Attached files
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| 8-K - FORM 8-K - Digimarc CORP | d490331d8k.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
info@liolios.com
FOR IMMEDIATE RELEASE
Digimarc Reports Fourth Quarter and Full Year 2012 Financial Results
2012 Operating Income Improved 128% Over 2011 on 23% Higher Revenues; Company
Declares Quarterly Dividend of $0.11 per Share
Beaverton, Ore. — February 21, 2013— Digimarc Corporation (NASDAQ: DMRC) reported financial results for the fourth quarter and fiscal year ended December 31, 2012.
Fourth Quarter 2012 Results
Revenues for the fourth quarter 2012 increased 4% to $9.3 million from $8.9 million in the same quarter a year ago. The increase was primarily attributable to higher licensing revenues from Verance and Intellectual Ventures (“IV”) as well as initial revenues for one month from Attributor Corporation, partially offset by the elimination of revenues from the suspension of operations of the Nielsen joint ventures in Q1 2012.
Operating income for the fourth quarter 2012 increased 60% to $1.9 million from $1.2 million in the same year-ago quarter. The increase reflects higher revenues and lower operating expenses.
Net income for the fourth quarter 2012 was $1.1 million or $0.14 per diluted share compared to $0.5 million or $0.06 per diluted share in the fourth quarter of 2011. The improvement in net income reflects increased revenues.
Full Year 2012 Results
Revenues in 2012 increased 23% to a record $44.4 million from $36.0 million in 2011. The improvement was driven primarily by the $8 million past due royalties payment from Verance received in Q1 2012 and from increased license payments from IV and Verance, partially offset by lower revenues from the suspension of the company’s joint ventures with Nielsen.
Operating income in 2012 increased 128% to $14.6 million from $6.4 million in 2011. The improvement reflects increased revenues, partially offset by slightly higher operating expenses as a result of the company’s recent acquisition of Attributor Corporation in December 2012.
Net income in 2012 increased 46% to $8.3 million or $1.12 per diluted share from $5.7 million or $0.76 per diluted share in 2011. The improvement primarily reflects increased revenues. Net income for 2011 includes losses from the suspended joint ventures as well as the reversal of the valuation allowance against deferred tax assets.
At December 31, 2012, cash, cash equivalents and marketable securities totaled $39.1 million, up from $33.4 million at December 31, 2011. This increase is net of the $5.4 million paid in connection with the Attributor acquisition.
On February 20, 2013, Digimarc declared a quarterly dividend of $0.11 per share on the outstanding common shares, payable on March 11, 2013 to shareholders of record at the close of business on March 4, 2013. The aggregate amount of the quarterly dividend payment is expected to be approximately $800,000.
The current investor presentation is available on Digimarc’s website at:
http://www.digimarc.com/investors/presentations
Conference Call
Digimarc will hold a conference call later today (Thursday, February 21, 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 until March 7, 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#: 10340926
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 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.
