POMPANO BEACH, Fla.,
Jan. 13, 2012 /PRNewswire/
-- Onstream Media Corporation (NASDAQ: ONSM), a leading online
service provider of live and on-demand corporate audio and web
communications, virtual event technology and social media
marketing, reported today its financial results for the fourth
fiscal quarter and the year ended September
30, 2011.
Financial Highlights
- Revenues for the three months ended September 30, 2011 were $4.4 million, representing a 7.1% increase from
the fourth quarter of fiscal 2010. Revenues for fiscal 2011 were a
record $17.7 million, up 6.0%
compared to $17.0 million in fiscal
2010. The fiscal 2011 revenues represented a record high and the
fiscal 2011 fourth quarter revenues represented a record high as
compared to any previous fiscal fourth quarter.
- Cash flow from operating activities (before changes in current
assets and liabilities) for the year ended September 30, 2011 was $271,000, compared to cash used in operating
activities of approximately $211,000
for the previous fiscal year. This is the first time in our
company's history this measurement has been positive for a full
year.
- Gross margin of $2.8 million for
the three months ended September 30,
2011, representing 64.8% of total revenues, was an increase
of 4.6% as compared to the year-ago quarter. Gross margin for
fiscal 2011 was $11.8 million, an
increase of 5.9% compared to gross margin for fiscal 2010 and
representing 66.5% of total revenues.
- Onstream's net loss for the three months ended September 30, 2011 was approximately $2.5 million, a 3.2% decrease as compared to a
net loss of approximately $2.6
million for the fourth quarter of fiscal 2010. These losses
included non-cash expenses for goodwill impairment ($1.7 million and $1.6
million, respectively) as well as other non-cash expenses,
which are discussed in more detail below.
- Onstream's fiscal 2011 net loss was approximately $5.2 million, a 44.0% decrease as compared to a
net loss of approximately $9.3
million for fiscal 2010. These losses included non-cash
expenses for goodwill impairment ($1.7
million and $4.7 million,
respectively) as well as other non-cash expenses, which are
discussed in more detail below.
Financial Discussion
The approximately $288,000, or
7.1%, increase in consolidated revenues for the three months ended
September 30, 2011 was primarily due
to higher sales from the Company's Audio and Web Conferencing
Services Group, which were approximately $2.5 million for the three months ended
September 30, 2011. This $2.5 million from the Audio and Web Conferencing
Services Group represented an increase of approximately
$208,000, or 9.1%, from the
corresponding period of the prior fiscal year, primarily a result
of increased audio conferencing revenues in the Infinite
division.
The Infinite division's revenues of $1,997,662 for the fourth quarter of fiscal 2011
represented a new record high for that division. Furthermore, the
fourth quarter of fiscal 2011 included Infinite's first month ever
in excess of 10 million minutes, which month in turn contained a
single daily record of almost 700,000 minutes.
Digital Media Services Group revenues were approximately
$1.9 million for the three months
ended September 30, 2011, an increase
of approximately $80,000, or 4.5%,
from the corresponding period of the prior fiscal year, primarily
due to an increase in Webcasting division revenues. Webcasting
division revenues included an approximately 21.1% growth in
revenues from webcasting services provided to the following
governmental entities: the State of
California, the California State Department of Technology
Services, the California State Board of Equalization, the United
States Nuclear Regulatory Commission and the Internal Revenue
Service.
Onstream recognized $271,000
positive cash flow from operating activities (before changes in
current assets and liabilities) for the year ended September 30, 2011, compared to cash used in
operating activities of approximately $211,000 in the previous fiscal year. This
represented an improvement of approximately $482,000 and the first time in our company's
history this measurement has been positive for a full fiscal year.
Even with the seasonal reduction in revenues that we historically
experience in our fourth fiscal quarter, cash used in operating
activities (before changes in current assets and liabilities) was
only approximately $13,000 for the
three months ended September 30,
2011.
Onstream's net loss for the three months ended September 30, 2011 of approximately $2.5 million included approximately the same
amount of non-cash expenses ($2.5
million, net of non-cash income). The primary non-cash
expenses included in that net loss were a $1.7 million impairment loss on goodwill, as well
as depreciation and amortization and certain items (employee
compensation, professional fees and interest) paid with equity.
