Attached files
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| 8-K - FORM 8-K - Digimarc CORP | d429469d8k.htm |
Exhibit 99.1
Company Contacts:
Michael McConnell
Chief Financial Officer
503-469-4652
mmcconnell@digimarc.com
Scott Liolios or Matt Glover
Liolios Group, Inc.
Investor Relations for Digimarc
949-574-3860
DMRC@liolios.com
FOR IMMEDIATE RELEASE
Digimarc Reports Third Quarter 2012 Financial Results
Net Income Up 57% to $1 Million or $0.14 per Share; Company Declares
Quarterly Dividend of $0.11 per Share
Beaverton, Ore. — October 25, 2012 — Digimarc Corporation (NASDAQ: DMRC) reported financial results for the third quarter ended September 30, 2012.
Third Quarter 2012 Results
Revenues for the third quarter of 2012 increased 4% to $8.9 million from $8.6 million in the same quarter a year ago. The improvement was primarily due to increased license revenues from Intellectual Ventures and Verance, offset by lower service revenues from joint ventures with The Nielsen Company (“Nielsen”) as a result of the previously announced suspension of operations of the joint ventures in Q1 2012.
Operating income for the third quarter of 2012 increased 11% to $1.6 million from $1.4 million in the same year-ago quarter. The improvement reflects the increase in revenues, partially offset by higher operating expenses, primarily for investments in research and development.
Net income for the third quarter of 2012 increased 57% to $1.0 million or $0.14 per diluted share. This compared to net income of $639,000 or $0.09 per diluted share in the third quarter of 2011.
At September 30, 2012, cash and cash equivalents, and marketable securities totaled $43.1 million, up 29% from $33.4 million at December 31, 2011. The improvement was primarily due to higher license revenues leading to increased profitability.
On October 23, 2012, Digimarc declared a quarterly dividend of $0.11 per share on the outstanding common shares, payable on November 20, 2012 to shareholders of record at the close of business on November 6, 2012. The aggregate amount of the quarterly dividend payment is expected to be approximately $785,000.
Conference Call
Digimarc will hold a conference call later today (Thursday, October 25, 2012) to discuss third quarter 2012 results and the company’s execution of strategy. 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 until November 8, 2012. 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#: 38887815
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 enabling technologies that create digital identities for all forms of media and many everyday objects. The embedded digital IDs are imperceptible to humans, but not to computers, networks and devices like mobile phones, which can now use cameras and microphones as sensory inputs to “see, hear and understand” the world around them within the context of their environment. 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, please visit www.digimarc.com.
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 about dividend payments, any inferences regarding increases in license 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, 2011 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
Income Statement Information
(in thousands, except per share amounts)
(Unaudited)
| Three-Month Information | Nine-Month Information | |||||||||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
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| Revenue: |
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| Service |
$ | 2,616 | $ | 3,108 | $ | 8,273 | $ | 9,342 | ||||||||
| License & subscription |
6,287 | 5,442 | 26,788 | 17,772 | ||||||||||||
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| Total revenue |
8,903 | 8,550 | 35,061 | 27,114 | ||||||||||||
| Cost of revenue: |
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| Service |
1,362 | 1,665 | 4,544 | 4,863 | ||||||||||||
| License & subscription |
105 | 77 | 316 | 218 | ||||||||||||
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| Total cost of revenue |
1,467 | 1,742 | 4,860 | 5,081 | ||||||||||||