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Digimarc Corporation
Income Statement Information
(in thousands, except per share amounts)
(Unaudited)
| Three-Month Information | Twelve-Month Information | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenue: |
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| Service |
$ | 2,519 | $ | 3,053 | $ | 10,792 | $ | 12,395 | ||||||||
| License & subscription |
6,795 | 5,872 | 33,583 | 23,644 | ||||||||||||
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| Total revenue |
9,314 | 8,925 | 44,375 | 36,039 | ||||||||||||
| Cost of revenue: |
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| Service |
1,373 | 1,775 | 5,917 | 6,638 | ||||||||||||
| License & subscription |
275 | 81 | 591 | 299 | ||||||||||||
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| Total cost of revenue |
1,648 | 1,856 | 6,508 | 6,937 | ||||||||||||
| Gross profit: |
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| Service |
1,146 | 1,278 | 4,875 | 5,757 | ||||||||||||
| License & subscription |
6,520 | 5,791 | 32,992 | 23,345 | ||||||||||||
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| Total gross profit |
7,666 | 7,069 | 37,867 | 29,102 | ||||||||||||
| Gross margin: |
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| Service |
45 | % | 42 | % | 45 | % | 46 | % | ||||||||
| License & subscription |
96 | % | 99 | % | 98 | % | 99 | % | ||||||||
| Total revenue |
82 | % | 79 | % | 85 | % | 81 | % | ||||||||
| Operating expenses: |
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| Sales and marketing |
913 | 1,051 | 3,827 | 4,336 | ||||||||||||
| Research, development and engineering |
2,277 | 1,710 | 8,741 | 7,327 | ||||||||||||
| General and administrative |
2,226 | 2,839 | 9,457 | 9,956 | ||||||||||||
| Intellectual property |
329 | 268 | 1,248 | 1,094 | ||||||||||||
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| Total operating expenses |
5,745 | 5,868 | 23,273 | 22,713 | ||||||||||||
| Operating income |
1,921 | 1,201 | 14,594 | 6,389 | ||||||||||||
| Net loss from joint ventures |
— | (784 | ) | (1,107 | ) | (2,714 | ) | |||||||||
| Interest income, net |
40 | 46 | 179 | 195 | ||||||||||||
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| Income before income taxes |
1,961 | 463 | 13,666 | 3,870 | ||||||||||||
| (Provision) benefit for income taxes |
(907 | ) | (10 | ) | (5,394 | ) | 1,786 | |||||||||
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| Net income |
$ | 1,054 | $ | 453 | $ | 8,272 | $ | 5,656 | ||||||||
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| Earnings per common share: |
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| Net income per common share - basic |
$ | 0.15 | $ | 0.07 | $ | 1.16 | $ | 0.84 | ||||||||
| Net income per common share - diluted |
$ | 0.14 | $ | 0.06 | $ | 1.12 | $ | 0.76 | ||||||||
| Weighted average common shares outstanding - basic |
6,791 | 6,699 | 6,757 | 6,741 | ||||||||||||
| Weighted average common shares outstanding - diluted |
6,966 | 7,279 | 6,989 | 7,430 | ||||||||||||
| Cash dividends declared per common share: |
$ | 0.11 | $ | — | $ | 0.33 | $ | — | ||||||||
Digimarc Corporation
Balance Sheet Information
(in thousands)
(Unaudited)
| December 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| Assets |
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| Current assets: |
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| Cash and cash equivalents (1) |
$ | 6,866 | $ | 3,419 | ||||
| Marketable securities (1) |
25,403 | 22,244 | ||||||
| Trade accounts receivable, net |
4,216 | 3,502 | ||||||
| Other current assets |
1,016 | 1,306 | ||||||
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| Total current assets |
37,501 | 30,471 | ||||||
| Marketable securities (1) |
6,787 | 7,715 | ||||||
| Property and equipment, net |
1,453 | 1,395 | ||||||
| Intangible assets, net |
6,721 | 2,808 | ||||||
| Goodwill |
1,114 | — | ||||||
| Investments in joint ventures |
— | 415 | ||||||
| Deferred tax assets, net |
3,589 | 2,634 | ||||||
| Other assets |
166 | 355 | ||||||
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| Total assets |
$ | 57,331 | $ | 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 |
$ | 1,143 | $ | 952 | ||||
| Deferred revenue |
2,512 | 2,660 | ||||||
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| Total current liabilities |
3,655 | 3,612 | ||||||
| Deferred rent and other long-term liabilities |
673 | 464 | ||||||
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| Total liabilities |
4,328 | 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 |
39,869 | 34,511 | ||||||
| Retained earnings |
13,077 | 7,149 | ||||||
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| Total shareholders’ equity |
53,003 | 41,717 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 57,331 | $ | 45,793 | ||||
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| (1) | Aggregate cash, cash equivalents, short- and long-term marketable securities was $39,056 and $33,378 at December 31, 2012 and 2011, respectively. |
Digimarc Corporation
Cash Flow Information
(in thousands)
(Unaudited)
| Three-Month Information | Twelve-Month Information | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Cash flows from operating activities: |
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| Net income |
$ | 1,054 | $ | 453 | $ | 8,272 | $ | 5,656 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization of property and equipment |
156 | 139 | 600 | 613 | ||||||||||||
| Amortization and write-off of intangibles |
172 | 38 | 385 | 143 | ||||||||||||
| Stock-based compensation |
1,054 | 1,178 | 5,256 | 4,216 | ||||||||||||
| Net loss from joint ventures |
— | 784 | 1,107 | 2,714 | ||||||||||||
| Deferred income taxes |
(207 | ) | (202 | ) | (284 | ) | (3,640 | ) | ||||||||
| Tax benefit from stock-based awards |
1,303 | 274 | 3,688 | 1,871 | ||||||||||||
| Excess tax benefit from stock-based awards |
(1,243 | ) | (274 | ) | (3,044 | ) | (1,066 | ) | ||||||||
| Changes in operating assets and liabilities: |
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| Trade accounts receivable, net |
(59 | ) | (82 | ) | (187 | ) | (21 | ) | ||||||||
| Other current assets |
264 | 109 | 219 | 240 | ||||||||||||
| Other assets |
34 | 73 | 201 | 107 | ||||||||||||
| Accounts payable and other liabilities |
(934 | ) | (741 | ) | (228 | ) | (668 | ) | ||||||||
| Deferred revenue |
128 | 729 | (384 | ) | 88 | |||||||||||
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| Net cash provided by operating activities |
1,722 | 2,478 | 15,601 | 10,253 | ||||||||||||
| Cash flows from investing activities: |
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| Purchase of property and equipment |
(194 | ) | (66 | ) | (570 | ) | (678 | ) | ||||||||
| Capitalized patent costs and purchased intellectual property |
(272 | ) | (168 | ) | (1,170 | ) | (712 | ) | ||||||||
| Investments in joint ventures, net |
— | — | (692 | ) | (2,100 | ) | ||||||||||
| Business acquisitions, net of cash acquired |
(5,092 | ) | — | (5,092 | ) | — | ||||||||||
| Sale or maturity of marketable securities |
26,534 | 14,385 | 144,214 | 74,689 | ||||||||||||
| Purchase of marketable securities |
(24,312 | ) | (15,247 | ) | (146,444 | ) | (65,044 | ) | ||||||||
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| Net cash provided by (used in) investing activities |
(3,336 | ) | (1,096 | ) | (9,754 | ) | 6,155 | |||||||||
| Cash flows from financing activities: |
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| Issuance of common stock |
212 | 96 | 1,660 | 1,651 | ||||||||||||
| Purchase of common stock |
(861 | ) | (452 | ) | (4,760 | ) | (22,046 | ) | ||||||||
| Cash dividends paid |
(783 | ) | — | (2,344 | ) | — | ||||||||||
| Excess tax benefit from stock-based awards |
1,243 | 274 | 3,044 | 1,066 | ||||||||||||
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| Net cash used in financing activities |
(189 | ) | (82 | ) | (2,400 | ) | (19,329 | ) | ||||||||
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| Net increase (decrease) in cash and cash equivalents (2) |
$ | (1,803 | ) | $ | 1,300 | $ | 3,447 | $ | (2,921 | ) | ||||||
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| Cash equivalents and marketable securities at beginning of period |
43,080 | 31,216 | 33,378 | 45,944 | ||||||||||||
| Cash equivalents and marketable securities at end of period |
39,056 | 33,378 | 39,056 | 33,378 | ||||||||||||
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| (2) Net increase (decrease) in cash, cash equivalents and marketable securities |
$ | (4,024 | ) | $ | 2,162 | $ | 5,678 | $ | (12,566 | ) | ||||||
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