-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UzNyyaYjIy9qNnwxT2XwgBKEcJa4XsY2KO/XlDLpY1w1QR0XrD4ai1eUhTdfA2t5 8YzrBuba6qfFrak/JcRJcA== 0001157523-03-004438.txt : 20030822 0001157523-03-004438.hdr.sgml : 20030822 20030821184542 ACCESSION NUMBER: 0001157523-03-004438 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030815 ITEM INFORMATION: ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SONIC FOUNDRY INC CENTRAL INDEX KEY: 0001029744 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 391783372 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30407 FILM NUMBER: 03861094 BUSINESS ADDRESS: STREET 1: 1617 SHERMAN AVE CITY: MADISON STATE: WI ZIP: 53704 BUSINESS PHONE: 6082563133 MAIL ADDRESS: STREET 1: 1617 SHERMAN AVE CITY: MADISON STATE: WI ZIP: 53704 8-K 1 a4459009.txt SONIC FOUNDRY 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 August 15, 2003 Date of Report (Date of earliest event reported) Sonic Foundry, Inc. (Exact name of registrant as specified in its chapter) Maryland 1-14007 39-1783372 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1617 Sherman Ave, Madison, WI 53704 (608) 256 - 3133 (Address of principal executive offices) (Registrant's telephone number) Item 9. Regulation FD Disclosure The following information, including the text of the press release attached as an exhibit to this Form 8-K, is being furnished pursuant to Item 12, "Results of Operations and Financial Condition," and Item 9 pursuant to the guidance issued by the SEC in Release Nos. 33-8216 and 34-47583. This Form 8-K and the attached exhibit are furnished to, but not filed with, the SEC. On August 15, 2003, Sonic Foundry, Inc. reported fiscal 2003, third quarter and nine month financial results. See attached press release at exhibit 99.1. EXHIBIT LIST NUMBER DESCRIPTION - ------ ----------- 99.1 Press release dated August 15, 2003 regarding the reporting of fiscal 2003 third quarter and nine month financial results SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Sonic Foundry, Inc. ------------------- (Registrant) August 20, 2003 By: /s/ Kenneth A. Minor -------------------- Kenneth A. Minor Chief Financial Officer EX-99 3 a4459009_ex991.txt SONIC FOUNDRY EXHIBIT 99.1 Exhibit 99.1 Sonic Foundry Reports Third Quarter, Nine Month Results; Company Reports Financial Results for First Time Following the Sale of Its Services and Software Businesses MADISON, Wis.--(BUSINESS WIRE)--Aug. 15, 2003--Sonic Foundry(R), Inc. (NASDAQ:SOFO), a leading rich media solutions company, today announced results for its third quarter and first nine months of fiscal 2003. Results demonstrate several significant activities the company has completed during the last several months, including the sale of its Services and Software businesses. They also reflect its newly formed operations. Revenues, expenses and balance sheet items of the company's previous Services and Software business have been combined as discontinued operations and previously reported financial statements have been restated to reflect the discontinued operations presentation. Highlights for the third quarter and first nine months of 2003 include: -- Third quarter revenues were $343,000, up 96 percent from $175,000 reported for the third quarter of last year, and up 57 percent from $218,000 recorded in the previous second quarter of this year. Year-to-date, revenues were $734,000 for the first nine months of fiscal 2003, up slightly from $718,000 reported for the same period one year earlier. -- For third quarter of fiscal 2003, gross margins were 43 percent compared to 46 percent for the same period a year earlier. Year-to-date, gross margins were 27 percent for the first nine months of fiscal 2003 versus 65 percent for the first nine months of 2002. Gross margins last year included a high margin custom software development project and sales of the company's MediaSite Publisher(TM) rich media content management and indexing product to federal agencies. The company expects margins to increase based on revenue growth from continued market expansion as well as from a mix of new higher margin project revenues it expects to realize from federal agencies. -- Operating expenses were flat quarter-to-quarter at $2.2 million for the third quarter of fiscal 2003 compared to $2.1 million last year. For the nine-month period, operating expenses increased slightly to $6.4 million, versus $5.8 million for the same period a year earlier. The increase for the nine-month period is a result of facility and other one-time expenses the company incurred in connection with disposing of its Services and Software businesses and re-focusing its efforts on the rich media communications market. The company will continue to focus on cost and expense reductions and expects to make significant further cuts in its general, administrative and other operating costs now that the sales of its Services and Software businesses are complete. -- The company reported a net loss for the third quarter of $4.5 million, or 16 cents per share, including a net loss of $2.4 million from discontinued operations. This compares to a net loss of $2.5 million, or 9 cents per share, including a net loss from discontinued operations of $200,000, for the second quarter of 2002. For the nine-month period, the company had a net loss of $10.0 million, including a net loss from discontinued operations of $3.7 million, versus a loss of $52.8 million for the first nine months of fiscal 2002, including a net loss from discontinued operations of $2.3 million. Prior year results also included a $44.7 million non-cash charge to reflect a change in accounting principle to write off goodwill. -- The company continues to build strong market demand and interest in its flagship rich media presentation system, Mediasite Live(TM), within the education, government and corporate enterprise markets. The next generation of Mediasite Live is almost complete and contains a number of new engineering enhancements based on customer input. It will begin shipping in September. "We have begun the next chapter of Sonic Foundry's story," explained Rimas Buinevicius, chairman and CEO of Sonic Foundry. "Our recent objectives have been met and allowed us to strengthen the balance sheet while simultaneously positioning the company toward a strategic focus in rich media communications. We have the cash, the management team, proven technology, a market ripe for growth and a group of talented people to execute our vision and build long-term shareholder value for our investors." The company will host a Webcast on Tuesday, Aug. 19 at 10 a.m. CT/11 a.m. ET to discuss its go forward strategy and third quarter 2003 fiscal results. It will use its award-winning rich media presentation system, Mediasite Live, to Webcast the presentation for live and on-demand viewing. To access the presentation, go to http://mslive.sonicfoundry.com/earningscallaug03. An archive of the Webcast will be available for 30 days. About Sonic Foundry(R), Inc. Founded in 1991, Sonic Foundry (NASDAQ: SOFO) has positioned itself as a provider of rich media communications technology for the enterprise. The company's integrated Webcasting and Web presentation solutions are trusted by Fortune 500 companies, education institutions and government agencies for a variety of critical communication needs. Sonic Foundry is based in Madison, Wis. For more information about Sonic Foundry, visit the company's Website at www.sonicfoundry.com. Certain statements contained in this news release regarding matters that are not historical facts may be forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties pertaining to continued market acceptance for Sonic Foundry's products, its ability to succeed in capturing significant revenues from media services and/or systems, the effect of new competitors in its market, integration of acquired business and other risk factors identified from time to time in its filings with the Securities and Exchange Commission. This news release does not constitute an offer to sell or the solicitation of an offer to buy our securities, nor will there be any sale of our securities in any jurisdiction where such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Sonic Foundry, Inc. Consolidated Balance Sheets (in 000's except for share data) June 30, September 2003 30, 2002 ------------ ------------ (unaudited) Assets Current Assets: Cash and cash equivalents $2,171 $3,704 Accounts receivable, net of allowances of $42 and $50 390 484 Accounts receivable, other 37 43 Inventories 62 48 Prepaid expenses and other current assets 449 294 Assets of discontinued operations 2,996 12,894 ------------ ------------ Total current assets 6,105 17,467 Property and equipment: Equipment 804 768 