Oregon
Digimarc Reports Third Quarter 2021 Financial Results
BEAVERTON, Ore., Nov. 15, 2021 /PRNewswire/ -- Digimarc Corporation (NASDAQ: DMRC) creator of the Digimarc Platform for digital identification and detection, reported financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial Results
Revenue for the third quarter of 2021 increased 12% to $6.4 million compared to $5.8 million in the third quarter of 2020, reflecting higher revenue from Commercial and Government services.
Operating expenses for the third quarter of 2021 remained flat at $12.2 million compared to the same quarter a year-ago, primarily as a result of increased consulting and recruiting costs, offset by severance costs incurred in the third quarter of 2020 related to organizational changes we made in July 2020.
Operating loss for the third quarter of 2021 decreased 5% to $8.0 million compared to $8.4 million in the third quarter of 2020, due to higher revenue.
Other income, net for the third quarter of 2021 was $5.1 million, reflecting a $5.1 million gain realized on the forgiveness of our Paycheck Protection Program loan during the third quarter.
Net loss for the third quarter of 2021 was $2.9 million or $(0.17) per diluted share compared to net loss of $8.4 million or $(0.68) per diluted share in the same quarter a year-ago. Excluding the $5.1 million gain noted above, net loss was $8.0 million or $(0.48) per diluted share.
At September 30, 2021, cash, cash equivalents, short- and long-term marketable securities totaled $52.5 million compared to $77.7 million at December 31, 2020.
Conference call
Digimarc will hold a conference call today (Monday, November 15, 2021) to discuss these results and provide an update on market conditions and execution of strategy. CEO Riley McCormack, CFO Charles Beck and CLO Robert Chamness will host the call starting at 8:00 a.m. Eastern time (5:00 a.m. Pacific time). A question and answer session will follow management's presentation.
The conference call will be broadcast live and available for replay here and in the investor section of the company's website. The conference call script will also be posted to the company's website shortly before the call.
For those who wish to call in via telephone to ask a question, please dial the number below at least five minutes before the scheduled start time:
Toll-Free Number: 866-562-9934
International Number: 706-679-0638
Conference ID: 7167329
If you have any difficulty connecting with the conference call, please contact Digimarc investor relations team at +1 503-469-4826.
About Digimarc
Digimarc Corporation (NASDAQ: DMRC) is a pioneer and leader in digital watermarking solutions and the automatic identification of media, including packaging, commercial print, digital images, audio and video. Digimarc helps customers drive efficiency, accuracy and security across physical and digital supply chains. Visit us at digimarc.com on LinkedIn and follow us on Twitter @digimarc to learn more.
Forward-looking statements
Except for historical information contained in this release, the matters described in this release contain various "forward-looking statements." These forward-looking statements include 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 regulatory factors. More detailed information about risk factors that may affect actual results are outlined in the company's Form 10-K for the year ended December 31, 2020, 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.
Digimarc Corporation Consolidated Income Statement Information (in thousands, except per share amounts) (Unaudited) | ||||||||||||||||
Three Month Information | Nine Month Information | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue: | ||||||||||||||||
Service | $ | 3,932 | $ | 3,352 | $ | 11,507 | $ | 10,982 | ||||||||
Subscription | 2,485 | 2,399 | 7,888 | 7,455 | ||||||||||||
Total revenue | 6,417 | 5,751 | 19,395 | 18,437 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Service | 1,630 | 1,406 | 4,715 | 4,691 | ||||||||||||
Subscription | 567 | 522 | 1,892 | 1,548 | ||||||||||||
Total cost of revenue | 2,197 | 1,928 | 6,607 | 6,239 | ||||||||||||
Gross profit: | ||||||||||||||||
Service | 2,302 | 1,946 | 6,792 | 6,291 | ||||||||||||
Subscription | 1,918 | 1,877 | 5,996 | 5,907 | ||||||||||||
Total gross profit | 4,220 | 3,823 | 12,788 | 12,198 | ||||||||||||
Gross profit margin: | ||||||||||||||||
Service | 59 | % | 58 | % | 59 | % | 57 | % | ||||||||
Subscription | 77 | % | 78 | % | 76 | % | 79 | % | ||||||||
Total gross profit margin | 66 | % | 66 | % | 66 | % | 66 | % | ||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 4,647 | 4,538 | 15,865 | 14,417 | ||||||||||||
Research, development and engineering | 4,586 | 4,662 | 12,930 | 13,303 | ||||||||||||
General and administrative | 2,943 | 3,009 | 15,611 | 9,457 | ||||||||||||
