Exhibit 99.1
REALNETWORKS ANNOUNCES FIRST QUARTER 2013 RESULTS
SEATTLE - May 1, 2013 - RealNetworks, Inc. (Nasdaq: RNWK) today announced results for the first quarter ended March 31, 2013.
Quarterly Summary:
| |
| • | Revenue of $56.8 million |
| |
| • | Net loss of $(11.7) million or $(0.33) per share |
| |
| • | Adjusted EBITDA of $(3.0) million |
| |
| • | Cash and short-term investments of $260.6 million as of March 31, 2013 |
"We continue to execute our turnaround plans to put RealNetworks on a path to growth and sustainable profitability," said Rob Glaser, Chairman and interim CEO of RealNetworks.
First Quarter Results
For the first quarter of 2013, revenue was $56.8 million, a sequential decrease of 16% from the fourth quarter of 2012, and a decrease of 15% compared with the first quarter of 2012. Revenue trends in each of RealNetworks' businesses in the first quarter of 2013 compared with the year-earlier quarter were: a 1% increase in RealPlayer Group revenue to $22.4 million, a 20% decrease in Mobile Entertainment revenue to $20.5 million and a 27% decrease in Games revenue to $13.9 million.
Net loss for the first quarter of 2013 was $(11.7) million, or $(0.33) per share, compared with net loss of $(17.0) million, or $(0.49) per share, in the first quarter of 2012. Adjusted EBITDA loss for the first quarter of 2013 was $(3.0) million, compared with an adjusted EBITDA loss of $(7.4) million for the first quarter of 2012. A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.
As of March 31, 2013, RealNetworks had $260.6 million in unrestricted cash, cash equivalents and short-term investments compared with $271.4 million as of Dec. 31, 2012, of which approximately $39.4 million was held in foreign jurisdictions. In addition, RealNetworks had $48.6 million in restricted cash and available-for-sale securities as of March 31, 2013, compared with $44.3 million as of Dec. 31, 2012.
Segment Reorganization
Beginning with the first quarter of 2013, RealNetworks reorganized its financial reporting to reflect changes in how we manage the businesses and changed the way we allocate certain operating expenses within the company to increase efficiency and accountability for financial and operational performance within each business. RealNetworks' 2013 financial results now reflect the new corporate organization with the following reportable segments: (1) the RealPlayer Group, which includes RealPlayer, SuperPass and mobile IP sales; (2) Mobile Entertainment, which includes SaaS services of ringback tones, music on demand, and intercarrier messaging; professional services and systems integration; and Helix software; and (3) Games.
Additionally, more of RealNetworks' corporate costs - such as some of the costs of finance, HR, legal and facilities - are now assigned to each business unit, although certain costs are being retained at the corporate level. On April 22, 2013, RealNetworks filed a report on Form 8-K with a description of the new segments and historical results that reflect those new segments.
Segment Operating Results
|
| | | | | | | | | | |
| | | | 2013 | | 2012 | | 2012 |
| | | | Q1 | | Q4 | | Q1 |
| | | | (in thousands) |
| Revenue | | | | | |
| | RealPlayer Group | 22,383 |
| | 25,838 |
| | 22,081 |
|
| | Mobile Entertainment | 20,495 |
| | 25,718 |
| | 25,775 |
|
| | Games | 13,915 |
| | 15,708 |
| | 19,108 |
|
| | Corporate | — |
| | — |
| | — |
|
| | | Total | 56,793 |
| | 67,264 |
| | 66,964 |
|
| | | | | | | | |
| Operating Income (loss) | | | | | |
| | RealPlayer Group | 866 |
| | 6,946 |
| | 1,542 |
|
| | Mobile Entertainment | 552 |
| | (882 | ) | | (4,507 | ) |
| | Games | (1,737 | ) | | (716 | ) | | (1,743 | ) |
| | Corporate | (11,107 | ) | | (12,236 | ) | | (13,834 | ) |
| | | Total | (11,426 | ) | | (6,888 | ) | | (18,542 | ) |
| | | | | | | | |
| Adjusted EBITDA | | | | | |
| | RealPlayer Group | 1,331 |
| | 7,620 |
| | 1,985 |
|
| | Mobile Entertainment | 3,382 |
| | 1,687 |
| | (2,077 | ) |
| | Games | (1,154 | ) | | (71 | ) | | (1,084 | ) |
| | Corporate | (6,568 | ) | | (5,972 | ) | | (6,241 | ) |
| | | Total | (3,009 | ) | | 3,264 |
| | (7,417 | ) |
Business Outlook
For the second quarter of 2013, RealNetworks expects total revenue of $49 million to $52 million, with all segments declining sequentially and year over year. We expect adjusted EBITDA for the quarter to be a loss of $(7) million to $(10) million.
