Company grows revenue by 19%, reduces cash used in operations by 40% and kicks off 2012 with design sample shipments of next-generation PicoP display engine

REDMOND, Wash.--(BUSINESS WIRE)--February 27, 2012--MicroVision, Inc. (NASDAQ: MVIS), the leader in innovative ultra-miniature projection display technology, today announced its 2011 operating and financial results and key 2012 business objectives.

MicroVision completed all of the key objectives of its 2011 business plan including:

MicroVision reported the following financial results for the quarter and year ended December 31, 2011, compared to the same periods one year ago.

As of December 31, 2011, backlog was $2.1 million and cash and cash equivalents were $13.1 million.

“MicroVision heads into 2012 with a focused strategy for delivering the world’s first HD pico display solution,” stated Alexander Tokman, president and CEO of MicroVision. “With the significant progress we made last year and the expected availability of the direct green lasers, we plan to deliver a robust solution to Pioneer for its targeted mid-year product launch and to supply PicoP Gen2 display engines to other customers later in the year.”

Secure OEM customer commitments to design products using the PicoP Gen2 display engine

The company is targeting OEMs in the consumer electronics, mobile entertainment, automotive, and industrial markets to define future products using the PicoP Gen2 technology.

MicroVision successfully completed the evaluation phase last year with Pioneer Corporation, delivering PicoP Gen2 display engine samples to them. Pioneer is now developing its HUD product which is expected to be introduced in the middle of 2012 and would be the first commercially available product with an embedded PicoP Gen2 display engine.

MicroVision recently began to deliver samples of the PicoP Gen2 display engine to additional OEMs for evaluation. During an evaluation phase, MicroVision provides design samples to prospective customers for their evaluation of the PicoP Gen2 display engine as a component they can embed in their future products. The company then provides design guidelines and engineering support in order to secure customer product development commitments and assist OEMs in the commercialization phase. During the later stages of an OEM’s product commercialization cycle, MicroVision would begin supplying commercial engines in larger volumes.

Commercial availability of the PicoP Gen2 display engine will be driven by the qualification and manufacturing readiness of three key elements: (1) direct green lasers by at least one manufacturer; (2) the laser module and display engine subsystems by Pioneer; and (3) the MEMS, electronics and systems controls.

Based on recent discussions with green laser suppliers, MicroVision currently believes that at least one manufacturer will be able to provide commercial direct green lasers to Pioneer and MicroVision by mid-2012 to enable Pioneer’s commercial product launch. Two additional suppliers now plan to introduce a commercial version of their lasers in the second half of 2012. At commercial introduction, direct green lasers are expected to meet all of the performance criteria necessary to launch the PicoP Gen2 display engine for automotive applications with Pioneer. To meet the display requirements for consumer applications, MicroVision identified and is developing PicoP Gen2 display engine system enhancements that are expected to be available to OEMs in the second half of 2012.

During 2012 MicroVision plans to transition to its core business model of enabling others to create products using its PicoP display engine technology, “Image by PicoP”. This ingredient brand strategy frees the company from developing the infrastructure necessary to develop and market end user products across multiple vertical markets and allows MicroVision to focus its resources on continuous innovation of its PicoP technology. For these reasons, the company believes that pursuing this strategy plays to its strengths as a technology company allowing OEMs to leverage their product development abilities and established product distribution networks.

The company will host a conference call today to discuss its financial and operating results for 2011, 2012 business strategy, and current business operations at 8:30 a.m. ET / 5:30 a.m. PT. Participants may join the conference call by dialing (866) 272-9941 (for U.S. participants) or (617) 213-8895 (for international participants) ten minutes prior to the start of the call. The conference call pass code number is 25048503. 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.

MicroVision provides the PicoP® display engine technology platform which enables 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:

Website: microvision.com
Blog: microvision.com/displayground
Twitter: twitter.com/microvision
Facebook: facebook.com/MicrovisionInc
YouTube: youtube.com/mvisvideo

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

Certain statements contained in this release, including those relating to future product development, expected product benefits, availability of direct green lasers and other risks relating to efforts by third parties, commercial contracting, operating results, and product commercialization, and those using words such as “expects”, “intends”, “plans”, “should”, “would”, “will” and “believe” 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)
(Unaudited)

	December 31,			December 31,
	2011			2010

Assets
Current Assets
Cash and cash equivalents	$	13,075		$	19,413
Investment securities, available-for-sale		8			13
Accounts receivable, net of allowances		463			1,116
Costs and estimated earnings in excess of billings on uncompleted contracts		70			137
Inventory		4,254			6,075
Current restricted investments		-			306
Other current assets		785			564
Total current assets		18,655			27,624

Property and equipment, net		2,347			4,169
Restricted investments		786			1,189
Intangible assets		2,048			2,233
Other assets		34			18
Total assets	$	23,870		$	35,233


Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$	7,341		$	7,665
Accrued liabilities		5,113			4,135
Billings in excess of costs and estimated earnings on uncompleted contracts		156			81
Current portion of capital lease obligations		39			40
Current portion of long-term debt		93			85
Total current liabilities		12,742			12,006

Capital lease obligations, net of current portion		72			114
Long-term debt, net of current portion		67			159
Deferred rent, net of current portion		187			697
Other long-term liabilities		-			424
Total liabilities		13,068			13,400

Commitments and contingencies

Shareholders' Equity
Common stock at par value		136			102
Additional paid-in capital		425,539			400,791
Accumulated other comprehensive loss		(35	)		(30	)
Accumulated deficit		(414,838	)		(379,030	)
Total shareholders' equity		10,802			21,833
Total liabilities and shareholders' equity	$	23,870		$	35,233


MicroVision, Inc.

Statement of Operations
(In thousands, except earnings per share data)
(Unaudited)

	Three months ended December 31,						Twelve months ended December 31,
	2011			2010			2011			2010


Product revenue	$	1,023		$	385		$	4,338		$	3,850
Contract revenue		481			298			1,279			890
Total revenue		1,504			683			5,617			4,740

Cost of product revenue		3,932			7,224			11,640			15,779
Cost of contract revenue		494			241			1,425			443
Total cost of revenue		4,426			7,465			13,065			16,222

Gross margin		(2,922	)		(6,782	)		(7,448	)		(11,482	)


Research and development expense		3,833			4,639			15,279			21,600
Sales, marketing, general and administrative expense		3,132			3,992			13,314			15,252
Gain on disposal of fixed assets		-			-			(11	)		-
Total operating expenses		6,965			8,631			28,582			36,852

Loss from operations		(9,887	)		(15,413	)		(36,030	)		(48,334	)

Interest income		11			18			47			112
Interest expense		(12	)		(14	)		(46	)		(62	)
Realized loss on sale of investment securities		-			(127	)		-			(127	)
Gain (loss) on derivative instruments, net		-			(33	)		-			842
Other income		82			149			221			109

Net loss	$	(9,806	)	$	(15,420	)	$	(35,808	)	$	(47,460	)

Net loss per share - basic and diluted	$	(0.62	)	$	(1.27	)	$	(2.57	)	$	(4.17	)

Weighted-average shares outstanding - basic and diluted		15,880			12,152			13,919			11,379

CONTACT:
MicroVision, Inc.
Tiffany Bradford, 425-882-6629 (investors)
Callie Snyder (Edelman), 503-997-3440 (media/PR)