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Immersion Corporation (NASDAQ:IMMR)

Q1 2010 Earnings Call Transcript

May 6, 2010 5:00 pm ET

Executives

Alex Wellins – IR, The Blueshirt Group

Victor Viegas –President & CEO

Shum Mukherjee – CFO

Analysts

Jeff Schreiner – Capstone Investments

Mark Argento – Craig-Hallum

Aaron Husock – Lanexa Global Management

Shawn Boyd – Westcliff Capital Management

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Immersion Corporation first quarter 2010 conference call. (Operator instructions) And I’d like to turn the conference over to Mr. Alex Wellins of The Blueshirt Group. Please go ahead, sir.

Alex Wellins

Good afternoon and thanks for joining us today. Today, after the market closed, Immersion posted its financial results for the first quarter of 2010. This call is also being webcast and can be accessed from the investor relation section of the Company’s Web site at immersion.com.

During today’s call, management may make forward-looking statements which may include projected financial results for operating metrics, business strategies, anticipated future products, anticipated market demand or opportunities and other forward-looking topics. These statements are subject to risks, uncertainties and assumptions. Accordingly, our actual results could differ materially. For a listing of the risks that could cause this, please see our latest Form 10-K as we as the factors identified in today’s press release. With that said, I’ll turn the call over to Vic Viegas. Vic?

Victor Viegas

Thank you, Alex, and thanks everyone for joining us this afternoon. Before I begin, I’d like to bring your attention to separate announcements made after the market closed today. I’m very pleased to announce that Shum Mukherjee has joined Immersion as our new CFO. Shum brings a deep financial background with the numerous public company environment, having served as CFO for both OpenTV and Genus, a semiconductor equipment company previously traded on NASDAQ. Shum is here with me on the call today and is looking forwarded to getting to know our analysts and investors in the near future. Shum, could you please say a little more about your background?

Shum Mukherjee

Thank you, Vic. I’m very excited to be joining Immersion at this point in the company’s development. I have quite a range and depth of experience including high growth public companies as well as turnaround situations. Early in my career, I was at Raychem, where I served in a variety of capacities including Assistant Treasurer, Assistant Controller, and Worldwide Group Controller.

Over the last ten years, I’ve enjoyed working at and establishing finance teams at smaller public technology companies like E*TRADE, Genus and most recently, OpenTV. I’m looking forward to working with the Immersion team to help grow the company profitably. Back to you, Vic.

Victor Viegas

Thanks, Shum. Given the Shum has only just joined us I will deliver our formal remarks today. I‘ll start by providing a brief summary of our high level financial results for the first quarter followed by discussion of recent developments since our last call.

Total first quarter revenues of $9.7 million were up approximately 29% from $7.5 million in the same period last year. Royalty and license revenue grew 69% to $6.4 million, and represented approximately 66% of total revenues. Solid growth in royalty and license revenue was driven by continued traction for our haptic solutions within the mobile market.

We also saw increased momentum for our technology within other market segment, including medical licensing and chip partnership. Product sales of 3 million include revenue for the first quarter prior to the sale of our laparoscopy, endoscopy and endovascular medical product lines to CAE Healthcare which was completed on March 31st. These products lines accounted for approximately 2 million in Q1.

While we no longer plan to break out revenue by touch and medical starting next quarter, I will provide that data for you today for comparison sake. Touch revenues for the first quarter increased by 54% to 6.8 million from the prior year period and represented 70% of total revenue, while medical revenues declined by 6% to 2.9 million from the prior year period and represented 30% of total revenue.

First quarter total costs and expenses of $12.1 million declined by $2.6 million or 18% from the prior year period. Net loss for the first quarter totaled $2.7 million or $0.09 per share as compared to a net loss of $6.1 million or $0.22 per share in the same period last year.

One internal metric that we’re pleased to see is our operating loss of 2.4 million passes over into profitability when we adjust for one-time investigation and restatement expenses of 1.6 million as well as non-cash expenses of 1.1 million for depreciation, amortization and stock-based compensation.

