Digimarc Reports Second Quarter 2012 Financial Results
Declares Quarterly Dividend of $0.11 per Share
BEAVERTON, Ore.--(BUSINESS WIRE)-- Digimarc Corporation (DMRC) reported financial results for the second quarter ended June 30, 2012.
Second Quarter 2012 Results
Revenues for the second quarter 2012 decreased 4% to $9.1 million from $9.5 million in the same quarter a year ago. The small decrease in revenues was primarily due to lower revenues from joint ventures with The Nielsen Company (Nielsen) as a result of the previously announced suspension of operations of the ventures in the first quarter of 2012.
Operating income for the quarter was $1.9 million, compared to $2.3 million in the second quarter of 2011. The lower income reflects the decrease in revenues noted above and increased investment in research and development.
Net income for the quarter was $1.2 million or $0.17 per diluted share. This compares to net income of $3.6 million or $0.50 per diluted share in the second quarter of 2011. The decrease is primarily due to the 2011 results having included a $2.6 million tax benefit that resulted from the reversal of a valuation allowance on the companys deferred tax assets.
At June 30, 2012, cash and cash equivalents, and marketable securities totaled $43.5 million, up from $33.4 million at December 31, 2011. The increase is primarily due to increased license revenues from Verance after settlement of litigation in the first quarter of 2012.
Digimarc declared a quarterly dividend of $0.11 per share on the outstanding common shares, payable on August 24, 2012 to shareholders of record at the close of business on August 10, 2012. The aggregate amount of the quarterly dividend payment is expected to be approximately $784,000.
Digimarc will hold a conference call later today (Thursday, July 26, 2012) to discuss second quarter 2012 results. 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 managements 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 August 9, 2012. Thereafter, the webcast will be archived and available on Digimarcs 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#: 99525122|
If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
Digimarc Corporation, 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.
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 providing inferences about future financial performance and amounts of future dividend payments, any related inferences regarding increases in 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, 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.
|Income Statement Information|
|(in thousands, except per share amounts)|
|Three-Month Information||Six-Month Information|
|June 30,||June 30,||June 30,||June 30,|
|License & subscription||6,503||6,308||20,501||12,330|
|Cost of revenue:|
|License & subscription||98||76||211||141|
|Total cost of revenue||1,583||1,690||3,393||3,339|
|License & subscription||6,405||6,232||20,290||12,189|
|Total gross profit||7,529||7,783||22,765||15,225|
|License & subscription||98||%||99||%||99||%||99||%|
|Sales and marketing||970||1,017||1,977||2,119|
|Research, development and engineering||2,146||1,884||4,144||3,659|
|General and administrative||2,191||2,270||4,949||5,117|
|Total operating expenses||5,598||5,437||11,680||11,462|
|Net loss from joint ventures||-||(698||)||(1,107||)||(1,235||)|
|Interest income, net||33||48||91||106|
|Income before provision for income taxes||1,964||1,696||10,069||2,634|
|(Provision) benefit for income taxes||(748||)||1,930||(3,854||)||1,930|
|Earnings per common share:|
|Net income per common share - basic||$||0.17||$||0.54||$||0.88||$||0.67|
|Net income per common share - diluted||$||0.17||$||0.50||$||0.84||$||0.62|
|Weighted average common shares outstanding - basic||6,737||6,696||6,738||6,780|
|Weighted average common shares outstanding - diluted||6,993||7,245||6,999||7,381|
|Balance Sheet Information|
|Cash and cash equivalents (1)||$||7,473||$||3,419|
|Marketable securities (1)||26,525||22,244|
|Trade accounts receivable, net||2,543||3,502|
|Other current assets||1,162||1,306|
|Total current assets||37,703||30,471|
|Marketable securities (1)||9,522||7,715|
|Property and equipment, net||1,357||1,395|
|Intangible assets, net||3,361||2,808|
|Investments in joint ventures||-||415|
|Deferred tax assets||2,229||2,634|
|Other assets, net||214||355|
|Liabilities and Shareholders' Equity|
|Accounts payable and other accrued liabilities||$||651||$||952|
|Income taxes payable||1,014||-|
|Total current liabilities||4,003||3,612|
|Deferred rent and other long-term liabilities||419||464|
|Commitments and contingencies|
|Additional paid-in capital||37,322||34,511|
|Total shareholders' equity||49,964||41,717|
|Total liabilities and shareholders' equity||$||54,386||$||45,793|
(1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $43,520 and $33,378 at June 30, 2012 and December 31, 2011.
|Cash Flow Information|
|Three-Month Information||Six-Month Information|
|June 30,||June 30,||June 30,||June 30,|
|Cash flows from operating activities:|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization of property and equipment||149||156||292||309|
|Amortization of intangibles||53||28||119||54|
|Net loss from joint ventures||-||698||1,107||1,235|
|Deferred income tax expense (benefit)||(649||)||(2,433||)||62||(2,433||)|
|Tax benefit from stock-based awards||558||501||1,893||501|
|Excess tax benefit from stock-based awards||(203||)||(501||)||(1,538||)||(501||)|
|Changes in operating assets and liabilities:|
|Trade accounts receivable, net||(73||)||(121||)||959||635|
|Other current assets||(34||)||(237||)||132||296|
|Other assets, net||58||(50||)||141||4|
|Accounts payable and other accrued liabilities||(264||)||(164||)||(341||)||(45||)|
|Income taxes payable||(46||)||-||1,014||-|
|Net cash provided by operating activities||1,922||2,325||12,535||6,188|
|Cash flows from investing activities:|
|Purchase of property and equipment||(106||)||(192||)||(254||)||(357||)|
|Capitalized patent costs||(176||)||(164||)||(622||)||(293||)|
|Investments in joint ventures, net||(692||)||(700||)||(692||)||(1,400||)|
|Sale or maturity of marketable securities||46,143||11,534||69,136||53,768|
|Purchase of marketable securities||(46,732||)||(14,808||)||(75,224||)||(43,123||)|
|Net cash (used in) provided by investing activities||(1,563||)||(4,330||)||(7,656||)||8,595|
|Cash flows from financing activities:|
|Issuance of common stock||531||733||603||733|
|Purchase of common stock||(1,388||)||(1,942||)||(2,187||)||(17,647||)|
|Cash dividends paid||(779||)||-||(779||)||-|
|Excess tax benefit from stock-based awards||203||501||1,538||501|
|Net cash used in financing activities||(1,433||)||(708||)||(825||)||(16,413||)|
|Net increase (decrease) in cash and cash equivalents (2)||$||(1,074||)||$||(2,713||)||$||4,054||$||(1,630||)|
|Cash equivalents and marketable securities at beginning of period||44,005||33,108||33,378||45,944|
|Cash equivalents and marketable securities at end of period||43,520||33,669||43,520||33,669|
|(2) Net increase (decrease) in cash, cash equivalents and marketable securities||$||(485||)||$||561||$||10,142||$||(12,275||)|
Chief Financial Officer
Michael McConnell, 503-469-4652
Liolios Group, Inc.
Investor Relations for Digimarc
Scott Liolios or Matt Glover, 949-574-3860
Source: Digimarc CorporationCopyright Business Wire 2012