BEAVERTON, OR--(Marketwired - May 2, 2013) - Digimarc Corporation (
First Quarter 2013 Results
Revenues for the first quarter of 2013 totaled $10.2 million, compared to $17.0 million in the first quarter of 2012 which included $8.0 million of revenue from Verance Corporation for the payment of past due royalties. Excluding the $8.0 million payment for past due royalties, revenues increased 13% or $1.2 million over the year-ago quarter. The majority of the increase was due to the inclusion of the company's acquisition of Attributor Corporation which was completed in December 2012.
Operating income for the first quarter of 2013 was $1.6 million compared to $9.2 million in the same quarter a year-ago. Net of the Verance past due royalties received and related litigation costs, operating income for the first quarter of 2012 was $1.6 million. The first quarter of 2013 operating results reflect the addition of Attributor's operations and related acquisition costs, plus increased investments in research and development initiatives.
Net income for the first quarter of 2013 was $1.0 million or $0.13 per diluted share compared to $5.0 million or $0.70 per diluted share in the first quarter of 2012. The decrease was due to lower operating income, partially offset by lower income taxes and no activity in the joint ventures which generated losses in the first quarter of 2012.
At March 31, 2013, cash, cash equivalents and marketable securities increased $1.5 million to $40.6 million from $39.1 million at December 31, 2012.
Conference Call
Digimarc will hold a conference call later today (Thursday, May 2, 2013) to discuss these results. The company's Chairman and CEO Bruce Davis and CFO Mike McConnell 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 call will be broadcast live via webcast at www.digimarc.com/investors and www.earnings.com, and will be available for replay through May 16, 2013. Thereafter, the webcast will be archived and available on Digimarc'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 listen-only telephone number below at least 5-10 minutes prior to the scheduled start time:
Listen-Only Number: 866-562-9934
Conference ID#: 36103818
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 increases in services and license and subscription revenues, 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 Form 10-K for the year ended December 31, 2012 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 | ||||||||||
| March 31, | March 31, | |||||||||
| 2013 | 2012 | |||||||||
| Revenue: | ||||||||||
| Service | $ | 2,929 | $ | 3,048 | ||||||
| Subscription | 1,384 | 278 | ||||||||
| License | 5,930 | 13,720 | ||||||||
| Total revenue | 10,243 | 17,046 | ||||||||
| Cost of revenue: | ||||||||||
| Service | 1,403 | 1,697 | ||||||||
| Subscription | 635 | 47 | ||||||||
| License | 96 | 66 | ||||||||
| Total cost of revenue | 2,134 | 1,810 | ||||||||
| Gross profit: | ||||||||||
| Service | 1,526 | 1,351 | ||||||||
| Subscription | 749 | 231 | ||||||||
| License | 5,834 | 13,654 | ||||||||
| Total gross profit | 8,109 | 15,236 | ||||||||
| Gross margin: | ||||||||||
| Service | 52 | % | 44 | % | ||||||
| Subscription | 54 | % | 83 | % | ||||||
| License | 98 | % | 100 | % | ||||||
| Percentage of gross profit to total revenue | 79 | % | 89 | % | ||||||
| Operating expenses: | ||||||||||
| Sales and marketing | 1,277 | 1,007 | ||||||||
| Research, development and engineering | 2,725 | 1,998 | ||||||||
| General and administrative | 2,186 | 2,758 | ||||||||
| Intellectual property | 277 | 319 | ||||||||
| Total operating expenses | 6,465 | 6,082 | ||||||||
| Operating income | 1,644 | 9,154 | ||||||||
| Net loss from joint ventures | - | (1,107 | ) | |||||||
| Other income, net | 29 | 58 | ||||||||
| Income before income taxes | 1,673 | 8,105 | ||||||||
| Provision for income taxes | (702 | ) | (3,106 | ) | ||||||
| Net income | $ | 971 | $ | 4,999 | ||||||
| Earnings per common share: | ||||||||||
| Earnings per common share - basic | $ | 0.13 | $ | 0.74 | ||||||
| Earnings per common share - diluted | $ | 0.13 | $ | 0.70 | ||||||
| Weighted average common shares outstanding - basic | 6,838 | 6,738 | ||||||||
| Weighted average common shares outstanding - diluted | 7,058 | 7,140 | ||||||||
