BEAVERTON, Ore., April 29, 2020 /PRNewswire/ -- Digimarc
Corporation (NASDAQ: DMRC), creator of the Digimarc Platform for
automatic identification, reported financial results for the first
quarter ended March 31, 2020.
First Quarter 2020 Financial Results
Revenue for the
first quarter of 2020 increased nine percent to $6.2 million compared to $5.7 million in the first quarter of 2019. The
increase in revenue was primarily due to higher subscription
revenue from Retail customers.
Operating expenses for the first quarter of 2020 increased seven
percent to $13.0 million
compared to $12.2 million in the
same quarter a year-ago. The increase in operating expenses was
primarily due to higher headcount and routine annual compensation
adjustments for employees.
Operating loss for the first quarter of 2020 increased four
percent to $9.1 million compared to
$8.7 million in the first quarter of
2019. The increased operating loss was primarily due to higher
operating expenses, partially offset by higher revenue.
Net loss for the first quarter of 2020 increased five percent to
$8.9 million or $(0.74) per
diluted share compared to net loss of $8.5
million or $(0.74) per diluted
share in the same quarter a year-ago.
At quarter-end, cash, cash equivalents and marketable securities
totaled $30.6 million compared to
$36.8 million at December 31, 2019.
Conference Call
Digimarc will hold a conference call
today (Wednesday, April 29, 2020) 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 here and 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: 7861309
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 media, including
packaging, other commercial print, digital images, audio and video.
The Digimarc Platform provides innovative and comprehensive
automatic identification software and services to simplify search,
and transform information discovery through unparalleled
reliability, efficiency and security. The Digimarc Platform enables
applications that benefit retailers and consumer brands, national
and state government agencies, media and entertainment industries,
and others. Digimarc is based in Beaverton, Oregon with a growing supplier
network around the world. 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, 2019 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
|
|
March
31,
|
|
March
31,
|
|
2020
|
|
2019
|
|
Revenue:
|
|
|
|
|
Service
|
$
3,738
|
|
$
3,814
|
|
Subscription
|
2,451
|
|
1,846
|
|
Total
revenue
|
6,189
|
|
5,660
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
Service
|
1,684
|
|
1,645
|
|
Subscription
|
514
|
|
489
|
|
Total cost of
revenue
|
2,198
|
|
2,134
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
Service
|
2,054
|
|
2,169
|
|
Subscription
|
1,937
|
|
1,357
|
|
Total gross
profit
|
3,991
|
|
3,526
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
Service
|
55%
|
|
57%
|
|
Subscription
|
79%
|
|
74%
|
|
Percentage of gross
profit to total revenue
|
64%
|
|
62%
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
5,246
|
|
4,950
|
|
Research, development and engineering
|
4,433
|
|
4,038
|
|
General
and administrative
|
3,367
|
|
3,210
|
|
Total operating
expenses
|
13,046
|
|
12,198
|
|
|
|
|
|
Operating
loss
|
(9,055)
|
|
(8,672)
|
|
|
|
|
|
Other income,
net
|
142
|
|
237
|
|
|
|
|
|
Loss before income
taxes
|
(8,913)
|
|
(8,435)
|
|
|
|
|
|
Benefit
(provision) for income taxes
|
5
|
|
(28)
|
|
Net
loss
|
$
(8,908)
|
|
$
(8,463)
|
|
|
|
|
|
Earnings (loss)
per common share:
|
|
|
|
|
Loss per common
share - basic
|
$
(0.74)
|
|
$
(0.74)
|
|
Loss per common
share - diluted
|
$
(0.74)
|
|
$
(0.74)
|
|
Weighted
average common shares outstanding - basic
|
12,037
|
|
11,487
|
|
Weighted
average common shares outstanding - diluted
|
12,037
|
|
11,487
|
|
Digimarc
Corporation
|
|
Consolidated Balance
Sheet Information
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents (1)
|
$
10,250
|
|
$
11,213
|
|
Marketable securities
(1)
|
20,320
|
|
25,604
|
|
Trade accounts
receivable, net
|
3,959
|
|
4,021
|
|
Other current
assets
|
2,118
|
|
2,456
|
|
Total current
assets
|
36,647
|
|
43,294
|
|
Property and
equipment, net
|
3,539
|
|
3,650
|
|
Intangibles,
net
|
6,629
|
|
6,670
|
|
Goodwill
|
1,114
|
|
1,114
|
|
Other
assets
|
2,524
|
|
2,660
|
|
Total
assets
|
$
50,453
|
|
$
57,388
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
2,349
|
|
$
2,272
|
|
Deferred
revenue
|
3,015
|
|
3,172
|
|
Total current
liabilities
|
5,364
|
|
5,444
|
|
Lease liability and
other long-term liabilities
|
2,346
|
|
2,494
|
|
Total
liabilities
|
7,710
|
|
7,938
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Preferred stock
|
50
|
|
50
|
|
Common
stock
|
13
|
|
12
|
|
Additional paid-in capital
|
190,303
|
|
188,103
|
|
Accumulated deficit
|
(147,623)
|
|
(138,715)
|
|
Total
shareholders' equity
|
42,743
|
|
49,450
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
50,453
|
|
$
57,388
|
|
|
|
(1)
|
Aggregate cash, cash
equivalents, short-term marketable securities was $30,570 and
$36,817 at March 31, 2020 and December 31, 2019,
respectively.
|
|
Digimarc
Corporation
|
|
Consolidated Cash
Flow Information
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Three-Month
Information
|
|
March
31,
|
|
March
31,
|
|
2020
|
|
2019
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net
loss
|
$
(8,908)
|
|
$
(8,463)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation, amortization and write-off of property and
equipment
|
374
|
|
357
|
|
Amortization and write-off of intangibles
|
201
|
|
180
|
|
Stock-based compensation
|
2,195
|
|
2,037
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
Trade accounts
receivable
|
62
|
|
161
|
|
Other current
assets
|
338
|
|
74
|
|
Other
assets
|
136
|
|
(33)
|
|
Accounts payable and
other accrued liabilities
|
61
|
|
800
|
|
Deferred
revenue
|
(146)
|
|
(393)
|
|
Lease liability and
other long-term liabilities
|
(159)
|
|
(174)
|
|
Net cash
used in operating activities
|
(5,846)
|
|
(5,454)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchase of property and equipment
|
(235)
|
|
(194)
|
|
Capitalized patent costs
|
(137)
|
|
(153)
|
|
Maturity of marketable securities
|
11,691
|
|
6,744
|
|
Purchase of marketable securities
|
(6,407)
|
|
(3,559)
|
|
Net cash
provided by investing activities
|
4,912
|
|
2,838
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Issuance of common stock, net of issuance costs
|
574
|
|
-
|
|
Exercise of stock options
|
135
|
|
99
|
|
Purchase of common stock
|
(738)
|
|
(486)
|
|
Net cash
used in financing activities
|
(29)
|
|
(387)
|
|
|
|
|
|
Net
decrease in cash and cash equivalents (2)
|
$
(963)
|
|
$
(3,003)
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities at beginning of period
|
36,817
|
|
43,656
|
|
Cash, cash equivalents and
marketable securities at end of period
|
30,570
|
|
37,468
|
|
(2)
Net decrease in cash, cash equivalents and marketable
securities
|
$
(6,247)
|
|
$
(6,188)
|
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SOURCE Digimarc Corporation