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RealNetworks reports Q4 and full year 2009 results |
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Digital entertainment services company RealNetworks, Inc. has announced its financial results for the fourth quarter and fiscal year ended December 31, 2009. For the fourth quarter of 2009, revenue declined 5% to $145.5 million compared with $152.6 million for the fourth quarter of 2008. Foreign currency exchange rate fluctuations positively affected 2009 fourth quarter revenue by approximately $4.5 million compared with the year-ago quarter. Excluding the impact of foreign exchange rate changes, revenue declined 8% year over year, Real said.  As compared to the same quarter during the previous year, RealNetworks reported a 4% increase in Technology Products and Solutions revenue to $54.3 million, a 1% increase in Media Software and Services revenue to $22.9 million, a 9% decrease in Games revenue to $30.7 million, and a 14% decrease in Music revenue to $37.6 million. Net loss attributable to common shareholders for the fourth quarter of 2009 was $(13.3) million, or $(0.11) per share, compared with net loss of $(240.5) million, or $(1.78) per share, in the fourth quarter of 2008. The net loss for the fourth quarter of 2009 included impairment and restructuring charges of $(7.4) million, or $(0.05) per share. Included in the fourth quarter 2008 net loss were impairment charges, net of tax benefit, totaling $(240.7) million, or $(1.78) per share. Adjusted EBITDA excluding impairments for the fourth quarter of 2009 was $12.9 million, compared with $11.3 million for the fourth quarter of 2008. As of December 31, 2009, Real had approximately $384.9 million in unrestricted cash, cash equivalents and short-term investments, an increase of $14 million from the prior year. In addition, Real has approximately $33.3 million in restricted cash and equity investments at December 31, 2009. Gross margin in the fourth quarter was 61%, compared with 48% for the fourth quarter a year earlier. Excluding the effect of a $19.7 million charge to reflect the impairment of deferred project costs and prepaid royalties, gross margin was 61% in the fourth quarter of 2008. Income tax provision was a benefit of $124,000, compared with $(17.4) million in the year-earlier period. Interest income in the fourth quarter of 2009 was $779,000 compared with $2.3 million in the year-earlier period. For the full year 2009, revenue declined 7% to $562.3 million compared with $604.8 million in 2008. Foreign currency exchange rate fluctuations negatively affected 2009 revenue by approximately $14 million compared with 2008. Excluding the effects of foreign exchange rate changes, revenue declined 5% year over year. Net loss attributable to common shareholders for the year was $(212.3) million, or $(1.60) per share, compared with a net loss of $(243.9) million, or $(1.74) per share, in 2008. The net loss for the most recent year included impairments of $(184.6) million, or $(1.37) per share. The net loss in 2008 included impairments of $(241.4) million, or $(1.72) per share. In 2009, adjusted EBITDA excluding impairments was $39.7 million compared with $60.7 million in 2008. A reconciliation of GAAP net loss attributable to common shareholders to adjusted EBITDA and adjusted EBITDA excluding impairments is provided in the financial tables that accompany this release. Bob Kimball, president and acting CEO of RealNetworks said the recession in 2009 hurt the company's revenue and profitability, and that he expected the trend to continue at least into the first quarter. “We are aggressively moving to transform RealNetworks into a more simple and focused company that delivers value to its shareholders. The first step in Real’s simplification was announced this week with the separation of our Rhapsody music business into an independent company,” he said. Kimball replaced RealNetworks founder and CEO Rob Glaser when he was appointed to the company's Board of Directors on January 12 and was also named acting CEO. For the first quarter of 2010, Real expects overall revenue to decline by up to 12% year-over-year and up to 15% sequentially, and warned that consequently adjusted EBITDA excluding impairments for the first quarter of 2010 could be below the first quarter of 2009. It also said that compared with the year-earlier quarter, it expects first-quarter revenue for music, media software and services, games and technology products and solutions to decline. Sequentially, the company expects revenue to be flat in Games, and to decline in Music, Media Software and Services and Technology Products and Solutions, with the largest decline in Technology Products and Solutions, primarily as a result of fourth quarter business seasonality. |
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