Lara.Burhenn@digimarc.com | +1 503-469-4704
Beaverton, Ore. — October 20, 2010 — Digimarc Corporation (NASDAQ: DMRC) reported financial results for the third quarter and nine months ended September 30, 2010.
Revenues for the third quarter increased 10% to $5.2 million from $4.8 million in the same quarter a year-ago, driven primarily by a 27% increase in license and subscription revenues. Revenues in the third quarter were affected by nonpayment from a large licensee, as well as a delay in approximately $0.4 million of government business expected in the quarter that has been deferred to the fourth quarter 2010 (as disclosed in a press release issued by Digimarc on October 6, 2010).
Operating loss for the third quarter was $0.8 million, compared to an operating loss of $0.5 million in the third quarter of 2009. The increase in operating loss was mostly due to increased expenses for professional services associated with the company's recently completed transaction with Intellectual Ventures, as well as increased marketing and research and development investment in certain mobile product initiatives.
Net loss for the quarter was $1.5 million or $(0.21) per diluted share, which included research and development investments of $0.6 million from joint ventures with Nielsen. This compares to a net loss of $0.7 million or $(0.10) per diluted share in the third quarter of 2009 that included research and development investments from the company's joint ventures of $0.3 million.
Revenues for nine months ended September 30, 2010 increased 53% to $20.7 million from $13.5 million in the same period of 2009. The increase reflected revenues in the first quarter of 2010 from a $4.5 million license agreement with Arbitron and higher royalties from other certain licensees.
Operating income for the nine months ended September 30, 2010 was $3.0 million, compared to an operating loss of $2.3 million in the first three quarters of 2009.
Net income from the three quarters of 2010 was $1.4 million or $0.19 per diluted share, compared to a net loss of $2.2 million or $(0.30) per diluted share in the same period of 2009.
At September 30, 2010, cash and cash equivalents and marketable securities totaled $45.5 million, compared to $46.6 million at June 30, 2010, and $42.8 million at December 31, 2009.
Management will host a conference call to discuss these financial results and execution of the company's strategy in more detail. Please see below for more information.
Digimarc will hold a conference call later today (October 20, 2010) to discuss these third quarter 2010 results. Chairman and CEO Bruce Davis and CFO Mike McConnell will host the call starting at 8:30 a.m. Eastern time (5:30 a.m. Pacific time). A question and answer session will follow management's presentation.
The call will be simulcast via a link available on Digimarc's home page at www.digimarc.com, and will be available for replay until November 3, 2010. Thereafter, the webcast will be archived at www.digimarc.com/investors/events.asp.
Digimarc Corporation (NASDAQ: DMRC), based in Beaverton, Oregon, is a leading innovator and provider of enabling technologies that create digital identities for all forms of media and many everyday objects. The embedded digital IDs are imperceptible to humans, but not to computers, networks and devices like mobile phones, which can now use cameras and microphones as sensory inputs to "see, hear and understand" the world around them within the context of their environment. Digimarc has built an extensive intellectual property portfolio with patents in digital watermarking, content identification and management, media and object discovery to enable ubiquitous computing, and related technologies. Digimarc develops solutions, licenses its intellectual property, and provides development services to business partners across a range of industries. For more information, please visit www.digimarc.com.
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 regarding the deferral of certain government business until the Company's fourth fiscal quarter and other 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 further delay in, or the failure to occur of, orders from a government customer, or changes in economic, business and/or regulatory factors. More detailed information about risk factors that may affect actual results is set forth in the company's Form 10-K for the year ended December 31, 2009 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.
Michael McConnell
Chief Financial Officer
+1 503 469 4652
mmcconnell@digimarc.com
Scott Liolios or Matt Glover
Liolios Group, Inc.
Investor Relations for Digimarc
+1 949 574 3860
info@liolios.com
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