We ended the year with cash, cash equivalents and short-term investments of $64.6 million, actually that number is as of the end of the quarter. At the end of the quarter we had $64.6 million as compared to $63.7 million existing the December quarter.

Given that is only been a few weeks since our last update, I’m going to keep the rest of my comments fairly brief, but I’d like to highlight a few important developments since our last call.

First, I’m delighted to now be serving as Immersion’s ongoing CEO and deeply appreciate the Board’s confidence in my ability to help the company realize its full growth potential. While I have a long tenure with the company I’m more energized than ever based on the opportunities to leverage Immersion’s rich technology assets and I feel my background is an excellent fit to extract value from our new pure play licensing business strategy.

When we first introduced the technology we have the challenge of having to educate the market from scratch on what haptics is and why it’s important to the emerging digital lifestyle. We’re fortunate to have a few key early adopters and design wins that helped establish Immersion’s value proposition within our core verticals.

As I look at our markets today, it’s fair to say that most leading OEMs have realized the importance of engaging the sense of touch to deliver intuitive user interfaces and a better overall experience for consumers. In the migration to touchscreen tactive confirmation and accuracy are a major part of this equation. As a company we believe that any touch-enable device without haptics is broken. And we think we’re on a cuss of seeing haptics embraced on a much broader scale moving forward.

Another aspect that drove my decision to accept the role of CEO is the depth and breadth of talent across the organization. And particularly, within emergency new management team which Shum now joining us as Chief Financial Officer, the build-out of our executive team is complete. And I firmly believe that we have the right set of leaders in place to carry the company forward.

We successfully executed a transaction with CAE Healthcare on March 30th and we remained very pleased with the clean nature of the transaction, which resulted in no significant write-off or one-time charges.

The 35 employees have affected by the acquisition have successfully made the transition over to CAE bringing our headcount as of the end of March to 95. The deal was also very favorable to Immersion and that consisted a both the acquisition of hard assets and healthy ongoing licensing fee in the medical simulation vertical.

It also serve to quickly establish our goal of becoming a pure play technology licensing company while bringing a closer to our goal of operating profitability.

At the 2010 Mobile World Congress in Barcelona, we announced new solutions to power feedback effects and user experience design and applications for mobile handsets and other devices. This included our piezo-based TouchSense 5000 solution, which enables true, high-definition haptic effects for significantly improved feedback quality and fidelity; and our TouchSense 4000 solution, which uses multiple conventional motors to power next generation effects.

Our TouchSense 4000 solution is also incorporated into the Fuse concept phone, which demonstrates multiple interface technologies, including multi-touch capacitive sensing, haptics feedback, 3D graphics and 4 sensing.

Our latest haptic solutions are being very well received by our current and prospective OEMs, with TouchSense 4000 currently available and shipping in our partners’ products. And TouchSense 5000 expected to ship in commercial mobile handsets in the second half of this year.

Nokia just announced their new N8 phone plan to hit the market in the next couple of months. Our engineering team work closely with Nokia to integrate the haptic effects into the fundamental aspects of the UI, making it truly a great example of what haptics can do to transform the user experience.

Also during the quarter Alcatel-Lucent became a new licensee in the office product sector and they recently showed of their OmniTouch 8082 IP phone featuring Immersion haptic technology. The user interface features a 7-inch wide capacity of Touchscreen that is LED backlit and includes context-aware, sensory feedback with Immersion’s TouchSense technology.

Immersion is poised to capitalize on another emerging trend with touch-enabled solutions in Tablet PC where we currently see a lot of design activity. We continue to expand the ecosystem partners incorporating Immersion’s technology into their products and solutions platforms, with the goal of increasing penetration across our various markets.

We announced our collaboration with Renesas Electronics, the world's number one supplier of microcontrollers, to provide system level solutions that enable designers of consumer electronics, white goods and medical, building automation and office equipment to integrate rich haptic feedback in their touch surface and touchscreen interfaces.

Also, in the quarter we license our TouchSense technology to Densitron Corporation, a global leader in the information display technology sector, operating in 35 countries. Densitron is focused on integrating our technology and the touchscreen solutions for medical products, scientific instruments and industrial controls.

