Onstream Media Corporation Announces Fiscal 2014 Third Quarter Financial Results - WFLA News Channel 8

Onstream Media Corporation Announces Fiscal 2014 Third Quarter Financial Results

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Onstream Media Corporation

Management to Discuss Results and Outlook for Remainder of Fiscal 2014 and Fiscal 2015 in Conference Call on Wednesday, August 20

POMPANO BEACH, Fla., Aug. 19, 2014 /PRNewswire/ -- Onstream Media Corporation (OTCQB: ONSM), a leading online service provider of corporate audio and web communications, including webcasting, webinar, conferencing and virtual event technology, has reported its financial results for the third quarter of fiscal 2014, the nine and three months ended June 30, 2014.

Summary

  • Revenues were approximately $4.5 million for both the three months ended June 30, 2014 and for the corresponding fiscal 2013 quarter. Revenues for the nine months ended June 30, 2014 were approximately $12.9 million as compared to approximately $13.1 million for the corresponding period of fiscal 2013. The nine month decrease was the result of a reduction in webcasting revenues, which was partially offset by increased revenues of the Audio and Web Conferencing Services Group. The webcasting revenue reduction was primarily related to the second quarter - webcasting revenues increased in the third quarter, exceeding such revenues for the corresponding fiscal 2013 quarter.
  • Audio and Web Conferencing Services Group revenues were approximately $2.9 million for the three months ended June 30, 2014, a decrease of approximately $5,000 (0.2%) from the third quarter of fiscal 2013. Audio and Web Conferencing Services Group revenues were approximately $8.6 million for the nine months ended June 30, 2014, an increase of approximately $153,000 (1.8%) from the corresponding period of fiscal 2013.
  • Consolidated gross margin percentage was 73.2% for the three months ended June 30, 2014, versus 72.1% for the second quarter of fiscal 2013. Consolidated gross margin percentage was 71.9% for the nine months ended June 30, 2014, versus 70.5% for the corresponding period of fiscal 2013.
  • EBITDA, as adjusted, for the three months ended June 30, 2014 was approximately $590,000, an increase of approximately $333,000 (129.6%) as compared to EBITDA, as adjusted, of approximately $257,000 for the third quarter of fiscal 2013. EBITDA, as adjusted, for the nine months ended June 30, 2014 was approximately $997,000, an increase of approximately $751,000 (305.0%) as compared to EBITDA, as adjusted, of approximately $246,000 for the corresponding period of fiscal 2013.

Management Commentary

Randy Selman, President and Chief Executive Officer of Onstream Media, stated, "We were pleased to see a recovery in our webcasting revenues in the third quarter, as well as the continued strong revenues from audio and web conferencing. And even though the nine month revenues are down by approximately 2% from the revenues for the comparable prior year period, as a result of the second quarter decline in webcasting revenues, our EBITDA, as adjusted, for the nine month period increased by approximately $721,000 or 293%, versus the same period of the previous year. This improvement in EBITDA, as adjusted, clearly demonstrates the success of our cost cutting initiatives. Furthermore, the continued trend of EBITDA improvements over the past three quarters demonstrates the sustainability of those cost cuts".

Mr. Selman continued, "We believe that our webcasting division revenues will continue to be favorably impacted during the remainder of fiscal 2014 and into fiscal 2015 by the comprehensive update to our Visual Webcaster webcasting platform (VW4), which we released in January 2013 and have been updating with new features since then. We also expect to see increased sales as a result of our Virtual Conference Center which is a multiple event conference venue with integrated webcasting (and based on our MarketPlace365® technology) as well as from iEncode, a service that allows our customers to self-encode their live professional video and attach the streams to the Visual Webcaster system in the cloud. iEncode allows them to take advantage of using their internal staff and facilities while still utilizing all of the Visual Webcaster features. Also in development is another "do it yourself" large audience webcasting product that can be run from the customer's desktop and will be available on a fixed cost monthly subscription basis that can be purchased on-line."

Mr. Selman added, "We believe we are on track to show continued improvement in our EBITDA and our operating cash flow for the remainder of fiscal 2014, as compared to the corresponding period of fiscal 2013. During the period from June 2013 through January 2014 we made certain headcount reductions representing approximately $1.1 million in annualized savings, which we expect will reduce our compensation expenditures by approximately $199,000 for the remaining three months of fiscal 2014 as compared to the corresponding prior year period and which we expect will reduce our compensation expenditures by approximately $159,000 in aggregate for the first seven months of fiscal 2015 as compared to the corresponding prior year period. Effective June 2014, we also renegotiated a supplier contract representing approximately $252,000 in annualized savings, which we expect will cumulatively reduce our cost of sales by approximately $63,000 for the remaining three months of fiscal 2014 as compared to the corresponding prior year period and which we expect will reduce our cost of sales by approximately $168,000 in aggregate for the first eight months of fiscal 2015 as compared to the corresponding prior year period."

