Click here to close now.


News Feed Item

Sonic Foundry Reports First Quarter Fiscal 2014 Results

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 An archive of the webcast will be available for 90 days.


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,
2013 2013
Current assets:
Cash and cash equivalents $ 3,097 $ 3,482
Accounts receivable, net of allowances of $90 6,817 6,885
Inventories 1,592 1,447
Prepaid expenses and other current assets   1,443     805  
Total current assets 12,949 12,619
Property and equipment:
Leasehold improvements 852 852
Computer equipment 5,459 5,296
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
Other assets:
Goodwill 7,576 7,576
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  
Total assets $ 25,800   $ 24,333  
Liabilities and stockholders' equity
Current liabilities:
Revolving line of credit $


Accounts payable 1,697 1,513
Accrued liabilities 2,143 1,204
Unearned revenue 6,143 6,470
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  
Total liabilities 15,123 13,629

Stockholders' equity:

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 deficit (180,246 ) (179,556 )
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,




Product $ 2,812 $ 2,841
Services 4,316 3,640
Other   78     71  
Total revenue 7,206 6,552
Cost of revenue:
Product 1,353 1,314
Services   457     371  
Total cost of revenue   1,810     1,685  
Gross margin 5,396 4,867
Operating expenses:
Selling and marketing 3,376 3,007
General and administrative 960 815
Product development 1,236 1,176
Acquisition costs   450     -  
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 )
Net loss $ (690 ) $ (139 )
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
– Basic   3,995,321     3,897,880  
– Diluted   3,995,321     3,897,880  

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
GAAP Adj(1) Non-GAAP GAAP Adj(1) Non-GAAP
Revenues $ 7,206 $ (133 ) $ 7,073 $ 6,552 $ 323 $ 6,875
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:
Billings $ (133 ) $ 323
Depreciation and amortization 301 258
Non-cash tax provision 70 60
Stock-based compensation(2) 277 183
Transaction Costs   450     -  
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
Product development 78 55
Total stock-based compensation $ 277 $ 183

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true ...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNu...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, San...
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at, examined how Docker has evolved into a highly effective tool for application del...
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Y...
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.