Immersion Corp (IMMR) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Immersion Corporation Fourth Quarter Fiscal Year 2011 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions.

(Operator Instructions)

This conference is being recorded today, Thursday, March 1, 2012. I would now like to turn the conference over to Ms. Jennifer Jarman, of the Blueshirt Group. Please go ahead, ma'am.

Thank you Camille. Good afternoon, and thank you for joining us today on Immersion's fourth quarter and fiscal 2011 conference call. This call is also being broadcast live over the web and can be accessed from the Investor Relations section of the Company's website at haptic.com. With me on today's call is Vic Viegas, President and CEO.

During this call, we may make forward-looking statements which may include projected financial results or 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, actual results could differ materially. For a listing of the risks that could cause this, please see our latest form 10-Q filed with the SEC, as well as the factors identified in today's press release.

Additionally, please note that during this call, we may discuss non-GAAP financial measures. For each non-GAAP financial measure discussed, a presentation of the most directly comparable GAAP financial measure, and a reconciliation of the differences between the non-GAAP financial measure discussed and the most directly comparable GAAP financial measure is available in the Company's press release issued today after market close. With that said, I'll turn the call over to Chief Executive Officer Vic Viegas. Vic?

Thank you, Jennifer, and thank you everyone for joining us this afternoon. 2011 was a productive year for Immersion. While total revenues of $30.6 million were slightly down from 2010, royalty and licensing revenues were up 16% from the prior year, and represented 88% of our Business, reflecting the successful transition to a scalable licensing model.

We kicked off the year by launching our Integrator product, which created an automated way for OEMs to deeply integrate Haptic Effects into their Android UI, and then quickly followed with the launch of an easy-to-use SDK for third-party developers to encourage the adoption of haptic effects into the design of mobile applications. Even more impressively, we saw these products adopted in the market very quickly, confirming that our Haptic solutions helped solve real-world user interface problems.

During the year, Haptics enjoyed widespread adoption in the mobile market, with operating systems such as the Android OS adopting Haptics as a critical user interface element for today's touchscreen-driven devices. At the same time, we enjoyed a broadening of our patent portfolio, which represents years of Immersion investment and innovation in a Haptic space.

As you may know, we recently initiated a complaint with the ITC against Motorola mobility to protect several of our patents covering various uses of Haptic effects in touch screens. Outside of the mobile market, we continued to see strength for Haptics in the gaming segment, and also experienced more engagement with partners and manufacturers in the automotive market.

I will discuss our recent business developments in just a few minutes, but first I'd like to highlight our financial results for the fourth quarter and fiscal 2011. Revenues in the fourth quarter of 2011 were $7.7 million, up 20% from revenues of $6.4 million in the fourth quarter of 2010. As a percentage of total revenue in the fourth quarter, 41% came from mobility, 32% from gaming, 16% from medical, 7% from auto, and 4% from chip and other.

Revenues from royalties and licenses were $6.8 million, up 26% from royalty revenues of $5.4 million in the fourth quarter of 2010, primarily reflecting strong demand in the gaming and mobility lines of business. Revenues from the sale of products were $691,000, compared to $768,000 in the same quarter last year, and revenues from development contracts were $193,000, compared to $223,000 in the year-ago period.

As I mentioned previously, revenues for the full year were $30.6 million, down 2% from revenues of $31.1 million for fiscal 2010. As a reminder, the prior year included revenue from medical product lines that have been transferred to CAE or discontinued, and some true-up adjustments for the gaming line of Business. Excluding these items, revenue for 2010 from ongoing business was $26.4 million. License and royalty revenues for fiscal 2011 were $26.9 million, up 16% from $23.3 million in 2010. Revenues from products and development contracts were $2.6 million and $1.1 million, respectively, compared to revenues of $6.8 million and $1.1 million respectively in 2010.

Cost of product sales in the fourth quarter of 2011 was $342,000, compared to $314,000 in the fourth quarter of 2010. Gross profit in the fourth quarter of 2011 was $7.3 million, or 96% of revenues, compared to gross profit of $6.1 million, or 95% of revenues in the same period last year. Gross profit for the year was $29.4 million, or 96% of revenues, compared to gross profit margin of $28.2 million, or 91% of revenues in 2010. The increase in gross profit as a percentage of revenues from year-to-year was primarily driven by the higher mix of revenues from royalties and licenses, which generated higher gross margins than gross margins from revenues related to product sales.

