Digimarc Reports Fourth Quarter and Full Year 2017 Financial Results
Digimarc Corporation (DMRC), inventor of the Intuitive Computing Platform(TM) featuring Digimarc Barcode, reported financial results for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter 2017 Financial Results Revenue for the fourth quarter of 2017 totaled $4.9 million compared to $5.2 million in the same quarter a year-ago. The decrease was primarily due to lower license revenue reflecting the impact of the $3.5 million upfront license fee we realized in the third quarter of 2017 whereby we waived any future royalty obligations from this licensee in one of the licensed fields of use.
Operating expenses for the fourth quarter of 2017 totaled $11.5 million compared to $9.0 million in the same quarter a year-ago. The increase was primarily due to higher investment in sales, marketing, and engineering as the company continues to address important opportunities in market development and delivery of Digimarc Discover and Digimarc Barcode.
Operating loss for the fourth quarter of 2017 totaled $8.7 million compared to an operating loss of $5.9 million in the same quarter a year-ago. The higher operating loss was primarily due to higher operating expenses.
Net loss for the fourth quarter of 2017 totaled $8.4 million or $(0.76) per diluted share, compared to net loss of $5.8 million or $(0.57) per diluted share in the same quarter a year-ago.
At quarter-end, cash, cash equivalents and marketable securities totaled $67.7 million, compared to $60.9 million at September 30, 2017. The increase was primarily due to $12.0 million of net proceeds from the sale of common stock in a registered direct offering completed during the quarter, partially offset by higher operating expenses.
Full Year 2017 Financial Results Revenue for the full year 2017 totaled $25.2 million compared to $21.8 million in 2016. The increase was primarily due to higher license revenue driven by a one-time $3.5 million license fee from an existing licensee. In exchange for the upfront license fee, we waived any future royalty obligations from this licensee in one of the licensed fields of use.
Operating expenses for the full year 2017 totaled $43.2 million compared to $35.2 million in 2016. The increase was primarily due to higher investment in sales, marketing, and engineering.
Operating loss for the full year 2017 totaled $26.6 million compared to an operating loss of $21.9 million in 2016. The higher operating loss was primarily due to higher operating expenses, partially offset by higher license revenue.
Net loss for the full year 2017 totaled $25.8 million or $(2.44) per diluted share, compared to a net loss of $21.7 million or $(2.36) per diluted share in 2016.
Conference Call Digimarc will hold a conference call later today (Wednesday, February 21, 2018) to discuss these results, as well as provide an update on market conditions and execution of strategy. Chairman and CEO Bruce Davis and CFO Charles Beck 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 managements presentation.
The conference call will be broadcast live and available for replay via the investor section of the companys website here.
For those who wish to listen to the call via telephone, please dial the number below at least five minutes prior to the scheduled start time:
Toll-Free Number: 866-562-9934 International Number: 706-679-0638 Conference ID: 96755398
If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.
About Digimarc Digimarc Corporation (DMRC) is a pioneer in the automatic identification of everyday objects such as product packaging and virtually any media, including print, images, and audio. Based on the patented Intuitive Computing Platform (ICP(TM)), Digimarc provides innovative and comprehensive automatic recognition technologies to simplify search, and transform information discovery through unparalleled reliability, efficiency and security. Digimarc has a global patent portfolio, which includes over 1,100 granted and pending patents. These innovations include state-of-the-art identification technology, Digimarc Barcode, as well as Digimarc Discover? software for barcode scanning and more. Digimarc is based in Beaverton, Oregon, with technologies deployed by major retailers and consumer brands, central banks, U.S. states, film companies and professional sports franchises, among others. Visit digimarc.com and follow us @digimarc to learn more about The Barcode of Everything(TM).
Forward-looking Statements 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 market opportunities for Digimarc Discover and Digimarc Barcode, 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 managements 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 companys Form 10-K for the year ended December 31, 2016 and in subsequent periodic reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect managements 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.
Consolidated Income Statement Information
(in thousands, except per share amounts)
Total cost of revenue
Total gross profit
Percentage of gross profit to total revenue
Sales and marketing
Research, development and engineering
General and administrative
Total operating expenses
Other income, net
Loss before income taxes
Benefit (provision) for income taxes
Earnings (loss) per common share:
Loss per common share - basic
Loss per common share - diluted
Weighted average common shares outstanding - basic
Weighted average common shares outstanding - diluted 11,046
Consolidated Balance Sheet Information
Cash and cash equivalents (1)
Marketable securities (1)
Trade accounts receivable, net
Other current assets
Total current assets
Marketable securities (1)
Property and equipment, net
Liabilities and Shareholders Equity
Accounts payable and other accrued liabilities $
Total current liabilities
Deferred rent and other long-term liabilities
Commitments and contingencies
Additional paid-in capital
Total shareholders equity
Total liabilities and shareholders equity
(1) Aggregate cash, cash equivalents, short- and long-term marketable securities was $67,738 and $60,526 at December 31, 2017 and December 31, 2016, respectively.
Consolidated Cash Flow Information
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and write-off of property and equipment
Amortization and write-off of intangibles
Changes in operating assets and liabilities:
Trade accounts receivable
Other current assets
Accounts payable and other accrued liabilities
Net cash used in operating activities
Cash flows from investing activities:
Purchase of property and equipment
Capitalized patent costs
Maturity of marketable securities
Purchase of marketable securities
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Issuance of common stock, net of issuance costs
Exercise of stock options
Purchase of common stock
Net cash provided by financing activities
Net increase in cash and cash equivalents (2)
Cash, cash equivalents and marketable securities at beginning of period
Cash, cash equivalents and marketable securities at end of period
Net increase in cash, cash equivalents and marketable securities
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SOURCE Digimarc Corporation