Financial Discussion

Three Months Results

Consolidated operating revenue was approximately $4.5 million for the three months ended June 30, 2014, an increase of approximately $15,000 (0.3%) from the corresponding period of the prior fiscal year.

Digital Media Services Group revenues were approximately $1.6 million for the three months ended June 30, 2014, an increase of approximately $20,000 (1.3%) from the corresponding period of the prior fiscal year, primarily due to an increase in webcasting division revenues.

Revenues of the webcasting division increased by approximately $48,000 (3.8%) for the three months ended June 30, 2014 as compared to the corresponding period of the prior fiscal year. The approximately 1,000 webcasts we produced during the three months ended June 30, 2014 was approximately 300 less than the number of webcasts we produced during the corresponding period of the prior fiscal year. The impact on revenue arising from the decreased number of events was partially offset by an increase in the average revenue per webcast event to $1,368 for the three months ended June 30, 2014, which represented an increase of $343, or 33.4%, from the corresponding period of the prior fiscal year.

Audio and Web Conferencing Services Group revenues were approximately $2.9 million for the three months ended June 30, 2014, a decrease of approximately $5,000 (0.2%) from the corresponding period of the prior fiscal year. The Infinite division, which is part of the Audio and Web Conferencing Services Group, had revenues of approximately $2.2 million for the three months ended June 30, 2014, which represented an increase of approximately $142,000 (6.9%) as compared to the corresponding period of the prior fiscal year. This was in turn due to an 8.6% increase in the number of minutes billed which was approximately 37.6 million for the three months ended June 30, 2014, as compared to approximately 34.6 million minutes for the corresponding period of the prior fiscal year.  This average revenue per minute was approximately 6.1 cents for the three months ended June 30, 2014, as well as for the corresponding period of the prior fiscal year.

Consolidated gross margin was approximately $3.3 million for the three months ended June 30, 2014, an increase of approximately $60,000 (1.9%) from the corresponding period of the prior fiscal year. In addition, our consolidated gross margin percentage was 73.2% for the three months ended June 30, 2014, versus 72.1% for the corresponding period of the prior fiscal year. This increase in percentage was primarily due to reductions in audio and web conferencing cost of sales and webcasting cost of sales (proportionally greater than the reduction in revenues).

Consolidated operating expenses were approximately $3.0 million for the three months ended June 30, 2014, a decrease of approximately $360,000 (10.6%) from the corresponding period of the prior fiscal year, primarily due to an approximately $288,000, or 13.9%, decrease in compensation other than amounts paid with equity, as compared to the corresponding period of the prior fiscal year.

Onstream's third quarter fiscal 2014 net income of approximately $360,000, or $0.02 per share, was based on approximately 23.6 million weighted average shares outstanding, as compared to a third quarter fiscal 2013 net loss of approximately $520,000, or $(0.03) loss per share, which was based on approximately 20.7 million weighted average shares outstanding. This $880,000 improvement in the results of operations for the fiscal 2014 third quarter was primarily due to an approximately $742,000 gain from litigation settlement, for which there was no comparable transaction in the corresponding period of the prior fiscal year.

Since November 2013, we have been involved in litigation with Intella2 and its owner in connection with the Intella2 acquisition. On July 29, 2014, the parties entered into a settlement agreement and on August 4, 2014, the lawsuit was dismissed with prejudice by the court. Under the terms of the settlement agreement, we agreed to transfer all free conferencing customers and all associated revenues and expenses to Intella2's owner, effective July 1, 2014. This activity represented revenues of $44,000 recorded by us for the three months ended June 30, 2014. We also agreed to pay Intella2's owner $20,000 cash and to transfer certain computer equipment to Intella2's owner with an estimated net book value of approximately $20,000. No further purchase price or other amounts will be payable by us under the agreements entered into at the time of the November 30, 2012 acquisition. Based on the litigation settlement, as of June 30, 2014 we reduced the approximately $782,000 estimated liability, previously recorded on our books for the unpaid portion of the purchase price, to an estimated liability of $40,000, which resulted in our recognition of a non-cash gain of $742,000 for the nine and three months ended June 30, 2014.