So as you can see, Immersion is generating strong interest for our solutions not only in the mobile touchscreen market but across a broad array of verticals where any device with the touchscreen or button stands the benefit from our haptics technology.

As you know, we have our Annual Meeting coming up in early June. And as you may have seen in our proxy materials, Robert Van Naarden has decided to retire as a Director of the Board after over seven years of service. I’d like to thank Rob for his valuable insight and contributions over that period and we wish him well in his future endeavors.

As listed in our proxy statements, the Company’s candidate for the Board seat to be vacated by Rob is Dave Sugishita. David currently serves as Chairman of the Board of Atmel, where he chairs the Audit and Corporate Governance and Nominating Committee and is a Director and Chairman of the Audit Committee for Ditech Networks. His career spans various senior financial management positions, including CFO role at Synopsys, Actel, and Micro Component Technology, Corporate Controller at Applied Materials and VP of Finance at National Semiconductor.

Based on David’s distinguished career, extensive board expertise and strong background in finance and financial controls with well-known technology companies we think he will be a very positive addition to our Board if elected.

In terms of our near-term outlook, we would expect total revenues in Q2 to be in the range of $6.2 million to $6.7 million, down on a comparative basis sequentially, reflecting our transition to a licensing model as well as typical downward seasonal trend based on our revenue recognition.

Even with the seasonally lower quarter we are on track for the full year 2010 revenue outlook of $25 million to $30 million that I have mentioned in prior calls. As I indicated last quarter operating expenses are expected to normalize based on lower legal fees and the reduced headcount following the transaction with CAE Healthcare.

We achieved our Q1 goal of operating profitability excluding one-time investigation restatement charges and non-cash expenses for depreciation, amortization and stock-based compensation. Combined with the benefits of the higher margins associated with our primarily licensing oriented model we plan to hit this operating profitability metric for the full year.

To conclude my formal remarks I think it’s clear from a topic discussed today that Immersion is making very tangible progress on a number of fronts. We completed the build out of our executive team with the appointment of a new CFO, adding exceptional talent to an already strong senior management bench.

We expanded our overall customer base with the addition of new licensees. We saw further penetration of our technology within our existing customer base. And we continue to set the stage for the increased proliferation of Immersion’s haptics technology across a number of markets through a growing network of impactful industry partners. Finally, we’re successfully executing toward our revenue and operating target for the year.

And last but not least, I’d like to remind you that we’ll be presenting next week at the JMP Securities Conference the MDB Bright Lights IT Conference and the TechAmerica Growth Cap Conference.

I’d like to thank you for your continued interest in support of Immersion and we will now open up the call for your questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator instructions) And our first question comes from the line of Jeff Schreiner with Capstone Investments. Please go ahead.

Jeff Schreiner – Capstone Investments

Yes, good afternoon, gentlemen. Welcome. I’d like to ask a few questions and appreciate your time. Given width that you’ve achieved several milestones on your (inaudible) you’ve now appointed a CFO, you’ve now got your new CFO, completed your management team, you spun off the medical business, what are the next three critical issues for you to tackle and what shall we be following?

Victor Viegas

Jeff, nice to talk to you. We got quite a few things ahead of us. I would say, first and foremost, we got a Q2 that we want to exceed expectations and so we’re anxiously working towards that. Couple of other kinds of key areas is which Shum joining, I want to make sure that he’s successful and so, we’re working closely in upgrading our whole finance group and moving forward with our remediation plans. Our IT partners are very close to launching some new products and so we want to make sure that we’ve got all of the marketing support that they need and we’re in touch with them on a very frequent regular basis.

Those are a few things, but I guess we’ve got a number of other goals and milestones. We’d like to bring on board some additional cell phone licensees before the end of the year and that’s important. We want to make sure our transition to CAE is seamless and very fruitful for them as well. And I think we’re anxious and trying to help work with LCD customers to maybe incorporate how to into LCD module. So we ease the integration challenges that design partners might have. So these are handful of areas that I’m personally focused and committed to moving the ball forward.