Total operating expenses | 12,176 | 12,209 | 44,406 | 37,177 | ||||||||||||
Operating loss | (7,956) | (8,386) | (31,618) | (24,979) | ||||||||||||
Other income: | ||||||||||||||||
Gain on extinguishment of note payable | 5,094 | | 5,094 | | ||||||||||||
Other income (loss) | (2) | 36 | 26 | 257 | ||||||||||||
Other income, net | 5,092 | 36 | 5,120 | 257 | ||||||||||||
Loss before income taxes | (2,864) | (8,350) | (26,498) | (24,722) | ||||||||||||
Benefit (provision) for income taxes | (7) | (2) | (17) | 1 | ||||||||||||
Net loss | $ | (2,871) | $ | (8,352) | $ | (26,515) | $ | (24,721) | ||||||||
Earnings (loss) per common share: | ||||||||||||||||
Loss per common share - basic | $ | (0.17) | $ | (0.68) | $ | (1.61) | $ | (2.04) | ||||||||
Loss per common share - diluted | $ | (0.17) | $ | (0.68) | $ | (1.61) | $ | (2.04) | ||||||||
Weighted average common shares outstanding - basic | 16,520 | 12,241 | 16,428 | 12,129 | ||||||||||||
Weighted average common shares outstanding - diluted | 16,520 | 12,241 | 16,428 | 12,129 | ||||||||||||
Digimarc Corporation Consolidated Balance Sheet Information (in thousands) (Unaudited) | ||||||||
September 30, | December 31, | |||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents (1) | $ | 25,155 | $ | 19,696 | ||||
Marketable securities (1) | 19,037 | 58,032 | ||||||
Trade accounts receivable, net | 4,110 | 3,907 | ||||||
Other current assets | 2,550 | 2,197 | ||||||
Total current assets | 50,852 | 83,832 | ||||||
Marketable securities (1) | 8,298 | | ||||||
Property and equipment, net | 2,962 | 3,272 | ||||||
Intangibles, net | 6,614 | 6,612 | ||||||
Goodwill | 1,114 | 1,114 | ||||||
Other assets | 2,112 | 2,198 | ||||||
Total assets | $ | 71,952 | $ | 97,028 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and other accrued liabilities | $ | 4,236 | $ | 2,827 | ||||
Deferred revenue | 2,146 | 3,002 | ||||||
Note payable, current | | 3,947 | ||||||
Total current liabilities | 6,382 | 9,776 | ||||||
Lease liability and other long-term liabilities | 2,685 | 2,295 | ||||||
Note payable, long-term | | 1,118 | ||||||
Total liabilities | 9,067 | 13,189 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Preferred stock | 50 | 50 | ||||||
Common stock | 17 | 17 | ||||||
Additional paid-in capital | 260,585 | 255,024 | ||||||
Accumulated deficit | (197,767) | (171,252) | ||||||
Total shareholders' equity | 62,885 | 83,839 | ||||||
Total liabilities and shareholders' equity | $ | 71,952 | $ | 97,028 | ||||
(1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $52,490 and $77,728 at September 30, 2021 and December 31, 2020, respectively. | ||||||||
Digimarc Corporation Consolidated Cash Flow Information (in thousands) (Unaudited) | ||||||||
Nine Month Information | ||||||||
September 30, | September 30, | |||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (26,515) | $ | (24,721) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation, amortization and write-off of property and equipment | 1,051 | 1,112 | ||||||
Amortization and write-off of intangibles | 525 | 612 | ||||||
Amortization of right of use assets under operating leases | 364 | 352 | ||||||
Amortization of net premiums and (discounts) on marketable securities | 605 | (39) | ||||||
Gain on extinguishment of note payable | (5,032) | | ||||||
Stock-based compensation | 10,348 | 7,149 | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts receivable | (427) | 999 | ||||||
Other current assets | (353) | 60 | ||||||
Other assets | (54) | (45) | ||||||
Accounts payable and other accrued liabilities | 1,630 | 146 | ||||||
Deferred revenue | (847) | (1,092) | ||||||
Lease liability and other long-term liabilities | 242 | 236 | ||||||
Net cash used in operating activities | (18,463) | (15,231) | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (797) | (694) | ||||||
Capitalized patent costs | (475) | (478) | ||||||
Maturities of marketable securities | 72,141 | 30,598 | ||||||
Purchases of marketable securities | (42,049) | (22,149) | ||||||
Net cash provided by investing activities | 28,820 | 7,277 | ||||||
Cash flows from financing activities: | ||||||||
Issuance of common stock, net of issuance costs | | 38,603 | ||||||
Proceeds from note payable | | 5,032 | ||||||
Exercise of stock options | | 135 | ||||||
Purchase of common stock | (4,898) | (1,568) | ||||||
Net cash provided by (used in) financing activities | (4,898) | 42,202 | ||||||
Net increase in cash and cash equivalents (2) | $ | 5,459 | $ | 34,248 | ||||
Cash, cash equivalents and marketable securities at beginning of period | 77,728 | 36,817 | ||||||
Cash, cash equivalents and marketable securities at end of period | 52,490 | 62,655 | ||||||
(2) Net increase (decrease) in cash, cash equivalents and marketable securities | $ | (25,238) | $ | 25,838 | ||||
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SOURCE Digimarc Corporation