UPDATED: Sonic Foundry Announces Fourth Quarter and Fiscal 2019 Financial Results

MADISON, Wis., Dec. 20, 2019 (GLOBE NEWSWIRE) — In the Sonic Foundry, Inc. (OTC Pink Sheets: SOFO) press release published Dec. 19, 2019, certain amounts on the balance sheets and statements of cash flows were misstated. This release corrects those misstatements and announces consolidated financial results for its fiscal 2019 fourth quarter and fiscal year ended September 30, 2019.
Fiscal 2019 Fourth Quarter HighlightsBillings totaled $9.8 million in the fourth quarter of 2019 consistent with billings of $9.8 million for the same period last yearTotal revenues of $9.2 million compared to $8.5 million in the fourth quarter of 2018, a 9 percent increaseGross margin was $6.5 million, or 70 percent of sales, compared to $6.1 million, or 72 percent of sales, in the fourth quarter of 2018Net loss attributable to common stockholders of $(179,000), or $(0.03) per share, compared to $(10.0) million, or $(2.01) per share, in the fourth quarter of 2018; net loss, net of the one-time impairment charges and the benefit from the write-off of the related deferred tax liability, was $(1.2) million in the fourth quarter of 2018Adjusted EBITDA was $744,000 compared to $(504,000) in the fourth quarter of 2018. The company adjusts EBITDA for non-cash stock compensation expense, severance and impairment of goodwill and other intangibles.Unearned revenue was $11.7 million as of September 30, 2019, down $1.7 million from September 30, 2018, largely a result of the ASC 606 adjustment upon adoption.Fiscal 2019 Full Year HighlightsBillings totaled $35.1 million in fiscal 2019 which is consistent with prior year billings of $35.0 millionTotal revenues of $34.8 million compared to $34.5 million in 2018, an increase of 1 percentGross margin was $25.5 million, or 73 percent of sales, compared to $24.9 million, or 72 percent of sales, in 2018Net loss attributable to common stockholders of $(3.7) million, or $(0.64) per share, compared to $(12.4) million, or $(2.67) per share, in 2018.  Fiscal 2019 was impacted by a $906,000 severance charge associated with the departure of four executives while fiscal 2018 was impacted by a one-time impairment charge of goodwill and other intangibles and partially offsetting related tax benefit of $8.8 million in 2018Adjusted EBITDA was $(450,000) compared to $(2.0) million in 2018. The company adjusts EBITDA for non-cash stock compensation expense, severance and impairment of goodwill and other intangibles.Fiscal 2019 Fourth Quarter ReviewProduct billings were $3.7 million during the fourth quarter of fiscal year 2019, compared to $3.4 million in the same quarter last year as a result of an increase in hardware product billings. Service billings, including support, hosting, events and installs were $6.1 million, compared to $6.5 million in the prior year. The primary driver of this change was a decrease in cloud service billings during the quarter. The company expects to recognize $4.0 million of the current unearned revenue in the first quarter of fiscal 2020. Recurring revenue of $5.9 million was 64 percent of total revenue in the fourth quarter of 2019, compared to $5.6 million, or 66 percent of total revenue, in the fourth quarter of 2018.Cost reduction measures taken in the second half of the fiscal year have resulted in a $1.1 million, or 4 percent, decrease in operating expenses from the same period in 2018, despite a charge of $906,000 for executive severance. Full impairment of the remaining balance of goodwill and intangible assets of $11.8 million was recorded in the fourth quarter of fiscal 2018.“When I took the helm at the beginning of Q3, we refined our strategic focus and put a plan in place to trim costs, drive additional revenue streams and ultimately become a profitable, more sustainable company. The success of the second half of the year reflects those initial efforts. While still in the early stages, I’m pleased to report that to date we have met our top-line expectations and saw significant improvement to our bottom line,” said Michael Norregaard, CEO, Sonic Foundry.“We acknowledge the mature nature of the enterprise video market but are optimistic about the year ahead. Our teams are realigning to focus on the path forward; offering better and more comprehensive professional services and helping customers solve their unified communications challenges. In the coming year we will apply focused resources in helping our customers move to the cloud, with customers like Penn Medicine – which has successfully made the transition – leading the way,” Norregaard continued.“The strategic plan and involvement of all employees has injected a new energy into the business that I am very excited about. We commit to making continual improvements to the core business, ramp up our efforts to define additional revenue streams and ultimately drive shareholder value,” he concluded.Non-GAAP Financial InformationTo supplement and enhance the reader’s understanding of our operating performance, we disclose adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (adjusted EBITDA), a non-GAAP measure of operating performance. Our adjusted EBITDA measure additionally adds back stock compensation expense, severance and impairment of goodwill from the SEC definition of EBITDA. As such, our adjusted EBITDA may not be comparable to similarly titled measures reported by other companies and should not be viewed as an alternative to net income as a measurement of our operating performance. A reconciliation of net income (loss) to adjusted EBITDA for the fourth quarters and fiscal year ended September 30, 2019 and 2018 are included in the release.About Sonic Foundry®, Inc.Sonic Foundry (OTC Pink Sheets:SOFO) is the global leader for video capture, management and streaming solutions. Trusted by more than 5,200 educational institutions, corporations, health organizations and government entities in over 65 countries, its Mediasite Video Platform quickly and cost-effectively automates the capture, management, delivery and search of live and on-demand streaming videos. Learn more at www.sonicfoundry.com and @mediasite.© 2019 Sonic Foundry, Inc. Product and service names mentioned herein are the trademarks of Sonic Foundry, Inc. or their respective owners.Forward Looking StatementsThis news release contains forward-looking statements about the products and services of Sonic Foundry within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward looking statements include statements about our products and services, our customer base, strategic investments, new partnerships, our future operating results and any statements we make about the company’s future.  These types of statements address matters that are subject to many risks and uncertainties. Actual results could differ materially from the forward-looking guidance we provide.  Any forward-looking statements should be considered in context of the risk factors disclosed in our periodic forms 10Q, 10K and other filings with the SEC.  These filings can be accessed on-line at www.sec.gov and other websites or can be obtained from the company’s investor relations department.  All of the information and disclosures we make in this news release regarding our business, including any forward looking guidance, are as of the date given and we assume no obligation to update or change this information, regardless of subsequent events.Contacts:
Media:
Nicole Wise, Director of Communications
920.226.0269
nicolew@sonicfoundry.com
Sonic Foundry, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except for share and per share data)
Sonic Foundry, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except for share and per share data)
Sonic Foundry, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Sonic Foundry, Inc.
Condensed Consolidated Non-GAAP Adjusted EBITDA Reconciliation
(in thousands)