|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||-|
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at Built.io, examined how Docker has evolved into a highly effective tool for application delivery by allowing increasingly popular Mobile Backend-as-a-Service (mBaaS) platforms to quickly crea...
Nov. 30, 2015 06:00 AM EST Reads: 382
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Nov. 30, 2015 05:30 AM EST Reads: 493
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
Nov. 30, 2015 04:00 AM EST Reads: 606
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Nov. 30, 2015 04:00 AM EST Reads: 347
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk was on IBM Cloudant, Apache CouchDB, and ...
Nov. 30, 2015 03:45 AM EST Reads: 435
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Nov. 30, 2015 02:00 AM EST Reads: 448
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context with p...
Nov. 30, 2015 02:00 AM EST Reads: 446
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical to maintaining positive ROI. Raxak Protect is an automated security compliance SaaS platform and ma...
Nov. 30, 2015 12:00 AM EST Reads: 449
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Nov. 29, 2015 02:00 PM EST Reads: 488
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Nov. 29, 2015 01:00 PM EST Reads: 358
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
Nov. 29, 2015 12:45 PM EST Reads: 423
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
Nov. 29, 2015 12:30 PM EST Reads: 428
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Nov. 29, 2015 12:00 PM EST Reads: 530
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Nov. 29, 2015 11:45 AM EST Reads: 334
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Nov. 29, 2015 09:45 AM EST Reads: 455
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
Nov. 29, 2015 09:15 AM EST Reads: 347
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Nov. 29, 2015 08:45 AM EST Reads: 234
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Nov. 29, 2015 08:00 AM EST Reads: 284
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Nov. 29, 2015 07:00 AM EST Reads: 503
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Nov. 29, 2015 06:45 AM EST Reads: 746