Jeff Schreiner – Capstone Investments

Okay, thank you for that. What about gross margin, should we expect to see that I mean I know you typically report us the gross margin but when you kind of look at net cost of sales, should we expect that to start going up, as you transition for the licensee model and how should we kind of be modeling OpEx for the rest of the year, should it be coming down and then staying flat, or we’re going to see it come down and start to step back up?

Victor Viegas

Well, I think we’ve made quite a few cost reduction moves already and even though during the quarter you had a number of expenses that maybe mask the true reduction in our operating expense numbers, I would expect Q2 for the operating expenses to be relatively normal and to be relatively consistent over the balance of the year, I don’t expect us to have an immediate reduction and then substantial growth in operating expenses, I think we’ll get to at the current operating level and probably maintain that level for at least the next three quarters or four quarters.

Jeff Schreiner – Capstone Investments

Okay. And then one more from me and then I’ll jump off for the time being, but I noticed that cash was up in the quarter, how should we be looking at cash for the remainder of 2010, should it be flat to up from here, are we done what seen the cash burn that we’ve seen over the last few quarters?

Victor Viegas

My goal is to end up the year with more cash than we started the year, and so, in any given quarter, it could be additive or slightly negative. I think over the full year, if you measure us against our body of work, our goal will be to be cash-positive for the full year.

Jeff Schreiner – Capstone Investments

Okay. Welcome, Shum, and thank you very much for taking the time to answer my questions.

Victor Viegas

Thanks a lot, Jeff.

Shum Mukherjee

Thanks.

Operator

Thank you. And our next question comes from the line of Mark Argento with Craig-Hallum. Please go ahead.

Mark Argento – Craig-Hallum

Hi, good afternoon, guys.

Victor Viegas

Hey, Mark.

Mark Argento – Craig-Hallum

And I apologize should I hopped on the call a little late, but you guys reported almost close to 10 million, what was the delta given the fact that you guys gave guidance late in the quarter that ended up driving that an extra almost $2 million in upside of the revenues?

Victor Viegas

I think we said we were somewhere in the $7 million to $8 million range was our guidance. And at the time that was about estimates that I had, we ended up the quarter at $9.7 million as you stated. When we announced that we’re transitioning out of the medical product line business there was some concern that the orders for that that market area would dry up or change significantly. At the time we didn’t have all the royalty reports in hand, we hadn’t yet done full analysis of all the contract revenue, and there’s always late in the quarter, contractual commitments, whether it’s delivering a product, or achieving a milestone, and those are sometimes that risk.

And so, again, when I gave the guidance it was my best estimate at the time it turns out this quarter, there’re obviously quite a few things that occurred late such as the product fitments for our medical and deliverables and contract signing. So, very happy to be pleased to report on a positive in the upside of that estimate.

Mark Argento – Craig-Hallum

I just want to make sure was it like a one-time event that came in or it was just the business outperformance; it sounds like that’s the case.

Victor Viegas

It was not any one-time event, it was solid results across the board, and again, if revenue comes in from royalty reports, contracts, service agreements, NRE agreements and product shipments, and so I think you’ll see a lot of hard work from a lot of people resulted in a good quarter, but not a one-time event.

Mark Argento – Craig-Hallum

I’m going to kind of shift gears a little bit because I know we just talked on your Q4 call, but I really want to delve into or at least maybe throw it out there for the beginning of a longer discussion at some point, the whole value of your IP portfolio, it strikes me, you guys have a tremendous amount of IP, hundreds of patents and then hundreds of patents pending or a process, want to know if you guys have really put a process in place or started to think about strategically, how to really create more value with that IP because the one trend we’re starting to see across IP when is that a lot of companies don’t even know they have a lot of value in their IP portfolios because there’s a specific skill set or technology or I should say process that you need to go through and actually extracting value and I just wanted to see how you guys thought about that, how could you potentially go about, creating more value with some of that late IP in your portfolio and I guess is there an opportunity that we could see you guys start to get a little creative instead of trying to discrete products but maybe go on get a little more aggressive on the licensing side or the session side like you have in the past?

