Microvision Inc. (MVIS, Financial) filed Quarterly Report for the period ended 2009-06-30.
Microvision Inc. develops information display and related technologies that allow electronically generated images and information to be projected onto a viewer\'s eye. They defined three distinct business platforms relating to the delivery of images and information in this manner:Retinal Scanning Displays Imaging Solutions Optical Material technology. Microvision Inc. has a market cap of $245.1 million; its shares were traded at around $3.6 with and P/S ratio of 37.2.
Level 1 Level 2 Level 3 Total ------------ ------------ ------------ ------------ Assets Corporate debt and equity securities $ -- $ 9,000 $ -- $ 9,000 Auction-rate securities -- -- 2,700,000 2,700,000 ------------ ------------ ------------ ------------ $ -- $ 9,000 $ 2,700,000 $ 2,709,000 ============ ============ ============ ============ Liabilities Liability associated with common stock warrants $ 1,133,000 $ 1,133,000 ============ ============ The corporate debt securities and liability associated with common stock warrants are classified within Level 2 of the fair value hierarchy because they are valued using valuation inputs and common methods with sufficient levels of transparency and observability. The SLARS are classified in Level 3 of the fair value hierarchy because of the significance of sufficiently unobservable assumptions and inputs developed by the Company and used in the valuations.
Classification on Balance Sheet ---------------------------------------------- Liability Associated Investment With Cost/ Gross Gross Securities, Other Common Amortized Unrealized Unrealized Estimated Cash Available- Current Stock Cost Gains Losses Fair Value Equivalents For-Sale Assets Warrants ----------- ---------- ---------- ---------- ---------- ---------- --------- ----------- As of June 30, 2009: Assets Corporate debt and equity securities $ 43,000 $ -- $ (34,000) $ 9,000 $ -- $ 9,000 $ -- Auction rate securities 2,700,000 -- -- 2,700,000 -- 2,700,000 -- ----------- ---------- ---------- ---------- ---------- ---------- --------- $ 2,743,000 $ -- $ (34,000) $2,709,000 $ -- $2,709,000 $ -- =========== ========== ========== ========== ========== ========== ========= Liabilities Liability associated with common stock warrants $1,133,000 $ 1,133,000 ========== =========== Classification on Balance Sheet ---------------------------------------------- Liability Associated Investment With Cost/ Gross Gross Securities, Other Common Amortized Unrealized Unrealized Estimated Cash Available- Current Stock Cost Gains Losses Fair Value Equivalents For-Sale Assets Warrants ----------- ---------- ---------- ---------- ---------- ---------- --------- ----------- As of December 31, 2008: Assets Corporate debt and equity securities $ 5,022,000 $ -- $ (38,000) $4,984,000 $4,979,000 $ 5,000 $ -- Auction rate securities 2,700,000 -- -- 2,700,000 -- 2,700,000 -- ----------- ---------- ---------- ---------- ---------- ---------- --------- $ 7,722,000 $ -- $ (38,000) $7,684,000 $4,979,000 $2,705,000 $ -- =========== ========== ========== ========== ========== ========== ========= Liabilities Liability associated with common stock warrants $ 331,000 $ 331,000 ========== =========== As of June 30, 2009, the unrealized losses on the Company\'s investments in equity securities were due primarily to declines in the stock prices of the equity securities. The realized gains and losses resulting from the liability associated with common stock warrants were primarily due to changes in the Microvision stock price and decreasing terms to expiration. The maturities of the debt investment securities available-for-sale as of June 30, 2009 are greater than 5 years.
June 30, December 31, 2009 2008 ------------ ------------ Raw materials $ 28,000 $ 45,000 Finished goods 988,000 1,480,000 ------------ ------------ $ 1,016,000 $ 1,525,000 ============ ============ The inventory at June 30, 2009 and December 31, 2008 consisted of raw materials and finished goods for ROV, the Company\'s hand-held bar code scanner. Inventory is stated at the lower of cost or market, with cost determined on a weighted-average basis. Management periodically assesses the need to provide for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. In addition, Microvision reduces the value of its inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through normal production during the next twelve months. During the second quarter of 2009, the Company recorded inventory write-downs of $318,000.
