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
April
25, 2013
(April
25, 2013)
Date
of Report (Date of earliest event reported)
Sonic
Foundry, Inc.
(Exact
name of registrant as specified in its charter)
Maryland |
1-14007 |
39-1783372 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
222 W. Washington Ave Madison, WI 53703 |
(608) 443-1600 |
(Address of principal executive offices) |
(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:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ 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 April 25, 2013, Sonic Foundry, Inc. reported financial results for the fiscal quarter ended March 31, 2013. 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 March 31, 2013. |
EXHIBIT LIST
NUMBER |
DESCRIPTION |
99.1 | Press release concerning financial results for the fiscal quarter ended March 31, 2013. |
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) |
||||
|
April 25, 2013 | By: |
/s/ Kenneth A. Minor |
|
Kenneth A. Minor |
||||
Chief Financial Officer |
Exhibit 99.1
Sonic Foundry Reports Second Quarter Fiscal 2013 Results
Quarterly Billings increase 19%
MADISON, Wis.--(BUSINESS WIRE)--April 25, 2013--Sonic Foundry, Inc. (NASDAQ: SOFO), the trusted market leader for video management and academic, enterprise and event webcasting, today announced financial results for its fiscal 2013 second quarter ended March 31, 2013.
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 March 31, 2013, $6.1 million of revenue was deferred, of which the company expects to realize approximately $2.5 million in the quarter ending June 30, 2013. 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 second quarter of fiscal 2012 to 73 percent in the second quarter of fiscal 2013 due to operational efficiencies in recorder and services costs.
International product and service billings accounted for 33 percent of overall billings, compared to 34 percent in the second quarter of fiscal 2012. During the second quarter of this fiscal year, 86 percent of billings were to preexisting customers, compared to 81 percent in second quarter fiscal 2012, with 47 percent to education customers and 39 percent to corporate.
“The new products we brought to market in the past year have contributed to the positive momentum we’re seeing in the second quarter,” said Gary Weis, chief executive officer of Sonic Foundry. “With the launch of Mediasite Enterprise Video Platform and My Mediasite we are providing customers with the most comprehensive video strategy solution in the market. As our team focuses on bringing these and other innovations to leading colleges, universities and corporations, we will continue to see growth in new annual licenses and renewals. As we enter our strongest quarters, I’m confident the momentum we’re seeing now will translate into revenue and income growth which will meet or exceed our three year goal of a minimum of $40 million in revenue with 15% pre-tax net income.”
Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its fiscal 2013 second 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, register at www.sonicfoundry.com/earnings. 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) is the trusted market leader for enterprise webcasting solutions, providing video content management and distribution for education, business and government. Powered by the patented Mediasite webcasting platform and webcast services of Mediasite Events, the company empowers people to advance how they share knowledge online, using video webcasts to bridge time and distance, enhance learning outcomes and improve performance.
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) |
||||||||
|
March 31, |
September 30, |
||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,676 | $ | 4,478 | ||||
Accounts receivable, net of allowances of $85 | 5,653 | 5,578 | ||||||
Inventories | 1,030 | 1,053 | ||||||
Prepaid expenses and other current assets | 915 | 757 | ||||||
Total current assets | 11,274 | 11,866 | ||||||
Property and equipment: | ||||||||
Leasehold improvements | 852 | 852 | ||||||
Computer equipment | 4,557 | 3,851 | ||||||
Furniture and fixtures | 865 | 865 | ||||||
Total property and equipment |
6,274 |
5,568 | ||||||
Less accumulated depreciation and amortization | 3,154 | 2,624 | ||||||
Net property and equipment | 3,120 | 2,944 | ||||||
Other assets: | ||||||||
Goodwill | 7,576 | 7,576 | ||||||
Investment in Mediasite KK | 588 | 420 | ||||||
Software development costs | 458 | - | ||||||
Other intangibles, net of amortization of $190 and $180 | 5 | 15 | ||||||
Total assets | $ | 23,021 | $ | 22,821 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Revolving line of credit | $ | - | $ | - | ||||
Accounts payable | 1,305 | 1,604 | ||||||
Accrued liabilities | 761 | 850 | ||||||
Unearned revenue | 5,725 | 5,284 | ||||||
Current portion of capital lease obligation | 184 | 129 | ||||||
Current portion of notes payable | 667 | 667 | ||||||
Total current liabilities | 8,642 | 8,534 | ||||||
Long-term portion of unearned revenue |
363 |
349 |
||||||
Long-term portion of capital lease obligation |
174 |
131 |
||||||
Long-term portion of notes payable | 433 | 766 | ||||||
Leasehold improvement liability | 488 | 532 | ||||||
Deferred tax liability | 2,090 | 1,970 | ||||||
Total liabilities | 12,190 | 12,282 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, $.01 par value, authorized 500,000 shares; |
— |
— |
||||||
5% preferred stock, Series B, voting, cumulative, |
— |
— |
||||||
Common stock, $.01 par value, authorized 10,000,000 shares; |
39 |
39 |
||||||
Additional paid-in capital | 189,917 | 189,459 | ||||||
Accumulated deficit | (178,930 | ) | (178,764 | ) | ||||
Receivable for common stock issued | (26 | ) | (26 | ) | ||||
Treasury stock, at cost, 12,716 shares | (169 | ) | (169 | ) | ||||
Total stockholders' equity | 10,831 | 10,539 | ||||||
Total liabilities and stockholders' equity | $ | 23,021 | $ | 22,821 |
Sonic Foundry, Inc. |
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Condensed Consolidated Statements of Operations |
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(in thousands, except for share and per share data) |
||||||||||||||||
(Unaudited) |
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Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2013 |
2012 |
2013 |
2012 |
|||||||||||||
Revenue: | ||||||||||||||||
Product | $ | 2,958 | $ | 2,617 | $ | 5,799 | $ | 5,216 | ||||||||
Services | 3,415 | 3,250 | 7,055 | 6,750 | ||||||||||||
Other | 57 | 61 | 128 | 147 | ||||||||||||
Total revenue | 6,430 | 5,928 | 12,982 | 12,113 | ||||||||||||
Cost of revenue: |
||||||||||||||||
Product | 1,360 | 1,354 | 2,674 | 2,616 | ||||||||||||
Services | 380 | 290 | 751 | 706 | ||||||||||||
Total cost of revenue | 1,740 | 1,644 | 3,425 | 3,322 | ||||||||||||
Gross margin | 4,690 | 4,284 | 9,557 | 8,791 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | 3,022 | 2,704 | 6,029 | 5,477 | ||||||||||||
General and administrative | 834 | 650 | 1,649 | 1,475 | ||||||||||||
Product development | 868 | 962 | 2,044 | 1,944 | ||||||||||||
Total operating expenses | 4,724 | 4,316 | 9,722 | 8,896 | ||||||||||||
Loss from operations | (34 | ) | (32 | ) | (165 | ) | (105 | ) | ||||||||
Equity in earnings from investment in Mediasite KK |
90 |
- |
168 |
- |
||||||||||||
Other expense, net | (23 | ) | (23 | ) | (49 | ) | (75 | ) | ||||||||
Income (loss) before income taxes | 33 | (55 | ) | (46 | ) | (180 | ) | |||||||||
Provision for income taxes | (60 | ) | (60 | ) | (120 | ) | (120 | ) | ||||||||
Net loss | $ | (27 | ) | $ | (115 | ) | $ | (166 | ) | $ | (300 | ) | ||||
Net loss per common share: | ||||||||||||||||
– basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.08 | ) | ||||
– diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.08 | ) | ||||
Weighted average common shares |
||||||||||||||||
– basic |
3,910,237 |
3,852,664 |
3,903,991 |
3,846,251 |
||||||||||||
– diluted | 3,910,237 | 3,852,664 | 3,903,991 | 3,846,251 |
Non-GAAP Consolidated Statements of Operations |
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(in thousands, except for per share data) |
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Fiscal Quarter Ended |
Fiscal Quarter Ended |
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GAAP |
Adj(1) |
Non-GAAP |
GAAP |
Adj(1) |
Non-GAAP |
||||||||||||||||||||
Revenues | $ | 6,430 | $ | 132 | $ 6,562 | $ | 5,928 | $ | (407 | ) | $ | 5,521 | |||||||||||||
Cost of revenue |
1,740 |
— |
1,740 |
|
1,644 |
— |
1,644 |
||||||||||||||||||
Total operating expenses |
4,724 |
(447 |
) |
4,277 |
4,316 |
(402 |
) |
3,914 |
|||||||||||||||||
Income (loss) from operations |
(34 |
) |
579 |
545 |
(32 |
) |
(5 |
) |
(37 |
) |
|||||||||||||||
Equity investment in earnings from Mediasite KK |
90 |
— |
90 |
— |
— |
— |
|||||||||||||||||||
Other expense, net | (23 | ) | — | (23 | ) | (23 | ) | — | (23 | ) | |||||||||||||||
Provision for income taxes | (60 | ) | 60 | — | (60 | ) | 60 | — | |||||||||||||||||
Net income (loss) |
$ |
(27 |
) |
$ |
639 |
$ 612 |
$ |
(115 |
) |
$ |
55 |
$ |
(60 |
) |
|||||||||||
Basic net income (loss) per common share |
$ |
(0.01 |
) |
$ |
0.16 |
$ 0.16 |
$ |
(0.03 |
) |
$ |
0.01 |
$ |
(0.02 |
) |
|||||||||||
(1) Adjustments consist of the following: |
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Billings | $ | 132 | $ | (407 | ) | ||||||||||||||||||||
Depreciation and amortization | 283 | 219 | |||||||||||||||||||||||
Non-cash tax provision | 60 | 60 | |||||||||||||||||||||||
Stock-based compensation(2) |
164 |
183 |
|||||||||||||||||||||||
Total non-GAAP adjustments |
$ |
639 |
$ |
55 |
|||||||||||||||||||||
|
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(2) Stock-based compensation is included in the following GAAP operating expenses: | |||||||||||||||||||||||||
Selling and marketing | $ | 108 | $ | 119 | |||||||||||||||||||||
General and administrative | 10 | 11 | |||||||||||||||||||||||
Product development | 46 | 53 | |||||||||||||||||||||||
Total stock-based compensation |
$ |
164 |
$ |
183 |
CONTACT:
Sonic Foundry, Inc.
For media relations:
Tammy
Jackson, 608.770.9052
tammy@sonicfoundry.com
or
For
investor inquiries:
investor@sonicfoundry.com