Victor Viegas

To answer your question we think about it’s a lot, and there’s always a room for improvement, but I think we do a fairly good job at least on the internal efforts and that is we’ve got very innovative people solving problems everyday in lots of different industries, in lots of different product areas. So we’re good at creating innovative solutions, we capture that very well, and I think do a pretty good job of prosecuting patent application and making sure that we have very relevant IT that it’s meaningful and that it’s properly protected there. So I think we do a good job there. Where we probably will invest more time in energy going forward is how we work with the IT portfolio more of an external facing lag, we want to make sure we bring good solutions to our customers, we continue to work closely with them.

In some cases, there are solutions in the market that are not license solutions, that maybe covered under our IT, I think we will accelerate our own efforts to evaluate and analyze the marketplace to competition in light of our IT and I think we will take the appropriate action. So, fine balance between working with prospective licensees and litigation. And as you know the history here is that we’re very careful about how we use litigation and we are not about the change that we’ll be very thoughtful about how we proceed.

Mark Argento – Craig-Hallum

Great. I would just, of course, my suggest, I think you got a tremendous amount of IP value there that it’s not really being realized and of course it doesn’t sit on your balance sheet, you can, pick up a value in the financials, but a really suggestion I have is that you guys should really take a deep dive, look there, and look at some of the solutions on the marketplace, of which, of course, that I could suggest, but really coming up with the cutting edge way of looking at that IP, like you said the world’s changed dramatically in terms of big companies, little companies but how companies, in general, we get IP and you guys should benefit from that tremendously, so I really hope you guys take advantage of the kind of the market and the time and really leverage our portfolio, so.

Victor Viegas

I appreciate your thoughts and I completely agree.

Mark Argento – Craig-Hallum

Thanks, guys.

Victor Viegas

Thanks a lot, Mark.

Operator

Thank you. And our next question comes from the line of Aaron Husock with Lanexa Global Management. Please go ahead.

Aaron Husock – Lanexa Global Management

Great, thanks for taking my questions. I’ve got a couple. Maybe just first kind of a housekeeping question. Can you tell us what handset unit shipments were in the quarter by your partners?

Victor Viegas

No, I don’t have that number, Aaron; I am sorry, but not the number which I can right now, we don’t have that number for Q1.

Aaron Husock – Lanexa Global Management

Okay. Looking at the guidance, would you say that $7.7 million is kind of the right number for us to compare your guidance to, $7.7 million in revenue in Q1, is that kind of the steady state number that we should be comparing the $6.2 million to $6.7 million?

Victor Viegas

Yes, I think that’s the right comparison. I think the $7.7 million you arrive at that as a $9.7 million minus the products revenue from the products that we transition to CAE. So I think $7.7 million compared to $6.2 million to $6.7 million for Q2 that's an apples-to-apples comparison.

Aaron Husock – Lanexa Global Management

Okay. So if I look at that is that almost 16% sequentially at the midpoint and I know you don’t really have all the roads you reports in yet or anything like that, but if I look, I mean, Samsung, who is your biggest or close to your biggest handset customers that that their touchscreen unit volume was actually up in buck normal seasonality in the March quarter and then Nokia has some models that it’s quite well that were touch models, in the March quarter, if you can talk about what is embedded in the guidance as far as there’s some degree of conservatism, because you’re on (inaudible) royalty reports or do you see it more pronounced seasonality in gaming or auto, because it’s certainly looks like your handset business had another good quarter in the March quarter than you ever reported in revenues?

Victor Viegas

I’d say that the guidance that we’re giving we would love to be able to come in at the high end of that or even beat those numbers, but given where we are today, as we add up the elements from each of the different verticals, there’s no doubt going to be some seasonality. And so without having that information in hand and maybe just working with industry data, I haven’t yet reconciled the differences, if there are any. So given what we know in all the different markets, the seasonality is not surprising, it occurs almost every year, you hope to grow new areas to offset the seasonality, but given where we’re at today, given the information I have, that’s about the guidance that I’m comfortable giving.

