POMPANO BEACH, Fla., Aug. 15, 2011 /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 third fiscal quarter ended June 30, 2011.
Financial Highlights
-- Revenues for the three months ended June 30, 2011 were a record $4.6 million, representing a 4.4% increase from the third quarter of fiscal 2010 and a 3.0% increase sequentially (from the second quarter of fiscal 2011). Revenues for the first nine months of fiscal 2011 were a record $13.4 million, up 5.7% compared to $12.6 million in the first nine months of fiscal 2010. -- Cash flow from operating activities (before changes in current assets and liabilities) for the three months ended June 30, 2011 was a record $328,000, compared to approximately $82,000 in the immediately preceding second quarter. This also represents a quarterly and nine-month record. -- Gross margin of $3.2 million for the three months ended June 30, 2011, representing 69.0% of total revenues, was an increase of 3.3% as compared to the year-ago quarter. -- Operating expenses of $3.5 million for the three months ended June 30, 2011 represented a decrease of approximately $249,000, or 6.6%, as compared to the third quarter of fiscal 2010. -- Onstream's net loss for the three months ended June 30, 2011 was approximately $486,000, a 54.8% decrease as compared to a net loss of approximately $1.1 million for the third quarter of fiscal 2010.
Financial Discussion
The approximately $194,000, or 4.4%, increase in consolidated revenues for the three months ended June 30, 2011 was primarily due to higher sales from the Company's Audio and Web Conferencing Services Group, which were approximately $2.4 million for the three months ended June 30, 2011. This represented an increase of approximately $103,000, or 4.4%, from the corresponding period of the prior fiscal year, primarily a result of increased audio conferencing revenues in the Infinite division.
Digital Media Services Group revenues were approximately $2.2 million for the three months ended June 30, 2011, an increase of approximately $91,000, or 4.4%, from the corresponding period of the prior fiscal year, primarily due to an increase in Webcasting division revenues. Webcasting revenue growth was primarily from a 75.5% 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.
The approximately $102,000, or 3.3%, increase in consolidated gross margin for the three months ended June 30, 2011 was primarily due to approximately $70,000 additional gross margin from the Webcasting division, corresponding to an approximately $110,000 increase in Webcasting division revenues.
Operating expenses were approximately $3.5 million for the three months ended June 30, 2011, a decrease of approximately $249,000, or 6.6%, from the corresponding period of the prior fiscal year, primarily due to decreased professional fee expense.
Onstream's net loss for the three months ended June 30, 2011 was approximately $486,000, or $(0.05) per share, based on 10.3 million weighted average shares outstanding, as compared to a net loss of approximately $1.1 million, or $(0.14) per share in the year-ago quarter, based on 7.9 million weighted average shares outstanding. Onstream's third quarter fiscal 2011 $486,000 net loss represented a 54.8% decrease from the year-ago third quarter's net loss, and included approximately $1.1 million of non-cash expenses, as well as approximately $283,000 non-cash income from adjustment of derivative liability to fair value. The primary non-cash expenses included in the third quarter fiscal 2011 net loss were depreciation and amortization, employee compensation paid with options and other equity, and professional fees paid with equity.
Onstream recognized a record $328,000 positive cash flow from operating activities (before changes in current assets and liabilities) for the three months ended June 30, 2011, compared to approximately $82,000 in the immediately preceding second quarter and approximately $188,000 for the corresponding quarter of the previous fiscal year. Onstream's $284,000 positive cash flow from operating activities (before changes in current assets and liabilities) for the nine months ended June 30, 2011 represents an improvement of approximately $539,000 from the corresponding nine month period of the previous year.
Management Commentary
Randy Selman, President and Chief Executive Officer of Onstream Media, commented, "Revenues in the third quarter of fiscal 2011 represented our second consecutive quarter of record revenues, surpassing the record we set last quarter, which in turn exceeded the previous record revenues going back to the third fiscal quarter of 2008. We are also pleased to report our second consecutive quarter of positive cash flow from operating activities (before changes in current assets and liabilities). Besides being a quarterly and nine-month record, this marks the first time that cash flow from operating activities (before changes in current assets and liabilities) for the first nine months of our fiscal year has been positive."
Selman continued, "In addition to these results generated by our legacy businesses, we now have nine active MarketPlace365® ("MP365") promoter sites, another 29 signed MP365 promoter agreements (for a total of 38) and our network of MP365 sales agents is also expanding. The launch of our MP365 web portal in the third quarter of fiscal 2011 also provides us with an integrated, searchable, and SEO-enhanced (Search Engine Optimization) online directory to market our active and forthcoming MP365 marketplaces."
Selman added, "It is also noteworthy that we strengthened our balance sheet in the third quarter of 2011. Including transactions closed after the June quarter, we have reduced the liability for certain convertible debentures from $1.2 million as of March 31, 2011 to $510,000, via cash payments as well as the issuance of common shares."
Teleconference
Management will hold a conference call on Tuesday, August 16, 2011 at 4:30 p.m. ET to discuss its financial results for the three and nine months ended June 30, 2011. 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=81388 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=81388.
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 212-792-4321 cfaust@fast-lane.net jramson@proactivecrg.com
Financial Tables Follow
ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Nine months Ended June 30, -------- 2011 2010 ---- ---- REVENUE: Audio and web conferencing $5,598,118 $5,038,769 Webcasting 4,694,866 4,450,214 DMSP and hosting 1,532,467 1,568,112 Network usage 1,442,542 1,415,935 Other 83,789 160,535 ------ ------- Total revenue 13,351,782 12,633,565 ---------- ---------- COSTS OF REVENUE: Audio and web conferencing 1,743,590 1,456,388 Webcasting 1,206,779 1,165,288 DMSP and hosting 727,251 713,668 Network usage 645,050 597,066 Other 71,367 271,650 ------ ------- Total costs of revenue 4,394,037 4,204,060 --------- --------- GROSS MARGIN 8,957,745 8,429,505 --------- --------- OPERATING EXPENSES: General and administrative: Compensation 6,558,735 6,368,200 Professional fees 1,434,726 1,532,406 Other 1,629,460 1,731,718 Impairment loss on goodwill and - 3,100,000 other intangible assets Depreciation and amortization 1,117,425 1,537,729 --------- --------- Total operating expenses 10,740,346 14,270,053 ---------- ---------- Loss from operations (1,782,601) (5,840,548) ---------- ---------- OTHER EXPENSE, NET: Interest expense (1,024,117) (962,644) Gain from adjustment of derivative 81,138 - liability to fair value Other income, net 51,627 128, 101 ------ -------- Total other expense, net (891,352) (834,543) -------- -------- Net loss $(2,673,953) $(6,675,091) =========== =========== Loss per share - basic and diluted: Net loss per share $(0.28) $(0.87) ====== ====== Weighted average shares of common stock outstanding - basic and diluted 9,514,683 7,635,390 ========= =========
Three months Ended June 30, -------- 2011 2010 ---- ---- REVENUE: Audio and web conferencing $1,947,602 $1,796,247 Webcasting 1,686,296 1,576,672 DMSP and hosting 474,314 500,739 Network usage 495,432 521,298 Other 21,556 35,802 ------ ------ Total revenue 4,625,200 4,430,758 --------- --------- COSTS OF REVENUE: Audio and web conferencing 576,290 461,573 Webcasting 412,806 373,372 DMSP and hosting 210,651 225,890 Network usage 216,565 214,752 Other 17,430 65,569 ------ ------ Total costs of revenue 1,433,742 1,341,156 --------- --------- GROSS MARGIN 3,191,458 3,089,602 --------- --------- OPERATING EXPENSES: General and administrative: Compensation 2,162,279 2,115,488 Professional fees 424,863 614,293 Other 571,877 620,514 Impairment loss on goodwill and - - other intangible assets Depreciation and amortization 363,987 421,568 ------- ------- Total operating expenses 3,523,006 3,771,863 --------- --------- Loss from operations (331,548) (682,261) -------- -------- OTHER EXPENSE, NET: Interest expense (480,265) (424,715) Gain from adjustment of derivative 283,144 - liability to fair value Other income, net 42,958 33,090 ------ ------ Total other expense, net (154,163) (391,625) -------- -------- Net loss $(485,711) $(1,073,886) ========= =========== Loss per share - basic and diluted: Net loss per share $(0.05) $(0.14) ====== ====== Weighted average shares of common stock outstanding - basic and diluted 10,307,645 7,880,691 ========== =========
ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, September 2011 30, (unaudited) 2010 ----------- ---- ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $370,769 $825,408 Accounts receivable, net of allowance for 2,657,489 2,805,420 doubtful accounts of $299,914 and $363,973, respectively Prepaid expenses 464,133 316,591 Inventories and other current assets 126,154 125,000 ------- ------- Total current assets 3,618,545 4,072,419 PROPERTY AND EQUIPMENT, net 2,676,601 2,854,263 INTANGIBLE ASSETS, net 914,210 1,284,524 GOODWILL, net 12,396,948 12,396,948 OTHER NON-CURRENT ASSETS 104,263 104,263 ------- ------- Total assets $19,710,567 $20,712,417 =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable $1,748,245 $2,553,366 Accrued liabilities 1,340,466 1,066,960 Amounts due to directors and officers 514,993 374,124 Deferred revenue 102,538 141,788 Notes and leases payable - current portion, net of discount 2,068,526 1,904,214 Convertible debentures, net of discount 559,992 1,626,796 ------- --------- Total current liabilities 6,334,760 7,667,248 Notes and leases payable, net of current portion and discount 60,129 120,100 Convertible debentures, net of discount 758,567 815,629 Detachable warrants, associated with sale of common shares 305,266 386,404 and Series A-14 Preferred ------- ------- Total liabilities 7,458,722 8,989,381 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Series A-13 Convertible Preferred stock, par value $.0001 per share, 3 3 authorized 170,000 shares, 35,000 issued and outstanding Series A-14 Convertible Preferred stock, par value $.0001 per share, 42 42 authorized 420,000 shares, 420,000 issued and outstanding Common stock, par value $.0001 per share; authorized 75,000,000 shares, 10,534,163 and 8,384,570 issued and outstanding, respectively 1,053 838 Additional paid-in capital 138,681,995 135,453,812 Unamortized discount (183,747) (297,422) Accumulated deficit (126,247,501) (123,434,237) ------------ ------------ Total stockholders' equity 12,251,845 11,723,036 ---------- ---------- Total liabilities and stockholders' equity $19,710,567 $20,712,417 =========== ===========
SOURCE Onstream Media Corporation