|By Business Wire||
|February 6, 2014 04:05 PM EST||
Sonic Foundry, Inc. (NASDAQ: SOFO), the trusted market leader for video management and academic, enterprise and event webcasting, today announced financial results for its fiscal 2014 first quarter ended December 31, 2013.
GAAP results include:
- Revenues of $7.2 million, up 10 percent from the first quarter of fiscal 2013
- Product and other revenue of $2.9 million for both fiscal first quarters
Services revenue of $4.3 million, up 19 percent from $3.6 million in
the first quarter of fiscal 2013
- Support and maintenance revenue of $2.1 million, an increase of 8 percent over the first quarter of fiscal 2013
- Event services and hosting revenue of $2.2 million, an increase of 31 percent over the first quarter of fiscal 2013
- Unearned revenue balance of $7.0 million, down from $7.1 million at September 30, 2013
- GAAP net loss of $(690) thousand, including $450 thousand of acquisition transaction costs, or $(0.17) per basic share, compared to net loss of $(139) thousand or $(0.04) per basic share in the fiscal first quarter of 2013
- Gross margin of $5.4 million or 75 percent compared to $4.9 million or 74 percent for the fiscal first quarter of 2013
- Cash balance of $3.1 million at December 31, 2013
Non-GAAP results include:
- Billings of $7.1 million, an increase of 3 percent over the first quarter of fiscal 2013
- Product and other billings of $3.0 million, up 3 percent from the first quarter of fiscal 2013
Services billings of $4.1 million, an increase of 3 percent over the
first quarter of fiscal 2013
- Support and maintenance billings of $1.9 million, a decrease of 12 percent over the first quarter of fiscal 2013
- Event services and hosting billings of $2.2 million, an increase of 19 percent over the first quarter of fiscal 2013
- Non-GAAP net income of $275 thousand or $0.07 per basic share compared to non-GAAP net income of $685 thousand or $0.18 per basic share in the first quarter of fiscal 2013
Non-GAAP net income primarily excludes all non-cash related expenses of stock compensation, depreciation, acquisition costs, amortization, provision for income taxes and includes the cash impact of billings not recognized as revenue. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
At December 31, 2013, $7.0 million of revenue was deferred, of which the company expects to realize approximately $2.5 million in the quarter ending March 31, 2014. Revenue from service contracts is recognized over the life of the contract. Services revenue includes Mediasite customer support contracts as well as training, installation, rental, event and content hosting services.
During the first quarter of this fiscal year, 81 percent of billings were to existing customers, compared to 82 percent in first quarter fiscal 2013, with 50 percent to education customers and 40 percent to corporate. International product and service billings accounted for 28 percent of overall billings, compared to 30 percent in the first quarter of fiscal 2013.
We completed the acquisition of Media Mission Holding B.V. on December 16, 2013 for €1.1 million ($1.5 million) consisting of €330,000 ($458,000) cash, €495,000 ($680,000) subordinated note payable over three years (interest rate of 6.5%) and €275,000 ($373,000) in shares of Sonic Foundry stock. Media Mission contributed revenue of $90 thousand and net income of $43 thousand for the two week period following close of the transaction.
The acquisition of Mediasite K.K. (“MSKK”) was complete effective January 14, 2014 and therefore had no impact, other than transaction costs, on the quarter ended December 31, 2013. Prior to completion of the acquisition of MSKK, the Company owned a minority interest of approximately 26% of MSKK. Generally Accepted Accounting Principles require that the initial investment of an acquired company be valued at the same amount as the value when control was achieved. As a result, Q2 2014 results will include a substantial non-cash gain of approximately $1.3 million in addition to the impact of the acquisition and results of their operations from January 14, 2014 through March 31, 2014.
Sonic Foundry announced in a separate press release today that University of Leeds, one of the world’s top 100 universities according to QS World University Rankings, has selected Mediasite for two strategic projects; lecture capture and enterprise video content management. Deployment of the projects is anticipated to begin in fiscal Q2, and is expected to exceed $1 million in billings in fiscal 2014.
“We’re pleased with the growth trends we’re seeing in our business, particularly in the international segment. Significant customer commitments such as that from University of Leeds are a validation of our global strategy and puts us one step closer to delivering on our revenue objectives. With other large deals moving forward, including several international deals that we’re confident we’ll win, we remain committed to our long-term strategies to build fundamental value to investors while delivering excellent products to our customers,” said Gary Weis, Chief Executive Officer of Sonic Foundry.
The Company is reiterating the fiscal 2014 guidance provided earlier of $39 million of billings for its core business but is making an upward revision to the range of guidance provided for large transactions. The Company had said it expected between $300 thousand and $2.0 million from large transactions in fiscal 2014. As a result of success with University of Leeds, the Company is revising that guidance to between $1.0 million and $2.0 million. Likewise the Company is increasing the guidance provided of pre-tax income as a percentage of revenue from 4-5% to 7-9%.
Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its fiscal 2014 first quarter results at 3:30 p.m. CT / 4:30 p.m. ET. It will use its patented rich media communications system, Mediasite, to webcast the presentation for both live and on-demand viewing. To access the presentation, register at www.sonicfoundry.com/earnings. An archive of the webcast will be available for 90 days.
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use a measure of non-GAAP net income or loss in our financial presentation, which excludes certain non-cash costs and includes certain cash billings not recognized as revenue for GAAP purposes. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Our non-GAAP financial measures reflect adjustments based on the following items:
- Billings not recorded as revenue: We have included the cash effect of billings not recorded as revenue, which are deferred for GAAP purposes, in arriving at non-GAAP net income or loss. Our services are typically billed and collected in advance of providing the service which requires minimal cost to perform in the future. Billings are a better indicator of customer activity and cash flow than revenue is, in management’s opinion, and is therefore used by management as a key operational indicator.
- Depreciation and amortization of intangible and other assets expenses: We have excluded the effect of depreciation and amortization of assets from our non-GAAP net income or loss. Depreciation and amortization of asset costs is a non-cash expense that includes the periodic write-off of tooling, product design and other assets that contributed to revenues earned during the periods presented and will contribute to future period revenues as well.
- Non-cash provision for income taxes: We have excluded the impact of the provision for income taxes from our non-GAAP net income or loss. The provision for income taxes is associated with the difference in treatment of goodwill which is not expensed for GAAP purposes but is amortized over a fifteen year life for Federal income tax purposes. The result is a non-cash expense and liability that will never be paid.
- Acquisition costs: We have excluded the effect of the acquisition costs related to the purchases of MediaMission B.V. and Mediasite KK. These acquisition costs are a one-time expense for the first quarter of fiscal year 2014 and we have excluded the effect of these acquisition costs from our non-GAAP net income for fiscal year 2014.
- Stock-based compensation expenses: We maintain an employee qualified stock option plan under which we grant options to acquire common stock to eligible employees. We also maintain an employee stock purchase plan under which common stock may be issued to eligible employees at a reduced price. Stock-based compensation expenses are recorded for these plans in accordance with FASB Accounting Standards Codification subtopic 718, Compensation-Stock Compensation. Stock-based compensation expense is a non-cash expense. As a result, we have excluded the effect of stock-based compensation expenses from our non-GAAP net income or loss.
About Sonic Foundry®, Inc.
Sonic Foundry (NASDAQ: SOFO) is the trusted market leader for enterprise webcasting solutions, providing video content management and distribution for education, business and government. Powered by the patented Mediasite webcasting platform and webcast services of Mediasite Events, the company empowers people to advance how they share knowledge online, using video webcasts to bridge time and distance, enhance learning outcomes and improve performance.
Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.
|Sonic Foundry, Inc.|
|Condensed Consolidated Balance Sheets|
|(in thousands, except for share data)|
|December 31,||September 30,|
|Cash and cash equivalents||$||3,097||$||3,482|
|Accounts receivable, net of allowances of $90||6,817||6,885|
|Prepaid expenses and other current assets||1,443||805|
|Total current assets||12,949||12,619|
|Property and equipment:|
|Furniture and fixtures||583||581|
|Total property and equipment||6,894||6,729|
|Less accumulated depreciation and amortization||3,744||3,449|
|Net property and equipment||3,150||3,280|
|Investment in Mediasite KK||408||385|
|Software development costs, net of amortization of $119 and $75||414||458|
|Excess purchase price of MediaMission over net assets acquired||1,293||
|Other intangibles, net of amortization of $140 and $135||10||15|
|Liabilities and stockholders' equity|
|Revolving line of credit||$||
|Current portion of subordinated notes payable||229||
|Current portion of capital lease obligation||158||223|
|Current portion of notes payable to bank||600||634|
|Total current liabilities||10,970||10,044|
|Long-term portion of unearned revenue||842||648|
|Long-term portion of subordinated note payable||458||
|Long-term portion of capital lease obligation||160||149|
|Long-term portion of notes payable to bank||
|Leasehold improvement liability||423||445|
|Deferred tax liability||2,270||2,210|
Preferred stock, $.01 par value, authorized 500,000 shares; none issued
|5% preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 1,000,000 shares, none issued||
|Common stock, $.01 par value, authorized 10,000,000 shares; 4,042,066 and 3,999,634 shares issued and 4,029,350 and 3,986,918 shares outstanding||
|Additional paid-in capital||191,317||190,653|
|Accumulated other comprehensive loss||(239||)||(238||)|
|Receivable for common stock issued||(26||)||(26||)|
|Treasury stock, at cost, 12,716 shares||(169||)||(169||)|
|Total stockholders' equity||10,677||10,704|
|Total liabilities and stockholders' equity||$||25,800||$||24,333|
|Sonic Foundry, Inc.|
|Condensed Consolidated Statements of Operations|
|(in thousands, except for share and per share data)|
|Three Month Ended December 30,|
|Cost of revenue:|
|Total cost of revenue||1,810||1,685|
|Selling and marketing||3,376||3,007|
|General and administrative||960||815|
|Total operating expenses||6,022||4,998|
|Loss from operations||(626||)||(131||)|
|Equity in earnings from investment in Mediasite KK||23||78|
|Other expenses, net||(17||)||(26||)|
|Loss before income taxes||(620||)||(79||)|
|Provision for income taxes||(70||)||(60||)|
|Loss per common share:|
|Basic net loss per common share||$||(0.17||)||$||(0.04||)|
|Diluted net loss per common share||$||(0.17||)||$||(0.04||)|
|Weighted average common shares|
|Non-GAAP Consolidated Statements of Operations|
|(in thousands, except for per share data)|
|Fiscal Quarter Ended||Fiscal Quarter Ended|
|December 31, 2013||December 31, 2012|
|Cost of revenue||1,810||-||1,810||1,685||-||1,685|
|Total operating expenses||6,022||(1,028||)||4,994||4,998||(441||)||4,557|
|Income (loss) from operations||(626||)||895||269||(131||)||764||633|
|Equity investment in earnings from Mediasite KK||23||-||23||78||-||78|
|Other expense, net||(17||)||-||(17||)||(26||)||-||(26||)|
|Provision for income taxes||(70||)||70||-||(60||)||60||-|
|Net income (loss)||$||(690||)||$||965||$||275||$||(139||)||$||824||$||685|
|Basic and diluted net income per common share||$||(0.17||)||$||0.24||$||0.07||$||(0.04||)||$||0.21||$||0.18|
|(1)Adjustments consist of the following:|
|Depreciation and amortization||301||258|
|Non-cash tax provision||70||60|
|Total non-GAAP adjustments||$||965||$||824|
|(2) Stock-based compensation is included in the following GAAP operating expenses:|
|Selling and marketing||$||182||$||118|
|General and administrative||17||10|
|Total stock-based compensation||$||277||$||183|
As the world moves toward more DevOps and Microservices, application deployment to the cloud ought to become a lot simpler. The Microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. Serverless computing is revolutionizing computing. In his session at 19th Cloud Expo, Raghav...
Aug. 24, 2016 10:00 AM EDT Reads: 401
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Aug. 24, 2016 09:45 AM EDT Reads: 2,236
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
Aug. 24, 2016 09:45 AM EDT Reads: 409
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Aug. 24, 2016 09:36 AM EDT
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Aug. 24, 2016 09:00 AM EDT Reads: 3,489
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
Aug. 24, 2016 08:59 AM EDT Reads: 203
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aug. 24, 2016 08:00 AM EDT Reads: 3,807
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Aug. 24, 2016 08:00 AM EDT Reads: 1,808
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Aug. 24, 2016 07:45 AM EDT Reads: 2,058
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Aug. 24, 2016 07:15 AM EDT Reads: 1,646
Aspose.Total for .NET is the most complete package of all file format APIs for .NET as offered by Aspose. It empowers developers to create, edit, render, print and convert between a wide range of popular document formats within any .NET, C#, ASP.NET and VB.NET applications. Aspose compiles all .NET APIs on a daily basis to ensure that it contains the most up to date versions of each of Aspose .NET APIs. If a new .NET API or a new version of existing APIs is released during the subscription peri...
Aug. 24, 2016 07:15 AM EDT Reads: 1,779
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Aug. 24, 2016 07:00 AM EDT Reads: 1,728
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Aug. 24, 2016 05:00 AM EDT Reads: 2,056
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Aug. 24, 2016 04:30 AM EDT Reads: 2,165
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Aug. 24, 2016 03:30 AM EDT Reads: 2,908