BEAVERTON, OR--(Marketwired - Oct 22, 2014) - Digimarc Corporation (
Third Quarter 2014 Results
Revenue for the third quarter of 2014 totaled $6.9 million compared to $7.4 million in the same quarter a year-ago. The decrease was due to lower license revenue primarily due to the scheduled completion of the quarterly license fee payments from The Nielsen Company in the first quarter of 2014.
Operating loss for the third quarter of 2014 totaled $3.2 million compared to operating loss of $2.0 million in the same quarter a year-ago. The operating loss was primarily due to lower license revenue and continued investment in the company's product development and sales growth initiatives, mainly focused on Digimarc Discover and Barcode.
Net loss for the third quarter of 2014 totaled $2.0 million or $(0.28) per diluted share compared to a net loss of $0.8 million or $(0.12) per diluted share in the third quarter of 2013.
At September 30, 2014, cash, cash equivalents and marketable securities totaled $24.7 million compared to $27.9 million at June 30, 2014.
Conference Call
Digimarc will hold a conference call later today (Wednesday, October 22, 2014) to discuss these results, as well as provide an update on market conditions and execution of strategy. Chairman and CEO Bruce Davis and CFO Charles Beck will host the call starting at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). A question and answer session will follow management's presentation.
The conference call will be broadcast simultaneously and available for replay via the investor section of the company's website at www.digimarc.com/investors/investor-events-and-webcasts.
For those who wish to listen to the call via telephone, please dial the telephone number below at least five minutes prior to the scheduled start time:
Number: 866-562-9934
Conference ID: 27179679
If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
About Digimarc
Digimarc Corporation (
Forward-looking Statements
With the exception of historical information contained in this release, the matters described in this release contain various "forward-looking statements." These forward-looking statements include statements and any related inferences regarding impact of continued investments in product development and sales growth initiatives, and other statements identified by terminology such as "will," "should," "expects," "estimates," "predicts" and "continue" or other derivations of these or other comparable terms. These forward-looking statements are statements of management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements in this release as a result of changes in economic, business and/or regulatory factors. More detailed information about risk factors that may affect actual results will be set forth in the company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 and in subsequent periodic reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this release. Except as required by law, Digimarc undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
| Digimarc Corporation | ||||||||||||||||||
| Consolidated Income Statement Information | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three-Month Information | Nine-Month Information | |||||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Revenue: | ||||||||||||||||||
| Service | $ | 3,155 | $ | 3,030 | $ | 8,859 | $ | 8,981 | ||||||||||
| Subscription | 1,452 | 1,424 | 4,360 | 4,241 | ||||||||||||||
| License | 2,320 | 2,971 | 6,576 | 14,916 | ||||||||||||||
| Total revenue | 6,927 | 7,425 | 19,795 | 28,138 | ||||||||||||||
| Cost of revenue: | ||||||||||||||||||
| Service | 1,224 | 1,232 | 3,807 | 4,067 | ||||||||||||||
| Subscription | 812 | 625 | 2,160 | 1,848 | ||||||||||||||
| License | 84 | 98 | 250 | 294 | ||||||||||||||
| Total cost of revenue | 2,120 | 1,955 | 6,217 | 6,209 | ||||||||||||||
| Gross profit: | ||||||||||||||||||
| Service | 1,931 | 1,798 | 5,052 | 4,914 | ||||||||||||||
| Subscription | 640 | 799 | 2,200 | 2,393 | ||||||||||||||
| License | 2,236 | 2,873 | 6,326 | 14,622 | ||||||||||||||
| Total gross profit | 4,807 | 5,470 | 13,578 | 21,929 | ||||||||||||||
| Gross margin: | ||||||||||||||||||
| Service | 61 | % | 59 | % | 57 | % | 55 | % | ||||||||||
| Subscription | 44 | % | 56 | % | 50 | % | 56 | % | ||||||||||
| License | 96 | % | 97 | % | 96 | % | 98 | % | ||||||||||
| Percentage of gross profit to total revenue | 69 | % | 74 | % | 69 | % | 78 | % | ||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing | 1,999 | 1,482 | 5,930 | 4,322 | ||||||||||||||
| Research, development and engineering | 3,499 | 3,277 | 10,449 | 8,824 | ||||||||||||||
| General and administrative | 2,183 | 2,456 | 6,929 | 6,990 | ||||||||||||||
| Intellectual property | 366 | 278 | 1,287 | 816 | ||||||||||||||
| Total operating expenses | 8,047 | 7,493 | 24,595 | 20,952 | ||||||||||||||
| Operating income (loss) | (3,240 | ) | (2,023 | ) | (11,017 | ) | 977 | |||||||||||