In the second quarter, we expect to finalize and announce plans to reduce our facilities costs by several millions of dollars per year. Our outlook for the second quarter does not include any cost reductions or one-time charges that could result from this change.
The foregoing forward-looking statements reflect RealNetworks' expectations as of May 1, 2013. It is not RealNetworks' general practice to update these forward-looking statements until its next quarterly results announcement.
Webcast and Conference Call Information
The company will host an audio Webcast conference call to review results and discuss the company's operations for the first quarter at 5:00 p.m. ET on May 1. The Webcast will be available at: http://investor.realnetworks.com
The on-demand Webcast will be available beginning approximately two hours following the conclusion of the live Webcast.
Conference Call Details
5 p.m. ET / 2 p.m. PT
Dial in:
888-790-3162 Domestic
415-228-4854 International
Passcode: First Quarter Earnings
Leader: Rob Glaser
Telephonic replay will be available until 8 p.m. ET, May 15, 2013.
Replay dial in:
888-566-0589 Domestic
402-998-0696 International
For More Information:
Investors Only:
Marj Charlier, 206-892-6718, or mcharlier@realnetworks.com
Tim Wan, 206-892-6604, or twan@realnetworks.com
Press Only:
Michael Eggerling, RealNetworks, 206-832-6308 or meggerling@realnetworks.com
About RealNetworks:
RealNetworks creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network. RealNetworks' corporate information is located at http://www.realnetworks.com/about-us
About Non-GAAP Financial Measures
To supplement RealNetworks' consolidated financial information presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA by reportable segment, which management believes provide investors with useful information.
In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP operating income (loss) to adjusted EBITDA and to adjusted EBITDA by reportable segment.
The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the first quarter earnings materials. Please refer to Exhibit 99.2 (“Information Regarding Non-GAAP Financial Measures”) to the company's report on Form 8-K, which is being submitted today to the SEC.
Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to RealNetworks' current expectations for future revenue, adjusted EBITDA, plans to undertake, as well as results and benefits from its business restructuring activities, including anticipated changes in headquarters, and strategic initiatives. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. Actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: fluctuations in foreign currencies; RealNetworks' ability to realize operating efficiencies, growth and other benefits from the implementation of its strategic initiatives; the emergence of new entrants and competition in the market for digital media products and services; other competitive risks, including the growth of competing technologies, products and services; the potential outcomes and effects of claims and legal proceedings on RealNetworks' business, prospects, financial condition or results of operations; risks associated with key customer or strategic relationships, business acquisitions and the introduction of new products and
services; changes in consumer and advertising spending in response to disruptions in the global financial markets; and changes in RealNetworks' effective tax rate. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks' financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.