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Cost of contract revenue $ 58,000 $ 14,000 $ 72,000 $ 64,000 Cost of product revenue 7,000 1,000 14,000 12,000 Research and development expense 522,000 165,000 711,000 447,000 Sales, marketing, general and administrative expense 779,000 356,000 1,145,000 1,081,000 ------------ ------------ ------------ ------------ Share-based employee compensation cost charged against income $ 1,366,000 $ 536,000 $ 1,942,000 $ 1,604,000 ============ ============ ============ ============ Options Activity and Positions
% of % of contract contract 2009 revenue 2008 revenue $ change % change (in thousands) --------- --------- --------- --------- --------- --------- Three months ended June 30 Government revenue $ 622 76.5 $ 661 65.7 $ (39) (5.9) Commercial revenue 191 23.5 345 34.3 (154) (44.6) --------- --------- --------- Total contract revenue $ 813 $ 1,006 $ (193) (19.2) ========= ========= ========= Six months ended June 30 Government revenue $ 1,042 68.3 $ 1,569 47.7 $ (527) (33.6) Commercial revenue 483 31.7 1,718 52.3 (1,235) (71.9) --------- --------- --------- Total contract revenue $ 1,525 $ 3,287 $ (1,762) (53.6) ========= ========= ========= We earn contract revenue from performance on development contracts with the U.S. government and commercial customers and from the sale of prototype units and evaluation kits based on our PicoP display engine.
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Microvision Inc. develops information display and related technologies that allow electronically generated images and information to be projected onto a viewer\'s eye. They defined three distinct business platforms relating to the delivery of images and information in this manner:Retinal Scanning Displays Imaging Solutions Optical Material technology. Microvision Inc. has a market cap of $245.1 million; its shares were traded at around $3.6 with and P/S ratio of 37.2.
Highlight of Business Operations:
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Numerator: Net loss available for common shareholders - basic and diluted $ (10,394) $ (9,266) $ (19,259) $ (14,304) ============ ============ ============ ============ Denominator: Weighted-average common shares outstanding - basic and diluted 68,881 56,782 68,482 56,756 ============ ============ ============ ============ Net loss per share - basic and diluted $ (0.15) $ (0.16) $ (0.28) $ (0.25) ============ ============ ============ ============ On June 30, 2009 and 2008, the Company excluded the following convertible securities from diluted net loss per share as the effect of including them would have been anti-dilutive: options and warrants convertible into a total of 20,241,000 and 10,992,000 shares of common stock, respectively, and 409,000 and 125,000 shares of nonvested equity shares, respectively.Level 1 Level 2 Level 3 Total ------------ ------------ ------------ ------------ Assets Corporate debt and equity securities $ -- $ 9,000 $ -- $ 9,000 Auction-rate securities -- -- 2,700,000 2,700,000 ------------ ------------ ------------ ------------ $ -- $ 9,000 $ 2,700,000 $ 2,709,000 ============ ============ ============ ============ Liabilities Liability associated with common stock warrants $ 1,133,000 $ 1,133,000 ============ ============ The corporate debt securities and liability associated with common stock warrants are classified within Level 2 of the fair value hierarchy because they are valued using valuation inputs and common methods with sufficient levels of transparency and observability. The SLARS are classified in Level 3 of the fair value hierarchy because of the significance of sufficiently unobservable assumptions and inputs developed by the Company and used in the valuations.
