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MakeMusic Reports Second Quarter 2012 Results

Stocks in this article: MMUS

MakeMusic, Inc. (NASDAQ: MMUS), a world leader in music technology, announced financial results for the quarter ended June 30, 2012.

Chairman of the Board Robert Morrison commented, “We accomplished a great deal in the second quarter of 2012. Under the direction of our very capable leadership team, we are making steady progress with our important growth initiatives, including modernizing MakeMusic’s technology platform, enhancing our distribution and marketing and expanding our range of products. As planned, 2012 is a year of investment for MakeMusic and we are positioning the company to take advantage of the many opportunities that new technologies are opening up in the field of music technology and music education.”

COO and CFO Karen VanDerBosch added, “Revenue rose 21% for the quarter. This is particularly notable without having the benefit of an annual release of our Finale® notation software. Development efforts are well underway towards a mid-2013 launch of a modernized Finale product that takes advantage of current technology and workflows. Our June introduction of Finale SongBook™, a free music app for iPad users, illustrates the way we are leveraging MakeMusic’s core technology and delivering exciting new solutions for musicians. Additionally, new branding and marketing efforts are being rolled out simultaneously with our new music dealer sales program that will provide a modern look and consistent brand message across all our product lines.”

Financial Results for the Quarter Ended June 30, 2012 Compared to the Quarter Ended June 30, 2011

  • Net revenues were $4.0 million, compared to $3.3 million.
    • Notation revenue was $2.1 million compared to $1.7 million. This includes $271,000 relating to Garritan product sales.
    • SmartMusic revenue was $1.9 million compared to $1.6 million.
  • Gross profit was $3.5 million, or 86% of revenue, compared to $2.8 million, or 84% of revenue.
  • Operating expenses were $5.0 million compared to $3.1 million due to previously announced investments in our technology architecture and sales and marketing initiatives, as well as to legal expenses and costs associated with the departure of the company’s CEO in June 2012.
  • Net loss was $938,000, or $0.19 per basic and diluted share, compared to net loss of $305,000, or $0.06 per basic and diluted share.

Financial Results for the Six Months Ended June 30, 2012 Compared to the Six Months Ended June 30, 2011

  • Net revenues were $8.2 million, compared to $7.3 million.
    • Notation revenue was $4.4 million compared to $4.0 million. This includes $483,000 relating to Garritan product sales.
    • SmartMusic revenue was $3.8 million compared to $3.3 million.
  • Gross profit was $7.0 million, or 85% of revenue, compared to $6.2 million, also 85% of revenue.
  • Operating expenses were $9.8 million, compared to $6.9 million due to previously announced investments in our technology architecture and sales and marketing initiatives, as well as to legal expenses and costs associated with the June 2012 departure of the company’s CEO.
  • Net loss was $1.8 million, or $0.36 per basic and diluted share, compared to net loss of $486,000, or $0.10 per basic and diluted share.

Cash and cash equivalents were $5.9 million compared to $9.3 million as of December 31, 2011. The decrease is attributable primarily to our technology and marketing investments.

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