Cash used in operating activities (before changes in current assets and liabilities other than cash) for the three months ended June 30, 2014 was approximately $341,000, compared to approximately $110,000 provided by operations for the corresponding period of the prior fiscal year. This approximately $231,000 improvement was primarily due to decreased operating expenses, including compensation.

Onstream's EBITDA, as adjusted, for the three months ended June 30, 2014 was approximately $590,000, an increase of approximately $333,000 (129.6%) as compared to EBITDA, as adjusted, of approximately $257,000 for the third quarter of fiscal 2013. This increase was primarily due to decreased operating expenses, including compensation. EBITDA, as adjusted, did not include the benefit of the approximately $742,000 non-cash gain from litigation settlement discussed above.

Nine Months Results

Consolidated operating revenue was approximately $12.9 million for the nine months ended June 30, 2014, a decrease of approximately $251,000 (1.9%) from the corresponding period of the prior fiscal year, due to decreased revenues of the Digital Media Services Group, partially offset by increased revenues of the Audio and Web Conferencing Services Group.

Digital Media Services Group revenues were approximately $4.3 million for the nine months ended June 30, 2014, a decrease of approximately $404,000 (8.6%) from the corresponding period of the prior fiscal year, primarily due to a decrease in webcasting division revenues.

Revenues of the webcasting division decreased by approximately $379,000 (9.8%) for the nine months ended June 30, 2014 as compared to the corresponding period of the prior fiscal year. The approximately 3,000 webcasts we produced during the nine months ended June 30, 2014 was approximately 800 less than the number of webcasts we produced during the corresponding period of the prior fiscal year. The impact on revenue arising from the decreased number of events was partially offset by an increase in the average revenue per webcast event to $1,255 for the nine months ended June 30, 2014, which represented an increase of $182, or 17.0%, from the corresponding period of the prior fiscal year.

Audio and Web Conferencing Services Group revenues were approximately $8.6 million for the nine months ended June 30, 2014, an increase of approximately $153,000 (1.8%) from the corresponding period of the prior fiscal year. The Infinite division, which is part of the Audio and Web Conferencing Services Group, had revenues of approximately $6.4 million for the nine months ended June 30, 2014, which represented an increase of approximately $266,000 (4.3%) as compared to the corresponding period of the prior fiscal year. This was in turn due to a 10.9% increase in the number of minutes billed which was approximately 109.1 million for the nine months ended June 30, 2014, as compared to approximately 98.3 million minutes for the corresponding period of the prior fiscal year.  This increase in the number of minutes billed was partially offset by a decrease in average revenue per minute, which was approximately 6.0 cents for the nine months ended June 30, 2014, as compared to approximately 6.4 cents for the corresponding period of the prior fiscal year.

Consolidated gross margin was approximately $9.3 million for the nine months ended June 30, 2014, an increase of approximately $5,000 (0.1%) from the corresponding period of the prior fiscal year. However, our consolidated gross margin percentage was 71.9% for the nine months ended June 30, 2014, versus 70.5% for the corresponding period of the prior fiscal year. This increase in percentage was primarily due to reductions in audio and web conferencing cost of sales, webcasting cost of sales (proportionally greater than the reduction in revenues) and network usage cost of sales (proportionally greater than the reduction in revenues).

Consolidated operating expenses were approximately $9.4 million for the nine months ended June 30, 2014, a decrease of approximately $2.2 million (18.9%) from the corresponding period of the prior fiscal year, primarily due to an approximately $1.7 million, or 21.9%, decrease in total compensation. This decrease in total compensation was comprised of an approximately $1.1 million, or 73.1%, decrease in compensation paid with equity, and an approximately $525,000, or 8.7%, decrease in compensation other than amounts paid in equity, both as compared to the corresponding period of the prior fiscal year.

Onstream's net loss of approximately $1.0 million, or $(0.04) loss per share for the nine months ended June 30, 2014, was based on approximately 22.7 million weighted average shares outstanding, as compared net loss of approximately $3.4 million, or $(0.20) loss per share, for the corresponding period of the prior fiscal year, which was based on approximately 17.4 million weighted average shares outstanding. The decreased net loss was primarily due to a decrease in compensation, as discussed above.

