Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Executives

Brett Maas - Hayden IR

Randy S. Selman - Chairman of the Board, President, Chief Executive Officer

Robert E. Tomlinson - Chief Financial Officer, Senior Vice President

Analysts

Colin Gillis - Brigantine Advisors

Michael Potter - Monarch Capital

Onstream Media Corp. (OTCPK:ONSM) F2Q09 Earnings Call May 18, 2009 4:30 PM ET

Operator

Good afternoon and welcome to the Onstream Media Corporation conference call to discuss the company’s fiscal 2009 second quarter financial results. (Operator Instructions) At this time, I would like to turn the floor over to your host, Brett Maas of Hayden IR. Sir, you may begin.

Brett Maas - Hayden IR

Thank you. Good afternoon and welcome to the Onstream Media conference call. I would like to point out that during the course of the conference call, there may be statements made related to future results of the company that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results, performance, or achievements could differ materially from those anticipated in such forward-looking statements and as a result of certain factors, including those set forth in the company’s filings with the Securities and Exchange Commission.

It also should be noted that the webcast for today’s conference call may be found on the Internet by visiting the Onstream Media corporate website at www.onstreammedia.com and then selecting company at the top of the web page, and then clicking on press releases. At the web page, you will find a link to the news release we issued to announce the company’s fiscal 2009 second quarter financial results and webcast. An archived version of the webcast will be shortly accessible from the press release page and will be available for at least the next 12 months pursuant to SEC guidelines.

Finally, those interested in reviewing our recently filed 10-Q, which contains all the financial information being discussed today, can find this document also via our corporate website by selecting company and under that heading, investor relations and then clicking on SEC filings, where all our recent SEC filings can be found, as well as via the EDGAR database directly at www.sec.gov and then search for company filings.

At this time, I would like to introduce Randy Selman, President and Chief Executive Officer of Onstream Media. Randy, the floor is yours.

Randy S. Selman

Good afternoon and thank you for joining us. Today we will review our results for the second quarter and first six months of fiscal 2009 for the period ended March 31, 2009. We will also update our overall strategic progress.

With me today is our Chief Financial Officer, Robert Tomlinson. Hopefully you have all had the opportunity to review our financial results, which were release Friday after the close of the market.

Despite a very nervous corporate environment and volatile economy, we were able to maintain revenue levels and generate operating income during the quarter from both of our segments. In addition, on a sequential basis comparing the second quarter of 2009 to the first quarter of 2009, we showed improvement in our consolidated gross profit margin, both in actual dollars and as a percentage of revenue, and reduced our cash burn. In fact, during the month of March, we generated positive cash flow from operating activities before changes in current assets and liabilities.

Onstream management remains focused on improving our operational efficiency and growing our business during the remainder of 2009, following a period of strategic investment for Onstream starting in fiscal 2008 and continuing through the present.

In previous calls, I have discussed the expense reduction initiatives we put in place and I will provide an update on these activities during this call.

In addition, I will provide an update on our successes with resellers, commercial customers of our webcasting, audio and web conferencing, and the MST business, and the progress we are making with our exciting iEncode product.

At this point, I would like to briefly mention an exciting new product that we are developing, which we expect to launch during the second half of this calendar year. The concept of this product is to encourage our clients to use several of our product offerings, not just a single product. This product will incorporate DMST, including user-generated video, pay-per-view, streaming publisher, along with webcasting and web-conferencing capabilities, all in one platform. We think with this product, there is a potential for substantial revenue improvement realized from each one of our clients. I just wanted to mention this new product briefly on this call, as you will hear more about it late this summer as it becomes an important part of our overall strategy for the future.

During the second quarter, in addition to the approximately 1,700 webcasts we produced for our regular webcasting clients, we performed two noteworthy webcasting productions -- one for an existing client, CERA, for the CERA Week energy conference, and one for a new client, Net Music Communities, for a series of 15 webcasts of concerts by The Allman Brothers Band from the Beacon Theater in New York City.