RealNetworks, RealPlayer and GameHouse are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
|
| | | | | | | | | | |
| | | | Quarters Ended March 31, | |
| | | | |
| | | | 2013 | | 2012 | |
| | | | (in thousands, except per share data) | |
| | | | | | | |
| Net revenue | | | $ | 56,793 |
| | $ | 66,964 |
| |
| | | | | | | |
| Cost of revenue | | | 20,506 |
| | 27,427 |
| |
| | | | | | | |
| Gross profit | | | 36,287 |
| | 39,537 |
| |
| | | | | | | |
| Sale of patents and other technology assets, net of costs (A) | | | — |
| | (1,580 | ) | |
| | | | | | | |
| Operating expenses: | | | | | | |
| Research and development | | | 15,251 |
| | 17,818 |
| |
| Sales and marketing | | | 21,134 |
| | 23,796 |
| |
| General and administrative | | | 9,946 |
| | 13,276 |
| |
| Restructuring and other charges | | | 1,382 |
| | 1,609 |
| |
| | | | | | | |
| Total operating expenses | | | 47,713 |
| | 56,499 |
| |
| | | | | | | |
| Operating income (loss) | | | (11,426 | ) | | (18,542 | ) | |
| | | | | | | |
| Other income (expenses): | | | | | | |
| Interest income, net | | | 647 |
| | 644 |
| |
| Equity in net loss of Rhapsody investment | | | (2,233 | ) | | (368 | ) | |
| Other income (expense), net | | | 109 |
| | 1,475 |
| |
| | | | | | | |
| Total other income (expense), net | | | (1,477 | ) | | 1,751 |
| |
| | | | | | | |
| Income (loss) before income taxes | | | (12,903 | ) | | (16,791 | ) | |
| Income tax expense (benefit) | | | (1,229 | ) | | 224 |
| |
| | | | | | | |
| Net income (loss) | | | $ | (11,674 | ) | | $ | (17,015 | ) | |
| | | | | | | |
| Basic net income (loss) per share | | | $ | (0.33 | ) | | $ | (0.49 | ) | |
| Diluted net income (loss) per share | | | $ | (0.33 | ) | | $ | (0.49 | ) | |
| | | | | | | |
| Shares used to compute basic net income (loss) per share | | | 35,343 |
| | 34,488 |
| |
| Shares used to compute diluted net income (loss) per share | | | 35,343 |
| | 34,488 |
| |
| | | | | | | |
| | | | | | | |
| (A) On April 5, 2012, RealNetworks completed the sale of certain patents and other technology assets to Intel for a cash purchase of $120.0 million. Because the transaction closed subsequent to March 31, 2012, the gain on the transaction was reflected in our financial statements in the second quarter of 2012. For the first quarter of 2012, $1.6 million of direct costs of the transaction were incurred. | |
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
|
| | | | | | | |
| | March 31, | | December 31, |
| | 2013 | | 2012 |
| | (in thousands) |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | 136,694 |
| | $ | 163,198 |
|
| Short-term investments | 123,894 |
| | 108,216 |
|
| Trade accounts receivable, net | 28,718 |
| | 30,754 |
|
| Deferred costs, current portion | 1,297 |
| | 825 |
|
| Deferred tax assets - current | 2,759 |
| | 2,869 |
|
| Prepaid expenses and other current assets | 13,266 |
| | 17,002 |
|
| Total current assets | 306,628 |
| | 322,864 |
|
| | | | |
| Equipment, software, and leasehold improvements, at cost: | | | |
| Equipment and software | 95,918 |
| | 98,041 |
|
| Leasehold improvements | 22,705 |
| | 22,767 |
|
| Total equipment, software, and leasehold improvements | 118,623 |
| | 120,808 |
|
| Less accumulated depreciation and amortization | (92,020 | ) | | (91,492 | ) |
| Net equipment, software, and leasehold improvements | 26,603 |
| | 29,316 |
|
| | | | |
| Restricted cash equivalents and investments | 10,000 |
| | 10,000 |
