Beaverton, Ore. — July 25, 2013 — Digimarc Corporation (NASDAQ: DMRC), a growing force in mobile discovery, reported financial results for the second quarter ended June 30, 2013.
Revenue for the second quarter of 2013 increased 15% to $10.5 million from $9.1 million in the second quarter of 2012. The improvement was primarily a result of increased subscription revenue from the company’s acquisition of Attributor Corporation in December 2012.
Operating income for the second quarter of 2013 was $1.4 million compared to $1.9 million in the same quarter a year ago. The operating results for the second quarter of 2013 reflect the addition of Attributor's operations and increased investments in sales and marketing, and research and development initiatives.
Net income for the second quarter of 2013 was $0.6 million or $0.08 per diluted share compared to $1.2 million or $0.17 per diluted share in the second quarter of 2012. The decrease reflects the decline in operating income and a higher effective income tax rate.
At June 30, 2013, cash, cash equivalents and marketable securities increased $1.5 million to $42.1 million from $40.6 million at March 31, 2013.
The company expects to continue investing in strategic initiatives during the remainder of 2013 in order to meet various development and marketing deadlines, as well as building or improving aspects of its Intuitive Computing Platform with the objective of having a fully functional system completed by year end.
"With the recent release of audio watermarking, we have the major elements of the platform in place," said Bruce Davis, Digimarc's chairman and CEO. "We continue to make progress on developing a high performance invisible barcode for consumer packaged goods; and improving our Online Services Portal for encoding digital identities and configuring associated network services, various Adobe plug-ins for advanced users, and the Digimarc Discover mobile application UI and performance."
Digimarc has completed integration of its invisible barcode reader into a commercially available retail scanner from a leading vendor and is working on other such scanners. The increased rate of investment also supports information requests and collaboration initiatives of numerous infrastructure providers, and continuing basic R&D on a virtual wallet to add simple and effective mobile payment processing to the company’s Intuitive Computing Platform. The company also plans to make significant changes to the acquired Guardian copyright protection solution to improve its cost effectiveness and competitive differentiation.
Market development investments will include major presentations at two important industry events. In October, Digimarc will be a primary sponsor of the American Magazine Media Conference, the magazine industry’s premier conference. In January, the company will have a booth at the National Retail Federation "BIG Show," where it will demonstrate its full mobile-optimized Shoppers Journey to retailers and potential business partners, in what is anticipated to be the largest marketing event in the company’s history.
"In addition to these product and market development activities," added Davis, "we continue to ramp basic and directed research, and associated IP development, having made several recent additions to our strategic IP development capability. The intended result of these investments is to foster an unprecedented growth in the rate of invention, size, and quality of our patent portfolio, laying a foundation for the next wave of patent income for Digimarc."
Digimarc will hold a conference call later today (Thursday, July 25, 2013) to discuss these results. 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 broadcast live via webcast at www.digimarc.com/investors and www.earnings.com, and will be available for replay through August 25, 2013. The webcast will be archived and available on Digimarc's website at www.digimarc.com/investors/investor-events-and-webcasts.
For those who wish to listen to the call via telephone, please dial the telephone number below at least 5-10 minutes prior to the scheduled start time:
If you have any difficulty connecting with the conference call, please contact Liolios Group at +1 949 574 3860.
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, 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 increased subscription revenue from the company's acquisition of Attributor, increased investments in sales and marketing and research and development initiatives, the development and marketing objectives discussed under "Strategy Update" associated with the company's anticipated investment in strategic initiatives, including the unprecedented growth rate of the company's patent portfolio, achieving a fully functional Intuitive Computing Platform by year-end, and significant improvements to the Guardian copyright protection solution, 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 will be set forth in the company's Form 10-K for the year ended December 31, 2012 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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