|By Business Wire||
|November 6, 2012 04:04 PM EST||
MakeMusic, Inc. (NASDAQ: MMUS), a world leader in music technology, announced financial results for the quarter ended September 30, 2012.
Chairman of the Board Robert Morrison commented, “The MakeMusic team executed well in the third quarter, achieving a sizable increase in net revenues and making solid headway with the company’s key growth initiatives.
We believe the commitment we made to invest in product development, sales and marketing capabilities and personnel is positioning MakeMusic to leverage the many changes in our markets and enhance our standing as a pre-eminent provider of cutting-edge, interactive music software products.”
COO and CFO Karen VanDerBosch added, “Net revenues rose 27% compared to the third quarter of 2011 and 17% on a year-to-date basis, reflecting the expansion of MakeMusic’s product lines and continued SmartMusic® growth. We ended the quarter with 201,838 SmartMusic subscriptions, a 14% increase over September 2011. Both our rebranding and our technology initiatives have been moving forward smoothly and we are on track to complete important modernizations to our software platform and unveil our new version of Finale® in mid-2013. It will offer many innovative features and a common file format to provide a platform for future development.”
Financial Results for the Quarter Ended September 30, 2012 Compared to the Quarter Ended September 30, 2011
Net revenues were $4.8 million, compared to $3.8 million.
- Notation revenue was $2.4 million compared to $1.6 million. Included in 2012 Notation revenue was $216,000 relating to Garritan product sales.
- SmartMusic revenue was $2.4 million compared to $2.2 million.
- Gross profit was $4.0 million, or 82% of revenue, compared to $3.0 million, or 79% of revenue.
- Operating expenses were $4.9 million, compared to $3.3 million, due to previously-announced investments in our technology architecture and sales and marketing initiatives, as well as legal and financial advisory expenses associated with responding to the proposal received from LaunchEquity Partners, LLC in July 2012.
- Net loss was $620,000, or $0.13 per basic and diluted share, compared to net loss of $205,000, or $.04 per basic and diluted share.
Financial Results for the Nine Months Ended September 30, 2012 Compared to the Nine Months Ended September 30, 2011
Net revenues were $13.0 million, compared to $11.1 million.
- Notation revenue was $6.8 million compared to $5.7 million. Included in 2012 Notation revenue was $699,000 relating to Garritan product sales.
- SmartMusic revenue was $6.3 million compared to $5.5 million.
- Gross profit was $11.0 million, or 84% of revenue, compared to $9.2 million, or 83% of revenue.
- Operating expenses were $14.7 million, compared to $10.1 million, due to previously-announced investments in our technology architecture and sales and marketing initiatives, as well as legal and financial advisory expenses associated with responding to the proposal received from LaunchEquity Partners, LLC in July 2012 and legal and severance expenses associated with the June 2012 departure of the company’s former CEO.
- Net loss was $2.4 million, or $0.49 per basic and diluted share, compared to net loss of $690,000, or $0.14 per basic and diluted share.
Cash and cash equivalents were $5.9 million compared to $9.3 million as of December 31, 2011. The decrease is attributable primarily to our technology and marketing investments, as well as our strategic alternatives review process.
Strategic Alternatives Review Process
The Special Committee appointed by MakeMusic’s Board of Directors is continuing to evaluate strategic alternatives including, but not limited to, the July 15, 2012 proposal from its largest shareholder, LaunchEquity Partners, LLC, other potential strategic transactions to realize the long-term value of the Company, or continuing as an independent, public company with the Company’s current growth plans. In August 2012 the Special Committee retained Lazard Middle Market LLC to advise the Special Committee during its deliberations and assist it in determining the course of action that it believes is in the best interests of MakeMusic and its shareholders. No assurance can be given as to whether this process, which is ongoing, will result in a proposed transaction, whether any transaction that may be proposed as a result of such process would be acceptable to the Company, the Special Committee and the Board, or whether any such proposed transaction will be announced or consummated.
Conference Call Information
The company will hold a conference call to review operating results for the quarter ended September 30, 2012, today, Tuesday, November 6, 2012, at 3:30 p.m. CST / 4:30 p.m. EST. To access the call, participants should call 888-463-4487 or 706-679-5355 and reference Conference ID #43445815. Two hours after the completion of the conference call, a digital recording will be available for replay by calling 855-859-2056 or 404-537-3406. The recording will be available through November 13, 2012.
About MakeMusic, Inc.
MakeMusic®, Inc. is a world leader in music technology whose mission is to develop and market solutions that transform how music is composed, taught, learned and performed. For more than 20 years, Finale® has been the industry standard in music notation software, enabling composers, arrangers, musicians, teachers, students and publishers to create, edit, audition, print and publish musical scores. MakeMusic is also the creator of SmartMusic® interactive software that is transforming the way students practice. With SmartMusic, students and teachers have access to thousands of band, orchestra and vocal pieces allowing students to practice with background accompaniment and get immediate feedback on their performance. SmartMusic allows teachers to individualize instruction and document the progress of every student. The SmartMusic Inbox™, an Android™ and Apple® mobile application, provides additional access for teachers to review, grade and comment on student assignments. MusicXML™ is an Internet-friendly way to publish musical scores, enabling musicians to distribute interactive sheet music online and to use sheet music files with a wide variety of musical applications. Garritan™ sound libraries provide musicians with state-of-the-art virtual instruments with the playback quality of a live performance. Additional information about this Minnesota company can be found at www.makemusic.com.
Certain statements found in this release may constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the speaker’s current views with respect to future events and include any statement that does not directly relate to a current or historical fact. Our forward-looking statements in this release relate to our expectations regarding: the opportunities created by technology upgrades; expected timing for future product offerings; the implementation of branding, marketing and sales efforts; and the Board and Special Committee’s evaluation of strategic alternatives. Forward-looking statements cannot be guaranteed and actual results may vary materially due to the uncertainties and risks, known and unknown, associated with such statements. Examples of risks and uncertainties for MakeMusic include, but are not limited to: (i) the ability of our management team to successfully implement growth initiatives for SmartMusic; (ii) market acceptance of our products; (iii) the impact of changing technology on our product upgrades; (iv) delays in finalizing and implementing product modernization initiatives; (v) risks and uncertainties relating to a possible transaction and process of exploring strategic alternatives; and (vi) those factors described from time to time in our reports to the Securities and Exchange Commission (including our Annual Report on Form 10-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on “forward-looking statements,” as such statements speak only as of the date of this release. We do not intend to update publicly or revise any forward-looking statements.
Condensed Balance Sheets
(In thousands of U.S. dollars, except share data)
|September 30,||December 31,|
|Cash and cash equivalents||$||5,894||$||9,296|
Accounts receivable (net of allowance of $5 and $9 in 2012 and 2011, respectively)
|Deferred income taxes, net||2,338||2,338|
|Prepaid expenses and other current assets||359||362|
|Total current assets||10,941||13,826|
|Property and equipment, net||589||441|
|Capitalized software products, net||3,872||3,113|
|Finite life intangible assets||843||1,020|
|Deferred income taxes, net||1,457||57|
|Liabilities and Shareholders’ Equity|
|Current portion of capital lease obligations||$||3||$||4|
|Other accrued expenses||626||508|
|Post contract support||125||125|
|Reserve for product returns||243||214|
|Current portion of deferred revenue||4,828||4,208|
|Total current liabilities||7,787||6,320|
|Capital lease obligations, net of current portion||8||-|
|Deferred revenue, net of current portion||114||123|
|Common stock, $0.01 par value:|
|Authorized shares – 10,000,000|
|Issued and outstanding shares – 4,898,707 and 4,934,020|
|in 2012 and 2011, respectively||49||49|
|Additional paid-in capital||67,107||66,930|
|Total shareholders’ equity||14,276||16,497|
|Total liabilities and shareholders’ equity||$||22,185||$||22,940|
Condensed Statements of Operations
(In thousands of U.S. dollars, except share and per share data)
|3 Months||9 Months|
|Ended September 30,||Ended September 30,|
|COST OF REVENUES||853||783||2,082||1,911|
|Selling and marketing expenses||1,846||1,384||5,105||3,632|
|General and administrative expenses||1,123||907||4,177||3,004|
|Patent litigation expense||-||-||-||225|
|Total operating expenses||4,940||3,262||14,739||10,132|
|LOSS FROM OPERATIONS||(978||)||(240||)||(3,782||)||(931||)|
|Net loss before income tax||(967||)||(202||)||(3,718||)||(840||)|
|Income tax expense (benefit)||(347||)||3||(1,320||)||(150||)|
|Loss per common share:|
|Basic and diluted||($0. 13||)||($0.04||)||($0.49||)||($0.14||)|
|Weighted average common shares outstanding:|
|Basic and diluted||4,898,707||4,908,829||4,921,142||4,884,755|
Condensed Statements of Cash Flows
(In thousands of U.S. dollars)
|Ended September 30,|
|Cash flows from operating activities|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||1,073||826|
|Loss on disposal of asset||5||-|
|Deferred income taxes, net||(1,400||)||(208||)|
|Share based compensation||171||293|
|Net changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||3||(76||)|
|Accrued expenses and product returns||615||(659||)|
|Net cash used in operating activities||(1,601||)||(713||)|
|Cash flows from investing activities|
|Purchases of property and equipment||(325||)||(239||)|
|Capitalized development and other intangibles||(1,472||)||(453||)|
|Net cash used in investing activities||(1,797||)||(692||)|
|Cash flows from financing activities|
|Proceeds from stock options exercised||-||87|
|Payments on redemption of stock options||-||(18||)|
|Repurchase of common stock||-||(291||)|
|Payments on capital leases||(4||)||(24||)|
|Net cash used in financing activities||(4||)||(246||)|
|Net decrease in cash and cash equivalents||(3,402||)||(1,651||)|
|Cash and cash equivalents, beginning of period||9,296||11,532|
|Cash and cash equivalents, end of period||$||5,894||$||9,881|
|Supplemental disclosure of cash flow information|
|Income taxes paid||97||124|
|Non-cash investment and financing activities|
|Equipment acquired under capital lease||11||-|
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Jun. 27, 2016 07:30 AM EDT Reads: 979
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Jun. 26, 2016 05:00 PM EDT Reads: 1,302
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Jun. 26, 2016 05:00 PM EDT Reads: 1,211
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Jun. 26, 2016 04:00 PM EDT Reads: 1,257
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Jun. 26, 2016 04:00 PM EDT Reads: 1,318
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Jun. 26, 2016 03:00 PM EDT Reads: 982
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
Jun. 26, 2016 02:00 PM EDT Reads: 1,147
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jun. 26, 2016 01:00 PM EDT Reads: 806
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Jun. 26, 2016 12:00 PM EDT Reads: 1,290
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Jun. 26, 2016 12:00 PM EDT Reads: 1,110
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
Jun. 26, 2016 12:00 PM EDT Reads: 1,351
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Jun. 26, 2016 12:00 PM EDT Reads: 1,089
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Jun. 26, 2016 11:00 AM EDT Reads: 1,118
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Jun. 26, 2016 09:45 AM EDT Reads: 634
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Jun. 26, 2016 08:45 AM EDT Reads: 748
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Jun. 25, 2016 03:00 PM EDT Reads: 1,622
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Jun. 24, 2016 01:00 PM EDT Reads: 1,362
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
Jun. 24, 2016 12:00 PM EDT Reads: 1,659
industrial company for a multi-year contract initially valued at over $4.0 million. In addition to DataV software, Bsquare will also provide comprehensive systems integration, support and maintenance services. DataV leverages advanced data analytics, predictive reasoning, data-driven diagnostics, and automated orchestration of remediation actions in order to improve asset uptime while reducing service and warranty costs.
Jun. 22, 2016 11:00 AM EDT Reads: 1,373
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
Jun. 19, 2016 12:45 PM EDT Reads: 1,279