MakeMusic Reports Fourth Quarter And Fiscal Year 2011 Results
MakeMusic, Inc. (NASDAQ: MMUS) announced financial results for the period ended December 31, 2011.
“Fiscal year 2011 was a challenging year due to turnover in several key leadership positions, including the CEO, CTO and other sales and marketing positions,” said Karen van Lith, MakeMusic CEO. “However, the team came together in the last half of the year and made tremendous strides on several fronts, especially with regard to quality product releases, including the company’s first mobile application. We are well positioned to take on 2012 and are looking forward to many exciting partnering and solution opportunities.”
Financial Results for the Three Months Ended December 31, 2011, Compared to December 31, 2010
Net revenues were $5.9 million, compared to $4.8 million.
- Notation revenue was $3.8 million, compared to $3.0 million. The increase was related to the timing of the upgrade release of Finale 2012.
- SmartMusic revenue was $2.1 million compared to $1.9 million.
- Gross Profit was $5.0 million, or 86% of revenue, compared to $4.0 million, or 83% of revenue.
- Operating expenses were $4.0 million, compared to $3.6 million.
- Net income was $694,000, or $0.14 per share, compared to net income of $936,000, or $0.19 per basic and diluted share.
- At December 31, 2011, cash and cash equivalents were $9.3 million, compared to $11.5 million as of December 31, 2010. The decrease in cash is primarily attributed to the acquisitions of Garritan Corporation and select Recordare assets in the fourth quarter of 2011.
Financial Results for the Year Ended December 31, 2011, Compared to December 31, 2010
Net revenues were $17.0 million, compared to $17.1 million.
- Notation revenue was $9.5 million, compared to $10.7 million.
- SmartMusic revenue was $7.5 million compared to $6.4 million.
- Gross Profit was $14.2 million, or 84% of revenue, compared to $14.3 million, or 83% of revenue.
- Operating expenses were $14.1 million compared to $13.8 million.
- Net income was $4,000, or $0.00 per share, compared to net income of $1,012,000, or $0.21 per basic and diluted share.
|(In thousands of U.S. dollars, except share and per share data)|
|Cash and cash equivalents||$9,296||$11,532|
|Accounts receivable (net of allowance of $9 and $20 in|
|2011 and 2010, respectively)||1,539||1,238|
|Deferred income taxes, net||2,338||2,786|
|Prepaid expenses and other current assets||362||252|
|Total current assets||13,826||16,009|
|Property and equipment, net||441||342|
|Capitalized software products, net||3,113||2,424|
|Finite life intangible assets||1,020||-|
|Long term deferred income taxes, net||57||214|
|Other non-current assets||-||2|
|Liabilities and Shareholders’ Equity|
|Current portion of capital lease obligations||$4||$25|
|Other accrued expenses||508||307|
|Post contract support||125||150|
|Reserve for product returns||214||380|
|Current portion of deferred revenue||4,208||3,603|
|Total current liabilities||6,320||6,326|
|Capital lease obligations, net of current portion||-||4|
|Deferred revenue, net of current portion||123||96|
|Common stock, $0.01 par value:|
|Authorized shares – 10,000,000|
|Issued and outstanding shares – 4,934,020 and 4,895,983|
|in 2011 and 2010, respectively||49||49|
|Additional paid-in capital||66,930||66,632|
|Total shareholders’ equity||16,497||16,195|
|Total liabilities and shareholders’ equity||$22,940||$22,621|
|Statements of Operations|
|(In thousands of U.S. dollars, except share and per share data)|
|3 Months||12 Months|
|Ended December 31,||Ended December 31,|
|COST OF REVENUES||846||833||2,757||2,833|
|Selling and marketing expenses||1,550||1,115||5,182||4,574|
|General and administrative expenses||1,049||1,056||4,053||3,741|
|Patent litigation expense||-||-||225||-|
|Total operating expenses||3,966||3,635||14,098||13,839|
|INCOME FROM OPERATIONS||1,070||374||139||476|
|Net income before income tax||1,094||393||254||551|
|Income tax expense (benefit)||400||(543)||250||(461)|
|Income per common share:|
|Weighted average common shares outstanding:|
|Statements of Cash Flows|
|(In thousands of U.S. dollars)|
|Ended December 31,|
|Cash flows from operating activities|
|Adjustments to reconcile net income to net cash used in operating activities:|
|Depreciation and amortization||1,138||1069|
|Gain on disposal of assets||-||(1||)|
|Deferred income taxes, net||165||(436||)|
|Share based compensation||419||438|
|Net changes in operating assets and liabilities, excluding the effect of business acquisitions:|
|Prepaid expenses and other current assets||(110||)||42|
|Accrued expenses and product returns||(729||)||231|
|Net cash provided by operating activities||1,269||3,128|
|Cash flows from investing activities|
|Purchases of property and equipment||(346||)||(143||)|
|Proceeds from disposal of property and equipment||-||1|
|Capitalized development and other intangibles||(588||)||(511||)|
|Net cash used in investing activities||(3,278||)||(653||)|
|Cash flows from financing activities|
|Proceeds from stock options exercised||111||181|
|Payments on redemption of stock options||(22||)||(6||)|
|Repurchase of common stock||(291||)||-|
|Principal payments on capital leases||(25||)||(61||)|
|Net cash (used in) provided by financing activities||(227||)||114|
|Net (decrease) increase in cash and cash equivalents||(2,236||)||2,589|
|Cash and cash equivalents, beginning of year||11,532||8,943|
|Cash and cash equivalents, end of year||$9,296||$11,532|
|Supplemental disclosure of cash flow information|
|Income taxes paid||124||136|
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