Sonic Foundry will host a corporate webcast today for analysts and investors to discuss its fiscal 2009 results at 3:30 p.m. CT / 4:30 p.m. ET. It will use its patented rich media communications system, Mediasite, to webcast the presentation for both live and on-demand viewing. To access the presentation, go to www.sonicfoundry.com/fy09. An archive of the webcast will be available for 30 days.
EXPLANATION OF NON-GAAP MEASURES
To supplement our financial results presented on a GAAP basis, we use a measure of non-GAAP net income or loss in our financial presentation, which excludes certain non-cash costs and includes certain cash billings not recognized as revenue for GAAP purposes. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Our non-GAAP financial measures reflect adjustments based on the following items:
-- Billings not recorded as revenue: We have included the cash effect of
billings not recorded as revenue, which are deferred for GAAP purposes,
in arriving at non-GAAP net income or loss. Our services are typically
billed and collected in advance of providing the service which requires
minimal cost to perform in the future. Billings are a better indicator
of customer activity and cash flow than revenue is, in management's
opinion, and is therefore used by management as a key operational
indicator.
-- Depreciation and amortization of intangible and other assets expenses:
We have excluded the effect of depreciation and amortization of assets
from our non-GAAP net income or loss. Amortization of intangible assets
expense varies in amount and frequency and it is significantly affected
by the timing and size of our acquisitions. Depreciation and
amortization of asset costs is a non-cash expense that includes the
periodic write-off of tooling, product design and other assets that
contributed to revenues earned during the periods presented and will
contribute to future period revenues as well.
-- Non-tax provision for income taxes: We have excluded the impact of the
provision for income taxes from our non-GAAP net income or loss. The
provision for income taxes is associated with the difference in
treatment of goodwill which is not expensed for GAAP purposes but is
amortized over a fifteen year life for Federal income tax purposes. The
result is a non-cash expense and liability that will never be paid.
-- Personnel and program reduction costs: We have excluded the additional
costs incurred as a result of our cost reduction plan which was
communicated in January 2008. These costs include severance costs
associated with employee reductions as we better aligned ourselves with
key vertical markets. Also excluded is a one time charge associated
with an early extinguishment of a lease.
-- Stock-based compensation expenses: We maintain an employee qualified
stock option plan under which we grant options to acquire common stock
to eligible employees. We also maintain an employee stock purchase plan
under which common stock may be issued to eligible employees at a
reduced price. Stock-based compensation expenses are recorded for these
plans in accordance with Statement of Financial Accounting Standard No.
123R, Share-Based Payment - an Amendment of FASB Statement Nos. 123 and
95. Stock-based compensation expense is a non-cash expense. As a result,
we have excluded the effect of stock-based compensation expenses from
our non-GAAP net income or loss.
About Sonic Foundry(R), Inc.
Sonic Foundry (NASDAQ: SOFOD) is the global leader for rich media webcasting and knowledge management, providing enterprise communication solutions for more than 1,600 customers in education, business and government. Powered by Mediasite, the patented webcasting platform which automates the capture, management, delivery and search of lectures, online training and briefings, Sonic Foundry empowers people to transform the way they communicate. Through the Mediasite platform and its Events Services group, the company helps customers connect a dynamic, evolving world of shared knowledge and envisions a future where learners and workers around the globe use webcasting to bridge time and distance, accelerate research and improve performance.
Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission.
Sonic Foundry, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)
September 30,
-------------
Revised
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $2,598 $3,560
Accounts receivable, net of allowances
of $105 and $150 3,741 3,864
Inventories 440 330
Prepaid expenses and other current assets 472 429
--- ---
Total current assets 7,251 8,183
Property and equipment:
Leasehold improvements 980 980
Computer equipment 2,545 2,476
Furniture and fixtures 461 461
--- ---
Total property and equipment 3,986 3,917
Less accumulated depreciation and
amortization 2,670 2,223
----- -----
Net property and equipment 1,316 1,694
Other assets:
Goodwill 7,576 7,576
Other intangibles, net of amortization
of $35 and $19 30 21
--- ---
Total assets $16,173 $17,474
======= =======
Liabilities and stockholders' equity
Current liabilities:
Revolving line of credit $300 $-
Accounts payable 636 1,256
Accrued liabilities 1,047 1,113
Unearned revenue 5,272 4,661
Current portion of capital lease
obligations 24 46
Current portion of notes payable 316 333
--- ---
Total current liabilities 7,595 7,409
Long-term portion of capital lease
obligations - 24
Long-term portion of notes payable 557 223
Other liabilities 170 255
Deferred tax liability 1,250 1,108
----- -----
Total liabilities 9,572 9,019
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value,
authorized 500,000 shares; none issued - -
5% preferred stock, Series B, voting,
cumulative, convertible, $.01 par
value (liquidation preference at par),
authorized 1,000,000 shares, none
issued - -
Common stock, $.01 par value,
authorized 10,000,000 shares;
3,619,639 and 3,572,883 shares issued
and 3,606,922 and 3,560,167 shares
outstanding 362 357
Additional paid-in capital 184,990 184,204
Accumulated deficit (178,556) (175,911)
Receivable for common stock issued (26) (26)
Treasury stock, at cost, 12,716 shares (169) (169)
---- ----
Total stockholders' equity 6,601 8,455
----- -----
Total liabilities and stockholders'
equity $16,173 $17,474
======= =======
See accompanying notes