Onstream's fourth quarter fiscal 2011 net loss of approximately
$2.5 million, or $(0.22) per share was based on 11.4 million
weighted average shares outstanding and represented a 3.2% decrease
from the fourth quarter fiscal 2010 net loss of approximately
$2.6 million, or $(0.33) per share, which was based on 8.0 million
weighted average shares outstanding.
Onstream's fiscal 2011 net loss of approximately $5.2 million included approximately $5.5 million of non-cash expenses (net of
non-cash income). The primary non-cash expenses included in that
net loss were a $1.7 million
impairment loss on goodwill and $1.5
million depreciation and amortization, as well as certain
items (employee compensation, professional fees and interest) paid
with equity. Onstream's fiscal 2011 net loss of approximately
$5.2 million, or $(0.52) per share was based on 10.0 million
weighted average shares outstanding and represented a 44.0%
decrease from the fiscal 2010 net loss of approximately
$9.3 million, or $(1.20) per share, which was based on 7.7 million
weighted average shares outstanding.
Management Commentary
Randy Selman, President and Chief
Executive Officer of Onstream Media, commented, "We are pleased
that we were able to accomplish new revenue records in the most
recently completed fiscal year and quarter, continuing our
achievement of such records in the previous recent quarters. Our
fourth quarter revenues, while seasonally lower than third quarter
revenues as expected, grew 7.1% year-over-year. We also saw a 6.0%
increase in our revenues for the entire fiscal year. Looking
forward to fiscal 2012, we believe that our legacy business,
including conferencing and webcasting services, as well as our
anticipation of the start of meaningful revenues from our
MarketPlace365 platform, will continue to drive our revenue
growth."
Mr. Selman added, "We are also pleased to report positive cash
flow from operating activities (before changes in current assets
and liabilities) for an entire fiscal year for the first time in
our history. Addressing cash flow going forward, based on our
results for the year ended September 30,
2011, revenues for the quarter ended December 31, 2011 and expense reductions already
implemented by us that will affect fiscal 2012, we estimate that
even with no increase from historic revenue levels our operations
would result in sufficient cash flow to adequately fund all but
approximately $515,000 of our
anticipated ongoing cash expenditures through September 30, 2012, including capital
expenditures and debt service. Since we expect to see
year-over-year increases in gross margin exceeding that amount for
the remaining nine months of fiscal 2012, we expect our operations
to cover all of our cash requirements for the next fiscal year,
although we may still choose to accept additional financial
investment in the company if necessary to finance worthy
initiatives."
"We continued to strengthen our balance sheet in the fourth
quarter of 2011," continued Mr. Selman. "Our liability under
certain convertible debentures was reduced by $140,000 as a result of conversion to common
shares and we paid off other debt and other current liabilities
using proceeds of approximately $668,000 received from sale of our common stock.
We also extended the maturity dates of $350,000 of our remaining debt, in some cases
beyond the end of fiscal 2012."
"Despite our lackluster stock price, these very positive revenue
and operating cash flow results support our continuing confidence
in our corporate strategy. Accordingly, we believe that the
market will reflect the value we have created and the further
progress we expect as we continue to execute our strategy,"
concluded Mr. Selman.
Teleconference
Management will hold a conference call on Tuesday, January 17, 2012 at 4:30 p.m. ET to discuss its financial results for
the three and twelve months ended September
30, 2011, as well as provide an outlook for fiscal 2012.
Management discussion will be followed by an open Q&A session.
Interested parties may listen to the presentation live online at
http://www.visualwebcaster.com/event.asp?id=84469 or by calling
1-888-645-4404 or 201-604-0169. It is recommended to dial in
approximately 10 to 15 minutes prior to the scheduled start time.
An audio rebroadcast of the conference call will be archived for
one year online at
http://www.visualwebcaster.com/event.asp?id=84469.
