Beaverton, Ore. — April 25, 2011 — Digimarc Corporation (NASDAQ: DMRC) reported financial results for the first quarter ended March 31, 2011.
Revenues for the first quarter 2011 decreased 11% to $9.1 million from $10.2 million in the same quarter a year ago. The decrease in revenues was primarily due to a one-time $4.5 million payment from Arbitron in Q1 last year, while the 2011 quarter reflects $3 million of new revenues from the Intellectual Ventures relationship and increased license revenues from some of our long term licensees.
Operating income for the first quarter 2011 was $1.4 million, compared to $4.2 million in the first quarter of 2010. The decrease primarily reflects lower revenues as described above, higher product development and marketing expenses associated with the launch of Digimarc Discover, and litigation expenses associated with the Verance matter.
Net income for the quarter was $0.9 million or $0.12 per diluted share, which included Digimarc's share of the net loss of $0.5 million from its joint ventures with Nielsen. This compares to a net income of $3.8 million or $0.51 per diluted share in the first quarter of 2010, which also included Digimarc's share of the net loss of $0.5 million from the company's joint ventures with Nielsen.
At March 31, 2011, cash and cash equivalents and marketable securities totaled $33.1 million, down from $45.9 million at December 31, 2010 primarily due to the $15 million stock buyback from Koninklijke Philips Electronics N.V. (NYSE: PHG) in January.
According to CEO Bruce Davis, "We got off to a nice start to the year. Our operating performance was in line with our expectations. We were pleased to be able to negotiate the purchase of a substantial number of our shares from Philips in January. The Company launched the beta program for Digimarc Discover, the seeing/hearing platform for mobile devices, in February, which will run through May 31st. The response has been encouraging. There are many interesting opportunities in the pipeline."
Digimarc will hold a conference call later today (Monday, April 25, 2011) to discuss first quarter 2011. Chairman and CEO, Bruce Davis and CFO, Mike McConnell 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 call will be simulcast via a link available on Digimarc's home page at www.digimarc.com, and will be available for replay until May 9, 2011. Thereafter, the webcast will be archived at www.digimarc.com/investors/events.asp.
About Digimarc
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 and any related inferences regarding Digimarc's investment in marketing and research and development associated with the launch of Digimarc Discover, increases in license revenues from long term licensees, opportunities in Digimarc's pipeline, 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 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, 2010 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
Lara.Burhenn@digimarc.com | +1 503-469-4704
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