Exhibit 99.1
Sonic Solutions Reports Results for Second Quarter Ended September 30, 2005
NOVATO, Calif.--(BUSINESS WIRE)--Nov. 8, 2005--Sonic Solutions
(NASDAQ: SNIC) announced today the financial results for its second
quarter ended September 30, 2005.
Net revenue for the quarter was $31,948,000 compared to
$17,437,000 for the same period in the prior fiscal year. Net income
for the quarter was $3,102,000 or $0.11 per diluted share compared to
net income of $3,575,000 or $0.14 per diluted share for the same
period in the prior fiscal year.
Net revenue for the six month period ended September 30, 2005 was
$67,467,000 compared to $35,346,000 for the same period in the prior
fiscal year. Net income for this six month period was $7,115,000 or
$0.26 per diluted share compared to net income of $7,562,000 or $0.29
per diluted share for the same period in the prior fiscal year.
Sonic will hold its second quarter ended September 30, 2005
earnings conference call on Tuesday, November 8, 2005 at 1:30 p.m.
(PT)/4:30 p.m. (ET). Investors are invited to listen to Sonic's
quarterly conference call on the investor section of the Sonic Web
site at www.sonic.com. A replay of the call will also be available via
Webcast at www.sonic.com.
Sonic Solutions
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts -- unaudited)
Three Months Ended Six Months Ended
September 30, September, 30,
2005 2004 2005 2004
------- ------- ------- -------
Net Revenue $31,948 $17,437 $67,467 $35,346
Cost of Revenue 6,845 1,639 16,093 3,500
------- ------- ------- -------
Gross Profit 25,103 15,798 51,374 31,846
------- ------- ------- -------
Operating expenses
Marketing and sales 7,354 3,686 15,877 7,598
Research and development 11,128 7,107 21,518 13,655
General and administrative 3,354 1,387 8,264 2,587
Business integration 41 0 336 0
------- ------- ------- -------
Total operating expenses 21,877 12,180 45,995 23,840
------- ------- ------- -------
Operating income 3,226 3,618 5,379 8,006
Other income (expense), net (234) 171 (347) 231
------- ------- ------- -------
Income before income taxes 2,992 3,789 5,032 8,237
Provision (benefit) for income taxes (110) 214 (2,083) 675
------- ------- ------- -------
Net income $ 3,102 $ 3,575 7,115 7,562
======= ======= ======= =======
Net income per share
Basic $ 0.13 $ 0.15 $ 0.29 $ 0.33
======= ======= ======= =======
Diluted $ 0.11 $ 0.14 $ 0.26 $ 0.29
======= ======= ======= =======
Shares used in computing
net income per share
Basic 24,586 23,422 24,468 22,733
======= ======= ======= =======
Diluted 27,975 26,400 27,738 25,931
======= ======= ======= =======
Sonic Solutions
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
2005
--------------------------
ASSETS March 31,(a) September 30,
------ ------------ -------------
(unaudited)
Current Assets:
Cash and cash equivalents $ 35,436 $ 18,741
Short term investments 0 26,100
Accounts receivable, net of allowance for
returns and doubtful accounts of $10,068
and $7,648 at March 31, 2005 and
September 30, 2005, respectively 12,839 16,978
Inventory 755 546
Unbilled receivables 121 0
Prepaid expenses and other current assets 2,153 3,044
-------- --------
Total current assets 51,304 65,409
Fixed assets, net 6,756 6,187
Purchased and internally developed software
costs, net 1,595 1,405
Goodwill 54,664 53,481
Acquired intangibles, net 49,046 46,413
Other assets 2,583 4,798
-------- --------
Total assets $165,948 $177,693
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 9,087 $ 6,891
Accrued liabilities 19,164 23,405
Deferred revenue 5,176 7,143
Obligations under capital leases,
current portion 84 62
-------- --------
Total current liabilities 33,511 37,501
Bank note payable 30,000 30,000
Other long term liabilities, net of current
portion 2,217 1,018
Deferred revenue, net of current portion 756 607
Obligations under capital leases, net of current
portion 41 11
-------- --------
Total liabilities 66,525 69,137
-------- --------
Shareholders' Equity:
Convertible preferred stock, no par value,
10,000,000 shares authorized; 0 shares
issued and outstanding at March 31, 2005,
and September 30, 2005, respectively --- ---
Common stock, no par value, 100,000,000 shares
authorized; 24,308,730 and 24,799,399 shares
issued and outstanding at March 31, 2005 and
September 30, 2005, respectively 106,410 109,021
Accumulated other comprehensive loss (274) (867)
Accumulated earnings (deficit) (6,713) 402
-------- --------
Total shareholders' equity 99,423 108,556
-------- --------
Total liabilities and
shareholders' equity $165,948 $177,693
======== ========
(a) The consolidated balance sheet at March 31, 2005 has been
derived from the Company's audited consolidated financial
statements on Form 10-K at that date, but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
About Sonic Solutions
Sonic Solutions (NASDAQ: SNIC)(http://www.sonic.com) is the leader
in digital media software, providing a broad range of interoperable,
platform independent software tools and applications for creative
professionals, business and home users, and technology partners.
Sonic's products range from advanced DVD authoring systems and
interactive content delivery technologies used to produce the majority
of Hollywood DVD film releases, to the award-winning Roxio- and
Sonic-branded CD and DVD creation, playback and backup solutions that
have become the premiere choice for consumers, prosumers and business
users worldwide.
Sonic products are globally available from major retailers, online
at Sonic.com and Roxio.com, and are bundled with personal
computers ("PCs"), after-market drives and consumer electronic
devices. Sonic's digital media creation engine is the de facto
standard and has been licensed by major software and hardware
manufacturers, including Adobe, Microsoft, Scientific-Atlanta, Sony,
and many others. Sonic Solutions is headquartered in Marin County,
California.
Sonic, the Sonic logo, Sonic Solutions, and Roxio are trademarks
or registered trademarks of Sonic Solutions in the United States
and/or other countries. All other company or product names are
trademarks of their respective owners and, in some cases, are used by
Sonic under license.
Forward-Looking Statements
This press release and Sonic's second quarter ended September 30,
2005 earnings conference call contain forward-looking statements that
are based upon current expectations. Such forward-looking statements
include revenue and earnings per share guidance for the fiscal
quarters ending December 31, 2005, March 31, 2006, the fiscal year
ending March 31, 2006 and the fiscal year ending March 31, 2007; the
gross margin, operating margin, effective tax rate and cost of
compliance with the Sarbanes-Oxley Act of 2002, as amended ("SOX"),
assumed for the guidance; the continuing effects of the increase in
operating expenses and headcount in connection with the Roxio
acquisition; and favorable expectations about Sonic's consumer
electronics strategy and ability to take advantage of the convergence
of the PC and consumer electronics industries. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results to differ materially from
any future results, performance or achievements expressed or implied
by such forward-looking statements. Important factors that could cause
such differences include, but are not limited to, Sonic's ability to
successfully integrate Roxio's Consumer Software Division and former
employees into Sonic's business and realize the anticipated synergies
and cost savings from the acquisition; general customer and market
reaction to the Roxio acquisition; the timely introduction and
acceptance of new products, including but not limited to Sonic's high
definition series products; the costs associated with new product
introductions and the possible adverse effect on gross margin; the
transition of products to new hardware configurations and platforms;
unforeseen increases in operating expenses as a result of the Roxio
acquisition, new product introductions, cost of SOX compliance or
business expansion; loss of significant customers due to the Roxio
acquisition and other market conditions; risks related to acquisitions
and international operations; and other factors, including those
discussed in Sonic's annual and quarterly reports on file with the
Securities and Exchange Commission. This press release should be read
in conjunction with Sonic's most recent quarterly report on Form 10-Q
and Sonic's other reports on file with the Securities and Exchange
Commission, which contain a more detailed discussion of Sonic's
business including risks and uncertainties that may affect future
results. Sonic does not undertake to update any forward-looking
statements.
CONTACT: Sonic Solutions
A. Clay Leighton, 415-893-8000
Chief Financial Officer
clay_leighton@sonic.com
Fax: 415-893-8008
or
Market Street Partners
Carolyn Bass, 415-445-3232
Susan Coss, 415-445-3237
investinsonic@sonic.com