About Onstream Media
Onstream Media Corporation (NASDAQ: ONSM) is a leading online
service provider of live and on-demand corporate audio and web
communications, virtual event technology and social media
marketing. Onstream Media's innovative Digital Media Services
Platform (DMSP) provides customers with cost effective tools for
encoding, managing, indexing, and publishing content via the
Internet. The company's MarketPlace365® solution enables
publishers, associations, tradeshow promoters and entrepreneurs to
rapidly and cost effectively self deploy their own online virtual
marketplaces. In addition, Onstream Media provides live and
on-demand webcasting, webinars, web and audio conferencing
services. To date, almost half of the Fortune 1000 companies and
78% of the Fortune 100 CEOs and CFOs have used Onstream Media's
services. Select Onstream Media customers include: AAA, Dell,
Disney, Georgetown University, National
Press Club, PR Newswire, Shareholder.com (NASDAQ), Sony Pictures
and the U.S. Government. Onstream Media's strategic relationships
include Akamai, BT Conferencing, Qwest and Trade Show News Network
(TSNN). For more information, visit Onstream Media at
http://www.onstreammedia.com or call 954-917-6655.
Cautionary Note Regarding Forward
Looking Statements
Certain statements in this document and elsewhere by
Onstream Media are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
information includes, without limitation, the business outlook,
assessment of market conditions, anticipated financial and
operating results, strategies, future plans, contingencies and
contemplated transactions of the company. Such forward-looking
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties and other factors which
may cause or contribute to actual results of company operations, or
the performance or achievements of the company or industry results,
to differ materially from those expressed, or implied by the
forward-looking statements. In addition to any such risks,
uncertainties and other factors discussed elsewhere herein, risks,
uncertainties and other factors that could cause or contribute to
actual results differing materially from those expressed or implied
for the forward- looking statements include, but are not limited to
fluctuations in demand; changes to economic growth in the U.S.
economy; government policies and regulations, including, but not
limited to those affecting the Internet. Onstream Media undertakes
no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
Actual results, performance or achievements could differ materially
from those anticipated in such forward-looking statements as a
result of certain factors, including those set forth in Onstream
Media Corporation's filings with the Securities and Exchange
Commission.
Media
Relations:
|
Investor Relations:
|
Chris
Faust
|
Jeff
Ramson
|
FastLane
Communications
|
ProActive
Newsroom
|
973-582-3498
|
212-792-4294
|
cfaust@fast-lane.net
|
jramson@proactivecrg.com
|
Financial Tables Follow
ONSTREAM MEDIA CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
Year
Ended
September 30,
|
Three
months Ended
September 30,
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
(unaudited)
|
REVENUE:
|
|
|
|
|
Audio and web
conferencing
|
$
7,595,779
|
$
6,831,900
|
$
1,997,661
|
$
1,793,131
|
Webcasting
|
6,088,804
|
5,741,022
|
1,393,938
|
1,290,808
|
DMSP and hosting
|
1,973,311
|
2,037,337
|
440,844
|
469,225
|
Network usage
|
1,912,604
|
1,876,116
|
470,062
|
460,181
|
Other
|
130,206
|
207,731
|
46,417
|
47,196
|
Total
revenue
|
17,700,704
|
16,694,106
|
4,348,922
|
4,060,541
|
|
|
|
|
|
COSTS OF
REVENUE:
|
|
|
|
|
Audio and web
conferencing
|
2,441,849
|
1,986,328
|
698,259
|
529,940
|
Webcasting
|
1,639,469
|
1,541,171
|
432,690
|
375,883
|
DMSP and hosting
