Liquid Audio Announces Fourth-Quarter and Fiscal Year 2002 Results.Business Editors REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BUSINESS WIRE)--March 24, 2003 Liquid Audio, Inc. (Nasdaq:LQID) today announced its financial results for the fourth quarter and fiscal year ended December 31, 2002. Liquid Audio's net revenues for the fourth quarter were $95,000, compared with $101,000 for the third quarter of 2002 and $768,000 for the fourth quarter of 2001. Fourth-quarter net loss was $8.1 million, or a loss of $0.35 per share(1). This included an asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $689,000, a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $365,000 related to a continued reduction in work force, and a $2.1-million fee for the termination of the company's merger agreement with Alliance Entertainment Corp., as announced on November 8, 2002. Fourth-quarter net loss compared with a net loss of $686,000, or a loss of $0.03 per share, for the third quarter of 2002 and a net loss of $5.8 million, or a loss of $0.26 per share, for the fourth quarter of 2001. Third-quarter 2002 net income included other income of $7.0 million generated from the sale of the company's patent portfolio to Microsoft Corp. (Nasdaq:MSFT MSFT Microsoft (stock symbol) MSFT Movimento Sociale Fiamma Tricolore (Italy) MSFT Multi-Stage Fitness Test MSFT Master of Science in Family Therapy MSFT Macalester Students for Fair Trade ). Liquid Audio's cash and cash equivalents at December 31, 2002 were $74.0 million, compared with $81.4 million at September 30, 2002 and $91.6 million at December 31, 2001. Liabilities at December 31, 2002 included a distribution payable to stockholders of $57.8 million. Net revenues for fiscal year 2002 were $482,000, compared with $4.7 million for 2001. Net loss for 2002 was $19.3 million, or a loss of $0.85 per share, compared with a net loss of $37.2 million, or a loss of $1.64 per share, for 2001. On January 2, 2003, Liquid Audio entered into a settlement and reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. agreement with MM Companies, Inc. (Nasdaq:MMCO MMCO Memory Management Control Operations MMCO Maintenance Material Control Officer .OB), whereby the company reimbursed MMC See MultiMediaCard and Microsoft Management Console. the sum of $929,000, representing MMC's costs associated with various litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. matters between the two companies. On January 21, 2003, the company settled a patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. claim filed against it by Network Commerce, Inc. (NCI See Liberate. ) with a payment of $150,000 to NCI. On January 24, 2003, Liquid Audio announced the sale of assets related to its digital media distribution technology and infrastructure business to Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. Media, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , an affiliate of Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic Merchandisers, LP, for $3.2 million. This followed the sale of the company's entire patent portfolio to Microsoft Corp. in the third quarter of 2002. With these two sales, Liquid Audio disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of substantially all of its operating and intellectual assets. On January 29, 2003, Liquid Audio paid a cash distribution of $2.50 per share to stockholders of record as of December 10, 2002, for a total distribution of $57.8 million. This followed the settlement of the company's lawsuit lawsuit: see procedure; tort. with BeMusic, Inc., a unit of Bertelsmann AG Bertelsmann AG German media company. Beginning as a religious printer and publisher in 1835, the company grew steadily over the next century. Though virtually destroyed by Allied bombing in 1945, it recovered quickly after World War II. , which sought to enjoin To direct, require, command, or admonish. Enjoin connotes a degree of urgency, as when a court enjoins one party in a lawsuit by ordering the person to do, or refrain from doing, something to prevent permanent loss to the other party or parties. the cash distribution to stockholders. The Company Liquid Audio, Inc. was formed in 1996 to provide record labels, artists and retail websites with the software, infrastructure and services for the secure digital delivery of media over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Today, the company has no current operating business and is exploring various alternatives for the use or disposition of its remaining assets. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. related to the future use or disposition of the company's remaining assets. Actual results could be affected by or differ materially from those anticipated in the forward-looking statements. Readers should refer to the 'Company Risk Factors' section of the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002, to be filed by March 31, 2003, and other filings with the Securities and Exchange Commission. (1) Per-share computations are both basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , except where specifically noted otherwise.
Liquid Audio, Inc.
Consolidated Statements of Operations
(in thousands, except per-share amounts; unaudited)
Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
-------- -------- --------- ---------
Net revenues:
License $ 18 $ 27 $ 108 $ 682
Services 77 172 374 1,173
Business development
(related party) -- 569 -- 2,873
-------- -------- --------- ---------
Total net revenues 95 768 482 4,728
-------- -------- --------- ---------
Cost of revenues:
License 136 136 388 491
Services 212 216 654 1,503
Non-cash cost of revenues -- 99 82 349
-------- -------- --------- ---------
Total cost of revenues 348 451 1,124 2,343
-------- -------- --------- ---------
Gross profit (loss) (253) 317 (642) 2,385
-------- -------- --------- ---------
Operating expenses:
Sales and marketing 562 1,327 3,765 11,404
Research and development 740 3,263 9,111 16,957
General and administrative 4,059 1,175 10,712 9,077
Strategic marketing--equity
instruments -- -- -- 607
Asset impairment charge 689 -- 689 --
Restructuring 365 825 1,163 4,497
Stock compensation
amortization 2 15 (21) (57)
-------- -------- --------- ---------
Total operating
expenses 6,417 6,605 25,419 42,485
-------- -------- --------- ---------
Loss from operations (6,670) (6,288) (26,061) (40,100)
Interest and other income, net 716 465 8,886 4,170
Merger termination fee (2,100) -- (2,100) --
Loss in equity investment -- -- -- (1,254)
-------- -------- --------- ---------
Net loss $(8,054) $(5,823) $(19,275) $(37,184)
======== ======== ========= =========
Net loss per share:
Basic and diluted $ (0.35) $ (0.26) $ (0.85) $ (1.64)
======== ======== ========= =========
Weighted average shares 22,890 22,689 22,775 22,614
======== ======== ========= =========
Liquid Audio, Inc.
Consolidated Balance Sheets
(in thousands; unaudited)
December 31, December 31,
2002 2001
------------ ------------
Assets
Current assets:
Cash and cash equivalents $73,985 $91,594
Accounts receivable, net 60 130
Other current assets 1,361 1,099
------------ ------------
Total current assets 75,406 92,823
------------ ------------
Restricted cash 826 826
Property and equipment, net 558 3,603
Other assets 7 163
------------ ------------
Total assets $76,797 $97,415
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,218 $ 1,107
Accrued liabilities 2,151 3,821
Distribution payable to stockholders 57,771 --
Deferred revenue 39 122
Capital lease obligations -- 28
Equipment loan -- 169
Note payable to related party -- 343
------------ ------------
Total current liabilities 61,179 5,590
------------ ------------
Stockholders' equity 15,618 91,825
------------ ------------
Total liabilities and stockholders'
equity $76,797 $97,415
============ ============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion