Rimage: Fiscal 1Q13 Financial Results

(in US$ million)	1Q12	1Q13
Revenues	19.5	19.5
*Growth*		0%
Net income (loss)	(1.7)	(4.0)

Rimage Corporation reported its financial results for the first quarter ended March 31, 2013.

Revenues for the first quarter 2013 were $19.5 million, unchanged from total revenues in the first quarter of 2012.

Qumu First Quarter Financial Highlights

Revenues totaled $4.3 million in the first quarter of 2013, an increase of 216% from $1.4 million in the first quarter of 2012 and slightly better than revenues in the seasonally strong fourth quarter of 2012.
Contracted commitments were $4.4 million in the recent first quarter. This represented a 225% increase from the first quarter last year.
Backlog of contracted revenues totaled $12.4 million at March 31, 2013, compared to $12.7 million at December 31, 2012.

Sherman L. Black, president and CEO, said: "Qumu’s secure enterprise video solution continues to attract new customers and our momentum in the marketplace continues to build. Our first quarter was anchored by three key wins – a global technology retailer, a top five global financial institution and a global engineering and construction company. The adoption of video as a key communication tool within companies is increasinglya, and maintaining complete control of that video from its creation to its consumption. Our innovative solutions release the power in video to fully engage and empower employees, partners, clients, and their customers.

"Enterprises are focused on the security of their data as well as the need for cost-effective distribution, and Qumu is well equipped to address both these requirements. Our software allows IT and other corporate managers to send videos and rich content to employees utilizing their existing IT infrastructure.

"We have been moving aggressively to strengthen Qumu’s position to capitalize on the tremendous opportunity we see. In the past six months, we have made substantial progress in building a more effective, efficient sales and marketing organization. We have expanded our presence internationally and improved our service capabilities. In addition we will be launching a new cloud version of our product that will expand our market reach.

"The outlook for Qumu remains strong. The enterprise video communications market is a large and emerging growth market. In a short period of time, Qumu has established itself as a leader in this space. In a report published in March 2013 by Forrester, Qumu was named one of the top two leaders in providing video communications solutions. We are excited about the opportunity ahead for Qumu and remain focused on ensuring competitive products and features, enhancing visibility and driving revenue growth," Black continued.

Disc Publishing 1Q13 Highlights
"Disc publishing revenues in the first quarter were down 16% from the first quarter of 2012. The first quarter last year included a large refresh order for a major retailer that did not recur this year. In addition, demand in other segments of the business declined more sharply than anticipated, reflecting a shift to alternative technologies and continued funding challenges for some customers. With our expectation that the market will continue to transition, we will take the actions needed to maximize the ability of this business to generate cash and appropriately manage this declining business over time," he concluded.

1Q13 Financial Highlights

Total revenues for the first quarter 2013 were $19.5 million, unchanged from total revenues in the first quarter of 2012. A 16% decrease in disc publishing revenues was offset by a significant increase in revenues from Qumu.
Gross margin for the first quarter of 2013 was 47% compared with 49% in the first quarter a year ago. The decrease reflected a less favorable sales mix and under-absorbed disc publishing manufacturing costs.
Operating expenses in the quarter were $13.2 million compared with $12.5 million in the first quarter last year. Included in the recent first quarter results was approximately $0.5 million, or $0.06 per share of non-recurring severance and legal costs. In addition, Qumu commission costs were higher due to the increased Qumu revenues.
The net loss for the first quarter was $4.0 million, or $(0.46) per share, compared with a net loss of $1.7 million in the first quarter of 2012, or $(0.17) per share. The first quarter Non-GAAP loss per share was $(0.42).
Cash and marketable securities totaled $48.4 million at March 31, 2013 compared with $50.1 million at the end of December 2012. First quarter cash used in operations was approximately $1.0 million.

Stock Repurchase Program
The company did not repurchase any shares of common stock during the first quarter 2013. There are approximately 778,000 shares remaining for repurchase under the authorization. As of March 31, 2013, there were 8,667,071 shares outstanding.

Revenue Guidance
Based on the current outlook, the company continues to believe the revenue guidance previously established for 2013 is achievable and expects consolidated revenues to grow compared to 2012. Qumu revenues are expected to grow greater than 50% in 2013 compared to 2012. The company expects this Qumu growth to be partially offset by a decline in disc publishing revenues. Second quarter 2013 revenues are expected to be between $18 and $20 million.