|
901,248
|
898,272
|
173,997
|
184,604
|
Network usage
|
853,290
|
797,849
|
208,240
|
200,783
|
Other
|
89,908
|
348,020
|
18,541
|
76,370
|
Total costs of revenue
|
5,925,764
|
5,571,640
|
1,531,727
|
1,367,580
|
|
|
|
|
|
GROSS
MARGIN
|
11,774,940
|
11,122,466
|
2,817,195
|
2,692,961
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
General and
administrative:
|
|
|
|
|
Compensation
|
8,655,143
|
8,276,677
|
2,096,408
|
1,908,477
|
Professional fees
|
1,959,746
|
2,015,249
|
525,020
|
482,843
|
Other
|
2,224,649
|
2,262,848
|
595,189
|
531,130
|
Impairment loss on goodwill
and
other intangible assets
|
1,700,000
|
4,700,000
|
1,700,000
|
1,600,000
|
Depreciation and
amortization
|
1,489,650
|
1,923,460
|
372,225
|
385,731
|
Total
operating expenses
|
16,029,188
|
19,178,234
|
5,288,842
|
4,908,181
|
|
|
|
|
|
Loss from
operations
|
(4,254,248)
|
(8,055,768)
|
(2,471,647)
|
(2,215,220)
|
|
|
|
|
|
OTHER
EXPENSE, NET:
|
|
|
|
|
Interest expense
|
(1,270,395)
|
(1,376,176)
|
(246,278)
|
(413,532)
|
Gain from adjustment of
derivative
liability
to fair value
|
198,193
|
-
|
117,055
|
-
|
Other income, net
|
131,488
|
151,372
|
79,861
|
23,271
|
|
|
|
|
|
Total
other expense, net
|
(940,714)
|
(1,224,804)
|
(49,362)
|
(390,261)
|
|
|
|
|
|
Net
loss
|
$
(5,194,962)
|
$
(9,280,572)
|
$
(2,521,009)
|
$
(2,605,481)
|
|
|
|
|
|
Loss per
share – basic and diluted:
|
|
|
|
|
|
|
|
|
|
Net loss
per share
|
$
(0.52)
|
$
(1.20)
|
$
(0.22)
|
$
(0.33)
|
Weighted
average shares of common
stock outstanding – basic and diluted
|
9,988,585
|
7,726,575
|
11,394,838
|
7,997,154
|
ONSTREAM MEDIA CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
September 30,
2011
|
September 30,
2010
|
ASSETS
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$
290,865
|
$
825,408
|
Accounts receivable, net of
allowance for doubtful accounts
|
2,453,390
|
2,805,420
|
Prepaid expenses
|
580,185
|
316,591
|
Inventories and other current
assets
|
139,099
|
125,000
|
Total
current assets
|
3,463,539
|
4,072,419
|
PROPERTY
AND EQUIPMENT, net
|
2,714,676
|
2,854,263
|
INTANGIBLE
ASSETS, net
|
785,927
|
1,284,524
|
GOODWILL,
net
|
10,696,948
|
12,396,948
|
OTHER
NON-CURRENT ASSETS
|
104,274
|
104,263
|
Total
assets
|
$
17,765,364
|
$
20,712,417
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts payable
|
$
1,573,703
|
$
2,553,366
|
Accrued liabilities
|
1,193,473
|
1,066,960
|
Amounts due to directors and
officers
|
396,392
|
374,124
|
Deferred revenue
|
96,437
|
141,788
|
Notes and leases payable –
current portion, net of discount
|
1,533,966
|
1,904,214
|
Convertible debentures, net of
discount
|
407,790
|
1,626,796
|
Total
current liabilities
|
5,201,761
|
7,667,248
|
Notes and
leases payable, net of current portion and discount
|
11,962
|
120,100
|
Convertible debentures, net of discount
|
1,031,870
|
815,629
|
Detachable
warrants, associated with sale of common shares
and Series
A-14 Preferred
|
188,211
|
386,404
|
Total
liabilities
|
6,433,804
|
8,989,381
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
Series
A-13 Convertible Preferred stock, par value $.0001 per share,
authorized 170,000 shares, 35,000
issued and outstanding
|
3
|
3
|
Series
A-14 Convertible Preferred stock, par value $.0001 per share,
authorized 420,000 shares, 420,000 issued and
outstanding
|
42
|
42
|
Common
stock, par value $.0001 per share; authorized 75,000,000
shares,
11,779,521 and 8,384,570 issued and outstanding,
respectively
|
1,177
|
838
|
Additional
paid-in capital
|
140,291,514
|
135,453,812
|
Unamortized discount
|
(146,418)
|
(297,422)
|
Accumulated deficit
|
(128,814,758)
|
(123,434,237)
|
Total
stockholders' equity
|
11,331,560
|
11,723,036
|
Total
liabilities and stockholders' equity
|
$
17,765,364
|
$
20,712,417
|
SOURCE Onstream Media Corporation