Microvision Announces Preliminary First Quarter 2006 Financial Results

Microvision Announces Preliminary First Quarter 2006 Financial Results

REDMOND, Wash. --(Business Wire)-- April 26, 2006 -- Microvision, Inc. (NASDAQ: MVIS), a leader in light scanning technologies, today announced preliminary consolidated financial results for the first quarter of 2006.

For the first quarter of 2006, Microvision expects to report revenue of approximately $2.5 million compared to $4.0 million for the first quarter of the prior year. The expected first quarter revenue is comprised of approximately $1.8 million of contract revenue and approximately $700,000 of product revenue. In the first quarter of 2005, the company reported contract revenue of $3.4 million and product revenue of$600,000. The reduction in contract revenue from the first quarter of 2005 is due primarily to lower commercial contract revenue. Product revenue for the first quarter of 2006 was derived primarily from record shipments of over 9,300 units of the Flic bar code scanner.

The company expects to report an operating loss for the first quarter of 2006 of between $6.5 and $7.0 million compared to $5.5 million for the first quarter of 2005 due primarily to lower commercial contract revenue in the first quarter of 2006. The operating loss in the first quarter of 2006 is expected to include approximately $400,000 in expense related to the adoption of FASB 123R, Accounting for Stock Options that the company adopted on January 1, 2006. The company expects to report net income available for common shareholders of between $200,000 and $700,000 for the first quarter of 2006 compared to a net loss available for common shareholders of $7.2 million for the first quarter of 2005. The improvement was due primarily to a $7.2 million gain from the sale of 2.55 million shares of the company's holdings in Lumera Corporation.

The company ended the quarter with $7.0 million in cash.

"Our first quarter results, although lower than last year, are generally in line with our expectations," said Alexander Tokman, Microvision President and CEO. "As anticipated, Flic had a record first quarter for unit shipments equaling nearly half of the total volume shipped for the entire year of 2005, setting the stage for a strong year for this product. Our government contract revenue was slightly below our 2006 operating plan while commercial contract revenue for the quarter was in line with our plan although well below prior year levels. We continue to advance discussions with potential development and distribution partners, tracking to our plan to sign a strategic Tier 1 partner for automotive head-up displays and a development partner for personal projection displays. We are making solid progress toward definition and development of our Integrated Photonics Module (IPM) that is expected to serve as the embedded platform for a wide range of high volume applications. With our newly named VP of Research and Development, Sid Madhavan on board as of May 1, we expect to accelerate the IPM development activities. We recently launched a redesigned web site that more effectively captures our new IPM focused business strategy and exciting growth opportunities it offers.

"One of our key financial goals for 2006 is to reduce the net operating loss by 30%, excluding the impact of the adoption of FASB 123R. We have implemented important steps toward this goal in the first quarter which included organizational restructuring. With Sid joining the company and Jeff Wilson promoted to CFO, we now have our management team firmly in place. Over the last couple of months we have implemented a number of key initiatives to position our company for a turnaround."