Aaron Husock – Lanexa Global Management

Okay. If your touch sales were up, I think, around 56% sequentially, in the March quarter, very sizable sequential growth, can you give us a sense for where the bulk of that growth came from, maybe do you have a number of your mobility sales increase sequentially but that’s a very rapid growth.

Victor Viegas

I would probably point you to some of the details that will be in the 10Q that we’ll be filing here shortly. I think we had a good quarter on the mobile side, and also on the gaming side. Other than that I’m not sure I can point you to what was the meaningful because it really felt like it came across most of all of our verticals.

Aaron Husock – Lanexa Global Management

Okay. Maybe just one more from me and then I’ll get back in line. You talked about how you’re going to get down to kind of a steady state operating expense level in Q2. Would you say that’s probably number that’s like $7 million or a bit lower or where you’re thinking as far as what’s the normal operating expense structure this company post-divestiture?

Victor Viegas

I think if you’re looking at cash versus non-cash, if you just did a simple reconciliation to the first quarter OpEx, if you backed out our cost of goods sold, and you backed up the cost of the restatement, you’re somewhere in the $9 million range and then you got another a million dollar or so, another $1.1 million in non-cash expenses, which gets you to closer to $8 million and then if you back out expenses related to the medical operation of another million, I think you’re coming in at about $7 million when you exclude the non-cash expenses, probably, closer to $8 million when you include the cash based expenses.

Aaron Husock – Lanexa Global Management

Okay. So was the medical related OpEx only a $l million in the quarter, it’s roughly a third of the workforce, right?

Victor Viegas

You’ve got some of the people are in the cost of goods sold, so, it’s a different mix and I don’t have a precise set of numbers, we don’t’ really disclose that that closely. So it’s in that $1 million range is what I’m using to arrive at $8 million in total touch expenses.

Aaron Husock – Lanexa Global Management

Okay. That makes sense. Great, thank you.

Victor Viegas

Thank you, Aaron.

Operator

Thank you. (Operator instructions) And our next question comes from the line of Shawn Boyd with Westcliff Capital Management. Please go ahead.

Shawn Boyd – Westcliff Capital Management

Hi, Vic, how are you doing?

Victor Viegas

Fine, thanks, Shawn.

Shawn Boyd – Westcliff Capital Management

Just wanted to touch on a couple of things. In terms of the touch interface revenue $6.8 million in the quarter, can you help us on how many different models or devices contribute to that versus contributing a year ago to the 4.4 million?

Victor Viegas

Shawn, we have so many models in some many different verticals. So I’m not going to be able to really give you any metrics to compare to at any given moment there are dozens of products in queue, ready to launch, and then depending on end of life cycles and how the partners supporting those in the markets, there’s lots of different ways to measure, but we don’t spend a lot of time and energy and trying to cut it that for size or that fine. So I’d say no, I really am not able to tell you because there’s just so many we don’t track them that way.

Shawn Boyd – Westcliff Capital Management

Okay. Can you characterize it any way just to there’re two or three above 10% or is it more granular than that?

Victor Viegas

I’d say more from a macro standpoint I think if you look at the 2009 numbers we’re in 75 million phones out of a couple hundred million touchscreen phones and that’s about 30% as we look at the current pipeline and the models that are launching in the mobile market space, we think our penetration is continuing to grow. So there’re more touchscreen phones and our penetration rates are going up as well. In other areas I think we believe we’re gaining ground and increasing our model wins, design wins and volumes, so, pretty much across the board, I’d say we’re continuing to grow our base of business, I don’t see any areas where we’re losing ground right now.

Shawn Boyd – Westcliff Capital Management

Got it. Okay. And the guidance that you gave for total revenues for the June quarter, do we have a maybe just over a million in product sales still in the model that’s embedded in the guidance?

Victor Viegas

So essentially you’ve got revenue that we derive from mobility, from gaming, from automotive, and also from medical. And on the medical side, you’re going to have license fees and royalties and you’re also going to have some product sales because we do retain one product line the Virtual I.V and so that that will continue to provide us with revenue. I don’t know what the exact number is, but when you add up all those verticals the total revenues is in that $6.2 million to $6.7 million range that I gave.

