Digimarc Reports First Quarter 2018 Financial Results
Digimarc Reports First Quarter 2018 Financial Results
BEAVERTON, Ore., April 25, 2018 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), inventor of the Intuitive Computing Platform(TM) featuring Digimarc Barcode, reported financial results for the first quarter 2018.
First Quarter 2018 Financial Results
Revenue for the first quarter of 2018 totaled $5.6 million compared to $6.1 million in the same quarter a year-ago. The decrease was primarily due to lower license revenue reflecting the impact of amending an existing license agreement in the third quarter of 2017 whereby the company waived all future royalty obligations in one of the licensed fields of use in exchange for an upfront $3.5 million license fee.
Operating expenses for the first quarter of 2018 totaled $11.8 million compared to $10.2 million in the same quarter a year-ago. 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 first quarter of 2018 totaled $8.4 million compared to an operating loss of $6.4 million in the same quarter a year-ago. The higher operating loss was primarily due to higher operating expenses.
Net loss for the first quarter of 2018 totaled $8.1 million or $(0.72) per diluted share, compared to net loss of $6.2 million or $(0.61) per diluted share in the same quarter a year-ago.
At quarter-end, cash, cash equivalents and marketable securities totaled $63.7 million, compared to $67.7 million at December 31, 2017.
Conference Call
Digimarc will hold a conference call later today (Wednesday, April 25, 2018) 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: 96755399
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 patented 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, 2017 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.
Company Contacts:
Charles Beck
Chief Financial Officer
503-469-4721
Charles.Beck@digimarc.com
Matt Glover
Liolios Group, Inc.
Investor Relations for Digimarc
949-574-3860
DMRC@liolios.com
Digimarc Corporation
Consolidated Income Statement Information
(in thousands, except per share amounts)
(Unaudited)
Three Month Information
-----------------------
March 31, March 31,
2018 2017
---- ----
Revenue:
Service $3,507 $3,696
Subscription 1,578 1,445
License 528 950
--- ---
Total
revenue 5,613 6,091
Cost of revenue:
Service 1,563 1,635
Subscription 482 556
License 140 118
--- ---
Total
cost of
revenue 2,185 2,309
Gross profit:
Service 1,944 2,061
Subscription 1,096 889
License 388 832
--- ---
Total
gross
profit 3,428 3,782
Gross margin:
Service 55% 56%
Subscription 69% 62%
License 73% 88%
Percentage
of gross
profit
to total
revenue 61% 62%
Operating expenses:
Sales and
marketing 4,887 3,992
Research,
development
and
engineering 3,947 3,459
General
and
administrative 2,632 2,385
Intellectual
property 315 392
Total
operating
expenses 11,781 10,228
Operating
loss (8,353) (6,446)
Other
income,
net 252 118
--- ---
Loss
before
income
taxes (8,101) (6,328)
Benefit
(provision)
for
income
taxes (11) 110
Net loss $(8,112) $(6,218)
======= =======
Earnings (loss) per common share:
Loss per
common
share -
basic $(0.72) $(0.61)
Loss per
common
share -
diluted $(0.72) $(0.61)
Weighted
average
common
shares
outstanding
-basic 11,266 10,161
Weighted
average
common
shares
outstanding
-
diluted 11,266 10,161
Digimarc Corporation
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
March 31, December 31,
2018 2017
---- ----
Assets
Current assets:
Cash and cash equivalents (1) $48,449 $40,823
Marketable securities (1) 15,219 26,915
Trade accounts receivable,
net 3,790 6,404
Other current assets 1,888 2,171
Total current assets 69,346 76,313
Property and equipment, net 4,103 4,236
Intangibles, net 6,478 6,381
Goodwill 1,114 1,114
Other assets 324 326
Total assets $81,365 $88,370
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and other
accrued liabilities $1,464 $1,914
Deferred revenue 2,839 3,124
Total current liabilities 4,303 5,038
Deferred rent and other long-
term liabilities 941 985
Total liabilities 5,244 6,023
Commitments and contingencies
Shareholders' equity:
Preferred stock 50 50
Common stock 12 12
Additional paid-in capital 157,540 155,793
Accumulated deficit (81,481) (73,508)
------- -------
Total shareholders' equity 76,121 82,347
Total liabilities and
shareholders' equity $81,365 $88,370
======= =======
(1) Aggregate cash, cash equivalents and marketable securities was $63,668 and $67,738
at March 31, 2018 and December 31, 2017, respectively.
Digimarc Corporation
Consolidated Cash Flow Information
(in thousands)
(Unaudited)
Three Month Information
-----------------------
March 31, March 31,
2018 2017
---- ----
Cash flows from operating activities:
Net loss $(8,112) $(6,218)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation,
amortization
and write-
off of
property and
equipment 380 299
Amortization
and write-
off of
intangibles 146 257
Stock-based
compensation 1,671 1,503
Changes in operating assets and
liabilities:
Trade
accounts
receivable 2,614 1,274
Other current
assets 304 70
Other assets 44 55
Accounts
payable and
other
accrued
liabilities (420) 128
Deferred
revenue (219) (498)
Net cash used
in operating
activities (3,592) (3,130)
Cash flows from investing activities:
Purchase of
property and
equipment (302) (605)
Capitalized
patent costs (208) (200)
Maturity of
marketable
securities 18,657 16,399
Purchase of
marketable
securities (6,961) (10,561)
------ -------
Net cash
provided by
investing
activities 11,186 5,033
Cash flows from financing activities:
Exercise of
stock
options 560 177
Purchase of
common stock (528) (583)
Net cash
provided by
(used in)
financing
activities 32 (406)
Net increase
in cash and
cash
equivalents
(2) $7,626 $1,497
====== ======
Cash, cash
equivalents
and
marketable
securities
at beginning
of period 67,738 60,526
Cash, cash
equivalents
and
marketable
securities
at end of
period 63,668 56,185
(2) Net
decrease in
cash, cash
equivalents
and
marketable
securities $(4,070) $(4,341)
======= =======
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SOURCE Digimarc Corporation