Excluding cost of product sales, total operating expenses were $7.1 million, compared to $8 million in the fourth quarter of 2010. The operating expenses of $7.1 million include non-cash charges related to depreciation and amortization of $789,000, and stock-based compensation of $850,000. Excluding these non-cash charges, OpEx was $5.5 million during the quarter, and benefited from a couple of one-time items totaling approximately $300,000 related to the move of our headquarters during the period.

For the full year, operating expenses excluding cost of revenues were $29.4 million, compared to $33 million in 2010. Non-operating other income and expenses, taxes, and discontinued operations were $495,000 in the fourth quarter of 2011, compared to $356,000 in the fourth quarter of 2010, primarily reflecting higher withholding taxes resulting from higher royalty revenues from certain Asian countries. We achieved positive operating income for the fourth quarter of $225,000, compared to an operating loss of $2 million in the fourth quarter of 2010.

Net loss in the fourth quarter was $270,000, or $0.01 per share, compared to a net loss of $2.3 million, or $0.08 per share in the same period last year. Net loss for 2011 was $1.6 million, a $4.3 million improvement over the net loss of $5.9 million reported in 2010, primarily reflecting the reduced operating costs as a result of the transfer of certain medical product lines to CAE, head count reduction, and other cost-saving actions.

As you know, in addition to normal GAAP metrics, we use a metric called adjusted EBITDA to track our Business. We define adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, less share-based compensation and other non-recurring items such as internal investigation or re-statement costs, restructuring costs, and discontinued operations. Adjusted EBITDA in the fourth quarter of 2011 was $1.9 million, compared to negative $144,000 in the same period last year. Adjusted EBITDA for 2011 was $6 million, up $3.4 million, or 129% from adjusted EBITDA of $2.6 million in 2010.

Cash generated from operations was $2.4 million in 2011, compared to cash used in operations of $1.8 million in 2010. Our deferred revenue balance as of December 31, 2011, was $17.3 million, compared to $20.9 million exiting 2010, a decline of $3.6 million related primarily to amortization of proceeds received under the Sony agreement. Our cash portfolio, including cash and investments, was $56.3 million as of December 31, 2011, compared to $61.2 million exiting 2010.

This primarily reflects activity within our stock re-purchase program. In the fourth quarter, we purchased 1,108,783 shares of our common stock, at an average cost of $5.65 per share, for a total of $6.2 million. As of December 31, 2011, we have $25.2 million remaining under our authorized stock re-purchase program.

Now I'll return to a discussion of our recent Business development and then conclude with some comments regarding our outlook for fiscal 2012. I'd like to start with an overview of some of the exciting activity we saw at this year's Consumer Electronics Show and Mobile World Congress event. At CES in Las Vegas, a number of our customers and partners demonstrated Immersion's technology.

On the automotive front, Cadillac showed off their Cadillac user experience system, which incorporates Immersion Haptics to provide critical confirmation feedback for the touch screen interface. Additionally, Kia demonstrated a Haptic rotary dial, located in the steering wheel, which uses Haptics to provide programmable feedback associated with the center display. Our partners Daesung and Vizion were also at the show, demonstrating a range of Haptic solutions for the automotive market.

We're pleased to announce that during the quarter we signed a license agreement with Sanyo Auto Media for touch screen-based Haptic technology. And while the lead times are notoriously long for the automotive space, we are seeing an increasing number of auto manufacturers looking to Haptics to help address the challenges of the automotive infotainment experience.

We were pleased to see our mobile customers showing off new designs at CES that use our TouchSense 3000 solutions. The Spectrum and Nitro devices were the latest releases from LG on display throughout the show. In addition to its 10-inch tablet, Toshiba demonstrated its recently released 7-inch tablet, which is now available in the United States. Samsung made a big marketing splash with its Note smartphone, which has a large 5.3 inch display, and also has pen-based input, in addition to traditional touch input. This was followed up by the launch of the 10.1 Note tablet at Mobile World Congress.

Nokia recently announced another high-end smartphone incorporating Haptics from Immersion, the Nokia 808 PureView, which offers an astounding 41 megapixel camera, and runs on a Symbian Bell platform. We are also excited to announce NEC as the latest OEM to join our expanding mobile customer base, with the introduction of its first devices leveraging TouchSense 3000. The Medias 05D smartphone is now available in Japan, and the Medias 06D tablet was on display at Mobile World Congress.

