Digimarc Reports Second Quarter 2016 Financial Results

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July 26, 2016 4:05 PM UTC

BEAVERTON, Ore., July 26, 2016 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), the inventor of the Digimarc Discover® platform featuring the Digimarc Barcode for automatically identifying and interacting with virtually any media, reported financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Financial Results Revenue for the second quarter of 2016 totaled $5.5 million compared to $5.8 million in the same quarter a year-ago. The decrease was primarily due to lower service and subscription revenue.

Operating expenses for the second quarter of 2016 totaled $8.7 million compared to $7.4 million in the same quarter a year-ago. The increase was due to higher investment in sales, marketing, research, development, and engineering as the company addresses important opportunities in market development and delivery for Digimarc Discover and Digimarc Barcode.

Operating loss for the second quarter of 2016 totaled $5.3 million compared to an operating loss of $4.0 million in the same quarter a year-ago. The higher operating loss was primarily due to higher operating expenses. 

Net loss for the second quarter of 2016 totaled $5.3 million or $(0.62) per diluted share, compared to a net loss of $4.0 million or $(0.50) per diluted share in the second quarter of 2015.

At quarter-end, cash, cash equivalents and marketable securities totaled $31.9 million, compared to $35.9 million at March 31, 2016.

Conference CallDigimarc will hold a conference call later today (Tuesday, July 26, 2016) 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 here.

For those who wish to listen to the call via telephone, please dial the number below at least five minutes prior to the scheduled start time:

Toll-Free Number: 866-562-9934International Number: 706-679-0638Conference ID: 8340826

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 the inventor of the Digimarc Discover® platform featuring the imperceptible Digimarc Barcode for automatically identifying and interacting with virtually any media. The platform enables industrial scanners, smartphones, tablets and other computer interfaces to reliably, efficiently and economically identify traditional barcoded items, along with many other media objects. Digimarc Barcodes are imperceptible to people and do all that visible barcodes do, but perform better. They can be applied to virtually all forms of media. These remarkable capabilities have allowed Digimarc and its business partners to supply a wide range of patented consumer engagement, media management and security solutions across multiple consumer and government industry sectors. Digimarc owns an extensive intellectual property portfolio, with patents in digital watermarking, content identification and management, media object discovery, and intuitive computing more generally. For more information and the latest news, please visit www.digimarc.com and follow on Twitter at @Digimarc.

Forward-looking StatementsWith 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 market opportunities for Digimarc Discover and Digimarc Barcode, 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 are set forth in the company's Form 10-K for the year ended December 31, 2015 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

Six Month Information

June 30,

June 30,

June 30,

June 30,

2016

2015

2016

2015

Revenue:

   Service

$              3,148

$              3,235

$              6,398

$              6,736

   Subscription

1,494

1,670

2,957

3,386

   License

815

893

1,682

1,665

      Total revenue

5,457

5,798

11,037

11,787

Cost of revenue:

   Service

1,401

1,497

2,833

3,075

   Subscription

594

866

1,256

1,620

   License

99

86

195

170

      Total cost of revenue

2,094

2,449

4,284

4,865

Gross profit:

   Service

1,747

1,738

3,565

3,661

   Subscription

900

804

1,701

1,766

   License

716

807

1,487

1,495

      Total gross profit

3,363

3,349

6,753

6,922

Gross margin:

   Service

55%

54%

56%

54%

   Subscription

60%

48%

58%

52%

   License

88%

90%

88%

90%

      Percentage of gross profit to total revenue

62%

58%

61%

59%

Operating expenses:

   Sales and marketing

2,856

2,098

5,811

4,188

   Research, development and engineering

3,379

3,025

6,684

6,109

   General and administrative

1,976

1,980

4,146

4,186

   Intellectual property

462

291

896

658

      Total operating expenses

8,673

7,394

17,537

15,141

Operating loss

(5,310)

(4,045)

(10,784)

(8,219)

