Loudeye (LOUD) Q1 2005 Earnings
>> Press Release: Loudeye Announces First Quarter 2005 Financial Results
Seattle, WA
May 3, 2005
loudeye.com
Loudeye Corp. LOUD, a worldwide leader in business-to-business digital media solutions, today announced preliminary financial results for the first quarter 2005.
First Quarter 2005 Financial Highlights
-- Revenue. Revenue was $6.0 million in the first quarter, compared with revenue of $2.0 million in the prior year first quarter and $6.6 million in the fourth quarter 2004.
-- Deferred revenue. Deferred revenue was $6.5 million at quarter end, compared with $5.7 million as of December 31, 2004 and $796,000 as of the end of the first quarter 2004.
-- Net Loss. For the first quarter 2005, GAAP net loss was $7.5 million or $0.07 per share, compared to a GAAP net loss of $5.6 million or $0.07 per share in the fourth quarter 2004 and $2.8 million or $0.04 per share in the first quarter 2004. Included in GAAP net loss were net foreign exchange transaction gains (losses) of approximately $0.2 million for the first quarter 2005 and ($1.0) million for the fourth quarter 2004. There were no foreign exchange transaction gains or losses for the first quarter 2004.
-- EBITDA Loss¹. EBITDA loss for the quarter totaled $6.6 million or $0.06 per share.
-- Cash and Marketable Securities. Cash, restricted cash, and short-term and long-term marketable securities were approximately $34.8 million as of March 31, 2005.
¹ EBITDA excludes charges related to depreciation and amortization expense and net interest income or expense. A reconciliation of Loudeye's GAAP financial results with its non-GAAP financial results is provided below.
Recent Highlights: Loudeye's recent operating highlights include:
-- Advancing our strategic collaboration with Nokia around mobile music. In February 2005, we launched our collaboration with Nokia at the 3GSM conference in Cannes, France, and in March 2005 Nokia announced that O2 Germany, the fastest growing mobile operator in Germany and part of the European O2 group, was the first operator to sign up to launch a complete mobile music experience under the O2 Germany brand powered by Loudeye.
-- Appointing Michael A. Brochu as president and chief executive officer and expanding our management team and board of directors through strategic appointments. Ron Stevens joined Loudeye as chief financial officer and chief operating officer, Larry Madden was promoted to the position of president, digital media solutions, and Jason Berman, Chairman Emeritus of the International Federation of Phonographic Industries (IFPI), joined our board of directors as an independent director. We believe the combined experience and vision from these individuals, together with our existing management team and board of directors, will play an important role in helping us achieve our strategic goals and grow our leadership position in digital media services worldwide.
-- Announcing new digital music store services for leading portable device manufacturer Gizmondo (UK), Swiss retailer Migros Electronics and Polish Internet portal Onet.pl
-- Deploying the aacPlus codec from Coding Technologies into our mobile music platform to enable a wider range of format options for operators.
-- Restructuring obligations related to our 2004 acquisition of OD2 resulting in an approximate 54% reduction in the maximum potential aggregate amount of our remaining deferred and contingent payment obligations, as valued based on the February 25, 2005 closing share price and exchange rates.
"This was primarily a quarter of investment as we continue to develop our mobile and online platform to prepare for marquee launches later in the year and support future growth. We continued to see solid growth in our digital music store services and significant progress with our mobile music initiative, as we look forward to a significant online store launch with a major U.S. retailer in the fall 2005 and, later in 2005, the launch of our first mobile operator partner via the Nokia collaboration," said Mike Brochu, Loudeye's president and chief executive officer. "Our new management team has strategically assessed our service lines, technology and operations, and is focused on driving our resources to improve operational and financial performance in coming periods."
Forward-Looking Financial Guidance
While future results are subject to change, Loudeye currently anticipates that revenue for the full-year 2005 will be approximately $35 million.
"Growth in our Digital Music Store Services was stronger than expected during the quarter but was overshadowed by weakness in revenue from our other service lines. At present we expect to achieve the lower end of our prior full-year revenue guidance and we are not giving specific guidance regarding profitability," said Ron Stevens, Loudeye's chief financial officer and chief operating officer. "Our focus for the next few quarters will be on growing revenue, streamlining our costs, and showing consistent, measurable progress towards profitability."
Forward-looking financial guidance reflects management's expectations as of the date of this release and is based upon limited available information which is dynamic and subject to risk and uncertainty. Results may be materially affected by many factors including those described in the Forward- Looking Statements section below.
The historical results below² are unaudited and represent management's current expectations and are preliminary and may be subject to change based upon the completion of the first quarter 2005 review procedures and the filing of Loudeye's Form 10-Q for the quarter ended March 31, 2005.
First Quarter 2005 Webcast Information
Loudeye management will conduct an audio webcast to discuss these financial results. The public is invited to listen in on this webcast. Management will discuss financial and operating results for the quarter and end the call with a question and answer session. Information regarding the first quarter 2005 results' webcast is as follows:
Date: Tuesday, May 3, 2005
Time: 5:00 p.m. EDT / 2:00 p.m. PDT
Audio Webcast: 5:00 p.m. EDT / 2:00 p.m. PDT; Webcast from
loudeye.com
This webcast will be available until May 18, 2005 at 5:00 p.m. EDT
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² Consolidated Balance Sheets
loudeye.com
² Consolidated Statements Of Operations
loudeye.com
Comment: Q1 loss greter than anticipated and 2005 guidance now anticipated to be at lower end of previous range.
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