Onstream Media Corp. F2Q10 (Qtr End 03/21/10) Earnings Call Transcript

Onstream Media Corp. (ONSM)

F2Q10 (Qtr End 03/21/10) Earnings Call

May 18, 2010 4:30 p.m. EST

Executives

Brett Maas - Hayden Communications - IR Contact

Randy Selman - Chairman, President and CEO

Robert Tomlinson - CFO

Analysts

Fred Milligan - Sanders Morris Harris

Van der Merve [ph] - EFG Bank

Don Steinkamp [ph]

Presentation

Operator

Good afternoon, and welcome to the Onstream Media Corporation Conference Call to discuss the company's fiscal 2010 second quarter financial results. All participants have been placed on a listen-only mode and the floor will be opened for questions and comments following the presentation.

At this time, I would like to turn the floor over to our host, Brett Maas of Hayden IR. Sir, you may begin.

Brett Maas

Thank you. Good afternoon and welcome to the Onstream Media conference call. Slide two, forward-looking statements. I'd like to point out that during the course of the conference call, there may be statements made related to future results of the company that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors including those set forth in the company's filings with the Securities and Exchange Commission.

It also should be noted that the webcast of today's conference call may be found on the internet by visiting Onstream Media’s corporate website at www.onstreammedia.com and then by selecting company at the top of the web page and then clicking on Press Releases. At that web page, you will find a link to the news release we issued to announce the company's fiscal 2010 second* quarter financial results and webcast.

An archived version of the webcast will shortly be available from the press release page and will be available for at least the next 12 months pursuant to SEC guidelines.

Finally, those interested in reviewing our recently filed 10-Q, which contains all of the financial information being discussed today, can find this document also via our corporate website by selecting company and under that heading Investor Relations and then clicking on SEC filings, where all of our recent SEC filings can be found as well as the Edgar database directly at www.sec.gov and then search for company filings.

At this time, I would like to introduce Randy Selman, President and Chief Executive Officer of Onstream Media. Randy, the floor is yours.

Randy Selman

Thank you. Good afternoon and thank you for joining us. Today we will review our results for the second fiscal quarter 2010 which ended March 31, 2010. We'll also provide an update on our overall strategic progress including some details about our iEncode and MarketPlace365 products.

With me today is our Chief Financial Officer, Robert Tomlinson. Hopefully you have all had an opportunity to review our financial results which were released Monday after the close of the market.

Revenues for our second fiscal quarter 2010, the period ended March 31, 2010 were approximately $4.1 million, up 1.6% sequentially from our first fiscal quarter of 2010 and down approximately 5.7% from the second fiscal quarter of the prior year.

The year-over-year decline in the second fiscal quarter primarily came from the audio and web conferencing services group.

However, with our recently announced partnership with iLinc, a leading provider of web conferencing technology and our partnership with etouches, a leading provider of event management tools which supports the division’s new webinar service, we expect that our audio and web conferencing division will quickly make up this revenue reduction and begin to demonstrate definitive growth during the coming quarters.

As we have seen over the last several quarters and again this quarter, the DMSP* and hosting revenues provided accelerating growth by 9.3% as compared to the same quarter last year.

In addition for the quarter, combined revenues of the digital media services group, which includes the DMSP and webcasting services exceeded last year's same quarter.

We expect DMSP revenues to continue accelerating and they will soon be driven by our new MarketPlace365 platform. It is increasingly clear that MarketPlace365 is being recognized as a compelling offering for virtual trade show producers, publishers and associations.

We are increasingly optimistic about the potential of this product offering and believe MarketPlace365 will become an important growth catalyst* for us starting this year.

So far we have signed 10 agent and nine promoter agreements for our MarketPlace365 platform which, as mentioned, is expected not only to drive some of the increase in DMSP and hosting revenues but also conferencing, webinars and webcasting revenues as well.

MarketPlace365 is an all-encompassing lead generation social media marketing and comprehensive communications platform. It enables publisher's associations, trade show promoters and entrepreneurs to rapidly and cost effectively self deploy their own online virtual marketplaces.

The solution comes prepackaged with an array of powerful marketing and search engine optimization features that can be implemented quickly with no upfront costs and minimal IT resources required. The initial MarketPlace365 marketplaces are expected to launch in July or August 2010.

Our infinite conferencing division signed an agreement with iLinc, a leading provider of web and video conferencing solutions to offer infinite clients tailored, affordable, web-based collaboration solutions.

This partnership adds a number of new solutions to the infinite portfolio including webinar tools, online meetings, virtual training capabilities and more. The new services will include advanced capabilities such as integrated* audio conferencing, voice over IP support, turnkey* webinar provisioning, robust reporting, learning management integration and CRM integration with salesforce.com, for example.

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