Other income, net

42

32

88

55

Loss before income taxes

(5,268)

(4,013)

(10,696)

(8,164)

(Provision) benefit for income taxes

(15)

1

(22)

2

Net loss

$             (5,283)

$             (4,012)

$           (10,718)

$             (8,162)

Earnings (loss) per common share:

Loss per common share - basic

$               (0.62)

$               (0.50)

$               (1.25)

$               (1.02)

Loss per common share - diluted

$               (0.62)

$               (0.50)

$               (1.25)

$               (1.02)

   Weighted average common shares outstanding - basic

8,587

8,029

8,560

7,995

   Weighted average common shares outstanding - diluted

8,587

8,029

8,560

7,995

 

Digimarc Corporation

Consolidated Balance Sheet Information

(in thousands)

(Unaudited)

June 30,

December 31,

2016

2015

Assets

Current assets:

Cash and cash equivalents (1)

$              9,557

$              3,160

Marketable securities (1)

22,378

33,027

Trade accounts receivable, net 

2,477

4,616

Other current assets 

1,435

1,487

Total current assets 

35,847

42,290

Marketable securities (1)

-

2,999

Property and equipment, net 

3,154

3,010

Intangibles, net 

6,469

6,613

Goodwill

1,114

1,114

Other assets

302

338

Total assets 

$            46,886

$            56,364

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable and other accrued liabilities

$              1,490

$              1,657

Deferred revenue

2,158

3,023

Total current liabilities 

3,648

4,680

Deferred rent and other long-term liabilities

511

226

Total liabilities 

4,159

4,906

Commitments and contingencies

Shareholders' equity:

   Preferred stock

50

50

   Common stock

9

9

   Additional paid-in capital

79,426

77,439

   Accumulated deficit

(36,758)

(26,040)

Total shareholders' equity 

42,727

51,458

Total liabilities and shareholders' equity 

$            46,886

$            56,364

(1)

 Aggregate cash, cash equivalents, short- and long-term marketable securities was $31,935 and $39,186 at June 30, 2016 and December 31, 2015, respectively.

 

Digimarc Corporation

Consolidated Cash Flow Information

(in thousands)

(Unaudited)

Six Month Information

June 30,

June 30,

2016

2015

Cash flows from operating activities:

  Net loss

$           (10,718)

$             (8,162)

  Adjustments to reconcile net loss to net cash used in operating activities:

    Depreciation and amortization and write-off of property and equipment

688

604

    Amortization and write-off of intangibles

639

520

    Change in allowance for doubtful accounts

-

16

    Stock-based compensation

2,707

2,480

  Changes in operating assets and liabilities:

      Trade accounts receivable

2,139

1,509

      Other current assets

52

36

      Other assets

36

74

      Accounts payable and other accrued liabilities

109

(160)

      Deferred revenue

(917)

(1,285)

        Net cash used in operating activities

(5,265)

(4,368)

Cash flows from investing activities:

    Purchase of property and equipment

(755)

(324)

    Capitalized patent costs

(436)

(428)

    Maturity of marketable securities

22,467

15,363

    Purchase of marketable securities

(8,819)

(12,412)

        Net cash provided by investing activities

12,457

2,199

Cash flows from financing activities:

    Exercise of stock options

309

1,129

    Purchase of common stock

(1,104)

(1,035)

        Net cash provided by (used in) financing activities

(795)

94

        Net increase (decrease) in cash and cash equivalents (2)

$              6,397

$             (2,075)

     Cash, cash equivalents and marketable securities at beginning of period

39,186

39,072

     Cash, cash equivalents and marketable securities at end of period

31,935

34,046

(2)    Net decrease in cash, cash equivalents and marketable securities

$             (7,251)

$             (5,026)

 

Logo - http://photos.prnewswire.com/prnh/20160106/319963LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/digimarc-reports-second-quarter-2016-financial-results-300304178.html

SOURCE Digimarc Corporation


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