|
| Equity method investment | 16,710 |
| | 19,204 |
|
| Available for sale securities | 38,608 |
| | 34,334 |
|
| Other assets | 3,331 |
| | 3,153 |
|
| Deferred costs, non-current portion | 802 |
| | 531 |
|
| Deferred tax assets, net, non-current portion | 4,803 |
| | 4,911 |
|
| Other intangible assets, net | 2,837 |
| | 3,275 |
|
| Goodwill | 6,410 |
| | 6,309 |
|
| | | | |
| Total assets | $ | 416,732 |
| | $ | 433,897 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
| | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 16,910 |
| | $ | 19,013 |
|
| Accrued and other current liabilities | 51,847 |
| | 57,530 |
|
| Deferred revenue, current portion | 8,846 |
| | 8,675 |
|
| Total current liabilities | 77,603 |
| | 85,218 |
|
| | | | |
| Deferred revenue, non-current portion | 169 |
| | 169 |
|
| Deferred rent | 2,026 |
| | 2,250 |
|
| Deferred tax liabilities, net, non-current portion | 432 |
| | 432 |
|
| Other long-term liabilities | 2,417 |
| | 3,100 |
|
| | | | |
| Total liabilities | 82,647 |
| | 91,169 |
|
| | | | |
| | | | |
| Shareholders' equity | 334,085 |
| | 342,728 |
|
| | | | |
| Total liabilities and shareholders' equity | $ | 416,732 |
| | $ | 433,897 |
|
RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
| | | | | | | |
| | Quarters Ended March 31, |
| | 2013 | | 2012 |
| | (in thousands) |
| |
| Cash flows from operating activities: | | | |
| Net income (loss) | $ | (11,674 | ) | | $ | (17,015 | ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
| Depreciation and amortization | 4,888 |
| | 4,118 |
|
| Stock-based compensation | 2,038 |
| | 2,343 |
|
| Equity in net loss of Rhapsody investment | 2,233 |
| | 368 |
|
| Deferred income taxes, net | (1,559 | ) | | (19 | ) |
| Realized translation gain | — |
| | (1,611 | ) |
| Other | (75 | ) | | (3 | ) |
| Net change in certain operating assets and liabilities | (2,584 | ) | | (5,423 | ) |
| Net cash provided by (used in) operating activities | (6,733 | ) | | (17,242 | ) |
| | | | |
| Cash flows from investing activities: | | | |
| Purchases of equipment, software, and leasehold improvements | (1,194 | ) | | (2,798 | ) |
| Purchases of short-term investments | (43,318 | ) | | (9,969 | ) |
| Proceeds from sales and maturities of short-term investments | 27,640 |
| | 5,027 |
|
| Acquisitions of businesses | (700 | ) | | — |
|
| Net cash provided by (used in) investing activities | (17,572 | ) | | (7,740 | ) |
| Cash flows from financing activities: | | | |
| Proceeds from issuance of common stock (stock options and stock purchase plan) | 20 |
| | 675 |
|
| Payment of contingent consideration | (828 | ) | | — |
|
| Tax payments from shares withheld upon vesting of restricted stock | (166 | ) | | — |
|
| Net cash provided by (used in) financing activities | (974 | ) | | 675 |
|
| Effect of exchange rate changes on cash and cash equivalents | (1,225 | ) | | 1,306 |
|
| Net increase (decrease) in cash and cash equivalents | (26,504 | ) | | (23,001 | ) |
| Cash and cash equivalents, beginning of period | 163,198 |
| | 106,333 |
|
| Cash and cash equivalents, end of period | $ | 136,694 |
| | $ | 83,332 |
|
RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 2013 | | 2012 |
| | | Q1 | | Q4 | | Q3 | | Q2 | | Q1 |
| | | | | (in thousands) |
| Net Revenue by Line of Business | | | | | | | | | | |
| RealPlayer Group (A) | | $ | 22,383 |
| | $ | 25,838 |
| | $ | 21,392 |
| | $ | 22,158 |
| | $ | 22,081 |
|
