Rimage Corporation (NASDAQ: RIMG) today reported its financial results for the fourth quarter and full year ended December 31, 2012. Qumu Fourth Quarter Financial Highlights
- Qumu revenues totaled $4.3 million in the fourth quarter of 2012, 56% above the $2.8 million in the third quarter 2012 and more than double its $1.8 million in revenues in the fourth quarter of 2011.
- Qumu contracted commitments totaled $8.7 million in the 2012 fourth quarter, the best quarterly performance in its history. This compares with $4.5 million in contracted commitments in the recent third quarter. Qumu’s backlog of contracted revenue grew to $12.7 million at December 31, 2012 compared with $8.4 million at September 30, 2012.
- Disc publishing revenues in the recent fourth quarter totaled $16.4 million, a decrease of 17% from revenues in the fourth quarter of 2011. The decrease continued to reflect softness in demand in Europe and continued funding challenges with the government business in the U.S.
Fourth Quarter 2012 Financial Highlights
- Total revenues for the fourth quarter 2012 were $20.7 million, above the high end of guidance of $18 to $20 million. Compared with revenues in the 2011 fourth quarter of $21.7 million, recent fourth quarter revenues represented a 4% decline, reflecting a decrease in revenues from disc publishing, offset by higher revenues from Qumu, acquired October 10, 2011.
- Gross margin for the fourth quarter of 2012 was 51%, approximately the same as the gross margin in the fourth quarter of 2011 but improved from 48% in the third quarter of 2012. The improvement from the 2012 third quarter reflected a higher mix of revenue from Qumu software.
- Operating expenses in the quarter were $12.0 million, down from $12.8 million in the fourth quarter of 2011. Included in the recent fourth quarter results was approximately $0.5 million of one-time severance costs.
- The net loss for the fourth quarter was $1.1 million, or $(0.12) per share, significantly better than the fourth quarter guidance of a loss between $(0.20) and $(0.33) per share. This compares with a net loss of $1.4 million in the fourth quarter of 2011, or $(0.13) per share.
- Cash and marketable securities totaled $50.1 million at December 31, 2012. During the quarter, the Company repurchased 1.4 million shares of Rimage common stock for a total of $8.4 million. Fourth quarter cash used in operations totaled $0.2 million.
- Full year 2012 revenues were $79.4 million, compared with $83.6 million in 2011, driven by a decline in revenues from the disc publishing operation partially offset by an increase in revenue from Qumu software and services.
- The Company reported a net loss of $48.3 million, or $(4.85) per share, for 2012. Included in the loss were three non-cash charges totaling $40.7 million taken in the third quarter of 2012. These non-cash charges included a $22.2 million goodwill impairment charge that eliminated all the goodwill on the balance sheet, a $7.3 million impairment charge for the reduction in the fair market value of amortizing intangible assets and an $11.2 million charge to establish a valuation allowance against the Company’s deferred tax assets.
- Excluding these non-cash charges and the amortization of Qumu intangibles, the non-GAAP net loss was $5.7 million, or $(0.57) per share in 2012. This compares with net income of $2.8 million, or $0.29 per diluted share, in 2011.