Shawn Boyd – Westcliff Capital Management

Got it. Okay. And on expenses, you mentioned in a press release that we’ve got depreciation and amortization and stock-comp, all totaling about 1.1 million, we know amortization at 235,000, can you just break out depreciation and stock comp for us?

Victor Viegas

I don’t have it with me but I know it’s in the cash flow statement in the Q. So if you take a quicker look at that I think when we file in the next day or two, you will have all that detail right there.

Shawn Boyd – Westcliff Capital Management

Okay, perfect. And do you expect that combined level of about 1.1 million to stay fairly flat going forward?

Victor Viegas

Actually, I think it may go up a little bit, but I think that number is not too far off.

Shawn Boyd – Westcliff Capital Management

Okay, that’s it from me. Thank you.

Victor Viegas

Thanks, Shawn.

Operator

Thank you. And our final question is a follow-up question from the line of Aaron Husock with Lanexa Global Management. Please go ahead.

Aaron Husock – Lanexa Global Management

Thanks. If you look at gross margin now after the divestiture I mean you only have a tiny bit of product sales left. Can we kind of think of this as a mid-90s gross margin business now?

Victor Viegas

Yes, I think that’s our assumption.

Aaron Husock – Lanexa Global Management

Okay, great. And then if you look at the Nokia N8, it sounds like you guys have done a lot of work on this, and are working very closely with Nokia. As we think of this as just kind of falls under your generic Nokia contract or is this one where you segment your product line, good, better and best, they’re taking a better robust functionality, not just the good functionality and move things like before?

Victor Viegas

No, I’d say it’s covered by the Nokia agreement. The highlight that we’re kind of point out was that our engineers work closely with their engineers and the product solutions pretty compelling. So we’re pleased with the quality of the experience, but it’s all covered under the current arrangement we have with Nokia.

Aaron Husock – Lanexa Global Management

Okay. Just one more, if you look at your partnerships with the different semiconductor vendors, Atmel, Cypress, IDT, and now Renesas , was there any revenue from those partnerships in the March quarter and if not when do you think you will start to see some level of revenue there?

Victor Viegas

I don’t know if I have a number for you or if there was any revenue in the quarter I can tell you Renesas has been shipping chips, they have a product in the market and there’re consumer products. I know there is a P&D [ph] product in the market, so we’ve been generating revenue from Renesas here for a bit. In terms of Cypress and Atmel, I think those two products are expected to come later this year.

Aaron Husock – Lanexa Global Management

Okay. Great, thank you. Congratulations.

Victor Viegas

Thanks, Aaron.

Operator

Thank you. And we have one more question from the line of Shawn Boyd with West Cliff Capital Management. Please go ahead.

Shawn Boyd – Westcliff Capital Management

Just a follow-up here. The company is reaffirming your guidance of 25 million to 30 million in total revenues for the year today. Is that correct?

Victor Viegas

That’s right.

Shawn Boyd – Westcliff Capital Management

And given what we’re seeing already here in the March quarter and your guidance for June quarter, it looks as though, we’re looking for second half, actually to be down slightly, if you take that guidance at its where. So my question to you is, is there anything that you’re seeing out there that would tell you the second half could be flat to down or are we simply being conservative and not taking this guidance up yet?

Victor Viegas

I don’t see anything in the market that says that will be down, but that’s the estimate we gave; and given where we’re today, I think that’s the estimate we’re trying to reaffirm.

Shawn Boyd – Westcliff Capital Management

Okay. Good enough. Thank you. Good luck.

Victor Viegas

Thank you.

Operator

Thank you. And at this time, there are no further questions in the queue. I’ll turn it back to management for any further remarks.

Victor Viegas

Well, thank you, everyone for being on the call today. We look forward to seeing you on the road and updating you again on our next quarterly call. Thanks for your support. Good-bye.

Operator

And ladies and gentlemen, this does conclude the Immersion Corporation first quarter 2010 conference call. Thank you for your participation. You may now disconnect.

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Source: Immersion Corporation Q1 2010 Earnings Call Transcript

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