UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
January 26, 2012(January 26, 2012)
Date of Report (Date of earliest event reported)
Sonic Foundry, Inc.
(Exact name of registrant as specified in its chapter)
Maryland (State or other jurisdiction of incorporation) |
1-14007 (Commission File Number) |
39-1783372 (IRS Employer Identification No.) |
222 W. Washington Ave Madison, WI 53703 |
(608) 443-1600 (Registrant's telephone number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On January 26, 2012, Sonic Foundry, Inc. reported financial results for the fiscal quarter ended December 31, 2011. See attached press release at exhibit 99.1.
The information in this Report on Form 8-K (including the exhibit) is furnished and shall not be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
99.1 | Press release concerning financial results for the fiscal quarter ended December 31, 2011. |
EXHIBIT LIST
NUMBER | DESCRIPTION | |
99.1 |
Press release concerning financial results for the fiscal quarter ended December 31, 2011.
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Sonic Foundry, Inc. (Registrant) | ||
January 26, 2012 | By: | /s/ Kenneth A. Minor |
Kenneth A. Minor Chief Financial Officer |
Sonic Foundry Reports First Quarter Fiscal 2012 Results
MADISON, Wis., Jan. 26, 2012 /PRNewswire/ -- Sonic Foundry, Inc. (NASDAQ: SOFO), the trusted market leader for enterprise webcasting and lecture capture, today announced financial results for its fiscal 2012 first quarter ended December 31, 2011.
GAAP results include:
Non-GAAP results include:
Non-GAAP net income primarily excludes all non-cash related expenses of stock compensation, depreciation, amortization, provision for income taxes and includes the cash impact of billings not recognized as revenue. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
At December 31, 2011, $5.5 million of revenue was deferred, of which the company expects to realize approximately $2.2 million in the quarter ending March 31, 2012. Revenue from service contracts is recognized over the life of the contract. Services revenue includes Mediasite customer support contracts as well as training, installation, rental, event and content hosting services.
Gross margin improved from 72 percent in the first quarter of fiscal 2011 to 73 percent in the first quarter of fiscal 2012 due to operational efficiencies in recorder and services costs.
International product and service billings accounted for 29 percent of overall billings, compared to 31 percent in the first quarter of fiscal 2011. During the first quarter of this fiscal year, 73 percent of billings were to preexisting customers, compared to 65 percent in first quarter fiscal 2011, with 53 percent to education customers and 39 percent to corporate.
"We are optimistic about our performance in 2012 and reaffirm our guidance of seventeen percent billings growth. Our growth of four percent in revenue over the first quarter of fiscal 2011, which contained one very significant sale to a single international education customer, is modest but nevertheless represents a strong showing in what is historically our slowest seasonal period, particularly when measured amidst lingering economic uncertainty," said Gary Weis, chief executive officer of Sonic Foundry. "We remain focused on improving the fundamentals of the company, building a solid pipeline and investing in new technology enhancements to reach our goals for both financial performance and customer value."
Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its fiscal 2012 first quarter results at 3:30 p.m. CT / 4:30 p.m. ET. It will use its patented rich media communications system, Mediasite, to webcast the presentation for both live and on-demand viewing. To access the presentation, go to www.sonicfoundry.com/q1. An archive of the webcast will be available for 30 days.
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use a measure of non-GAAP net income or loss in our financial presentation, which excludes certain non-cash costs and includes certain cash billings not recognized as revenue for GAAP purposes. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Our non-GAAP financial measures reflect adjustments based on the following items:
About Sonic Foundry®, Inc.
Sonic Foundry (NASDAQ: SOFO, www.sonicfoundry.com) is the trusted market leader for enterprise webcasting and lecture capture, providing video communication solutions for education, business and government. Powered by the patented Mediasite webcasting platform and Mediasite Events group, the company empowers people to transform the way they communicate online, using video webcasts to bridge time and distance, accelerate research and improve performance. Product and service names mentioned herein are the trademarks of Sonic Foundry, Inc. or their respective owners.
Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.