Furniture and fixtures 96 96 ------------ ------------ Total property and equipment 900 864 Less accumulated depreciation 424 290 ------------ ------------ Net property and equipment 476 574 Other assets: Goodwill and other intangibles, net 7,738 7,776 Capitalized software development costs, net 963 1,173 Debt issuance costs, net of $690 and $323 of amortization 286 653 ------------ ------------ Total other assets 8,987 9,602 ------------ ------------ Total assets $15,568 $27,643 ============ ============ Liabilities and stockholders' equity Current liabilities: Accounts payable $703 $1,532 Unearned revenue 90 -- Accrued liabilities 1,572 948 Current portion of long-term debt 1,201 -- Convertible debt, net of discount 2,477 3,482 Current portion of capital lease obligations 49 217 Liabilities of discontinued operations 974 3,212 ------------ ------------ Total current liabilities 7,066 9,391 Long-term obligations, net of current portion -- 230 Capital lease obligations, net of current portion 10 38 Stockholders' equity: Preferred stock, $.01 par value, authorized 5,000,000 shares; none issued and outstanding -- -- 5% preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 10,000,000 shares, none issued and outstanding -- -- Common stock, $.01 par value, authorized 100,000,000 shares; 27,883,135 and 27,729,825 issued and 27,855,385 and 27,702,075 outstanding at June 30, 2003 and September 30, 2002 279 277 Additional paid-in capital 167,301 167,028 Accumulated deficit (158,954) (148,985) Receivable for common stock issued (26) (26) Cumulative foreign currency translation adjustments 52 (111) Unearned compensation (10) (49) Treasury stock, at cost, 27,750 shares (150) (150) ------------ ------------ Total stockholders' equity 8,492 17,984 ------------ ------------ Total liabilities and stockholders' equity $15,568 $27,643 ============ ============ Sonic Foundry, Inc. Statements of Operations (in 000's except for share data) (Unaudited) Three Months Ended Nine Months Ended June 30, June 30, 2003 2002 2003 2002 --------- --------- --------- --------- Revenue $343 $175 $734 $718 Cost of revenue 195 95 538 253 --------- --------- --------- --------- Gross margin 148 80 196 465 Operating expenses: Selling and marketing expenses 641 749 2,128 1,738 General and administrative expenses 980 626 2,343 1,781 Product development expenses 602 757 1,953 2,310 Loss on debt extinguishment 22 - 22 - --------- --------- --------- --------- Total operating expense 2,245 2,132 6,446 5,829 --------- --------- --------- --------- Loss from operations (2,097) (2,052) (6,250) (5,364) Interest income and other (3) (250) (2) (335) --------- --------- --------- --------- Loss from continuing operations and cumulative effect of change in accounting principle (2,100) (2,302) (6,252) (5,699) Discontinued operations: Loss from operations of discontinued media services business (360) (474) (1,696) (1,765) Loss on disposal of media services business (1,788) - (1,788) - Income (loss) from operations of discontinued desktop software business (269) 272 (233) (569) --------- --------- --------- --------- Loss from discontinued operations (2,417) (202) (3,717) (2,334) --------- --------- --------- --------- Loss before cumulative effect of change in accounting principle (4,517) (2,504) (9,969) (8,033) Cumulative effect of change in accounting principle -- -- -- (44,732) --------- --------- --------- --------- Net loss $(4,517) $(2,504) $(9,969) $(52,765) ========= ========= ========= ========= Loss per common share: Loss from continuing operations before cumulative effect of change in accounting principle $ (0.08) $ (0.08) $ (0.23) $ (0.22) Loss from operations of discontinued media services business (0.01) (0.02) (0.06) (0.06) Loss on disposal of media services business (0.06) -- (0.06) -- Income (loss) from operations of discontinued desktop software business (0.01) 0.01 (0.01) (0.02) Cumulative effect of change in accounting principle -- -- -- (1.69) --------- --------- --------- --------- Net loss per common share- basic and diluted $(0.16) $(0.09) $(0.36) $(1.99) ========= ========= ========= ========= CONTACT: For Sonic Foundry Press: Catapult PR-IR Terri Douglas, 303-581-7760, ext. 18 tdouglas@catapultpr-ir.com Investor: Strategic Growth International Richard Cooper/Rob Schatz, 212-838-1444 rob@sgi-ir.com -----END PRIVACY-ENHANCED MESSAGE-----