BEAVERTON, Ore., July 29, 2020 /PRNewswire/
-- Digimarc Corporation (NASDAQ: DMRC), creator of the
Digimarc Platform for digital identification and detection,
reported financial results for the second quarter ended
June 30, 2020.
Second quarter 2020 financial results
Revenue for the
second quarter of 2020 increased five percent to $6.5 million compared to $6.2 million in the second quarter of 2019. The
increase in revenue was primarily a result of growth in service
revenue from Government and Retail customers.
Operating expenses for the second quarter of 2020 decreased two
percent to $11.9 million compared to
$12.1 million in the same quarter a
year ago. The primary contributors to the decrease in operating
expenses were lower travel, consulting and marketing costs.
Operating loss for the second quarter of 2020 decreased eight
percent to $7.5 million compared to
$8.2 million in the second quarter of
2019, due to higher revenue and lower operating expenses.
Net loss for the second quarter of 2020 decreased six percent to
$7.5 million or $(0.62) per diluted share compared to a net loss
of $7.9 million or $(0.68) per diluted share in the same quarter a
year ago.
At quarter-end, cash, cash equivalents and marketable securities
totaled $30.5 million compared to
$36.8 million at December 31, 2019. The change in cash and
investments during the second quarter was nominal due to the
proceeds from the Paycheck Protection Program loan, higher revenues
and lower expenses.
Conference call
Digimarc will hold a conference call
today (Wednesday, July 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 call in via telephone, please dial the
number below at least five minutes before the scheduled start
time:
Toll-Free Number: 866-562-9934
International Number: 706-679-0638
Conference ID: 7779319
If you have any difficulty connecting with the conference call,
please contact Digimarc investor relations at 503-469-4762.
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
Except for 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 regulatory factors. More detailed information about
risk factors that may affect actual results are outlined 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
|
|
Six Month
Information
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
Service
|
$
3,892
|
|
$
3,575
|
|
$
7,630
|
|
$
7,389
|
Subscription
|
2,605
|
|
2,605
|
|
5,056
|
|
4,451
|
Total
revenue
|
6,497
|
|
6,180
|
|
12,686
|
|
11,840
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Service
|
1,601
|
|
1,676
|
|
3,285
|
|
3,321
|
Subscription
|
512
|
|
509
|
|
1,026
|
|
998
|
Total cost of
revenue
|
2,113
|
|
2,185
|
|
4,311
|
|
4,319
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
Service
|
2,291
|
|
1,899
|
|
4,345
|
|
4,068
|
Subscription
|
2,093
|
|
2,096
|
|
4,030
|
|
3,453
|
Total gross
profit
|
4,384
|
|
3,995
|
|
8,375
|
|
7,521
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Service
|
59%
|
|
53%
|
|
57%
|
|
55%
|
Subscription
|
80%
|
|
80%
|
|
80%
|
|
78%
|
Percentage of gross
profit to total revenue
|
67%
|
|
65%
|
|
66%
|
|
64%
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales
and marketing
|
4,633
|
|
5,087
|
|
9,879
|
|
10,037
|
Research, development and engineering
|
4,208
|
|
3,981
|
|
8,641
|
|
8,019
|
General
and administrative
|
3,081
|
|
3,079
|
|
6,448
|
|
6,289
|
Total operating
expenses
|
11,922
|
|
12,147
|
|
24,968
|
|
24,345
|
|
|
|
|
|
|
|
|
Operating
loss
|
(7,538)
|
|
(8,152)
|
|
(16,593)
|
|
(16,824)
|
|
|
|
|
|
|
|
|
Other income,
net
|
79
|
|
231
|
|
221
|
|
468
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(7,459)
|
|
(7,921)
|
|
(16,372)
|
|
(16,356)
|
|
|
|
|
|
|
|
|
Benefit
(provision) for income taxes
|
(2)
|
|
(12)
|
|
3
|
|
(40)
|
Net
loss
|
$ (7,461)
|
|
$ (7,933)
|
|
$(16,369)
|
|
$(16,396)
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Loss per common
share - basic
|
$
(0.62)
|
|
$
(0.68)
|
|
$
(1.36)
|
|
$
(1.42)
|
Loss per common
share - diluted
|
$
(0.62)
|
|
$
(0.68)
|
|
$
(1.36)
|
|
$
(1.42)
|
Weighted
average common shares outstanding - basic
|
12,108
|
|
11,665
|
|
12,073
|
|
11,576
|
Weighted
average common shares outstanding - diluted
|
12,108
|
|
11,665
|
|
12,073
|
|
11,576
|
Digimarc
Corporation
|
Consolidated Balance
Sheet Information
|
(in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2020
|
|
2019
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents (1)
|
$ 11,934
|
|
$
11,213
|
Marketable securities
(1)
|
18,559
|
|
25,604
|
Trade accounts
receivable, net
|
3,576
|
|
4,021
|
Other current
assets
|
2,095
|
|
2,456
|
Total current
assets
|
36,164
|
|
43,294
|
Property and
equipment, net
|
3,359
|
|
3,650
|
Intangibles,
net
|
6,611
|
|
6,670
|
Goodwill
|
1,114
|
|
1,114
|
Other
assets
|
2,342
|
|
2,660
|
Total
assets
|
$ 49,590
|
|
$
57,388
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
2,083
|
|
$
2,272
|
Deferred
revenue
|
2,678
|
|
3,172
|
Note payable,
current
|
2,245
|
|
-
|
Total current
liabilities
|
7,006
|
|
5,444
|
Note payable,
long-term
|
2,795
|
|
-
|
Lease liability and
other long-term liabilities
|
2,512
|
|
2,494
|
Total
liabilities
|
12,313
|
|
7,938
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred stock
|
50
|
|
50
|
Common
stock
|
13
|
|
12
|
Additional paid-in capital
|
192,298
|
|
188,103
|
Accumulated deficit
|
(155,084)
|
|
(138,715)
|
Total
shareholders' equity
|
37,277
|
|
49,450
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$ 49,590
|
|
$
57,388
|
|
|
(1)
|
Aggregate cash, cash
equivalents and short-term marketable securities was $30,493 and
$36,817 at June 30, 2020 and December 31, 2019,
respectively.
|
Digimarc
Corporation
|
Consolidated Cash
Flow Information
|
(in
thousands)
|
(Unaudited)
|
|
|
|
|
|
Six Month
Information
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net
loss
|
$(16,369)
|
|
$(16,396)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation, amortization and write-off of property and
equipment
|
745
|
|
747
|
Amortization and write-off of intangibles
|
431
|
|
372
|
Stock-based compensation
|
4,522
|
|
4,053
|
Changes in
operating assets and liabilities:
|
|
|
|
Trade accounts
receivable
|
445
|
|
(351)
|
Other current
assets
|
361
|
|
(40)
|
Other
assets
|
318
|
|
77
|
Accounts payable and
other accrued liabilities
|
(155)
|
|
1,132
|
Deferred
revenue
|
(500)
|
|
(244)
|
Lease liability and
other long-term liabilities
|
24
|
|
(325)
|
Net cash
used in operating activities
|
(10,178)
|
|
(10,975)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property and equipment
|
(456)
|
|
(404)
|
Capitalized patent costs
|
(311)
|
|
(359)
|
Maturity of marketable securities
|
26,535
|
|
14,671
|
Purchase of marketable securities
|
(19,490)
|
|
(15,085)
|
Net cash
provided by (used in) investing activities
|
6,278
|
|
(1,177)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from note payable
|
5,032
|
|
-
|
Issuance of common stock, net of issuance costs
|
574
|
|
19,615
|
Exercise of stock options
|
135
|
|
293
|
Purchase of common stock
|
(1,120)
|
|
(1,868)
|
Net cash
provided by financing activities
|
4,621
|
|
18,040
|
|
|
|
|
Net
increase in cash and cash equivalents (2)
|
$
721
|
|
$
5,888
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities at beginning of period
|
36,817
|
|
43,656
|
Cash, cash equivalents and
marketable securities at end of period
|
30,493
|
|
49,958
|
(2)
Net increase (decrease) in cash, cash equivalents and marketable
securities
|
$
(6,324)
|
|
$
6,302
|
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SOURCE Digimarc Corporation