Sonic Foundry, Inc. Condensed Consolidated Balance Sheets (in thousands, except for share data) (Unaudited) | ||||
December 31, 2011 | September 30, 2011 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 4,110 | $ 5,515 | ||
Accounts receivable, net of allowances of $150 and $90 | 5,373 | 5,799 | ||
Inventories | 1,048 | 536 | ||
Prepaid expenses and other current assets | 716 | 740 | ||
Total current assets | 11,247 | 12,590 | ||
Property and equipment: | ||||
Leasehold improvements | 1,728 | 980 | ||
Computer equipment | 3,737 | 3,586 | ||
Furniture and fixtures | 703 | 461 | ||
Total property and equipment | 6,168 | 5,027 | ||
Less accumulated depreciation and amortization | 3,575 | 3,391 | ||
Net property and equipment | 2,593 | 1,636 | ||
Other assets: | ||||
Goodwill | 7,576 | 7,576 | ||
Other intangibles, net of amortization of $154 and $137 | 21 | 38 | ||
Total assets | $ 21,437 | $ 21,840 | ||
Liabilities and stockholders' equity | ||||
Current liabilities: | ||||
Revolving line of credit | $ - | $ - | ||
Accounts payable | 992 | 1,373 | ||
Accrued liabilities | 1,017 | 1,073 | ||
Accrued severance | 354 | 528 | ||
Unearned revenue | 5,133 | 5,547 | ||
Current portion of capital lease obligation | 91 | 89 | ||
Current portion of notes payable | 657 | 897 | ||
Total current liabilities | 8,244 | 9,507 | ||
Long-term portion of unearned revenue | 412 | 471 | ||
Long-term portion of capital lease obligation | 153 | 177 | ||
Long-term portion of notes payable | 967 | 694 | ||
Other liabilities | 510 | - | ||
Deferred tax liability | 1,790 | 1,730 | ||
Total liabilities | 11,988 | 12,579 | ||
Stockholders' equity: | ||||
Preferred stock, $.01 par value, authorized 500,000 shares; none issued and outstanding | — | — | ||
5% preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 1,000,000 shares, none issued | — | — | ||
Common stock, $.01 par value, authorized 10,000,000 shares; 3,855,364 and 3,845,531 shares issued and 3,842,648 and 3,832,815 shares outstanding | 39 | 38 | ||
Additional paid-in capital | 188,622 | 188,339 | ||
Accumulated deficit | (179,105) | (178,921) | ||
Receivable for common stock issued | (26) | (26) | ||
Treasury stock, at cost, 12,716 shares | (169) | (169) | ||
Total stockholders' equity | 9,361 | 9,261 | ||
Total liabilities and stockholders' equity | $ 21,437 | $ 21,840 | ||
Sonic Foundry, Inc. Condensed Consolidated Statements of Operations (in thousands, except for share and per share data) (Unaudited) | ||||||||
Three Months Ended December 31, | ||||||||
2011 | 2010 | |||||||
Revenue: | ||||||||
Product | $ 2,599 | $ 2,844 | ||||||
Services | 3,500 | 3,025 | ||||||
Other | 86 | 61 | ||||||
Total revenue | 6,185 | 5,930 | ||||||
Cost of revenue: | ||||||||
Product | 1,261 | 1,350 | ||||||
Services | 417 | 319 | ||||||
Total cost of revenue | 1,678 | 1,669 | ||||||
Gross margin | 4,507 | 4,261 | ||||||
Operating expenses: | ||||||||
Selling and marketing | 2,772 | 2,462 | ||||||
General and administrative | 825 | 619 | ||||||
Product development | 982 | 834 | ||||||
Total operating expenses | 4,579 | 3,915 | ||||||
Income (loss) from operations | (72) | 346 | ||||||
Other expense, net | (52) | (63) | ||||||
Income (loss) before income taxes | (124) | 283 | ||||||
Provision for income taxes | (60) | (60) | ||||||
Net income (loss) | $ (184) | $ 223 | ||||||
Net income (loss) per common share: | ||||||||
– basic | $ (0.05) | $ 0.06 | ||||||
– diluted | $ (0.05) | $ 0.06 | ||||||
Weighted average common shares – basic | 3,839,907 | 3,654,751 | ||||||
– diluted | 3,839,907 | 3,875,483 | ||||||
Non-GAAP Consolidated Statements of Operations (in thousands, except for per share data) | ||||||||||||||
Fiscal Quarter Ended December 31, 2011 | Fiscal Quarter Ended December 31, 2010 | |||||||||||||
GAAP | Adj(1) | Non-GAAP | GAAP | Adj(1) | Non-GAAP | |||||||||
Revenues | $ 6,185 | $ (473) | $ 5,712 | $ 5,930 | $ (347) | $ 5,583 | ||||||||
Cost of revenue | 1,678 | — | 1,678 | 1,669 | — | 1,669 | ||||||||
Total operating expenses | 4,579 | (433) | 4,146 | 3,915 | (351) | 3,564 | ||||||||
Income (loss) from operations | (72) | (40) | (112) | 346 | 4 | 350 | ||||||||
Other expense | (52) | — | (52) | (63) | — | (63) | ||||||||
Provision for income taxes | (60) | 60 | — | (60) | 60 | — | ||||||||
Net income (loss) | $ (184) | $ 20 | $ (164) | $ 223 | $ 64 | $ 287 | ||||||||
Basic net income (loss) per common share | $ (0.05) | $ 0.01 | $ (0.04) | $ 0.06 | $ 0.02 | $ 0.08 | ||||||||
(1)Adjustments consist of the following: | ||||||||||||||
Billings | $ (473) | $ (347) | ||||||||||||
Depreciation and amortization | 201 | 172 | ||||||||||||
Non-cash tax provision | 60 | 60 | ||||||||||||
Stock-based compensation(2) | 232 | 179 | ||||||||||||
Total non-GAAP adjustments | $ 20 | $ 64 | ||||||||||||
(2) Stock-based compensation is included in the following GAAP operating expenses: | ||||||||||||||
Selling and marketing | $ 157 | $ 122 | ||||||||||||
General and administrative | 14 | 12 | ||||||||||||
Product development | 61 | 45 | ||||||||||||
Total stock-based compensation | $ 232 | $ 179 | ||||||||||||
CONTACT: For investor inquiries, investor@sonicfoundry.com, for media relations, tammy@sonicfoundry.com