Stock Repurchase ProgramDuring the quarter, the Company repurchased approximately 1.4 million shares of Rimage common stock for a total cost of $8.4 million. There are approximately 778,000 shares remaining for repurchase under the authorization. As of December 31, 2012, there were 8,653,932 shares outstanding. Financial Guidance For the first quarter 2013, the Company expects revenues of between $19 and $21 million and the net loss per share is expected to be between $(0.18) and $(0.30). Excluding amortization of Qumu intangibles, non-GAAP net loss per share is expected to be between $(0.16) and $(0.28). These loss projections reflect no tax benefit due to the establishment of the tax valuation allowance for book purposes. For total year 2013, the Company expects consolidated revenues to grow compared to 2012. Qumu revenues are expected to grow greater than 50% in 2013 compared to 2012. The Company expects this Qumu growth to be partially offset by a decline in disc publishing revenues. Consolidated cash from operations is expected at approximately break even levels for the year. The Company has approximately 778,000 shares remaining on its repurchase authorization and may repurchase shares from time to time during the year depending on market conditions. Earnings per Share and Financial Guidance Reconciliation
|Fourth Quarter 2012||Full Year 2012|
|GAAP earnings (loss) per share||$(0.12)||$(4.85)|
|Impact of amortization of intangibles||$0.03||$0.12|
|Impact of non cash charges for goodwill impairment, intangible asset impairment and deferred tax valuation allowance||$0.00||$4.16|
|Non-GAAP earnings (loss) per share||$(0.09)||$(0.57)|
|First Quarter 2013|
|Estimated GAAP earnings (loss) per share||$(0.18) - $(0.30)|
|Estimated impact of amortization of intangibles||$0.02|
|Estimated Non-GAAP earnings (loss) per share||$(0.16) - $(0.28)|
Conference CallThe Company has scheduled a conference call and webcast to review its fourth quarter results and recent corporate developments today, February 26, 2013 at 4:30 p.m. Eastern Time. The dial-in number for the conference call is 877-941-0844 for domestic participants and 480-629-9835 for international participants. Investors can also access a webcast of the live conference call by linking through the investor relations section of the Rimage website, www.rimage.com. Webcasts will be archived on Rimage’s website. Forward-Looking Statements This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” or “estimate” or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements include, for example, statements about: the Company’s future revenue and operating performance, the demand for the Company’s products or software, the integration of the Qumu business, anticipated synergies between Rimage and Qumu businesses, the effect of changes in technology, the development and marketing of new products, or repurchases under the Company’s expanded stock repurchase program. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and other factors set forth in the Company’s filings with the Securities and Exchange Commission. About Rimage Corporation Founded in 1978, Rimage Corporation (NASDAQ: RIMG) helps businesses deliver digital content directly and securely to their employees, customers, and partners. Rimage’s Qumu business is the global leader in the rapidly growing enterprise video communications market and an innovator in the secure mobile delivery of rich content. Rimage’s Disc Publishing business is the global leader in CD, DVD and Blu-ray-Disc™ archiving and distribution solutions. Rimage’s industry-leading solutions help thousands of organizations in North America, Europe and Asia use video and other rich content to increase engagement and collaboration without losing control. Additional information can be found at www.rimage.com. Blu-ray Disc™ is a trademark of the Blu-ray Disc Association.
|Selected Consolidated Financial Information|
|(In thousands except per share data)|
|Consolidated Statements of Operations Information:|
|Three months ended||Year ended|
|December 31,||December 31,|
|Cost of revenues||10,096||10,721||40,782||41,613|
|Research and development||2,909||2,642||11,866||7,257|
|Selling, general and administrative||8,900||9,913||36,039||30,093|
|Goodwill and intangible asset impairment charge||-||-||29,548||-|
|Amortization of purchased intangibles||157||223||952||223|
|Total operating expenses||11,966||12,778||78,405||37,573|
|Operating income (loss)||(1,313||)||(1,836||)||(39,744||)||4,448|
|Other income (expense), net||(44||)||57||(44||)||221|
|Income (loss) before income taxes||(1,357||)||(1,779||)||(39,788||)||4,669|
|Income tax expense (benefit)||(199||)||(382||)||8,809||1,997|
|Net income (loss)||(1,158||)||(1,397||)||(48,597||)||2,672|
|Net loss attributable to noncontrolling interest||43||46||259||163|
|Net income (loss) attributable to Rimage||$||(1,115||)||$||(1,351||)||$||(48,338||)||$||2,835|
|Net income (loss) per basic share||$||(0.12||)||$||(0.13||)||$||(4.85||)||$||0.29|
|Net income (loss) per diluted share||$||(0.12||)||$||(0.13||)||$||(4.85||)||$||0.29|
|Basic weighted average shares outstanding||9,320||10,207||9,971||9,674|
|Diluted weighted average shares outstanding||9,320||10,207||9,971||9,699|
|Consolidated Balance Sheet Information:|
|Balance as of|
|December 31,||December 31,|
|Cash and marketable securities||$||50,140||$||70,161|
|Total current assets||75,950||98,437|
|Property and equipment, net||5,966||6,177|
|Rimage stockholders’ equity||70,524||131,940|