| Mobile Entertainment (B) | | 20,495 |
| | 25,718 |
| | 22,820 |
| | 26,005 |
| | 25,775 |
|
| Games (C) | | 13,915 |
| | 15,708 |
| | 14,876 |
| | 17,363 |
| | 19,108 |
|
| Total net revenue | | $ | 56,793 |
| | $ | 67,264 |
| | $ | 59,088 |
| | $ | 65,526 |
| | $ | 66,964 |
|
| | | | | | | | | | | |
| Net Revenue by Product | | | | | | | | | | |
| RealPlayer Group | | | | | | | | | | |
| - Licensing (D) | | $ | 8,332 |
| | $ | 10,956 |
| | $ | 6,757 |
| | $ | 8,334 |
| | $ | 7,733 |
|
| - Subscriptions (E) | | 4,924 |
| | 6,192 |
| | 7,056 |
| | 6,810 |
| | 7,601 |
|
| - Media Properties (F) | | 9,127 |
| | 8,690 |
| | 7,579 |
| | 7,014 |
| | 6,747 |
|
| | | | | | | | | | | |
| Mobile Entertainment | | | | | | | | | | |
| - SaaS (G) | | 18,674 |
| | 22,793 |
| | 20,696 |
| | 23,286 |
| | 23,464 |
|
| - Systems Integration / Professional Services (H) | | 291 |
| | 1,295 |
| | 247 |
| | 965 |
| | 426 |
|
| - Licensing (I) | | 1,530 |
| | 1,630 |
| | 1,877 |
| | 1,754 |
| | 1,885 |
|
| | | | | | | | | | | |
| Games | | | | | | | | | | |
| - Licensing (J) | | 5,249 |
| | 5,222 |
| | 5,136 |
| | 6,053 |
| | 7,587 |
|
| - Subscriptions (K) | | 6,312 |
| | 6,876 |
| | 6,952 |
| | 7,536 |
| | 8,170 |
|
| - Media Properties (L) | | 2,354 |
| | 3,610 |
| | 2,788 |
| | 3,774 |
| | 3,351 |
|
| | | | | | | | | | | |
| Total net revenue | | $ | 56,793 |
| | $ | 67,264 |
| | $ | 59,088 |
| | $ | 65,526 |
| | $ | 66,964 |
|
| | | | | | | | | | | |
| Net Revenue by Geography: | | | | | | | | | | |
| United States | | $ | 28,024 |
| | $ | 28,315 |
| | $ | 29,101 |
| | $ | 28,614 |
| | $ | 31,814 |
|
| Rest of world | | 28,769 |
| | 38,949 |
| | 29,987 |
| | 36,912 |
| | 35,150 |
|
| Total net revenue | | $ | 56,793 |
| | $ | 67,264 |
| | $ | 59,088 |
| | $ | 65,526 |
| | $ | 66,964 |
|
| | | | | | | | | | | |
| Net Revenue by Line of Business | | | | | | | | | | |
| (A) The RealPlayer Group primarily includes revenue from RealPlayer and related products, such as the distribution of third party software products, advertising on RealPlayer websites, and sales of RealPlayer Plus software licenses to consumers, sales of intellectual property licenses, and consumer subscriptions such as SuperPass. |
| (B) The Mobile Entertainment division primarily includes revenue from SaaS services, system integration, and professional services to mobile carriers, and sales of technology licenses of our software products such as Helix. |
| (C) The Games division primarily includes revenue from sales of games licenses, online games subscription services, advertising on games sites and social network sites, microtransactions from online and social games, and sales of mobile games. |
| Net Revenue by Product | | | | | | | | | | |
| (D) Licensing revenue within the RealPlayer Group includes sales of RealPlayer Plus software licenses to consumers and sales of intellectual property licenses. |
| (E) Subscriptions revenue within the RealPlayer Group includes revenue from subscriptions such as SuperPass. |
| (F) Media Properties revenue within the RealPlayer Group includes distribution of third party software products and advertising on RealPlayer websites. |
| (G) SaaS revenue within Mobile Entertainment includes revenue from music on demand, video on demand, ringtones, ringback tones, and intercarrier messaging services provided to network services providers who are largely mobile phone networks. |