Another highlight for Immersion was the introduction of the first tablet with HD Haptics from Pantech by AT&T at its developers' conference. The Pantech element is an 8-inch waterproof tablet that is targeted to the US market. The tablet uses Immersion's TouchSense 5000 software in conjunction with a single piezo actuator from Samsung Electromechanics Corporation, and a piezo driver from Texas Instruments.

Additionally, the element leveraged our integrator tool to incorporate Haptics throughout the UI. In addition to being the first of our customers to launch HD Haptics in the market, Pantech also became the first to elect to use the reverb module, which translates audio into Haptic Effects content, to make multimedia content more engaging. We're encouraged by an innovation leader like Pantech integrating Haptic Effects more deeply throughout the UI and into mobile content.

We've spoken at length about the capabilities of HD Haptics to provide superior user experiences, and we're excited to see the first device on the market using high-fidelity Haptics. The technology fundamentally changes the way Haptics can be integrated into a mobile UI. Because the technology has such a fast response time, and can create a broader range of effects, it is possible to dynamically inject Haptic space on user actions.

Whereas with other Haptic technology effects must be authored and integrated, our recently announced HD Integrator allows for real-time user influence to determine Haptic Effects. The OEM build time tool is based on extensive user experience research we've done to help us identify compelling ways Haptics can be used in the mobile UX. HD Integrator works in conjunction with Immersion's TouchSense 5000 software and high fidelity actuators from our ecosystem partners to create a truly unique experience with Haptics.

One compelling aspect of the technology is delivering Haptic Effects that create ambient awareness. These are subtle effects that users can feel in the background that help them process information. An example we showed at mobile world Congress is a gallery of photos. As you swipe through the photos, some images feel heavier than others.

That heaviness is created by Haptic Effects associating a sensation with the amount of comments each image has. While the screen gives no indication of how many comments a photo has, the user can tell how popular an image is by the way it feels and can decide whether they should flip over the photo to read the comments. The result is a really intuitive interface that removes UI clutter by communicating to the user through Haptics.

Another interesting capability of HD Integrator on display at Mobile World Congress was the heightened sense of realism the technology creates. We showed a demo of video content that demonstrated how Haptics can be layered into video, allowing the user to feel different effects at the same time. A great example was a roller coaster video, where users could feel not only the vibrations as they traveled over the rails, but also the whoosh of the wind as they flew past the pillars.

Another example was a percussion instrument demo, where users could shake and play instruments like maracas, cowbells, and washboards. The speed and intensity with which the user shakes the phone directly alters the effects that are felt. If you shake the phone softly, you get a soft and subtle effect. Shake the phone hard, and the effects are stronger and perfectly synchronized with the movements of the phone.

The HD Integrator is yet another example of how Immersion sits at the center of the Haptic ecosystem, innovating new ways for Haptics to provide engaging and realistic user experiences. We're encouraged by the response we've been seeing from the mobile ecosystem, as we've been able to demonstrate the value and impact Haptic technology can have on the user experience.

As a final note on Mobile World Congress, Immersion also demonstrated a number of top-tier content provider apps that are using Immersion Haptics. Rockstar Games' Grand Theft Auto 3 was released this quarter with built-in Immersion Haptic effects. Also on display was the Frogger game with Haptics from Konami, which is now available for OEM bundling, as well as Sonic CD from Sega. We're encouraged to see such high-profile titles incorporate Haptic Effects, and are optimistic that Immersion Haptic Effects will become more broadly adopted by content providers in 2012.

As many of you are aware, in February Immersion filed a complaint with the US International Trade Commission against Motorola Mobility for patent infringement. As I've shared with you on prior conference calls, Haptics is becoming an increasingly important aspect of the mobile user interface. While litigation is always a last resort, we understand that as a Licensing Company, it is imperative that we protect our intellectual property in the interest of our shareholders, partners, and our customers.

Immersion prides itself on innovation, and has been delivering solutions to top-tier mobile manufacturers for several years. In fact, since its inception in 1993, Immersion has invested over $130 million in innovation research and engineering, and another $130 million in marketing and promoting our innovative ideas, for a total investment of over $260 million. Immersion's strategy has always been to innovate in the field of Haptics, and get fair value for our inventions.