| Cash dividends declared per common share: | $ | 0.11 | $ | - | ||||||
| Digimarc Corporation | |||||||||||
| Consolidated Cash Flow Information | |||||||||||
| (in thousands) | |||||||||||
| (Unaudited) | |||||||||||
| Three-Month Information | |||||||||||
| March 31, | March 31, | ||||||||||
| 2013 | 2012 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 971 | $ | 4,999 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of property and equipment | 158 | 143 | |||||||||
| Amortization and write-off of intangibles | 299 | 85 | |||||||||
| Gain on reversal of contingent merger consideration | (190 | ) | - | ||||||||
| Stock-based compensation | 1,092 | 1,356 | |||||||||
| Net loss from joint ventures | - | 1,107 | |||||||||
| Deferred income taxes | (112 | ) | 603 | ||||||||
| Tax benefit from stock-based awards | - | 1,443 | |||||||||
| Excess tax benefit from stock-based awards | - | (1,335 | ) | ||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Trade accounts receivable, net | (228 | ) | 1,032 | ||||||||
| Other current assets | (44 | ) | 166 | ||||||||
| Other assets | 1 | 83 | |||||||||
| Accounts payable and other accrued liabilities | (213 | ) | (27 | ) | |||||||
| Income taxes payable | 778 | 1,060 | |||||||||
| Deferred revenue | 832 | (83 | ) | ||||||||
| Net cash provided by operating activities | 3,344 | 10,632 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (86 | ) | (148 | ) | |||||||
| Capitalized patent costs and purchased intellectual property | (228 | ) | (465 | ) | |||||||
| Sale or maturity of marketable securities | 23,116 | 22,993 | |||||||||
| Purchase of marketable securities | (21,933 | ) | (28,492 | ) | |||||||
| Net cash provided by (used in) investing activities | 869 | (6,112 | ) | ||||||||
| Cash flows from financing activities: | |||||||||||
| Issuance of common stock | - | 72 | |||||||||
| Purchase of common stock | (648 | ) | (799 | ) | |||||||
| Cash dividends paid | (801 | ) | - | ||||||||
| Excess tax benefit from stock-based awards | - | 1,335 | |||||||||
| Net cash provided by (used in) financing activities | (1,449 | ) | 608 | ||||||||
| Net increase in cash and cash equivalents (2) | $ | 2,764 | $ | 5,128 | |||||||
| Cash equivalents and marketable securities at beginning of period | 39,056 | 33,378 | |||||||||
| Cash equivalents and marketable securities at end of period | 40,637 | 44,005 | |||||||||
| (2) Net increase in cash, cash equivalents and marketable securities | $ | 1,581 | $ | 10,627 | |||||||
| Digimarc Corporation | |||||||||
| Consolidated Balance Sheet Information | |||||||||
| (in thousands) | |||||||||
| (Unaudited) | |||||||||
| March 31, | December 31, | ||||||||
| 2013 | 2012 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents (1) | $ | 9,630 | $ | 6,866 | |||||
| Marketable securities (1) | 23,620 | 25,403 | |||||||
| Trade accounts receivable, net | 4,444 | 4,216 | |||||||
| Other current assets | 1,088 | 1,016 | |||||||
| Total current assets | 38,782 | 37,501 | |||||||
| Marketable securities (1) | 7,387 | 6,787 | |||||||
| Property and equipment, net | 1,381 | 1,453 | |||||||
| Intangibles, net | 6,683 | 6,721 | |||||||
| Goodwill | 1,114 | 1,114 | |||||||
| Deferred tax assets, net | 3,673 | 3,589 | |||||||
| Other assets | 165 | 166 | |||||||
| Total assets | $ | 59,185 | $ | 57,331 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and other accrued liabilities | $ | 937 | $ | 1,143 | |||||
| Income taxes payable | 744 | - | |||||||
| Deferred revenue | 3,347 | 2,512 | |||||||
| Total current liabilities | 5,028 | 3,655 | |||||||
| Deferred rent and other long-term liabilities | 507 | 673 | |||||||
| Total liabilities | 5,535 | 4,328 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders' equity: | |||||||||
| Preferred stock | 50 | 50 | |||||||
| Common stock | 7 | 7 | |||||||
| Additional paid-in capital | 40,346 | 39,869 | |||||||
| Retained earnings | 13,247 | 13,077 | |||||||
| Total shareholders' equity | 53,650 | 53,003 | |||||||
| Total liabilities and shareholders' equity | $ | 59,185 | $ | 57,331 | |||||
| (1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $40,637 and $39,056 at March 31, 2013 and December 31, 2012, respectively. | |||||||||