Cash provided by operating activities (before changes in current assets and liabilities other than cash) for the nine months ended June 30, 2014 was approximately $376,000, compared to approximately $116,000 used in operations for the corresponding period of the prior fiscal year. This approximately $492,000 improvement was primarily due to decreased operating expenses, including compensation.

Onstream's EBITDA, as adjusted, for the nine months ended June 30, 2014 was approximately $997,000, an increase of approximately $751,000 (305.0%) as compared to EBITDA, as adjusted, of approximately $246,000 for the corresponding period of fiscal 2013. This increase was primarily due to decreased operating expenses, including compensation. EBITDA, as adjusted, did not include the benefit of the approximately $742,000 non-cash gain from litigation settlement discussed above.

Teleconference

Onstream's leadership team will conduct a conference call at 4:30 p.m. ET on Wednesday, August 20, 2014, to discuss the above financial results. During this teleconference, Mr. Randy Selman, President and Chief Executive Officer of Onstream and Mr. Robert Tomlinson, the company's Chief Financial Officer, will also discuss the outlook for the remainder of fiscal 2014 as well as fiscal 2015. The discussion will be followed by an open Q&A session.

Interested parties may listen to the presentation live online at https://www.webcaster4.com/Webcast/Page/1/5537 or by calling 1-888-645-4404 or 1-862-255-5395 (toll). 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 https://www.webcaster4.com/Webcast/Page/1/5537.

About Onstream Media:

Onstream Media Corporation (OTCQB: ONSM) is a leading online service provider of corporate audio and web communications, including webcasting, webinar, conferencing and virtual event technology. Onstream Media's innovative webcasting platform has recently been ranked #1 by TopTenREVIEWS. The company's video streaming, hosting and publishing platform  - Streaming Publisher - provides customers with cost effective tools for encoding, managing, indexing, and publishing content to the Internet or virtually any mobile device. 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 American Honda, Dell, GE Capital, Georgetown University, IRS, HBO Latin America, HubSpot, PR Newswire, Stanford University, Twitter and the U.S. Department of Agriculture. Onstream Media's strategic relationships include Akamai, BT Conferencing, Telefónica and Trade Show News Network. 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:



FastLane

Wolfe Axelrod Weinberger Associates, LLC

Chris Faust

Donald C. Weinberger

(973) 906-5553

(212) 370-4500; (212) 370-4505

cfaust@fast-lane.net

don@wolfeaxelrod.com

 

Financial Tables Follow

 

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



Nine Months Ended

June 30,

Three Months Ended

June 30,


2014

2013

2014

2013






REVENUE:





    Audio and web conferencing

$      7,143,122

$      6,849,678

$   2,439,117

$        2,369,937

    Webcasting

3,484,966

3,863,667

1,316,931

1,268,936

    Network usage

1,438,937

1,529,051

455,380

521,086

    DMSP and hosting

706,131

718,607

235,931

242,069

    Other

120,804

184,438

37,971

68,374

Total revenue

12,893,960

13,145,441

4,485,330

4,470,402






COSTS OF REVENUE:





    Audio and web conferencing

1,948,290

1,913,242

644,756

660,557

    Webcasting

910,318

1,074,188

310,497

319,894

    Network usage

623,698

744,031

197,033

220,968

    DMSP and hosting

122,732

103,071

47,056

34,185

    Other

22,822

49,665

4,272

12,878

Total costs of revenue

3,627,860

3,884,197

1,203,614

1,248,482






GROSS MARGIN

9,266,100

9,261,244

3,281,716

3,221,920

 

OPERATING EXPENSES:





    General and administrative:





         Compensation (excluding equity)

5,505,988

6,030,654

1,786,479

2,074,773

         Compensation paid with common

           shares and other equity

417,351

1,551,138

 

113,950

 

133,569

         Professional fees

1,032,490

1,054,628

327,087

260,529

         Other

1,743,283

1,899,478

587,450

629,800

   Depreciation and amortization

662,667

1,008,193

227,456

303,512

Total operating expenses

9,361,779

11,544,091

3,042,422

3,402,183






(Loss) income from operations

(95,679)

(2,282,847)

239,294

(180,263)

 

OTHER (EXPENSE) INCOME, NET:





    Interest expense

(1,531,057)

(975,796)

(630,120)

(340,197)

    Debt extinguishment loss

(132,427)

(143,251)

-

-

    Gain from litigation settlement

741,554

-

741,554

-

    Other income (expense), net

12,313

(2,938)

9,394

217






Total other (expense) income, net

(909,617)

(1,121,985)