| (H) Systems Integration / Professional Services revenue within Mobile Entertainment includes professional services, other than those associated with software sales, provided to mobile carriers. |
| (I) Licensing revenue within Mobile Entertainment includes revenue from Helix-related products. |
| (J) Licensing revenue within Games includes retail games-related revenue, microtransactions from online and social games and sales of mobile games. |
| (K) Subscriptions revenue within Games includes revenue from online games subscriptions. |
| (L) Media Properties revenue within Games includes distribution of third party software products and advertising on games sites and social network sites. |
RealNetworks, Inc. and Subsidiaries
Segment Results of Operations
(Unaudited)
|
| | | | | | | | | | | | |
| | | 2013 | | 2012 |
| | | Q1 | | Q4 | | Q1 |
| | | (in thousands) |
| RealPlayer Group | | | | | | |
| | | | | | | |
| Net revenue | | $ | 22,383 |
| | $ | 25,838 |
| | $ | 22,081 |
|
| Cost of revenue | | 5,311 |
| | 5,518 |
| | 4,564 |
|
| Gross profit | | 17,072 |
| | 20,320 |
| | 17,517 |
|
| | | | | | | |
| Gross margin | | 76 | % | | 79 | % | | 79 | % |
| | | | | | | |
| Operating expenses | | 16,206 |
| | 13,374 |
| | 15,975 |
|
| Operating income (loss) | | $ | 866 |
| | $ | 6,946 |
| | $ | 1,542 |
|
| | | | | | | |
| Adjusted EBITDA | | $ | 1,331 |
| | $ | 7,620 |
| | $ | 1,985 |
|
| | | | | | | |
| Mobile Entertainment | | | | | | |
| | | | | | | |
| Net revenue | | $ | 20,495 |
| | $ | 25,718 |
| | $ | 25,775 |
|
| Cost of revenue | | 10,832 |
| | 14,577 |
| | 15,478 |
|
| Gross profit | | 9,663 |
| | 11,141 |
| | 10,297 |
|
| | | | | | | |
| Gross margin | | 47 | % | | 43 | % | | 40 | % |
| | | | | | | |
| Operating expenses | | 9,111 |
| | 12,023 |
| | 14,804 |
|
| Operating income (loss) | | $ | 552 |
| | $ | (882 | ) | | $ | (4,507 | ) |
| | | | | | | |
| Adjusted EBITDA | | $ | 3,382 |
| | $ | 1,687 |
| | $ | (2,077 | ) |
| | | | | | | |
| Games | | | | | | |
| | | | | | | |
| Net revenue | | $ | 13,915 |
| | $ | 15,708 |
| | $ | 19,108 |
|
| Cost of revenue | | 3,800 |
| | 4,496 |
| | 6,713 |
|
| Gross profit | | 10,115 |
| | 11,212 |
| | 12,395 |
|
| | | | | | | |
| Gross margin | | 73 | % | | 71 | % | | 65 | % |
| | | | | | | |
| Operating expenses | | 11,852 |
| | 11,928 |
| | 14,138 |
|
| Operating income (loss) | | $ | (1,737 | ) | | $ | (716 | ) | | $ | (1,743 | ) |
| | | | | | | |
| Adjusted EBITDA | | $ | (1,154 | ) | | $ | (71 | ) | | $ | (1,084 | ) |
| | | | | | | |
| Corporate | | | | | | |
| | | | | | | |
| Net revenue | | $ | — |
| | $ | — |
| | $ | — |
|
| Cost of revenue | | 563 |
| | 507 |
| | 672 |
|
| Gross profit | | (563 | ) | | (507 | ) | | (672 | ) |
| | | | | | | |
| Gross margin | | N/A |
| | N/A |
| | N/A |
|
| | | | | | | |
| (Loss) Gain on sale of patents and other technology assets, net of costs | | — |
| | — |
| | (1,580 | ) |
| Operating expenses | | 10,544 |
| | 11,729 |
| | 11,582 |
|
| Operating income (loss) | | $ | (11,107 | ) | | $ | (12,236 | ) | | $ | (13,834 | ) |
| | | | | | | |
| Adjusted EBITDA | | $ | (6,568 | ) | | $ | (5,972 | ) | | $ | (6,241 | ) |
| | | | | | | |
| Total | | | | | | |
| | | | | | | |
| Net revenue | | $ | 56,793 |
| | $ | 67,264 |
| | $ | 66,964 |
|
| Cost of revenue | | 20,506 |
| | 25,098 |
| | 27,427 |
|
| Gross profit | | 36,287 |
| | 42,166 |
| | 39,537 |
|
| | | | | | | |
| Gross margin | | 64 | % | | 63 | % | | 59 | % |
| | | | | | | |