In addition, in April we announced that we expanded our contract with the U.S. Nuclear Regulatory Commission and working through a sub-contractor, added a new government customer, The Department of Interior Mining Management Service.

Our Infinite conferencing division also recently signed a master agency agreement with Presidio Network Solutions, a leading provider of business enablement and telecommunications solutions. The agreement is the first systems integrated relationship for Infinite.

Finally, another noteworthy point is our DMST platform now has over 350 clients, including major accounts using the service.

Before I further discuss these and other business developments, I will turn it over to Robert for the review of the financials.

Robert E. Tomlinson

Thank you, Randy. Good afternoon. As you can see on this slide, for the three months ended March 31, 2009, our consolidated operating revenue was approximately $4.4 million, an increase of approximately $96,000, or 2.2%, from the $4.3 million in the corresponding quarter in the prior fiscal year. To break this down further, the audio and web conferencing group revenues were approximately $2.4 million for the second quarter, a decrease of approximately $7,500 or 0.3% from the corresponding prior fiscal year quarter.

Digital media services group revenues were approximately $2 million for the three months ended March 31, 2009, which represented an increase of approximately $104,000 or 5.5% over the corresponding period of the prior fiscal year.

This increase was primarily due to an approximately $57,000, 4.4% increase, in webcasting revenues for the three months ended March 31, 2009, as compared to the corresponding period of the prior fiscal year. The number of webcasts produced increased to approximately 1,700 webcasts for the three months ended March 31, 2009, versus approximately 1,650 webcasts for the corresponding period of the prior fiscal year.

This increase in digital media services group revenue also includes an approximately $14,000, 3.1% increase in DMSP and hosting division revenues over the corresponding period of the prior fiscal year. This increase in DMSP and hosting division revenues was comprised of an approximately $85,000 increase in DMSP store and stream revenues, partially offset by an approximately $31,000 decrease in hosting and bandwidth charges to certain larger DMSP customers serviced by our smart encoding division.

For the six months ended March 31, 2009, our consolidated operating revenue was approximately $8.8 million, an increase of approximately $23,000, 0.3%, from the corresponding period of the prior fiscal year, primarily due to increased revenues of the digital media services group, partially offset by decreased revenues of the audio and web conferencing services group.

Digital media services group revenues were approximately $4 million for the six months ended March 31, 2009, which represented an increase of approximately $153,000, 3.9%, over the corresponding period of the prior fiscal year. This increase was primarily due to an approximately $140,000, 19.2% increase in DMSP and hosting division revenues over the corresponding period of the prior fiscal year. This increase in DMSP and hosting division revenues was comprised of an approximately $192,000 increase in DMSP store and stream revenues, and an approximately $32,000 increase in hosting and bandwidth charges to certain larger DMSP customers serviced by our smart encoding division.

This slide shows a summary of our fiscal second quarter 2009 financial results. As you can see, our gross margin percentage was 68.5%, up 130 basis points, compared to 67.2% in the second fiscal quarter last year and up 80 basis points sequentially from our first fiscal 2009 quarter.

Our consolidated net loss for the three months ended March 31, 2009 was approximately $1.9 million, or $0.04 loss per share, comparable to a loss of approximately $1.9 million, or $0.05 loss per share for the corresponding period of the prior fiscal year.

Although the reported net loss for both quarters, 2009 and 2008, both second quarters 2009 and 2008, are similar in amount, it is important to note that the 2009 second quarter’s net loss includes a $540,000 write-off of deferred acquisition costs related to the cancelled Narrowstep acquisition versus no comparable amount in the prior fiscal year quarter.

This slide shows a summary of our year-to-date 2009 financial results. Gross margin for the fiscal 2009 six-month period was approximately $6 million, reflecting a gross profit margin percentage of 68.1%, compared to gross margin of approximately $6 million, reflecting a gross profit margin of 68.7% for the comparable fiscal 2008 period.

Our consolidated net loss for the six months ended March 31, 2009, was approximately $9.1 million, $0.21 loss per share, as compared to a loss of approximately $3.6 million, $0.09 loss per share, for the prior fiscal year period, an increase in our loss of approximately $5.5 million. However, the increased net loss was due to a $5 million non-cash charge for impairment of good will and other intangible assets in the current fiscal year period versus no comparable amount in the prior fiscal year period.

Similarly to my comments related to the fiscal 2009 three-month period, it is important to note that the fiscal 2009 six-month period net loss also includes the same $540,000 write-off of deferred acquisition costs related to the cancelled Narrowstep acquisition versus no comparable amount in the prior fiscal year period.

This slide provides more detail on our operating cash flow. Although the cash flow statement in the 10-Q is only presented on a cumulative six-month basis, this slide shows the two quarters of fiscal 2009 on a separated basis. A significant non-cash expense in our second quarter results was a $540,000 write-off of deferred acquisition costs for terminating the Narrowstep acquisition. Taking into account this and the other non-cash expenses, including depreciation and amortization, as well as employee compensation and professional fees paid with equity, the net loss of approximately $1.9 million for the second quarter of fiscal 2009 included approximately $1.8 million of non-cash items. This resulted in cash used in operations before working capital changes of just $142,000 for the three months ended March 31, 2009.

The second quarter of fiscal 2009 burn of $142,000 before working capital changes is better than last year’s second quarter burn of $228,000. Furthermore, this operating cash burn of $142,000 for the second quarter of fiscal 2009 represents an improvement from the operating cash burn of $225,000 for the first fiscal quarter of 2009.

Our operating cash flow is expected to continue to improve during the June 2009 quarter, as February 2009 payroll and other cost reductions are included on a full quarter basis.

This chart breaks the second quarter operating cash flow down further by month. You can see that as the quarter progressed and our payroll and other expense reduction initiatives that started in February began to have an impact, we reduced our operating cash burn and in fact, during March 2009 we generated more than $100,000 positive operating cash flow before changes in current assets and liabilities. Although the trend of relative cash flow by month within a given quarter is also affected by other factors, such as the distribution of revenues within that quarter, based on the current positive trend, we expect to report positive operating cash flow before changes in current assets and liabilities during the third quarter of 2009.

Turning to the balance sheet, as of March 31, 2009, we had approximately $506,000 in cash and the company stockholders’ equity was approximately $19.4 million.

During April 2009, we received $750,000 from Rockridge Capital Holdings, an entity controlled by one of our largest shareholders, under an agreement which allows for total borrowings of up to $1 million.

The financing proceeds will be used to advance certain company initiatives, which Randy will expand on in a few minutes, and were also used to pay certain debt and meet other working capital requirements.

I would now like to turn it back over to Randy.

Randy S. Selman

Thank you, Robert, for the overview of our fiscal 2009 second quarter operating results and financial position. Year-to-date, we produced approximately 3,600 webcasts compared to 3,200 webcasts in the comparable period of the prior year. However, since most of the 400 additional webcasts were attributable to audio only events with a lower per event cost than video events, the average revenue per webcast event decreased to approximately $796 for the current fiscal year period as compared to approximately $889 for the prior fiscal year period. However, total webcasting revenue increased by $24,000 for the six months ended March 31, 2009, as compared to the comparable period of the prior year.

Our customer base continues to expand, as more and more clients are turning to Onstream with innovative ways to use our products and services to monetize the distribution of rich media content, such as live presentations. For example, as I mentioned earlier, during March we successfully completed a 15-day webcast for Net Music Communities, the owner of the website moogus.com. Thousands of fans of the Allman Brothers Band participated in this three-week long pay-per-view event for the band’s historic 40th anniversary concert series at The Beacon Theater in New York City. This innovative live online and in-person event demonstrates that entertainment can have a much broader audience than what the limitations of physical attendance offers. It can extend the reach of any act’s performance to potentially all its worldwide fan base simultaneously, and it can significantly expand the revenue potential of a live event.

The concerts were shot in high definition and seen live by Allman Brothers fans over the Internet in TV-like quality and heard with CD-like sound. This concert series also generated hundreds of thousands of dollars in incremental revenue for moogus.com. This new on-site, online format offers entertainers another means of capitalizing on their material and further proves that fans are willing to pay for concert quality content.

In addition, as I also mentioned, we provided the webcasting for this CERA Week energy conference in February. Our efforts to penetrate the trade show and conference market continue to produce tangible results.

In January 2008, we introduced iEncode, a low cost appliance and subscription based webcasting service that puts self-administered, highly affordable Internet broadcasting power into the hands of users. Featuring on-premises encoding for a higher quality signal, the iEncode appliance services as a front-end to Onstream's full featured visual webcast software that is utilized by thousands of corporations worldwide.

We are nearing the completion of iEncode version 2 and expect to launch the revised product during the third fiscal quarter. The new version significantly improves the user interface and makes the iEncode virtually plug and play with its automated self-provisioning, all based on customer input from the prior version.

The new version will also be provided in three formats -- standard, high definition, and desktop share, or DTS, which provides the ability to share a user’s desktop, which is one of the key applications of the web conferencing and now available in a webcast.

In addition, we continued to make progress in developing European and Asian distribution agreements which will open sales channels for this innovative product overseas.

Just last month, Georgetown University utilized our iEncode solution to webcast President Obama’s “A New Foundation for America” speech. This very public demonstration of our technology in action helped to validate the application. In addition, we helped Georgetown to extend the reach of this event by helping them port the webcast to iTunes so people could download the video directly to their iPod or their computer to watch it offline. This webcast was part of an ongoing series of Internet broadcasts that Georgetown University’s office of communications provides for high profile guests visiting the campus. These sessions address the most important current issues, including healthcare, leadership, socio-economic, religious, health, environment, corporate, and world affairs.

We continue to expect that each iEncode customer will generate in excess of $20,000 per year in revenues, since the iEncode appliance contains almost the entire required infrastructure and it is client administered, there is very little or no corresponding costs associated with scaling the product.

Our infinite audio and webcasting conferencing division -- I’m sorry, web conferencing division reported all-time record revenue of $1.9 million for the three months ended March 31, 2009. So far in fiscal 2009, we have added several large resellers, including the master services agreement with Presidio announced by us in April, and this should help Infinite to accelerate its growth trajectory. We also expect that our previously announced partnership with Pro Forma will also begin to generate incremental revenues during the next quarters.

To further differentiate our conference services, we teamed up with Peer Port to co-develop and deliver Web Meet Community, an integrated suite of virtual collaboration services enabling organizations and business professionals to work together more effectively. Its robust feature set includes audio and web conferencing, messaging, chat, calendaring, action item tracking, and document management. By delivering these services through an intuitive, easy-to-use interface, Web Meet Community fosters team collaboration across the entire communication spectrum, enabling the exchange of business information. The services are provided within the context of private communities, essentially self-organized, secure environments which host both members and their data. Each community can accommodate professionals regardless of their company or business affiliation and membership in the community can easily be modified to reflect the ever-changing composition of a project team.

The combination of services delivered by Peer Port and Infinite under the Web Meet Community brand name, coupled with industry-leading price points, creates a compelling opportunity for small or medium-sized businesses to take advantage of the new Internet enabled collaborations and communications paradigm.

Our DMSP division continues to grow. We reported that we had approximately 314 clients, including 21 major clients as of the end of the second fiscal quarter. As I mentioned, we are currently at over 350 total clients and we continue to expand our DMSP customer base. This is in part due to referrals from [inaudible], but our marketing initiatives are also generating leads.

We also expect the recently launched streaming publisher, our latest upgrade to the DMSP platform, to contribute meaningfully to the expansion of the DMSP customer base. Streaming publisher is designed to provide enhance capabilities for advanced users such as publishers, media companies, and other content developers, and is a significant step in our objective to address the developing online video advertising market. Streaming publisher includes features such as automated transcoding, the ability to convert media files into multiple file formats, player gallery, the ability to create various video players, as well as advanced permissioning, detailed usage reports, security, and syndication features. Users of the basic store and stream version of DMSP may easily upgrade to the streaming publisher version for a higher monthly fee.

Our new product introduction that I mentioned earlier in the call will help us to expand the usage of DMSP, as well as almost all of our other products.

Finally, as Robert mentioned earlier, we secured a $1 million line of credit in April, drawing an immediate $750,000 and giving us access to $250,000 more. Details of the financing were included in our just filed 10-Q, as well as the previously filed 8-K.

I would like to add that we carefully looked at several options and specifically evaluated three possible financing vehicles before selecting this one and we think the terms are fair, considering how challenging the credit market is for small companies. Many of the traditional debt or equity sources are simply not participating with small cap companies anymore. This line of credit was important for Onstream. Some of the proceeds will be used to consolidate our infrastructure in an effort to reduce operating expenses. Previously we had some of our infrastructure hosted in various co-location facilities. We are consolidating much of this into fewer locations and expect that this will reduce our operating expenses beginning in July.

We also are funding the support and marketing infrastructure for iEncode based on expectations that this product will grow significantly in the coming months. In addition, this money will fund development of the new product offering I alluded to earlier in this call and will also help us to meet certain working capital requirements.

I would like to thank you all for your time and attention today and with the help of our Operator, we will now open it up for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Colin Gillis of Brigantine Advisors.

Colin Gillis - Brigantine Advisors

Can you talk a little bit about the pace of business in the quarter, and any change you saw sequentially through the month?

Randy S. Selman

Actually, revenue was increasing from the beginning of the quarter to the end. I think in fact I can give you some revenue numbers per month. Starting in January, the revenue level was $1.3 million; February, just under 1.5; March, just under 1.6. So that shows you with just a little bit of revenue incremental growth the cost cuts that we put in place certainly turned us cash flow positive and we expect that that will now continue. And that was a very rough quarter. We had a lot of events cancelled due to the economic conditions that were postponed, so we are hoping to see those events come in in this quarter. And this quarter so far is off to a pretty good start. We should be seeing further sequential improvement on the revenue side throughout the rest of this quarter.

Once our iEncode and new products are introduced later this year, I think we are going to start to see some really substantial revenue growth, something we really have, and I know this, been lacking over the last couple of years. Obviously we have been building products and we are really looking forward to introducing these products and like I said, DMSP has started to really grow. We are up to over 350 clients, so we are starting to see some traction and it will reflect in the revenues coming up.

Colin Gillis - Brigantine Advisors

And then just turning to, on the entertainment side, the 15 live broadcast generated some strong industry buzz. Can you go out there and make outbound sales efforts for these types of events, and highlight the fact that it’s additional revenue streams to these companies or is this really just sort of an inbound event?

Randy S. Selman

No, no -- there’s definitely marketing going on. We are working on conjunction with Net Music Communities to go after that marketplace. There are several events in the works right now. They are very sizable events. You know, the dollar amounts are pretty big and so obviously it is something that some people have to get over, the price ticket, in order for them to participate in it. But moogus and Net Music Communities has a great formula and I think overall they should do very well in attracting more bands and more acts to do online webcasting for their concerts.

It’s kind of like adding another day or two to the venue, to their concert tour in basically online venues, and so as a result, they can see a lot more revenue really not to do much more work.

Colin Gillis - Brigantine Advisors

Thank you.

Operator

(Operator Instructions)

Randy S. Selman

In the meanwhile, I have a question from Jeff Miller -- Jeff says you stated in your earnings release that the company has cut $65,000 per month in operating costs, therefore is the company operating at full capacity? Can you increase revenue with current personnel and operations at this reduced monthly burn?

Yes, the cuts that we made did not affect our operations. Obviously we are now trying to move the company from the development stages more towards the sales and marketing stages, so we are going to ease into that, try to bring that online, heavier the coming quarters and so our entire focus for the latter half of this year is to improve sales results, now that we’ve got the company pretty much cash flow positive, which was the directive both from our shareholders and the board. We’ll be definitely focusing on trying to increase our sales.

So no, the cuts did not affect that and we believe that we can create substantial more revenue before we have to add any additional personnel.

Operator

We do have a question from the phone side. It comes from Michael Potter of Monarch Capital.

Michael Potter - Monarch Capital

Randy, you mentioned that the, and it was in the release with regard to the financing, can you go over the terms of the financing, please?

Randy S. Selman

Certainly. The financing was for a total of $1 million. We borrowed $750,000 of it so far. There’s a balance of $250,000 whenever we are -- if we need it, we can take it down. The financing was set up as a 12% annual monthly payment with a balloon payment of $350,000 at the end of the two-year period, so we make monthly payments to pay it down and then at the end, we have a balloon payment for the balance.

We paid 150,000 shares, which was negotiated at the time when the stock was $0.15, it just happened to be that week, otherwise we probably would have been a little bit more negotiable on the number of shares but that time was the -- they were looking for a specific yield and we talked to three financing firms. This was the best terms for the company of the three. I can tell you that the terms of the other two weren’t as generous as our larger shareholder made these -- in fact, he basically took the best one of those other two and improved on it so that we could make it a tolerable financing. It is tough out there, Mike.

Michael Potter - Monarch Capital

Okay. So it’s 12% coupon with a two-year balloon?

Randy S. Selman

Oh, I’m sorry, that was 1.5 million, not 150,000 shares.

Michael Potter - Monarch Capital

A million --

Randy S. Selman

Five-hundred thousand shares, not 150,000.

Michael Potter - Monarch Capital

-- five-hundred thousand shares at $0.15?

Randy S. Selman

Right.

Michael Potter - Monarch Capital

That we sold or that --

Randy S. Selman

Were part of the financing -- to get the lender to make the investment.

Michael Potter - Monarch Capital

Okay. So then the cost of capital is significantly higher than 12% coupon?

Randy S. Selman

Absolutely. Over the two-year period, the yield increases up to -- considerably higher than 12%. Do you have a number?

Robert E. Tomlinson

It’s in the 40% range, depends on what the pricing of the shares are and what day you use, but basically in the 40% range.

Randy S. Selman

And the other two, just to give you a comparable number, one of the yields was 82% and the other one was in the 60s.

Michael Potter - Monarch Capital

Okay. And --

Randy S. Selman

The need to raise capital at this point wasn’t our first choice but if we are really going to make a change in the revenue levels of the company, we really needed to raise this capital now so that we could, number one, put in the infrastructure to grow iEncode and two, to fund the final development of the new product. Obviously some of the capital was used for working capital. We are -- we did run a deficit so now that we turning cash flow positive, we hopefully should not have to use too much more capital for operating results.

Michael Potter - Monarch Capital

But when do you anticipate reaching at least on a free cash flow break even?

Randy S. Selman

I would think that we’ll see contribution from our new products in the third and fourth quarters, so probably by the end of the year, we should be there.

Michael Potter - Monarch Capital

By the end of the year, you think you’ll be free cash flow positive?

Randy S. Selman

Yes, of the calendar year.

Michael Potter - Monarch Capital

And is this financing enough to get us there?

