Digimarc Reports First Quarter 2015 Financial Results
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BEAVERTON, OR -- (Marketwired) -- 04/27/15 -- Digimarc Corporation (NASDAQ: DMRC) reported financial results for the first quarter ended March 31, 2015.
Revenue for the first quarter of 2015 totaled $6.0 million compared to $7.2 million in the same quarter a year-ago. The decrease was due to lower license revenue, reflecting the end of the quarterly license fee payments from The Nielsen Company in the first quarter of 2014 and the end of the quarterly royalty payments from Verance Corporation in the fourth quarter of 2014. The decline in license revenue was partially offset by higher service and subscription revenue.
Operating expenses for the first quarter of 2015 decreased 8% to $7.7 million from $8.4 million the same quarter a year-ago. The decrease was due to lower investment in research and development, partially offset by higher investment in sales and marketing as the company continues its transition from research and product development to market development and delivery of Digimarc Discover and Barcode. Legal and third-party consulting costs were also lower during the first quarter of 2015.
Operating loss for the first quarter of 2015 totaled $4.2 million compared to an operating loss of $3.3 million in the same quarter a year-ago. The higher operating loss is largely due to lower license revenue, partially offset by lower operating expenses.
Net loss for the first quarter of 2015 totaled $4.2 million or $(0.52) per diluted share, compared to a net loss of $2.0 million or $(0.29) per diluted share in the first quarter of 2014.
Cash, cash equivalents and marketable securities totaled $37.1 million at March 31, 2015, compared to $39.1 million at December 31, 2014.
Conference Call Digimarc will hold a conference call later today (Monday, April 27, 2015) 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 live 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: 27179681
If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
About Digimarc Digimarc Corporation (NASDAQ: DMRC), based in Beaverton, Oregon, is a leading innovator and provider of consumer engagement, media management, and security solutions that create digital identities for all forms of media and many everyday objects. Digimarc's digital IDs are imperceptible to humans and enable computers, networks and devices like mobile phones to better "see, hear and understand" brand impressions and other objects of interest. Digimarc has built an extensive intellectual property portfolio with patents in digital watermarking, content identification and management, media and object discovery to enable ubiquitous computing and related technologies. Digimarc develops solutions, licenses its intellectual property, and provides development services to business partners across a range of industries. For more information and the latest news, visit www.digimarc.com or follow us on Twitter @DigimarcCorp.
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 service and subscription revenue, decreased investment in research and development, increased investments in market development and delivery 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 Form 10-K for the year ended December 31, 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 --------------------------- March 31, March 31, 2015 2014 ------------ ------------ Revenue: Service $ 3,501 $ 2,988 Subscription 1,716 1,412 License 772 2,805 ------------ ------------ Total revenue 5,989 7,205 Cost of revenue: Service 1,578 1,414 Subscription 754 649 License 84 83 ------------ ------------ Total cost of revenue 2,416 2,146 Gross profit: Service 1,923 1,574 Subscription 962 763 License 688 2,722 ------------ ------------ Total gross profit 3,573 5,059 Gross margin: Service 55% 53% Subscription 56% 54% License 89% 97% Percentage of gross profit to total revenue 60% 70% Operating expenses: Sales and marketing 2,090 1,879 Research, development and engineering 3,084 3,546 General and administrative 2,206 2,421 Intellectual property 367 534 ------------ ------------ Total operating expenses 7,747 8,380 Operating loss (4,174) (3,321) Other income, net 23 27 ------------ ------------ Loss before income taxes (4,151) (3,294) Benefit for income taxes 1 1,308 ------------ ------------ Net loss $ (4,150) $ (1,986) ============ ============ Earnings (loss) per common share: Loss per common share - basic $ (0.52) $ (0.29) Loss per common share - diluted $ (0.52) $ (0.29) Weighted average common shares outstanding - basic 7,960 7,000 Weighted average common shares outstanding - diluted 7,960 7,000 Cash dividends declared per common share: $ - $ 0.11 Digimarc Corporation Consolidated Balance Sheet Information (in thousands) (Unaudited) March 31, December 31, 2015 2014 ------------ ------------ Assets Current assets: Cash and cash equivalents (1) $ 5,064 $ 6,122 Marketable securities (1) 32,031 32,201 Trade accounts receivable, net 3,620 4,545 Other current assets 2,518 2,611 ------------ ------------ Total current assets 43,233 45,479 Marketable securities (1) - 749 Property and equipment, net 2,895 2,976 Intangibles, net 6,692 6,720 Goodwill 1,114 1,114 Other assets 337 378 ------------ ------------ Total assets $ 54,271 $ 57,416 ============ ============ Liabilities and Shareholders' Equity Current liabilities: Accounts payable and other accrued liabilities $ 1,473 $ 1,379 Deferred revenue 2,984 3,660 ------------ ------------ Total current liabilities 4,457 5,039 Deferred rent and other long-term liabilities 158 203 ------------ ------------ Total liabilities 4,615 5,242 Commitments and contingencies Shareholders' equity: Preferred stock 50 50 Common stock 9 8 Additional paid-in capital 61,853 60,222 Accumulated deficit (12,256) (8,106) ------------ ------------ Total shareholders' equity 49,656 52,174 ------------ ------------ Total liabilities and shareholders' equity $ 54,271 $ 57,416 ============ ============ (1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $37,095 and $39,072 at March 31, 2015 and December 31, 2014, respectively. Digimarc Corporation Consolidated Cash Flow Information (in thousands) (Unaudited) Three-Month Information --------------------------- March 31, March 31, 2015 2014 ------------ ------------ Cash flows from operating activities: Net loss $ (4,150) $ (1,986) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation, amortization and write-off of property and equipment 328 231 Amortization and write-off of intangibles 277 308 Changes in allowance for doubtful accounts 10 (7) Stock-based compensation 1,217 1,259 Deferred income taxes - (509) Excess tax benefit from stock-based awards - (72) Changes in operating assets and liabilities: Trade accounts receivable 915 1,809 Other current assets 93 (699) Other assets 41 84 Accounts payable and other accrued liabilities (99) (314) Deferred revenue (668) (1,484) ------------ ------------ Net cash used in operating activities (2,036) (1,380) Cash flows from investing activities: Purchase of property and equipment (125) (117) Capitalized patent costs (194) (295) Maturity of marketable securities 21,976 11,192 Purchase of marketable securities (21,057) (9,266) ------------ ------------ Net cash provided by investing activities 600 1,514 Cash flows from financing activities: Exercise of stock options 874 712 Purchase of common stock (496) (850) Cash dividends paid - (824) Excess tax benefit from stock-based awards - 72 ------------ ------------ Net cash provided by (used in) financing activities 378 (890) ------------ ------------ Net decrease in cash and cash equivalents (2) $ (1,058) $ (756) ============ ============ Cash, cash equivalents and marketable securities at beginning of period 39,072 34,964 Cash, cash equivalents and marketable securities at end of period 37,095 32,282 ------------ ------------ (2) Net decrease in cash, cash equivalents and marketable securities $ (1,977) $ (2,682) ============ ============
Company Contacts: Charles Beck Chief Financial Officer 503-469-4721 Email Contact Matt Glover Liolios Group, Inc. Investor Relations for Digimarc 949-574-3860 Email Contact
Source: Digimarc
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