/EINPresswire.com/ -- BEAVERTON, OR -- (Marketwired) -- 10/28/15 -- Digimarc Corporation (NASDAQ: DMRC) reported financial results for the third quarter ended September 30, 2015.

Revenue for the third quarter of 2015 totaled $5.4 million compared to revenue of $6.9 million in the same quarter a year-ago. The decrease reflects $1.6 million of lower license revenue due to the end of payments from Verance Corporation in the fourth quarter of 2014, partially offset by growth in subscription revenue.

Operating expenses for the third quarter of 2015 decreased 4% to $7.8 million from $8.0 million in the same quarter a year-ago. The decrease was due to lower spending in research, development and engineering and general and administrative, partially offset by higher investment in sales and marketing related to market development and delivery of Digimarc Discover and Barcode.

Operating loss for the third quarter of 2015 totaled $4.5 million compared to an operating loss of $3.2 million in the same quarter a year-ago. The higher operating loss is due to lower license revenue.

Net loss for the third quarter of 2015 totaled $4.5 million or $(0.54) per diluted share, compared to a net loss of $2.0 million or $(0.28) per diluted share in the third quarter of 2014. The higher net loss is largely due to $1.6 million lower license revenue in the third quarter of this year and $1.3 million of income tax benefits recognized in the third quarter of last year.

Cash, cash equivalents and marketable securities totaled $43.0 million at September 30, 2015, compared to $34.0 million at June 30, 2015. The increase reflects the sale of 341,949 shares of common stock during the quarter, which generated net proceeds of $12.9 million, less cash used in operations of $2.7 million.

Conference Call
Digimarc will hold a conference call later today (Wednesday, October 28, 2015) to discuss these results, as well as provide an update on market conditions and execution of strategy. Chairman and CEO Bruce Davis and CFO Charles Beck will host the call starting at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). A question and answer session will follow management's presentation.

The conference call will be broadcast live and available for replay via the investor section of the company's website at www.digimarc.com/investors/investor-events-and-webcasts.

For those who wish to listen to the call via telephone, please dial the number below at least five minutes prior to the scheduled start time:

Toll-Free Number: 866-562-9934
International Number: 706-634-1493
Conference ID: 27179683

If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

About Digimarc
Digimarc Corporation (NASDAQ: DMRC), based in Beaverton, Oregon, is the inventor of the Digimarc Barcode. The Digimarc Barcode enables industrial scanners, smartphones, tablets, and other computer interfaces to reliably, efficiently and economically identify traditional barcoded items, along with many other media objects. Digimarc Barcodes are imperceptible to humans and do all that visible barcodes do, but even better, and can be applied to virtually all forms of media. These remarkable capabilities have allowed Digimarc and its business partners to supply a wide range of patented consumer engagement, media management, and security solutions across multiple consumer and government industry sectors. Digimarc owns an extensive intellectual property portfolio with patents in digital watermarking, content identification and management, media object discovery, and intuitive computing more generally. Digimarc develops and delivers solutions, licenses its intellectual property, and provides development services to business partners across a range of industries. For more information and the latest news, please visit www.digimarc.com and follow us on Twitter @DigimarcCorp.

Forward-looking Statements
With the exception of historical information contained in this release, the matters described in this release contain various "forward-looking statements." These forward-looking statements include statements and any related inferences regarding growth in subscription revenue, lower license revenue, lower spending in research, development and engineering and general and administrative and higher investment in sales and marketing, and other statements identified by terminology such as "will," "should," "expects," "estimates," "predicts" and "continue" or other derivations of these or other comparable terms. These forward-looking statements are statements of management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements in this release as a result of changes in economic, business and/or regulatory factors. More detailed information about risk factors that may affect actual results will be set forth in the company's Form 10-K for the year ended December 31, 2014 and in subsequent periodic reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this release. Except as required by law, Digimarc undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this release.

                            Digimarc Corporation
                 Consolidated Income Statement Information
                  (in thousands, except per share amounts)
                                (Unaudited)

                    Three-Month Information       Nine-Month Information
                 ----------------------------  ----------------------------
                 September 30,  September 30,  September 30,  September 30,
                      2015           2014           2015           2014
                 -------------  -------------  -------------  -------------
Revenue:
  Service        $       3,072  $       3,155  $       9,808  $       8,859
  Subscription           1,561          1,452          4,947          4,360
  License                  753          2,320          2,418          6,576
                 -------------  -------------  -------------  -------------
    Total revenue        5,386          6,927         17,173         19,795

Cost of revenue:
  Service                1,204          1,224          4,279          3,807
  Subscription             808            812          2,428          2,160
  License                   86             84            256            250
                 -------------  -------------  -------------  -------------
    Total cost of
     revenue             2,098          2,120          6,963          6,217

Gross profit:
  Service                1,868          1,931          5,529          5,052
  Subscription             753            640          2,519          2,200
  License                  667          2,236          2,162          6,326
                 -------------  -------------  -------------  -------------
    Total gross
     profit              3,288          4,807         10,210         13,578

Gross margin:
  Service                   61%            61%            56%            57%
  Subscription              48%            44%            51%            50%
  License                   89%            96%            89%            96%
    Percentage of
     gross profit
     to total
     revenue                61%            69%            59%            69%

Operating
 expenses:
  Sales and
   marketing             2,309          1,999          6,497          5,930
  Research,
   development
   and
   engineering           3,236          3,499          9,345         10,449
  General and
   administrative        1,847          2,183          6,033          6,929
  Intellectual
   property                367            366          1,025          1,287
                 -------------  -------------  -------------  -------------
    Total
     operating
     expenses            7,759          8,047         22,900         24,595

