Digimarc Reports Second Quarter 2017 Financial Results
BEAVERTON, Ore., July 26, 2017 /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, 2017.
Second Quarter 2017 Financial Results
Revenue for the second quarter of 2017 totaled $5.6 million compared to $5.5 million in the same quarter a year-ago.
Operating expenses for the second quarter of 2017 totaled $10.5 million compared to $8.7 million in the second quarter of 2016. The increase was primarily due to higher investment in sales, marketing, and engineering as the company continues to address important opportunities in market development and delivery of Digimarc Discover and Digimarc Barcode.
Operating loss for the second quarter of 2017 totaled $7.1 million compared to an operating loss of $5.3 million in the same quarter a year-ago. The higher operating loss was due to higher operating expenses.
Net loss for the second quarter of 2017 totaled $6.9 million or $(0.68) per diluted share, compared to a net loss of $5.3 million or $(0.62) per diluted share in the second quarter of 2016.
At quarter-end, cash, cash equivalents and marketable securities totaled $67.8 million, compared to $56.2 million at March 31, 2017. The increase was due to $17.7 million of net proceeds from the sale of common stock in a registered direct offering completed during the quarter.
Conference Call
Digimarc will hold a conference call later today (Wednesday, July 26, 2017) 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: 866-562-9934
International Number: 706-679-0638
Conference ID: 8340850
If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
About Digimarc
Digimarc Corporation (NASDAQ: DMRC) is a pioneer in the automatic identification of everyday objects such as product packaging and virtually any media, including print, images and audio. Based on the Intuitive Computing Platform (ICP(TM)), Digimarc provides innovative and comprehensive automatic recognition technologies to simplify search, and transform information discovery through unparalleled reliability, efficiency and security. Digimarc has a global patent portfolio, which includes over 1,100 granted and pending patents. These innovations include state-of-the-art identification technology, Digimarc Barcode, as well as Digimarc Discover® software for barcode scanning, and more. Digimarc is based in Beaverton, Oregon, with technologies deployed by major retailers and consumer brands, central banks, U.S. states, film companies and professional sports franchises, among others. Visit digimarc.com and follow us @digimarc to learn more about The Barcode of Everything(TM).
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 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, 2016 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,
2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Service $3,253 $3,148 $6,949 $6,398
Subscription 1,420 1,494 2,865 2,957
License 914 815 1,864 1,682
--- --- ----- -----
Total revenue 5,587 5,457 11,678 11,037
Cost of revenue:
Service 1,464 1,401 3,099 2,833
Subscription 534 594 1,090 1,256
License 122 99 240 195
--- --- --- ---
Total cost of
revenue 2,120 2,094 4,429 4,284
Gross profit:
Service 1,789 1,747 3,850 3,565
Subscription 886 900 1,775 1,701
License 792 716 1,624 1,487
--- --- ----- -----
Total gross profit 3,467 3,363 7,249 6,753
Gross margin:
Service 55% 55% 55% 56%
Subscription 62% 60% 62% 58%
License 87% 88% 87% 88%
Percentage of gross
profit to total
revenue 62% 62% 62% 61%
Operating expenses:
Sales and marketing 3,997 2,856 7,989 5,811
Research,
development and
engineering 3,936 3,379 7,395 6,684
General and
administrative 2,239 1,976 4,624 4,146
Intellectual
property 345 462 737 896
Total operating
expenses 10,517 8,673 20,745 17,537
Operating loss (7,050) (5,310) (13,496) (10,784)
Other income, net 116 42 234 88
--- --- --- ---
Loss before income
taxes (6,934) (5,268) (13,262) (10,696)
Benefit (provision)
for income taxes (9) (15) 101 (22)
Net loss $(6,943) $(5,283) $(13,161) $(10,718)
======= ======= ======== ========
Earnings (loss) per common share:
Loss per common
share -basic $(0.68) $(0.62) $(1.29) $(1.25)
Loss per common
share -diluted $(0.68) $(0.62) $(1.29) $(1.25)
Weighted average
common shares
outstanding -
basic 10,266 8,587 10,214 8,560
Weighted average
common shares
outstanding -
diluted 10,266 8,587 10,214 8,560
Digimarc Corporation
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
June 30, December 31,
2017 2016
---- ----
Assets
Current assets:
Cash and cash equivalents (1) $34,242 $11,638
Marketable securities (1) 33,513 44,496
Trade accounts receivable, net 3,897 5,078
Other current assets 1,858 1,695
Total current assets 73,510 62,907
Marketable securities (1) - 4,392
Property and equipment, net 3,846 3,570
Intangibles, net 6,416 6,422
Goodwill 1,114 1,114
Other assets 281 331
Total assets $85,167 $78,736
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and other accrued
liabilities $1,731 $1,523
Deferred revenue 2,121 2,923
Total current liabilities 3,852 4,446
Deferred rent and other long-term
liabilities 1,029 956
Total liabilities 4,881 5,402
Commitments and contingencies
Shareholders' equity:
Preferred stock 50 50
Common stock 11 11
Additional paid-in capital 141,123 120,985
Accumulated deficit (60,898) (47,712)
------- -------
Total shareholders' equity 80,286 73,334
Total liabilities and shareholders'
equity $85,167 $78,736
======= =======
(1) Aggregate cash, cash
equivalents, short- and long-
term marketable securities was
$67,755 and $60,526 at June 30,
2017 and December 31, 2016,
respectively.
Digimarc Corporation
Consolidated Cash Flow Information
(in thousands)
(Unaudited)
Six Month Information
---------------------
June 30, June 30,
2017 2016
---- ----
Cash flows from operating activities:
Net loss $(13,161) $(10,718)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation,
amortization
and write-
off of
property and
equipment 664 688
Amortization
and write-
off of
intangibles 486 639
Stock-based
compensation 3,093 2,707
Changes in operating assets and
liabilities:
Trade
accounts
receivable 1,181 2,139
Other current
assets (163) 52
Other assets 50 36
Accounts
payable and
other
accrued
liabilities 336 109
Deferred
revenue (835) (917)
Net cash used
in operating
activities (8,349) (5,265)
Cash flows from investing activities:
Purchase of
property and
equipment (938) (755)
Capitalized
patent costs (406) (436)
Maturity of
marketable
securities 28,636 22,467
Purchase of
marketable
securities (13,261) (8,819)
------- ------
Net cash
provided by
investing
activities 14,031 12,457
Cash flows from financing activities:
Issuance of
common
stock, net
of issuance
costs 17,702 -
Exercise of
stock
options 568 309
Purchase of
common stock (1,348) (1,104)
Net cash
provided by
(used in)
financing
activities 16,922 (795)
Net increase
in cash and
cash
equivalents
(2) $22,604 $6,397
======= ======
Cash, cash
equivalents
and
marketable
securities
at beginning
of period 60,526 39,186
Cash, cash
equivalents
and
marketable
securities
at end of
period 67,755 31,935
(2) Net
increase
(decrease)
in cash,
cash
equivalents
and
marketable
securities $7,229 $(7,251)
====== =======
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SOURCE Digimarc Corporation
