Digimarc Reports Second Quarter 2019 Financial Results
BEAVERTON, Ore., July 24, 2019 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC), the inventor of the Intuitive Computing Platform (ICP(TM)) featuring Digimarc Barcode, reported financial results for the second quarter ended June 30, 2019.
Second Quarter 2019 Financial Results
Revenue for the second quarter of 2019 totaled $6.2 million compared to $5.4 million in the second quarter of 2018. The increase in revenue was due to higher subscription and service revenue.
Operating expenses for the second quarter of 2019 totaled $12.1 million compared to $11.5 million in the same quarter a year-ago. The increase in operating expenses was primarily due to routine annual compensation adjustments for employees.
Operating loss for the second quarter of 2019 totaled $8.2 million compared to $8.3 million in the second quarter of 2018. The lower operating loss was primarily due to higher revenue, partially offset by higher operating expenses.
Net loss for the second quarter of 2019 totaled $7.9 million or $(0.68) per diluted share compared to net loss of $8.0 million or $(0.71) per diluted share in the same quarter a year-ago.
At quarter-end, cash, cash equivalents and marketable securities totaled $50.0 million, compared to $37.5 million at March 31, 2019. The increase in cash, cash equivalents and marketable securities was primarily due to the sale of 336 thousand shares of common stock during the quarter, which generated cash net proceeds of $19.6 million.
Conference Call
Digimarc will hold a conference call today (Wednesday, July 24, 2019) 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 in the investor section of the company's website. The conference call script will also be posted to the company's website shortly before the call.
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: 96755404
If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations 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, image recognition, as layers of its ground-breaking Intuitive Computing Platform. Digimarc is based in Beaverton, Oregon. Its Platform is used by major retailers and consumer brands, global 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®
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 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, 2018 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,
2019 2018 2019 2018
Revenue:
Service $3,529 $3,336 $7,164 $6,843
Subscription 2,088 1,444 3,651 3,022
License 563 658 1,025 1,186
Total revenue 6,180 5,438 11,840 11,051
Cost of revenue:
Service 1,553 1,548 3,084 3,111
Subscription 465 508 910 990
License 167 149 325 289
Total cost of
revenue 2,185 2,205 4,319 4,390
Gross profit:
Service 1,976 1,788 4,080 3,732
Subscription 1,623 936 2,741 2,032
License 396 509 700 897
Total gross profit 3,995 3,233 7,521 6,661
Gross margin:
Service 56% 54% 57% 55%
Subscription 78% 65% 75% 67%
License 70% 77% 68% 76%
Percentage of gross
profit to total
revenue 65% 59% 64% 60%
Operating expenses:
Sales and marketing 5,087 4,757 10,037 9,644
Research,
development and
engineering 3,981 4,058 8,019 8,005
General and
administrative 2,686 2,416 5,538 5,048
Intellectual
property 393 305 751 620
Total operating
expenses 12,147 11,536 24,345 23,317
Operating loss (8,152) (8,303) (16,824) (16,656)
Other income, net 231 274 468 526
Loss before income
taxes (7,921) (8,029) (16,356) (16,130)
Provision for income
taxes (12) (9) (40) (20)
Net loss $(7,933) $(8,038) $(16,396) $(16,150)
===
Earnings (loss) per common share:
Loss per common
share -basic $(0.68) $(0.71) $(1.42) $(1.43)
Loss per common
share -diluted $(0.68) $(0.71) $(1.42) $(1.43)
Weighted average
common shares
outstanding -basic 11,665 11,337 11,576 11,302
Weighted average
common shares
outstanding -
diluted 11,665 11,337 11,576 11,302
Digimarc Corporation
Consolidated Balance Sheet Information
(in thousands)
(Unaudited)
June 30,
December 31,
2019 2018
Assets
Current assets:
Cash and cash equivalents (1) $33,166 $27,278
Marketable securities (1) 16,792 16,378
Trade accounts receivable, net 4,239 3,888
Other current assets 2,140 2,100
Total current assets 56,337 49,644
Property and equipment, net 3,632 3,955
Intangibles, net 6,699 6,649
Goodwill 1,114 1,114
Other assets 3,057 425
Total assets $70,839 $61,787
===
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and other
accrued liabilities $2,660 $1,092
Deferred revenue 2,824 3,226
Total current liabilities 5,484 4,318
Deferred rent and other long-
term liabilities 2,953 854
Total liabilities 8,437 5,172
Commitments and contingencies
Shareholders' equity:
Preferred stock 50 50
Common stock 12 12
Additional paid-in capital 184,611 162,428
Accumulated deficit (122,271) (105,875)
Total shareholders' equity 62,402 56,615
Total liabilities and
shareholders' equity $70,839 $61,787
===
(1) Aggregate cash, cash equivalents
and short-term marketable
securities was $49,958 and
$43,656 at June 30, 2019 and
December 31, 2018,
respectively.
Digimarc Corporation
Consolidated Cash Flow Information
(in thousands)
(Unaudited)
Six Month Information
June 30,
June 30,
2019 2018
Cash flows from operating activities:
Net loss $(16,396) $(16,150)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation,
amortization and
write-off of
property and
equipment 747 764
Amortization and
write-off of
intangibles 372 287
Stock-based
compensation 4,053 3,480
Changes in operating assets and liabilities:
Trade accounts
receivable (351) 2,561
Other current assets (40) 210
Other assets 77 (35)
Accounts payable and
other accrued
liabilities 1,132 (227)
Deferred revenue (244) (658)
Lease liability and
other long-term
liabilities (325) (21)
Net cash used in
operating
activities (10,975) (9,789)
Cash flows from investing activities:
Purchase of property
and equipment (404) (557)
Capitalized patent
costs (359) (402)
Maturity of
marketable
securities 14,671 20,839
Purchase of
marketable
securities (15,085) (15,637)
Net cash provided by
(used in) investing
activities (1,177) 4,243
Cash flows from financing activities:
Issuance of common
stock, net of
issuance costs 19,615 -
Exercise of stock
options 293 914
Purchase of common
stock (1,868) (1,120)
Net cash provided by
(used in) financing
activities 18,040 (206)
Net increase
(decrease) in cash
and cash
equivalents (2) $5,888 $(5,752)
===
Cash, cash
equivalents and
marketable
securities at
beginning of period 43,656 67,738
Cash, cash
equivalents and
marketable
securities at end
of period 49,958 56,784
(2) Net increase
(decrease) in cash,
cash equivalents
and marketable
securities $6,302 $(10,954)
===
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SOURCE Digimarc Corporation