Randy S. Selman

Well, we identified in the Q that we would probably need to see a growth in our revenues but that’s assuming that all of our CapEx is paid in cash and that we are going to not defer any of our CapEx. So based on the current business plan and the current projection, that’s the number. But that number could be significantly different. But we do hope to see that kind of a change in our sales growth, if not better than that, over the coming quarters.

Michael Potter - Monarch Capital

Okay. And what is the CapEx budget for the year?

Robert E. Tomlinson

We have disclosed in the Q that for the next year, we would spend $2 million in CapEx but there’s a lot of caveats to that. Basically a lot of it is scheduled -- we could schedule that how we want to do it. There’s a certain base level of development obviously but there’s a number of those items that we believe that at some point in time we’ll need to do, so for disclosure, we’ve disclosed $2 million, but that’s more of a maximum case budget.

Randy S. Selman

That would be based on obviously if we had the corresponding sales levels, we would expend those kind of numbers but to show that level of expense, we would have to show an 18% sales growth.

Michael Potter - Monarch Capital

Okay, so what was the CapEx through the first two quarters?

Robert E. Tomlinson

The historical CapEx?

Michael Potter - Monarch Capital

No, what was the CapEx for the first two quarters of this year?

Robert E. Tomlinson

Right, through March?

Michael Potter - Monarch Capital

Yes.

Robert E. Tomlinson

We expended CapEx of approximately -- of pure CapEx was about -- approximately $600,000 and that’s excluding items related to Narrowstep, which technically speaking are CapEx but we really don’t count it as CapEx, so $600,000 of pure CapEx.

Michael Potter - Monarch Capital

And what’s the budget for the third and fourth quarter?

Robert E. Tomlinson

We really haven’t broken it out in terms of third and fourth -- we’ve broken it out only based on a 12-month running cycle. Some of these are -- we can move some of these depending on sales and other volume, other things that have more sales volume, so we’ve talked about 2 million for a 12-month period.

Michael Potter - Monarch Capital

But that 12-month period was for fiscal 2009 or that is for calendar 2009?

Robert E. Tomlinson

For the balance of 2009 and the first part of 2010.

Randy S. Selman

It would be for the 12 months starting with March 31st.

Michael Potter - Monarch Capital

Okay.

Robert E. Tomlinson

Yeah, so what Randy said, three quarters of this calendar year and then the March quarter --

Michael Potter - Monarch Capital

But that’s taking into consideration that if we get the ramp up -- I’m just talking what kind of maintenance CapEx is required throughout the balance of this fiscal year?

Robert E. Tomlinson

Even the historical amount that we’ve spent, the $600,000 that I just talked about, there’s a certain amount in that that we are flexible with that we choose to do. You say a base level, that’s what we have historically done. You can probably say if we continued as we had been, that’s what we would spend but there’s still a certain amount of that that we have flexibility to ramp up or ramp down, depending on other requirements.

Michael Potter - Monarch Capital

Okay. I am trying to kind of get what’s budgeted, really what our --

Randy S. Selman

Well, we’ve given you the 12-month budget. If you are looking at it on a quarterly basis, the number isn’t definite every quarter. In some quarters, we’ll have higher expenses, such as when we are building out infrastructure, and others we may not be doing anything so we won’t expend as much. So the 12-month budget is $2 million. Shorter term than that, I mean, I don’t think we can give you specifically what we are going to spend in the June quarter and what we are going to spend in the September quarter, because we are trying to ramp that CapEx based on sales growth.

Michael Potter - Monarch Capital

All right. I’ll get back in queue.

Operator

(Operator Instructions) Sir, there appear to be no further questions at this time.

Randy S. Selman

Okay. In that case, thank you again for joining us today. We look forward to reporting next quarter’s numbers to you and have a pleasant evening. Take care.

Operator

Thank you. This does conclude today’s teleconference. We thank you for your participation. You may disconnect your lines at this time and have a great day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Onstream Media F2Q09 (Qtr End 3/31/09) Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts