Broadcast International Reports Q4 and Full Year 2011 Results

Annual Revenue Up 15% to $8.4 Million, Marking Third Consecutive Year of Revenue Growth, and Driving Gross Profit Up 21%

Marketwired

SALT LAKE CITY, UT--(Marketwire -03/30/12)- Broadcast International (OTC.BB: BCST.OB - News), a leading provider of video management software and services for next-generation video internet protocol networks, reported financial results for the fourth quarter and full year ended December 31, 2011.

Q4 2011 Operational Highlights

  • Partnered with Fujitsu to feature "CodecSys powered by Fujitsu" technology in the Fujitsu NuVola Private Cloud;

  • Launched first over-the-top (OTT) implementation of CodecSys with Multicable, Northern Mexico's largest cable operator. CodecSys allows Multicable to extend services to PCs and mobile devices with breakthrough, artificial intelligence-based video compression technology that cuts video bandwidth requirements by more than 50% while expanding revenue-generating functionality;

  • Joined forces with National Datacast (NDI) to combine BI's powerful managed services capability with NDI's datacasting and content delivery footprint to more economically and effectively deliver content to new and existing customer locations;

  • Released Managed Media Services Platform version 2.5, allowing a large customer to eliminate more than 90% of its print-based marketing materials, and migrate static, outdated marketing materials to an interactive, personalized and relevant customer experience based on intuitive rich media and video content.

Q4 and Full Year 2011 Results
Revenues in the fourth quarter 2011 increased 9% to $2.1 million from the same period a year ago. For the full year 2011, revenues increased 15% to $8.4 million. The improvement was primarily due to expanded installation of digital signage systems with the company's largest customer.

Gross profit in the fourth quarter 2011 increased 9% to $670,000 from same year-ago period. For the full year 2011, gross profit increased 21% to $2.6 million.

Operating loss in the fourth quarter 2011 was $1.6 million, compared to $1.2 million in the same period a year ago. For the full year 2011, operating loss was $8.0 million versus $5.7 million in 2010. The increase was primarily due to CodecSys sales and marketing, contract labor as well as non-cash stock-based compensation which accounted for more than half of the increase.

Net loss in the fourth quarter 2011 was $2.4 million or $(0.02) per basic and diluted share, an improvement from a net loss of $7.0 million or $(0.14) per basic and diluted share in the fourth quarter 2010. For the full year 2011, net income totaled $1.3 million or $0.02 per basic and diluted share, compared to a net loss of $18.7 million or $(0.43) per basic and diluted share in 2010. The annual improvement was primarily due to a decrease of $10.4 million in interest expense from restructuring a senior convertible note and a gain on derivative valuation of $15.2 million.

On March 16, 2012, Broadcast completed a $6.95 million private placement to fund the company's growth initiatives and retire senior long-term debt at discount to par. After paying off the long-term note and financing costs, net proceeds totaled approximately $2.5 million.

Management Commentary
"2011 marked our third consecutive year of revenue growth, driven by the continued rollout of our digital signage solutions," said Rod Tiede, Broadcast International's CEO. "However, during the year we also made tremendous progress with our new flagship product, CodecSys, culminating in the fourth quarter with our first CodecSys OTT installation. This launch with Multicable propelled us into a new, hugely expansive and fast-growing market for IP video delivery.

"This achievement reflects how we have strengthened our CodecSys marketing efforts, including establishing new channel partnerships with key industry players, including Fujitsu in Q4 and more recently Vivicast. In fact, Fujitsu has made CodecSys such an integral part of its video compression solution that it has trained over 200 people in its global sales channels. Our first purchase order from Fujitsu is imminent as the response has been tremendous.

"As we advance through the beginning of 2012, we are encouraged by the continued growth of our BI Networks and our expanding CodecSys customer base, especially our recent CodecSys OTT win with TeleCable. All of our BI Network solutions now use our CodecSys technology to optimize content delivery and storage, providing the end user high quality video content with minimal bandwidth. This includes Zions Bank, who recently chose us to provide its customer's an engaging digital marketing and merchandising network.

"Our recent capital raise of nearly $7 million allowed us to strengthen our balance sheet and provides the resources for us to pursue large scale rollouts for both CodecSys and BI Networks, and capitalize on two rapidly growing industries. We are confident our technologies will continue to be adopted worldwide and driving new customer wins through the year."

Podcast
Broadcast International will stream its fourth quarter and full year 2011 results podcast on Monday, April 2, 2012 at 11:00 a.m. Eastern time. The video podcast will be available via the Investor Relations section of the company's Web site at www.brin.com.

Broadcast International President and CEO Rod Tiede, CFO Jim Solomon, and Senior VP and General Manager of the CodecSys Division Steve Jones will discuss the company's financial results, and provide an operational update and outlook for 2012.

Date: Monday, April 2, 2012
Time: 11:00 a.m. Eastern time (9:00 a.m. Mountain time)
Podcast: www.brin.com/news/podcast-new

If you have any difficulty connecting with the podcast, please contact Liolios Group at 1-949-574-3860.

About Broadcast International
Broadcast International is a leading provider of video-powered broadcast solutions, including IP, digital satellite, Internet streaming and other types of wired/wireless network distribution. BI's patented CodecSys software is a breakthrough, multi-codec video compression technology that cuts video bandwidth requirements over satellite, cable, IP and wireless networks. By slashing bandwidth needs, CodecSys enables a new generation of rich-media applications and offers unprecedented price/ performance benefits for existing applications. Broadcast International is a public company (OTC.BB: BCST.OB - News) headquartered in Salt Lake City, UT.

