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Sonic Foundry Reports First Quarter Results
Sonic Foundry[R], Inc. (NASDAQ: SOFO), a leading developer of digital media and Internet software products and services, today announced its financial results for the fiscal first quarter ended December 31, 2000.
Revenues grew $1.4 million or 28% to $6.5 million during the December 2000 quarter, compared with $5.1 million reported for the similar period ended December 31, 1999. Revenue from software sales accounted for $4.0 million while revenues from Sonic Foundry Media Services contributed $2.5 million.
The increase in revenue during the recently completed quarter was driven primarily by content repurposing and digital video-tape conversion services performed by the operations of entities acquired in late fiscal 2000. Software revenues reflected weak retail market conditions; partially offset by strong sales of the Company's recently released VideoFactory[TM] consumer video editing software.
"The release of VideoFactory, Sonic Foundry's entry-level digital video and audio editing tool designed for the home user, provided us with a new stream of revenues from the consumer market. Revenues realized from new video-focused products, media fulfillment services and continuing relationships with partners such as Sony have provided a platform for future revenue growth," stated Rimas P Buinevicius, chairman and chief executive officer for Sonic Foundry.
The Company posted a net loss of $19.7 million or $0.90 per diluted share for the quarter ended December 31, 2000 compared to $2.2 million or $0.16 per diluted share for the prior year quarter. The current period loss included a non-cash charge for amortization of goodwill and other intangibles of $7.0 and a restructuring charge of $3.8 million. Restructuring charges consist primarily of 1)severance costs resulting from recently announced layoffs, 2)write down of assets no longer required in our operations and placed for sale and 3)excess facility operating costs currently marketed for sub lease. Excluding such amortization and restructuring charges, the net loss for the quarter ended December 31, 2000 would have been $8.9 million, or $0.41 per diluted share.
"We were proactive in realizing the need to reduce our workforce in order to reach cash flow breakeven earlier than anticipated, " stated Buinevicius. "The Company has been focusing its efforts on new technological software developments and furthering our enterprise content management initiative in our Media Services division. These two areas of focus are key to our goal of reaching and surpassing cash flow breakeven."
The Company also reported total cash and equivalents for the quarter ended December 31, 2000, of $12.9 million.
Sonic Foundry, Inc.
Consolidated Balance Sheets
(in thousands except for share data)
December 31, September 30,
2000 2000
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Assets (Unaudited)
Current Assets:
Cash and cash equivalents $ 12,930 $ 21,948
Accounts receivable, net of
allowances of $1,170 and $1,209 at
December 31, 2000 and
September 30, 2000, respectively 8,133 9,075
Accounts receivable, other 299 355
Revenues in excess of billings
for software license fees 202 105
Inventories 2,148 1,906
Prepaid expenses and other
current assets 1,161 1,591
Prepaid Advertising 1,000 1,000
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Total current assets 25,873 35,980
Property and equipment:
Land - 95
Buildings and improvements 2,092 3,186
Equipment 15,543 15,370
Furniture and fixtures 577 504
Assets held for sale 1,323 -
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Total property and equipment 19,535 19,155
Less accumulated depreciation 3,171 3,071
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Net property and equipment 16,364 16,084
Other assets:
Goodwill and other
intangibles, net 65,244 73,632
Capitalized software development
costs, net 395 518
Long-term investment 514 514
Other assets 181 97
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Total other assets 66,334 74,761
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Total assets $ 108,571 $ 126,825
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Sonic Foundry, Inc.
Consolidated Balance Sheets
(in thousands except for share data)
December 31, September 30,
Liabilities and stockholders' equity 2000 2000
----------------------------------
Current liabilities:
Accounts payable $ 3,648 $ 5,231
Accrued liabilities 3,667 2,819
Accrued restructuring charges 2,557 -
Current portion of long-term debt 4,299 4,300
Current portion of capital lease
obligations 1,446 1,477
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Total current liabilities 15,617 13,827
Long-term obligations, net of
current portion 850 923
Capital lease obligations,
net of current portion 1,390 1,703
Other liabilities 29 6
Stockholders' equity:
Preferred stock, $.01 par value,
authorized 5,000,000 shares,
non issued and outstanding - -
5% preferred stock, Series B, voting,
cumulative, convertible, $.01 par
value (liquidation preference at par),
authorized 10,000,000 shares, none
issued and Outstanding - -
Common stock, $.01 par value,
authorized 100,000,000 shares;
21,962,788 and 21,904,574 shares
issued and 21,932,638 and 21,876,824
outstanding at December 31, 2000 and
September 30, 2000 220 219
Common stock to be issued 5,579 5,579
Additional paid-in capital 147,238 148,290
Accumulated deficit (62,061) (42,388)
Receivable for common stock issued (26) (72)
Cumulative foreign currency
translations/adjustments 7 137
Unearned compensation (85) (1,249)
Treasury stock, at cost, 30,150
and 27,750 shares at December 31,
2000 and September 30, 2000 (187) (150)
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Total stockholders' equity 90,685 110,366
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Total liabilities and stockholders'
equity $ 108,571 $ 126,825
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Sonic Foundry, Inc
Statements of Operations
(Unaudited)
(in thousands except for per share data)
Three Months Ended
December 31,
2000 1999
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Revenue:
Software license fees $ 3,988 $ 5,049
Media services 2,530 37
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Total revenue 6,518 5,086
Cost of revenue:
Cost of license fees 1,404 1,055
Cost of services 2,333 103
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Total cost of revenues 3,737 1,158
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Gross profit 2,781 3,928
Operating expenses:
Selling and marketing expenses 5,228 4,038
General and administrative expenses 3,684 1,452
Product development expenses 2,834 1,191
Amortization of goodwill and
other intangibles 7,018 -
Restructuring charges 3,782 -
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Total operating expenses 22,546 6,681
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Loss from operations (19,765) (2,753)
Other income (expense):
Interest expense (187) (166)
Interest and other income 279 716
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Total other income 92 550
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Net loss $ (19,673) $ (2,203)
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Loss per common share:
Basic $ (0.90) $ (0.16)
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Diluted $ (0.90) $ (0.16)
================================== 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.