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Onstream Media Corporation Reports Third Quarter Fiscal 2012 Results

-- Reports Record High Revenues and Positive Cash from Operating Activities (before changes in working capital items) --

-- Management to Hold Conference Call for Investment Community on Wednesday, August 15, 2012 at 4:30pm ET --

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POMPANO BEACH, Fla., Aug. 14, 2012 /PRNewswire/ -- Onstream Media Corporation (NASDAQ: ONSM), a leading online service provider of live and on-demand corporate audio and web communications, virtual event technology and social media marketing, reported today its financial results for the third quarter of fiscal 2012, the nine and three months ended June 30, 2012.

Third Quarter Highlights

  • Revenues for the three months ended June 30, 2012 were over $4.8 million, representing a record for Onstream Media. Third quarter revenues, which were approximately 4% higher than the third quarter of fiscal 2011, also represented the eighth consecutive quarter where revenues increased from the corresponding quarter of the previous fiscal year.
  • Revenues from the Audio and Web Conferencing Services Group improved by 8.8% to $2.7 million during the fiscal 2012 third quarter, versus the comparable year-ago period.
  • Revenues for the three months ended June 30, 2012, were sufficient to fund operating cash expenditures plus all capital expenditures and major debt service expenditures (as defined) for that period.
  • Onstream's EBITDA, as adjusted, for the three months ended June 30, 2012 was approximately $245,000, an approximately 227% improvement as compared to EBITDA, as adjusted, of approximately $75,000 for the third quarter of fiscal 2011.

Management Commentary

Randy Selman, President and Chief Executive Officer of Onstream Media, stated, "We are pleased to report a new revenue record for the most recently completed fiscal quarter, continuing such records achieved over our past seven quarters. We were also pleased to continue to report positive cash flow from operating activities (before changes in current assets and liabilities other than cash) for the first nine months of this fiscal year, continuing and exceeding the pace set in fiscal 2011 when we reported our first full fiscal year having positive cash provided by operating activities (before changes in current assets and liabilities other than cash). In addition, we were especially glad to report not only positive operating cash flow, but for the first time in the Company's history, positive operating cash flow sufficient to cover all capital expenditures and major debt service expenditures (as defined) for that period."

Mr. Selman added, "Looking forward to the remainder of fiscal 2012, we believe that our core businesses, including conferencing and webcasting, are well positioned to continue to drive our revenue growth, allowing for the seasonality we usually see in the fourth fiscal quarter. Although webcasting revenues are running behind the prior year, we believe that the future of this division will be favorably impacted by the comprehensive update to our webcasting platform which we expect to release during the first quarter of fiscal 2013. In addition, we recently implemented a new MarketPlace365 (MP365) pricing model that establishes MarketPlace365 as a value-added platform to assist the customer in using our webcasting services and more particularly, our webinar services. In addition, our new model enables various components of the platform to be used separately opening up new opportunities for MarketPlace365."  

Financial Discussion

Three Months Results

Our consolidated revenues of over $4.8 million for the three months ended June 30, 2012 represented a new record high for Onstream Media. Those revenues represented an increase of approximately $182,000, or 3.9%, over our revenues for the three months ended June 30, 2011, with such increase due to higher sales from the Company's Audio and Web Conferencing Services Group. Those consolidated revenues of approximately $4.8 million for the three months ended June 30, 2012 also represented an increase of $151,000, or 3.3%, over our revenues for the immediately preceding quarter, the three months ended March 31, 2012.

Audio and Web Conferencing Services Group revenues were approximately $2.7 million for the three months ended June 30, 2012, an increase of approximately $216,000, or 8.8%, from the corresponding quarter of the prior fiscal year, primarily due to an increase in the Infinite division's audio conferencing revenues.

Digital Media Services Group revenues were approximately $2.1 million for the three months ended March 31, 2012, a decrease of approximately $33,000, or 1.5%, from the corresponding period of the prior fiscal year, primarily due to a decrease in webcasting division revenues, partially offset by an increase in DMSP and hosting revenues.

Revenues for the three months ended June 30, 2012, were sufficient to fund operating cash expenditures plus all capital expenditures and major debt service expenditures for that period.  Major debt service expenditures is defined as the monthly principal and interest payments on a major scheduled note owed by Onstream plus interest payable in cash on all other debts.

Gross margin of approximately $3.2 million for the three months ended June 30, 2012, representing 66.6% of total revenues, was an increase of 0.4% as compared to the year-ago quarter.

Onstream's third quarter fiscal 2012 net loss of approximately $244,000, or $(0.02) per share, was based on approximately 12.3 million weighted average shares outstanding and represented a 49.8% decrease from the third quarter fiscal 2011 net loss of approximately $486,000, or $(0.05) per share, which was based on approximately 10.3 million weighted average shares outstanding. These losses included non-cash expenses for depreciation and amortization (approximately $340,000 and $364,000, for the three months ended June 30, 2012 and 2011, respectively) as well as other non-cash expenses, which are discussed in more detail below.

