27,929 27,805
expenses
Loss from (9,297 ) (8,975 ) (27,860 ) (25,332 )
operations
Interest income 45 271 188 962
Interest expense (19 ) (11 ) (50 ) (36 )
Impairment of
investment - (300 ) - (300 )
securities,
available-for-sale
Gain (loss) on
derivative (2,246 ) 585 (3,048 ) 2,004
instruments, net
Other expense (8 ) (13 ) (14 ) (45 )
Net loss $ (11,525 ) $ (8,443 ) $ (30,784 ) $ (22,747 )
Net loss per share
- basic and $ (0.15 ) $ (0.13 ) $ (0.43 ) $ (0.38 )
diluted
Weighted-average
shares outstanding 76,265 64,879 71,105 59,483
- basic and
diluted
Source: Microvision, Inc.
Released October 22, 2009