| Other income, net | 3 | 33 | 50 | 81 | ||||||||||||||
| Income (loss) before income taxes | (3,237 | ) | (1,990 | ) | (10,967 | ) | 1,058 | |||||||||||
| (Provision) benefit for income taxes | 1,252 | 1,195 | 4,316 | (280 | ) | |||||||||||||
| Net income (loss) | $ | (1,985 | ) | $ | (795 | ) | $ | (6,651 | ) | $ | 778 | |||||||
| Earnings (loss) per common share: | ||||||||||||||||||
| Earnings (loss) per common share - basic | $ | (0.28 | ) | $ | (0.12 | ) | $ | (0.95 | ) | $ | 0.09 | |||||||
| Earnings (loss) per common share - diluted | $ | (0.28 | ) | $ | (0.12 | ) | $ | (0.95 | ) | $ | 0.09 | |||||||
| Weighted average common shares outstanding - basic | 7,176 | 6,860 | 7,097 | 6,850 | ||||||||||||||
| Weighted average common shares outstanding - diluted | 7,176 | 6,860 | 7,097 | 7,080 | ||||||||||||||
| Cash dividends declared per common share: | $ | - | $ | 0.11 | $ | 0.22 | $ | 0.33 | ||||||||||
| Digimarc Corporation | ||||||||||||
| Consolidated Cash Flow Information | ||||||||||||
| (in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine-Month Information | ||||||||||||
| September 30, | September 30, | |||||||||||
| 2014 | 2013 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | (6,651 | ) | $ | 778 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization of property and equipment | 708 | 513 | ||||||||||
| Amortization and write-off of intangibles | 916 | 931 | ||||||||||
| Change in allowance for doubtful accounts | (13 | ) | 22 | |||||||||
| Gain on reversal of contingent merger consideration | - | (190 | ) | |||||||||
| Stock-based compensation | 4,085 | 3,219 | ||||||||||
| Deferred income taxes | (2,874 | ) | 354 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Trade accounts receivable, net | 2,000 | (923 | ) | |||||||||
| Other current assets | (1,559 | ) | (577 | ) | ||||||||
| Other assets | 160 | (99 | ) | |||||||||
| Accounts payable and other accrued liabilities | (171 | ) | 286 | |||||||||
| Income taxes payable | (169 | ) | 88 | |||||||||
| Deferred revenue | (2,338 | ) | 263 | |||||||||
| Net cash provided by (used in) operating activities | (5,906 | ) | 4,665 | |||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | (1,010 | ) | (1,532 | ) | ||||||||
| Capitalized patent costs | (922 | ) | (824 | ) | ||||||||
| Maturity of marketable securities | 47,961 | 47,344 | ||||||||||
| Purchase of marketable securities | (38,840 | ) | (48,186 | ) | ||||||||
| Net cash provided by (used in) investing activities | 7,189 | (3,198 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Issuance of common stock | 1,319 | - | ||||||||||
| Purchase of common stock | (1,931 | ) | (854 | ) | ||||||||
| Cash dividends paid | (1,654 | ) | (2,400 | ) | ||||||||
| Common stock issuance costs | (124 | ) | - | |||||||||
| Net cash used in financing activities | (2,390 | ) | (3,254 | ) | ||||||||
| Net decrease in cash and cash equivalents (1) | $ | (1,107 | ) | $ | (1,787 | ) | ||||||
| Cash, cash equivalents and marketable securities at beginning of period | 34,964 | 39,056 | ||||||||||
| Cash, cash equivalents and marketable securities at end of period | 24,736 | 38,111 | ||||||||||
| (1) Net decrease in cash, cash equivalents and marketable securities | $ | (10,228 | ) | $ | (945 | ) | ||||||
| Digimarc Corporation | |||||||||
| Consolidated Balance Sheet Information | |||||||||
| (in thousands) | |||||||||
| (Unaudited) | |||||||||
| September 30, | December 31, | ||||||||
| 2014 | 2013 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents (2) | $ | 2,704 | $ | 3,811 | |||||
| Marketable securities (2) | 19,081 | 25,851 | |||||||
| Trade accounts receivable, net | 3,851 | 5,838 | |||||||
| Other current assets | 3,541 | 1,658 | |||||||
| Total current assets | 29,177 | 37,158 | |||||||
| Marketable securities (2) | 2,951 | 5,302 | |||||||
| Property and equipment, net | 2,904 | 2,395 | |||||||
| Intangibles, net | 6,836 | 6,709 | |||||||
| Goodwill | 1,114 | 1,114 | |||||||
| Deferred tax assets, net | 5,447 | 3,949 | |||||||
| Other assets | 410 | 570 | |||||||
| Total assets | $ | 48,839 | $ | 57,197 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and other accrued liabilities | $ | 1,868 | $ | 1,560 | |||||
| Deferred revenue | 1,853 | 4,218 | |||||||
| Total current liabilities | 3,721 | 5,778 | |||||||
| Deferred rent and other long-term liabilities | 241 | 496 | |||||||
| Total liabilities | 3,962 | 6,274 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders' equity: | |||||||||
| Preferred stock | 50 | 50 | |||||||
| Common stock | 8 | 7 | |||||||
| Additional paid-in capital | 43,756 | 41,498 | |||||||
| Retained earnings | 1,063 | 9,368 | |||||||
| Total shareholders' equity | 44,877 | 50,923 | |||||||
| Total liabilities and shareholders' equity | $ | 48,839 | $ | 57,197 | |||||
| (2) | Aggregate cash, cash equivalents, short- and long-term marketable securities was $24,736 and $34,964 at Sepetmber 30, 2014 and December 31, 2013, respectively. | |