| (Loss) Gain on sale of patents and other technology assets, net of costs | | — |
| | — |
| | (1,580 | ) |
| Operating expenses | | 47,713 |
| | 49,054 |
| | 56,499 |
|
| Operating income (loss) | | $ | (11,426 | ) | | $ | (6,888 | ) | | $ | (18,542 | ) |
| | | | | | | |
| Adjusted EBITDA | | $ | (3,009 | ) | | $ | 3,264 |
| | $ | (7,417 | ) |
RealNetworks, Inc. and Subsidiaries
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment
(Unaudited)
|
| | | | | | | | | | | | |
| | | 2013 | | 2012 |
| | | Q1 | | Q4 | | Q1 |
| | | (in thousands) |
| RealPlayer Group | | | | | | |
| | | | | | | |
| Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | | | | |
| | | | | | | |
| Operating income (loss) | | $ | 866 |
| | $ | 6,946 |
| | $ | 1,542 |
|
| Acquisitions related intangible asset amortization | | 67 |
| | 62 |
| | 79 |
|
| Depreciation and amortization | | 398 |
| | 612 |
| | 364 |
|
| Adjusted EBITDA | | $ | 1,331 |
| | $ | 7,620 |
| | $ | 1,985 |
|
| | | | | | | |
| Mobile Entertainment | | | | | | |
| | | | | | | |
| Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | | | | |
| | | | | | | |
| Operating income (loss) | | $ | 552 |
| | $ | (882 | ) | | $ | (4,507 | ) |
| Acquisitions related intangible asset amortization | | 813 |
| | 809 |
| | 802 |
|
| Depreciation and amortization | | 2,017 |
| | 1,760 |
| | 1,628 |
|
| Adjusted EBITDA | | $ | 3,382 |
| | $ | 1,687 |
| | $ | (2,077 | ) |
| | | | | | | |
| Games | | | | | | |
| | | | | | | |
| Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | | | | |
| | | | | | | |
| Operating income (loss) | | $ | (1,737 | ) | | $ | (716 | ) | | $ | (1,743 | ) |
| Acquisitions related intangible asset amortization | | 21 |
| | — |
| | 209 |
|
| Depreciation and amortization | | 562 |
| | 645 |
| | 450 |
|
| Adjusted EBITDA | | $ | (1,154 | ) | | $ | (71 | ) | | $ | (1,084 | ) |
| | | | | | | |
| Corporate | | | | | | |
| | | | | | | |
| Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | | | | |
| | | | | | | |
| Operating income (loss) | | $ | (11,107 | ) | | $ | (12,236 | ) | | $ | (13,834 | ) |
| Other income (expense), net | | 109 |
| | (433 | ) | | 1,475 |
|
| Depreciation and amortization | | 1,010 |
| | 593 |
| | 586 |
|
| Restructuring and other charges | | 1,382 |
| | 1,353 |
| | 1,609 |
|
| Stock-based compensation | | 2,038 |
| | 1,704 |
| | 2,343 |
|
| Loss (Gain) on sale of patents and other technology assets, net of costs | | — |
| | — |
| | 1,580 |
|
| Loss (Gain) on excess office facilities | | — |
| | 3,047 |
| | — |
|
| Adjusted EBITDA | | $ | (6,568 | ) | | $ | (5,972 | ) | | $ | (6,241 | ) |
| | | | | | | |
| Total | | | | | | |
| | | | | | | |
| Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment: | | | | |
| | | | | | | |
| Operating income (loss) | | $ | (11,426 | ) | | $ | (6,888 | ) | | $ | (18,542 | ) |
| Other income (expense), net | | 109 |
| | (433 | ) | | 1,475 |
|
| Acquisitions related intangible asset amortization | | 901 |
| | 871 |
| | 1,090 |
|
| Depreciation and amortization | | 3,987 |
| | 3,610 |
| | 3,028 |
|
| Loss (Gain) on excess office facilities | | — |
| | 3,047 |
| | — |
|
| Restructuring and other charges | | 1,382 |
| | 1,353 |
| | 1,609 |
|
| Stock-based compensation | | 2,038 |
| | 1,704 |
| | 2,343 |
|
| Loss (Gain) on sale of patents and other technology assets, net of costs | | — |
| | — |
| | 1,580 |
|
| Adjusted EBITDA | | $ | (3,009 | ) | | $ | 3,264 |
| | $ | (7,417 | ) |