We believe that the monetization of basic Haptics in the mobile market represents a real opportunity for Immersion, and while we had hoped to avoid litigation, we were unable to come to a fair resolution. We will continue to work to deliver compelling new solutions to customers, as well as monetize basic Haptics in the market.

From a timing standpoint, we expect the ITC to initiate its investigation roughly 30 days after the filing, and shortly thereafter to begin the discovery process. In general, we expect a preliminary determination from the ITC in approximately a year, with final completion of the investigation in 16 to 18 months. Typically, the district court case would be stayed until the ITC case is resolved, as the outcome will determine how the district court case moves forward.

Now to update you on a few additional corporate updates. The Company is actively engaged in a search for a new CFO. We're working with a prominent and national search firm, and are committed to conducting a thorough evaluation to bring the right blend of expertise to the Company, and we will update you when we've concluded our search.

I'm also pleased to announce the conclusion of the IPO securities litigation concerning Immersion, with the Second Circuit Court of Appeals dismissing the final objection to the District Court-approved settlement, and judgment of dismissal. In addition, with regard to the securities class action, Immersion was granted a motion to dismiss on December 16, 2011.

Now I'd like to make a few remarks regarding our current outlook for fiscal 2012. As we look at 2012, we believe Immersion is at the center of a growing opportunity for Haptics across multiple markets. We remain focused on building upon our position as the premier partner and leading innovator in the Haptics space. Based on our current outlook, we expect revenues for 2012 to be in the range of $34 million to $36 million, reflecting growth of 11% to 18% over the prior year, based on expected growth in the mobile, gaming, and automotive markets.

With our anticipated increased quarterly spending, related to our efforts to defend and monetize our IP of between $2 million to $2.5 million, we expect the quarterly run rate for OpEx, excluding non-cash charges, to increase to the range of $8 million to $9 million. As a result, while we expect adjusted EBITDA to be positive in 2012, we are projecting a net loss for the year.

In closing, we are energized by the traction we're seeing for Haptics in the mobile market, and are encouraged by positive trends in additional segments, including gaming and automotive. We believe the adoption of Haptic technology by OEMs and content providers, combined with the strength of our IP portfolio, positions us to expand our customer base and to achieve solid revenue growth in 2012 and beyond. Thank you, and we will now open up the call to your questions. Camille?

Thank you, sir. (Operator Instructions) Charlie Anderson, Dougherty & Company.

Good afternoon, or should I say good evening over here in Barcelona, thanks for taking my question. Wanted to focus in on the growth of the business in royalties in 2012. I think it was interesting how in 2011, gaming grew almost as fast as mobility, so I wonder if you could give us some color on each of the segments -- how you expect them to grow relative to the total Company growth?

Yes, I'd be happy to, Charlie. I'm also happy to know that you were at the Mobile World Congress, and I'm sure you saw a lot of exciting things. As we look forward, we expect our mobility business to continue to grow and benefit from existing customers launching of new products and continued growth in the marketplace. We expect to see higher ASP's as a result of migration from the existing TouchSense 3000 solution to our high-definition solutions TS 5000. We continue to see substantial growth opportunities in near term and long term for mobility. Gaming, as you mentioned, has also had quite a bit of strength and continues to grow at a rapid pace. We hope to continue that as our licensees, existing and new licensees, launch new products. Clearly, haptics is a key differentiator in the gaming space, and are enthusiastically looking forward to new product launches. Automotive also looks to be a substantial growth driver, as our tier supply partners are launching new solutions, and new OEMs are integrating haptics into their vehicles, such as the Cadillac Q system. Medical is currently projected to be relatively flat with modest growth, but overall the combination of numerous verticals with good growth opportunities, balanced with medical, we expect to see decent growth in 2012.

Got it. Then in terms of the buy-back, do you guys continue to expect to be buying at the rate you were in Q4 potentially, and given the litigation element now with -- you have that cost at hand, how are you balancing the two?

I would expect us to be less aggressive in terms of the stock buy-back. We currently have some amounts of monies in a 10b5 plan which, depending on pricing, could be triggered, but the amount that we would be re-purchasing going forward, until there's more visibility on the litigation side, I think we will be preserving cash and not aggressively pursuing buy-backs.

Got it. Then just lastly for me, I think maybe in the next week or two, you'll have the opportunity to add additional defendants to your ITC case. Are you expecting any activity between now and then, either on the -- adding people or potentially people wanting to stay -- to hit that milestone?

Yes. The ITC case -- or the ITC process -- does allow for the addition of additional defendants, I'm not at liberty to state whether we will or will not add any new defendants. That is not the only vehicle for us to add defendants over time. We have other vehicles, other ways to approach people if they continue to infringe on our IP. We'll take advantage of whatever vehicle is available to us.

Okay. Fair enough, thanks so much.

Thanks, Charlie.

Jeff Schreiner, Capstone Investments.

Congratulations on a great year.

Thank you, Jeff.

You listed some interesting content providers in terms of integrating haptics into their recent releases. Are these content providers paying some type of license or royalty to Immersion at this time? How is that type of business going to evolve over the next 12 to 24 months in terms of how much of the revenue is coming from content providers versus maybe the handset provider?

Sure. The content providers are excited by the way haptics infuses life to their products. At Mobile World Congress, I think the feedback I'm getting is the booth swamped by lots of people, but primarily developers looking to develop relationships, get access to our SDK, and learn how to add haptics to their content. We're very excited about the opportunity there. We have waived royalty fees through 2012 for content developers who are using our SDK. We do benefit from a number of marketing relationships and promotional activities, so we think that it's a great relationship, but currently in order to really gain traction, we have waived the fees through the end of 2012. All of the revenue for mobility will be coming from the licensing of our TouchSense software, primarily through OEMs.

Okay, thank you. Very helpful. I was also wondering in terms of what's the expectation in fiscal 2012 in terms of the contribution from higher-fidelity or HD haptic solutions? You've talked in the past about those providing potentially a higher contribution for Immersion. Is that still the case, if you can give us any color on that as we move into the design and begin shipping in 2012?

I would say that the design opportunities, the engagements that we have more today than ever before with our high-definition solution. Our current OEMs and our prospects appreciate the benefit and the fidelity of our high-definition solution. In terms of what happens in 2012, I think, given the number of design win opportunities, we're pretty confident you'll see multiple smart phones and tablets launched during the year. Depending on timing, depending on volume, I'm not sure that it will translate into a substantial change in our ASPs for mobility, but it will provide some level of benefit. I think the visibility and the experience in the market place will be a great incentive for others to catch on, and to accelerate their own design activities with Immersion.

Okay. Just two more quick ones for me and I'll step back. You talked about automotive and it seems like you've also stepped up to highlight that in questions about future growth areas, and certainly it was once a great growth opportunity for Immersion, and it seems like it could certainly be another growth opportunity in the future. I guess relative to what revenues are now, I think single digits in fiscal year 2011 for automotive. What's the opportunity here for five years from now for the automotive aspect for what haptics could really generate there?

Well, we're very excited about automotive space and have for some time. I think the only lull that we experienced was the 2008-2009 time table, where the world economy was in dire straits, and the automotive industry in particular was reducing their investment in new and innovative solutions. As these car companies add new capability and more complex interfaces, haptics adds that extra intuitive aspect that provides more confidence and the ability to manage multiple sources of information while keeping your attention on the road. The benefits I think are pretty clear. The advantage we're starting to benefit from right now are support from the Cadillac program and other high-profile projects, so within the supply community, they're getting more requests for proposal, more design opportunities, and as a result, we see great things. Whether it's rotary knobs on the center con, on the arm rest, or a full touch panel replacing the center stack of buttons and knobs, or thumb wheels on a steering wheel, all those opportunities present, I think, a great revenue opportunity for us over the next three to five years, and based on the design wins that we believe are pending, we expect that to benefit our revenue in 2012, as well.

Okay. Final one for me, in terms of the seasonal lift you've seen in March the last two years, how pronounced directionally can you help us, relative to the last two years, should we be expecting the March quarter to look like?

Well, we currently are aware of a fair portion of our Q1 revenue, many of the reports are in. We're feeling, as we have in the past, we're seeing relatively strong first-quarter revenue. Again, it may be the best quarter of the year. It could be arguably close to what we hope to have in Q4, but we do see it as a seasonally strong quarter as we have in the past.

Okay. Thank you very much for your time, Vic.