120,828

(339,980)






Net (loss) income

$     (1,005,296)

$     (3,404,832)

$        360,122

$        (520,243)











Net (loss) income per share - basic

$            (0.04)

$             (0.20)

$              0.02

$              (0.03)

Net income per share – fully diluted



$              0.02


Weighted average shares of common

   stock outstanding – basic

22,763,248

 

17,448,815

 

23,590,587

20,704,496

Weighted average shares of common

   stock outstanding – fully diluted



 

23,590,587


 

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND EBITDA, AS ADJUSTED

(unaudited)



Nine Months Ended

June 30,

Three Months Ended

June 30,


2014

2013

2014

2013






Net (loss) income

$     (1,005,296)

$     (3,404,832)

$          360,122

$        (520,243)

Add: Depreciation and amortization

662,667

1,008,193

227,456

303,512

Add: Interest expense

1,531,057

975,796

630,120

340,197

EBITDA

$       1,188,428

$     (1,420,843)

$       1,217,698

$         123,466






EBITDA

$       1,188,428

$     (1,420,843)

$       1,217,698

$         123,466

Add: Compensation paid with

    common shares and other equity

417,351

1,551,138

 

113,950

 

133,569

Add: Debt extinguishment loss

132,427

143,251

-

-

Less: Gain from litigation settlement

(741,554)

-

(741,554)

-

Less: Gain from adjustment of

    derivative liability to fair value

 

-

 

(27,480)

 

-

 

-

EBITDA, as adjusted

$          996,652

$          246,066

$          590,094

$         257,035

 

EBITDA is defined as earnings (loss) before interest expense, depreciation, income taxes and amortization.

 

EBITDA, as adjusted, represents EBITDA, as defined above, adjusted for compensation paid with common shares and other equity, debt extinguishment loss, gain from litigation settlement and gain from adjustment of derivative liability to fair value.

 

EBITDA and EBITDA, as adjusted, are non-U.S. GAAP financial measures.

 

Management believes EBITDA and EBITDA, as adjusted, to be meaningful indicators of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted, is commonly used by financial analysts and others who follow our industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted, to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (GAAP). EBITDA and EBITDA, as adjusted, do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA or EBITDA, as adjusted, in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.

 

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



June 30,

2014

September 30,

2013


   (unaudited)


ASSETS



CURRENT ASSETS:



    Cash and cash equivalents

$            599,837

$             257,018

 Accounts receivable, net of allowance for doubtful accounts

2,288,143

2,175,505

    Prepaid expenses

191,969

142,307

    Inventories and other current assets

131,128

140,585

Total current assets

3,211,077

2,715,415

PROPERTY AND EQUIPMENT, net

1,908,266

2,047,633

INTANGIBLE ASSETS, net

572,162

669,543

GOODWILL, net

8,358,604

8,358,604

OTHER NON-CURRENT ASSETS

165,960

136,215

Total assets

$       14,216,069

$       13,927,410







LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES:



    Accounts payable

$         1,961,358

$         1,927,430

    Accrued liabilities

1,781,935

1,527,435

    Amounts due to directors and officers

744,130

409,410

    Deferred revenue

114,873

152,696

    Notes and leases payable –  current portion, net of discount

3,376,127

2,198,858

    Convertible debentures – current portion, net of discount

1,457,891

587,198

Total current liabilities

9,436,314

6,803,027

Accrued liabilities – non-current portion

-

354,813

Notes and leases payable, net of current portion and discount

13,142

759,932

Convertible debentures, net of current portion and discount

-

548,796

Total liabilities

9,449,456

8,466,568




COMMITMENTS AND CONTINGENCIES






STOCKHOLDERS' EQUITY:



Common stock, par value $.0001 per share; authorized 75,000,000 shares, 21,634,580 and 19,345,744 issued and outstanding, respectively

 

2,162

 

1,933

Common stock committed for issue – 2,541,667 and 2,291,667 shares,

   respectively

 

254

 

229

Additional paid-in capital

144,952,818

144,385,772

Obligation to repurchase common shares

(420,233)

(164,000)

Accumulated deficit

(139,768,388)

(138,763,092)

Total stockholders' equity

4,766,613

5,460,842

Total liabilities and stockholders' equity

$       14,216,069

$     13,927,410

 

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow

200 South Parker Street, Tampa, FL 33606

Telephone: 813.228.8888
Fax: 813.225.2770
Email: news@wfla.com

Can’t find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.