| Gross profit: |
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| Service |
1,254 | 1,443 | 3,729 | 4,479 | ||||||||||||
| License & subscription |
6,182 | 5,365 | 26,472 | 17,554 | ||||||||||||
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| Total gross profit |
7,436 | 6,808 | 30,201 | 22,033 | ||||||||||||
| Gross margin: |
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| Service |
48 | % | 46 | % | 45 | % | 48 | % | ||||||||
| License & subscription |
98 | % | 99 | % | 99 | % | 99 | % | ||||||||
| Total revenue |
84 | % | 80 | % | 86 | % | 81 | % | ||||||||
| Operating expenses: |
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| Sales and marketing |
937 | 1,166 | 2,914 | 3,285 | ||||||||||||
| Research, development and engineering |
2,320 | 1,958 | 6,464 | 5,617 | ||||||||||||
| General and administrative |
2,282 | 2,000 | 7,231 | 7,117 | ||||||||||||
| Intellectual property |
309 | 259 | 919 | 826 | ||||||||||||
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| Total operating expenses |
5,848 | 5,383 | 17,528 | 16,845 | ||||||||||||
| Operating income |
1,588 | 1,425 | 12,673 | 5,188 | ||||||||||||
| Net loss from joint ventures |
— | (695 | ) | (1,107 | ) | (1,930 | ) | |||||||||
| Interest income, net |
48 | 43 | 139 | 149 | ||||||||||||
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| Income before provision for income taxes |
1,636 | 773 | 11,705 | 3,407 | ||||||||||||
| (Provision) benefit for income taxes |
(633 | ) | (134 | ) | (4,487 | ) | 1,796 | |||||||||
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| Net income |
$ | 1,003 | $ | 639 | $ | 7,218 | $ | 5,203 | ||||||||
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| Earnings per common share: |
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| Net income per common share—basic |
$ | 0.14 | $ | 0.10 | $ | 1.02 | $ | 0.77 | ||||||||
| Net income per common share—diluted |
$ | 0.14 | $ | 0.09 | $ | 0.98 | $ | 0.71 | ||||||||
| Weighted average common shares outstanding—basic |
6,761 | 6,706 | 6,745 | 6,755 | ||||||||||||
| Weighted average common shares outstanding—diluted |
6,984 | 7,344 | 6,980 | 7,366 | ||||||||||||
| Cash dividends declared per common share: |
$ | 0.11 | $ | — | $ | 0.22 | $ | — | ||||||||
Digimarc Corporation
Balance Sheet Information
(in thousands)
(Unaudited)
| September 30, 2012 |
December 31, 2011 |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents (1) |
$ | 8,669 | $ | 3,419 | ||||
| Marketable securities (1) |
21,759 | 22,244 | ||||||
| Trade accounts receivable, net |
3,630 | 3,502 | ||||||
| Other current assets |
1,333 | 1,306 | ||||||
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| Total current assets |
35,391 | 30,471 | ||||||
| Marketable securities (1) |
12,652 | 7,715 | ||||||
| Property and equipment, net |
1,327 | 1,395 | ||||||
| Intangible assets, net |
3,570 | 2,808 | ||||||
| Investments in joint ventures |
— | 415 | ||||||
| Deferred tax assets |
2,145 | 2,634 | ||||||
| Other assets, net |
188 | 355 | ||||||
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| Total assets |
$ | 55,273 | $ | 45,793 | ||||
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| Liabilities and Shareholders’ Equity |
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| Current liabilities: |
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| Accounts payable and other accrued liabilities |
$ | 842 | $ | 952 | ||||
| Income taxes payable |
875 | — | ||||||
| Deferred revenue |
2,156 | 2,660 | ||||||
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| Total current liabilities |
3,873 | 3,612 | ||||||
| Deferred rent and other long-term liabilities |
397 | 464 | ||||||
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| Total liabilities |
4,270 | 4,076 | ||||||
| Commitments and contingencies |
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| Shareholders’ equity: |
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| Preferred stock |
50 | 50 | ||||||
| Common stock |
7 | 7 | ||||||
| Additional paid-in capital |
38,140 | 34,511 | ||||||
| Retained earnings |