Darice Liu, Brigantine Advisors LLC.

Just a follow-up on the prior question regarding seasonality, Q1 has historically been the strongest quarter and then Q2 and Q3 we see some dips, and then Q4 you see a bit of a return. Should we be modeling that going forward?

For the foreseeable future, I would say yes. We still see strong Q1, strong Q4. We see some softness in Q2 and Q3, not because the business is changing, it's just the nature of the timing of product launches and the seasonality selling of the holiday fourth-quarter selling season.

Okay. Despite that seasonality, should we be modeling the OpEx increasing on a quarterly basis because of your defense strategy?

The activities at the ITC are relatively straight-lined, if you will. There's obviously preparation efforts, there's discovery, there are various activities that will go on. I believe that it should be relatively consistent throughout the year, and not experience a lot of seasonality.

Okay. To a prior point you made regarding the products developed with SDK, you're waiving the royalty fees until the end of this year. I was wondering what the structure of those agreements are? In terms of when January 1, 2013, rolls around, even if products were developed pre-2013 on SDK, will you be receiving royalty payments for those products, or is it just for products developed starting January 1, 2013?

It's the latter. It's products that launch in 2013. We may begin charging the normal royalties that we have currently in the shrink-wrap license agreement.

Okay. In terms of piezo, the Pantech Element was launched. Can you talk about other design activities for the piezo?

Sure. There's quite a bit of activity in the tablet space. We would clearly expect to see a number of new tablets and new OEMs launching tablet products with our piezo-based solution. We are working closely with our ecosystem partners on reducing the size and the cost of the piezo module, and we think we're getting very close to the point where smartphone OEMs are beginning their design efforts. We'd like to think that we'll have some OEMs shipping smartphones with our high-definition solution as well.

Okay. Just to clarify, is the Pantech the only tablet with piezo, or are some of the other tablet products you mentioned earlier also using piezo -- Toshiba or Samsung or --?

No. Today, Pantech Element tablet is the only tablet with the Immersion high-definition solution.

Okay. Thank you very much.

Thanks, Darice.

Matt Bendixen, Craig-Hallum Capital Group.

Just wondering, as you get deeper in the process on that Motorola Mobility suit, do you plan on doing the legal aspect of that on contingency, or is that something you bear the cost of?

We bear the cost on the action.

Okay. Can you give us an update on the Haptify business? Are you seeing any success or gains there? Do you have any plans on launching new apps?

On Haptify? Haptify is still very active. We are using that group to continue to support and develop their own content as well as the content from third parties. What we have benefited from is rapid interest in adoption from third-party content developers, so many of our technical support people are supporting third-party activities, and Haptify has become, I'd say, a little less of a focus because the market itself is growing rapidly for us.

Okay. Thank you.

(Operator Instructions) Larry Solomon, Capital Research.

Vic, you said that the litigation expense would be $2 million to $2.5 million a quarter, and the process would go on for 16 to 18 months, which implies somewhere between $10 million and $15 million of expense. I'm just wondering whether you'll be able to recover that given the royalty rates for your products, and if you're successful, will that be reimbursed in addition to the royalty? Would you expect punitive damage? Also, are there other major handset and tablet vendors that have similar infringement to Motorola that by winning this case, you would automatically have a strong case to proceed with against the others?

The last part of your question, clearly there are other companies that we believe are infringing, and based on our strategy, we may add other defendants to the current case, or may add them in other types of actions. Yes, we believe there other infringers beyond just Motorola. In terms of damages, the ITC case, ITC venue is really primarily focused on determining infringement. If it's determined there's infringement, then they would typically grant an injunction, and would prohibit the importation or sale of infringing products. The separate case that we have filed in Delaware would typically be focused on damages, and having the damages as well as potentially punitive damages for the willful infringement of our IP. That would be the vehicle to collect on our damages.

Okay, thank you.

Thanks, Larry.

Thank you and there are no further questions at this time. I would now like to turn the call back over to Mr. Viegas for closing remarks.

Okay. Well, thank you everybody for being on the call with us today. We look very much forward to updating you as our business progresses, and we'll speak with you on our next quarterly call. Thank you.

Ladies and gentlemen, this concludes the Immersion Corporation fourth quarter fiscal year 2011 earnings conference call. Thank you for your participation. You may now disconnect.