Rimage Corporation (NASDAQ: RIMG) today reported its financial results for the third quarter and nine months ended September 30, 2012.
- Third quarter 2012 revenues totaled $20.9 million, a 3% increase from $20.3 million in revenues in the third quarter of 2011 and within previously established financial guidance. The increase was attributable to the revenues from Qumu, acquired October 10, 2011, partially offset by lower disc publishing revenues.
- Qumu revenues totaled $2.8 million in the recent third quarter with contracted commitments in the third quarter of $4.5 million. Qumu’s backlog of contracted revenue grew to $8.4 million at September 30, 2012 compared with $6.6 million at June 30, 2012.
- Disc publishing revenues in the recent third quarter were $18.2 million, a decrease of 10% from revenues in the third quarter of 2011. Foreign exchange impacts reduced revenues by 3% compared to the prior year’s third quarter. The remaining decline reflected lower hardware revenues in North America from the government sector.
- Gross margin for the 2012 third quarter was 48% compared with 51% in the same quarter last year and 45% in the second quarter of 2012. The decline compared to last year was mainly due to the mix of lower government hardware disc publishing revenues during the quarter.
- Operating expenses in the quarter were $41.9 million compared with $8.3 million in the third quarter last year, reflecting a $29.5 million non-cash goodwill and intangible asset impairment charge and the addition of $4.4 million of operating expenses associated with Qumu. Excluding these noncash impairment charges and the impact of Qumu, operating expenses were below last year’s third quarter.
- During the third quarter, the Company booked three non-cash charges to its financial statements. It recorded a $22.2 million goodwill impairment charge eliminating all the goodwill on the balance sheet and a $7.3 million impairment charge for the reduction in the fair market value of its amortizing intangible assets. In addition, the Company established a non-cash valuation allowance against its deferred tax assets resulting in a charge to income tax expense of $11.2 million. The total of these non-cash charges was $40.7 million.
- The net loss for the third quarter of 2012 was $42.8 million, or $(4.23) per share. Excluding the non-cash charges and the amortization of intangibles associated with the Qumu acquisition, the net loss for the quarter was $0.9 million, or $(.09) per share, within previously established financial guidance. This compares with net income of $1.5 million in the third quarter of 2011, or $0.16 per diluted share.
- Cash and marketable securities totaled $59 million at September 30, 2012 compared with $62 million at June 30, 2012. During the third quarter, the Company paid out $1.7 million in dividends and used $0.4 million to repurchase stock. Cash used in operations during the third quarter totaled $0.3 million.
- Year to date, 2012 revenues were $58.7 million, compared with $62.0 million in the comparable period of 2011. The Company reported a net loss of $47.2 million, or $(4.64) per share, for the first nine months of 2012. Excluding the non-cash charges and the amortization of intangibles associated with the Qumu acquisition, the year to date net loss in 2012 was $4.7 million, or $(0.46) per share versus net income of $4.2 million, or $0.44 per diluted share, in the first nine months of 2011.
Sherman L. Black, president and CEO, said, “We were pleased with the progress our software business demonstrated during the quarter. Revenues doubled over last quarter and we added $4.5 million of contracted commitments resulting in a backlog of $8.4 million. This was the level of performance we anticipated when we acquired Qumu last year.”