Operating loss          (4,471)        (3,240)       (12,690)       (11,017)

Other income, net           29              3             84             50
                 -------------  -------------  -------------  -------------

Loss before
 income taxes           (4,442)        (3,237)       (12,606)       (10,967)

(Provision)
 benefit for
 income taxes              (27)         1,252            (25)         4,316
                 -------------  -------------  -------------  -------------
Net loss         $      (4,469) $      (1,985) $     (12,631) $      (6,651)
                 =============  =============  =============  =============

Earnings (loss)
 per common
 share:
Loss per common
 share - basic   $       (0.54) $       (0.28) $       (1.56) $       (0.95)
Loss per common
 share - diluted $       (0.54) $       (0.28) $       (1.56) $       (0.95)
  Weighted
   average common
   shares
   outstanding -
   basic                 8,309          7,176          8,101          7,097
  Weighted
   average common
   shares
   outstanding -
   diluted               8,309          7,176          8,101          7,097

Cash dividends
 declared per
 common share:   $           -  $           -  $           -  $        0.22



                            Digimarc Corporation
                   Consolidated Balance Sheet Information
                               (in thousands)
                                (Unaudited)


                                               September 30,   December 31,
                                                    2015           2014
                                               -------------  -------------
Assets
  Current assets:
    Cash and cash equivalents (1)              $      11,452  $       6,122
    Marketable securities (1)                         31,585         32,201
    Trade accounts receivable, net                     2,687          4,545
    Other current assets                               2,862          2,611
                                               -------------  -------------
      Total current assets                            48,586         45,479
  Marketable securities (1)                                -            749
  Property and equipment, net                          2,852          2,976
  Intangibles, net                                     6,723          6,720
  Goodwill                                             1,114          1,114
  Other assets                                           312            378
                                               -------------  -------------
      Total assets                             $      59,587  $      57,416
                                               =============  =============

Liabilities and Shareholders' Equity
  Current liabilities:
    Accounts payable and other accrued
     liabilities                               $       1,814  $       1,379
    Deferred revenue                                   1,642          3,660
                                               -------------  -------------
      Total current liabilities                        3,456          5,039
  Deferred rent and other long-term
   liabilities                                           210            203
                                               -------------  -------------
      Total liabilities                                3,666          5,242

  Commitments and contingencies

  Shareholders' equity:
    Preferred stock                                       50             50
    Common stock                                           9              8
    Additional paid-in capital                        76,599         60,222
    Accumulated deficit                              (20,737)        (8,106)
                                               -------------  -------------
      Total shareholders' equity                      55,921         52,174

                                               -------------  -------------
      Total liabilities and shareholders'
       equity                                  $      59,587  $      57,416
                                               =============  =============
(1) Aggregate cash, cash equivalents, short- and long-term marketable
    securities was $43,037 and $39,072 at September 30, 2015 and December
    31, 2014, respectively.



                            Digimarc Corporation
                     Consolidated Cash Flow Information
                               (in thousands)
                                (Unaudited)

                                                  Nine-Month Information
                                               ----------------------------
                                               September 30,  September 30,
                                                    2015           2014
                                               -------------  -------------
Cash flows from operating activities:
  Net loss                                     $     (12,631) $      (6,651)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Depreciation, amortization and write-off
     of property and equipment                           930            708
    Amortization and write-off of intangibles            794            916
    Changes in allowance for doubtful accounts            16            (13)
    Stock-based compensation                           3,857          4,085
    Deferred income taxes                                  -         (2,874)
  Changes in operating assets and liabilities:
    Trade accounts receivable                          1,842          2,000
    Other current assets                                (251)        (1,559)
    Other assets                                          66            160
    Accounts payable and other accrued
     liabilities                                         280           (340)
    Deferred revenue                                  (1,929)        (2,338)
                                               -------------  -------------
      Net cash used in operating activities           (7,026)        (5,906)

Cash flows from investing activities:
  Purchase of property and equipment                    (747)        (1,010)
  Capitalized patent costs                              (646)          (922)
  Maturity of marketable securities                   79,985         47,961
  Purchase of marketable securities                  (78,620)       (38,840)
                                               -------------  -------------
      Net cash provided by (used in) investing
       activities                                        (28)         7,189

Cash flows from financing activities:
  Issuance of common stock, net of issuance
   costs                                              12,896           (124)
  Exercise of stock options                            1,321          1,319
  Purchase of common stock                            (1,833)        (1,931)
  Cash dividends paid                                      -         (1,654)
                                               -------------  -------------
      Net cash provided by (used in) financing
       activities                                     12,384         (2,390)

                                               -------------  -------------
      Net increase (decrease) in cash and cash
       equivalents (2)                         $       5,330  $      (1,107)
                                               =============  =============


  Cash, cash equivalents and marketable
   securities at beginning of period                  39,072         34,964
  Cash, cash equivalents and marketable
   securities at end of period                        43,037         24,736
                                               -------------  -------------
(2) Net increase (decrease) in cash, cash
 equivalents and marketable securities         $       3,965  $     (10,228)
                                               =============  =============

Company Contacts:
Charles Beck
Chief Financial Officer
503-469-4721
Email Contact

Matt Glover
Liolios Group, Inc.
Investor Relations for Digimarc
949-574-3860
Email Contact

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