For more information visit: http://www.brin.com and http://www.codecsys.com.

Forward Looking Statements
All statements in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Additional Factors That May Affect Our Business" in the Company's most recent Form 10-K and 10-Q filings, and amendments thereto. In addition, we operate in a highly competitive and rapidly changing environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statement.

 

                       Broadcast International, Inc.
                        Consolidated Balance Sheets

                                              Dec 31, 2010    Dec 31, 2011
                                             --------------  --------------
ASSETS:
Current Assets
  Cash and cash equivalents                  $    6,129,632  $      961,265
  Trade accounts receivable, net                  1,125,055       1,239,903
  Inventory                                          52,175          60,851
  Prepaid expenses                                  190,877         203,973
                                             --------------  --------------
  Total current assets                            7,497,739       2,465,992
                                             --------------  --------------
Property and equipment, net                       2,419,891       1,417,134
                                             --------------  --------------
Other Assets, non current
  Debt offering costs                                    --         123,278
  Patents, net                                      167,410         131,079
  Deposits and other assets                         624,598         406,004
                                             --------------  --------------
  Total other assets, non current                   792,008         660,361
                                             --------------  --------------

  Total assets                               $   10,709,638  $    4,543,487
                                             --------------  --------------

LIABILITIES AND STOCKHOLDERS DEFICT
LIABILITIES:
Current Liabilities
  Accounts payable                           $    1,552,006  $    1,252,538
  Payroll and related expenses                      341,255         390,206
  Other accrued expenses                            381,015         175,008
  Unearned revenue                                  139,437          10,449
  Current portion of notes payable (net of
   discount of $0 and $103,859,
   respectively)                                    775,000       2,068,016
  Other current obligations                       1,426,834       1,067,649
  Derivative valuation                           14,759,300       3,760,200
                                             --------------  --------------
    Total current liabilities                    19,374,847       8,724,066
                                             --------------  --------------
Long-term Liabilities
  Long-term portion of notes payable (net of
   discount of $992,832 and $659,496,
   respectively)                                  6,187,984       6,349,445
  Other long-term obligations                     1,067,649              --
                                             --------------  --------------
  Total long-term liabilities                     7,255,633       6,349,445
                                             --------------  --------------
  Total liabilities                              26,630,480      15,073,511
                                             --------------  --------------
Commitments and contingencies                            --              --
STOCKHOLDERS' DEFICIT:
  Preferred stock, no par value, 20,000,000
   shares authorized; none issued                        --              --
  Common stock, $.05 par value, 180,000,000
   shares authorized; 74,078,153 and
   75,975,656 shares issued as of December
   31, 2010 and December 31, 2011,
   respectively                                   3,703,908       3,798,783
  Additional paid-in capital                     92,867,561      96,859,058
  Accumulated deficit                          (112,492,311)   (111,187,865)
                                             --------------  --------------
    Total stockholders' deficit                 (15,920,842)    (10,530,024)
                                             --------------  --------------

    Total liabilities and stockholders'
     deficit                                 $   10,709,638  $    4,543,487
                                             --------------  --------------



                       Broadcast International, Inc.
                    Concolidated Statement of Operations

                                               -------------  -------------
                                                For the Year   For the Year
                                               Ended Dec 31,  Ended Dec 31,
                                                    2010           2011
                                               -------------  -------------

Net sales                                      $   7,313,218  $   8,446,082
Cost of sales                                      5,185,779      5,868,601
                                               -------------  -------------
Gross profit                                       2,127,439      2,577,481
                                               -------------  -------------

Operating expenses:
  Administrative and general                       4,139,717      6,172,794
  Selling and marketing                              254,002      1,277,629
  Research and development                         2,711,933      2,410,249
  Impairment of assets                                    --         26,180
  Depreciation and amortization                      766,614        685,191
                                               -------------  -------------
    Total operating expenses                       7,872,266     10,572,043
                                               -------------  -------------
    Total operating loss                          (5,744,827)    (7,994,562)
                                               -------------  -------------

Other income (expense):
  Interest income                                      3,295          2,327
  Interest expense                               (11,354,858)    (1,000,072)
  Gain (loss) on derivative valuation             (3,480,311)    11,724,400
  Loss on sale of securities                         (49,264)            --
  Equity issuance costs related to warrants       (1,102,682)            --
  Gain on debt restructuring                       3,062,457             --
  Debt conversion costs                                   --       (476,234)
  Loss on extinguishment of debt                          --       (954,017)
  Loss on sale of assets                                  --           (362)
  Other income, net                                    2,073          2,966
                                               -------------  -------------
    Total other income (expense)                 (12,919,290)     9,299,008
                                               -------------  -------------

Income (loss) before income taxes                (18,664,117)     1,304,446
Provision for income taxes                                --             --
                                               -------------  -------------
Net income (loss)                              $ (18,664,117) $   1,304,446
                                               -------------  -------------

Income (loss) per share basic                  $       (0.43) $        0.02
                                               -------------  -------------
Income (loss) per share diluted                $       (0.43) $        0.02
                                               -------------  -------------

Weighted average shares basic                     43,353,180     75,416,916
                                               -------------  -------------
Weighted average shares diluted                   43,353,180     78,098,166
                                               -------------  -------------


Contact:
Company
Cameron Francis
Vice President Products
Broadcast International
801-562-2252
Email Contact
Investor Relations
Michael Koehler or Matt Glover
Liolios Group, Inc.
949-574-3860
Email Contact

View Comments (0)