Microvision, Inc. (MVIS)

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Microvision, Inc. (MVIS)

Q4 2008 Earnings Call Transcript

March 5, 2009 4:30 pm ET


Tiffany Bradford – IR

Alexander Tokman – President and CEO

Jeff Wilson – CFO


Jed Dorsheimer – Canaccord Adams

Brian Yurinich – Craig-Hallum Capital

Suji De Silva – Kaufman Brothers

Arthur Doglione – Alpha Fiduciary

Joe Dubroth [ph] – Morgan Stanley

Larry Sisson [ph]

Tom Lardner [ph] – Microvision [ph]



Good day, ladies and gentlemen, and welcome to the fourth quarter 2008 Microvision Incorporated earnings conference call. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator instructions) I will now turn the call over to Tiffany Bradford, Investor Relations Specialist. Please proceed, ma'am.

Tiffany Bradford

Thank you. I'd like to welcome everyone to Microvision's fourth quarter and year-end 2008 financial results conference call. In addition to myself, participants on today's call include Alexander Tokman, President and Chief Executive Officer, and Jeff Wilson, Chief Financial Officer.

The information in today's conference call may include forward-looking statements, including statements regarding projections of future operations, product development, introduction, applications and benefits, business partnering expectations, market opportunities and growth and demand, as well as statements containing words like believe, estimate, expects, anticipate, target, plans, will, could, would, and other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statements.

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are included in our most recent Annual Report on Form 10-K filed with the Securities Exchange Commission under the heading Risk Factors Relating to the Company's Business and our other reports filed with the commission from time to time. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in circumstances, or any other reason.

I would now like to turn the call over to Alexander Tokman. Alex?

Alexander Tokman

Thank you, Tiffany. Welcome everyone. Our call is divided into several parts. First, I will give you update on 2008 results. Jeff will come back with financials, and we will jump into 2009 outlook followed by question session.

So without further ado, let me just start with 2008 results. While at times challenging, 2008 was an exciting and very productive year for the Microvision team as we continued to execute on our PicoP commercialization roadmap. We made substantial progress on the objectives that we set for ourselves early in 2008 in completing multiple business developments, technology and supply chain milestones. All were more essential for bringing our first PicoP consumer product to market.

Now, you are also aware that the longer than expected development and commercialization cycles of one of our key light source components as well as the deteriorating economic conditions have delayed a full fulfillment of our goals for 2008. We will highlight on these later in the discussion. A key indicator of how we have progressed against the commercialization milestones is measured not by us, not by you, but by our customers and interests that OEMs have expressed for our product. And judging by the most recent feedback we received at the shows, OEM interest remains very strong for bringing our unique solution to market in 2009.

Clearly, the positive results of 2008 execution were realized at the three global commercial trade shows, Macworld Expo, Consumer Electronics show, and Mobile World Congress, all of which happened in the January and February of this year. We have demonstrated, to the delight of many prospective customers, a preproduction ultra-miniature plug-and-play accessory, Pico Projector, code named SHOW WX. WX stands for wide-screen experience. I would qualify a different way. I think it's a wild experience, because if you had a chance to see the units and you would immediately recognize that no one today, except for Microvision, is able in controlled lighting environment to produce a screen of 70, 80 inches and watch entourage [ph] on 24 while seeing every detail in the image.

We are not limited by resolution, like some of our competitors, and we are not limited by focus, which is also one of the limitations that – and advantages that we have over the competitive products. SHOW WX was selected by the editors of Appletell, one of Apple ecosystem premier players and websites as one of their favorite gadgets in 2009 Macworld Expo.

We were also acknowledged by the Discovery Channel as one of the top technology innovations at CES for 2009. The significance of SHOW WX lied not only in the fact that it offered performance features superior to its predecessors as well as the existing competitive products, but more importantly that this accessory projector, for the first time, was produced by our manufacturing partner, Asia Optical, which in itself represents a major milestone on the path to launch of our first PicoP-enabled consumer product in mid-2009.

We're going to hit on several critical areas that describe and characterize our commercial launch readiness. These areas obviously include customer development, technology maturity, and supply chain readiness. Let's start with customer development first. Recall that we began customer trials late in 2008 with the goal to get an early feedback in order to finalize the accessory product design by the end the year. We've done this. Those trial units incorporated several important advancements, including new generation green lasers, improved PicoP engines, as well as several image quality improvements.

The outcome of those initial customer trials resulted in two important wins. First, it allowed us to incorporate the valuable customer feedback that resulted in SHOW WX. Second, they allow us to develop a core funnel of prospective OEM customers, which includes some of the well-known handset manufacturers, mobile operators, and large consumer electronic brands, as well as the distributors.

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