12,806 | 7,149 | ||||||
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| Total shareholders’ equity |
51,003 | 41,717 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 55,273 | $ | 45,793 | ||||
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| (1) | Aggregate cash, cash equivalents, short- and long-term marketable securities was $43,080 and $33,378 at September 30, 2012 and December 31, 2011. |
Digimarc Corporation
Cash Flow Information
(in thousands)
(Unaudited)
| Three-Month Information | Nine-Month Information | |||||||||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
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| Cash flows from operating activities: |
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| Net income |
$ | 1,003 | $ | 639 | $ | 7,218 | $ | 5,203 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization of property and equipment |
152 | 165 | 444 | 474 | ||||||||||||
| Amortization and write-off of intangibles |
59 | 36 | 213 | 94 | ||||||||||||
| Stock-based compensation |
1,395 | 1,057 | 4,202 | 3,038 | ||||||||||||
| Net loss from joint ventures |
— | 695 | 1,107 | 1,930 | ||||||||||||
| Deferred income taxes |
(139 | ) | (309 | ) | (77 | ) | (3,163 | ) | ||||||||
| Tax benefit from stock-based awards |
492 | 400 | 2,385 | 1,322 | ||||||||||||
| Excess tax benefit from stock-based awards |
(263 | ) | (291 | ) | (1,801 | ) | (792 | ) | ||||||||
| Changes in operating assets and liabilities: |
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| Trade accounts receivable, net |
(1,087 | ) | (574 | ) | (128 | ) | 61 | |||||||||
| Other current assets |
(177 | ) | (165 | ) | (45 | ) | 131 | |||||||||
| Other assets, net |
26 | 30 | 167 | 34 | ||||||||||||
| Accounts payable and other accrued liabilities |
172 | 118 | (169 | ) | 73 | |||||||||||
| Income taxes payable |
(139 | ) | — | 875 | — | |||||||||||
| Deferred revenue |
(185 | ) | (229 | ) | (512 | ) | (641 | ) | ||||||||
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| Net cash provided by operating activities |
1,309 | 1,572 | 13,879 | 7,764 | ||||||||||||
| Cash flows from investing activities: |
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| Purchase of property and equipment |
(122 | ) | (255 | ) | (376 | ) | (612 | ) | ||||||||
| Capitalized patent costs |
(241 | ) | (236 | ) | (898 | ) | (533 | ) | ||||||||
| Investments in joint ventures, net |
— | (700 | ) | (692 | ) | (2,100 | ) | |||||||||
| Sale or maturity of marketable securities |
48,544 | 6,536 | 117,680 | 60,304 | ||||||||||||
| Purchase of marketable securities |
(46,908 | ) | (6,674 | ) | (122,132 | ) | (49,797 | ) | ||||||||
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| Net cash provided by (used in) investing activities |
1,273 | (1,329 | ) | (6,418 | ) | 7,262 | ||||||||||
| Cash flows from financing activities: |
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| Issuance of common stock |
845 | 822 | 1,448 | 1,555 | ||||||||||||
| Purchase of common stock |
(1,712 | ) | (3,947 | ) | (3,899 | ) | (21,594 | ) | ||||||||
| Cash dividends paid |
(782 | ) | — | (1,561 | ) | — | ||||||||||
| Excess tax benefit from stock-based awards |
263 | 291 | 1,801 | 792 | ||||||||||||
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| Net cash used in financing activities |
(1,386 | ) | (2,834 | ) | (2,211 | ) | (19,247 | ) | ||||||||
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| Net increase (decrease) in cash and cash equivalents (2) |
$ | 1,196 | $ | (2,591 | ) | $ | 5,250 | $ | (4,221 | ) | ||||||
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| Cash equivalents and marketable securities at beginning of period |
43,520 | 33,669 | 33,378 | 45,944 | ||||||||||||
| Cash equivalents and marketable securities at end of period |
43,080 | 31,216 | 43,080 | 31,216 | ||||||||||||
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| (2) Net (decrease) increase in cash, cash equivalents and marketable securities |
$ | (440 | ) | $ | (2,453 | ) | $ | 9,702 | $ | (14,728 | ) | |||||
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