Classification on Balance Sheet ---------------------------------------------- Liability Associated Investment With Cost/ Gross Gross Securities, Other Common Amortized Unrealized Unrealized Estimated Cash Available- Current Stock Cost Gains Losses Fair Value Equivalents For-Sale Assets Warrants ----------- ---------- ---------- ---------- ---------- ---------- --------- ----------- As of June 30, 2009: Assets Corporate debt and equity securities $ 43,000 $ -- $ (34,000) $ 9,000 $ -- $ 9,000 $ -- Auction rate securities 2,700,000 -- -- 2,700,000 -- 2,700,000 -- ----------- ---------- ---------- ---------- ---------- ---------- --------- $ 2,743,000 $ -- $ (34,000) $2,709,000 $ -- $2,709,000 $ -- =========== ========== ========== ========== ========== ========== ========= Liabilities Liability associated with common stock warrants $1,133,000 $ 1,133,000 ========== =========== Classification on Balance Sheet ---------------------------------------------- Liability Associated Investment With Cost/ Gross Gross Securities, Other Common Amortized Unrealized Unrealized Estimated Cash Available- Current Stock Cost Gains Losses Fair Value Equivalents For-Sale Assets Warrants ----------- ---------- ---------- ---------- ---------- ---------- --------- ----------- As of December 31, 2008: Assets Corporate debt and equity securities $ 5,022,000 $ -- $ (38,000) $4,984,000 $4,979,000 $ 5,000 $ -- Auction rate securities 2,700,000 -- -- 2,700,000 -- 2,700,000 -- ----------- ---------- ---------- ---------- ---------- ---------- --------- $ 7,722,000 $ -- $ (38,000) $7,684,000 $4,979,000 $2,705,000 $ -- =========== ========== ========== ========== ========== ========== ========= Liabilities Liability associated with common stock warrants $ 331,000 $ 331,000 ========== =========== As of June 30, 2009, the unrealized losses on the Company\'s investments in equity securities were due primarily to declines in the stock prices of the equity securities. The realized gains and losses resulting from the liability associated with common stock warrants were primarily due to changes in the Microvision stock price and decreasing terms to expiration. The maturities of the debt investment securities available-for-sale as of June 30, 2009 are greater than 5 years.
June 30, December 31, 2009 2008 ------------ ------------ Raw materials $ 28,000 $ 45,000 Finished goods 988,000 1,480,000 ------------ ------------ $ 1,016,000 $ 1,525,000 ============ ============ The inventory at June 30, 2009 and December 31, 2008 consisted of raw materials and finished goods for ROV, the Company\'s hand-held bar code scanner. Inventory is stated at the lower of cost or market, with cost determined on a weighted-average basis. Management periodically assesses the need to provide for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. In addition, Microvision reduces the value of its inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through normal production during the next twelve months. During the second quarter of 2009, the Company recorded inventory write-downs of $318,000.
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Cost of contract revenue $ 58,000 $ 14,000 $ 72,000 $ 64,000 Cost of product revenue 7,000 1,000 14,000 12,000 Research and development expense 522,000 165,000 711,000 447,000 Sales, marketing, general and administrative expense 779,000 356,000 1,145,000 1,081,000 ------------ ------------ ------------ ------------ Share-based employee compensation cost charged against income $ 1,366,000 $ 536,000 $ 1,942,000 $ 1,604,000 ============ ============ ============ ============ Options Activity and Positions
% of % of contract contract 2009 revenue 2008 revenue $ change % change (in thousands) --------- --------- --------- --------- --------- --------- Three months ended June 30 Government revenue $ 622 76.5 $ 661 65.7 $ (39) (5.9) Commercial revenue 191 23.5 345 34.3 (154) (44.6) --------- --------- --------- Total contract revenue $ 813 $ 1,006 $ (193) (19.2) ========= ========= ========= Six months ended June 30 Government revenue $ 1,042 68.3 $ 1,569 47.7 $ (527) (33.6) Commercial revenue 483 31.7 1,718 52.3 (1,235) (71.9) --------- --------- --------- Total contract revenue $ 1,525 $ 3,287 $ (1,762) (53.6) ========= ========= ========= We earn contract revenue from performance on development contracts with the U.S. government and commercial customers and from the sale of prototype units and evaluation kits based on our PicoP display engine.
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