Onstream's EBITDA, as adjusted, for the three months ended June 30, 2012 was approximately $245,000, an approximately 227% improvement as compared to EBITDA, as adjusted, of approximately $75,000 for the third quarter of fiscal 2011.

Cash flow from operating activities (before changes in current assets and liabilities other than cash) for the three months ended June 30, 2012 was approximately $372,000, compared to cash provided by operating activities of approximately $328,000 for the three months ended June 30, 2011. 

Nine Months Results

Onstream's consolidated revenues were approximately $14.0 million for the nine months ended June 30, 2012 representing an increase of approximately $626,000, or 4.7%, over our revenues for the nine months ended June 30, 2012. This increase was due to higher sales from the Company's Audio and Web Conferencing Services Group, and in particular the Infinite division.

Gross margin of approximately $9.2 million for the nine months ended June 30, 2012, representing 66.0% of total revenues, was an increase of 2.9% versus the comparable year-ago period.

Onstream's net loss of approximately $1.6 million, or $(0.13) per share, for the first nine months of fiscal 2012 was based on approximately 12.1 million weighted average shares outstanding and represented a 39.5% decrease from the net loss for the first nine months of fiscal 2011 of approximately $2.7 million, or $(0.28) per share, which was based on approximately 9.5 million weighted average shares outstanding. These losses included non-cash expenses for depreciation and amortization (approximately $1.1 million, for each of the nine months ended June 30, 2012 and 2011) as well as other non-cash expenses, which are discussed in more detail below.

Onstream's EBITDA, as adjusted, for the nine months ended June 30, 2012 was negative by approximately $44,000, an approximately 93% improvement as compared to EBITDA, as adjusted, for the comparable year-ago period, which was negative by approximately $611,000.

Onstream's net loss of approximately $1.6 million for the nine months ended June 30, 2012 included approximately $2.2 million of non-cash items (non-cash expenses, net of non-cash income), resulting in approximately $552,000 positive cash flow from operating activities (before changes in current assets and liabilities other than cash) for that period. The primary non-cash expenses included in that net loss were depreciation and amortization and certain items (employee compensation, professional fees and interest) paid with equity.  The $552,000 positive cash flow from operating activities (before changes in current assets and liabilities other than cash) for the nine months ended June 30, 2012 represented an improvement of approximately $268,000, as compared to cash provided by operating activities of approximately $284,000 in the corresponding period of the previous fiscal year. Cash flow from operating activities (before changes in current assets and liabilities other than cash) was positive for all three quarters of fiscal 2012.

Teleconference

Management will hold a conference call on Wednesday, August 15, 2012 at 4:30 p.m. ET to discuss our financial results for the nine and three months ended June 30, 2012, as well as provide an outlook for the remainder of fiscal 2012. Management discussion will be followed by an open Q&A session. Interested parties may listen to the presentation live online at http://www.visualwebcaster.com/event.asp?id=88713 or by calling 1-888-645-4404 or 201-604-0169. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. An audio rebroadcast of the conference call will be archived for one year online at http://www.visualwebcaster.com/event.asp?id=88713.

About Onstream Media

Onstream Media Corporation (NASDAQ: ONSM) is a leading online service provider of live and on-demand corporate audio and web communications, virtual event technology and social media marketing. Onstream Media's innovative Digital Media Services Platform (DMSP) provides customers with cost effective tools for encoding, managing, indexing, and publishing content via the Internet. The company's MarketPlace365® solution enables publishers, associations, tradeshow promoters and entrepreneurs to rapidly and cost effectively self deploy their own online virtual marketplaces. In addition, Onstream Media provides live and on-demand webcasting, webinars, web and audio conferencing services. To date, almost half of the Fortune 1000 companies and 78% of the Fortune 100 CEOs and CFOs have used Onstream Media's services. Select Onstream Media customers include: AAA, Dell, Disney, Georgetown University, National Press Club, PR Newswire, Shareholder.com (NASDAQ), Sony Pictures and the U.S. Government. Onstream Media's strategic relationships include Akamai, BT Conferencing and Trade Show News Network (TSNN). For more information, visit Onstream Media at http://www.onstreammedia.com or call 954-917-6655.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this document and elsewhere by Onstream Media are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of the company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward- looking statements include, but are not limited to fluctuations in demand; changes to economic growth in the U.S. economy; government policies and regulations, including, but not limited to those affecting the Internet. Onstream Media undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in Onstream Media Corporation's filings with the Securities and Exchange Commission.

Media Relations:                   

Investor Relations:

Chris Faust                                    

Wolfe Axelrod Weinberger Associates, LLC

FastLane Communications               

Donald C. Weinberger; Adam Lowensteiner

973-582-3498                                       

(212) 370-4500; (212) 370-4505

cfaust@fast-lane.net                              

don@wolfeaxelrod.com


adam@wolfeaxelrod.com     

Financial Tables Follow

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS









Nine months ended
June 30,


 

Three months ended

June 30,


2012


2011


2012


2011





(unaudited)

(unaudited)

REVENUE:







    Audio and web conferencing

$        6,393,755


$        5,598,118


$       2,131,118


$       1,947,602

    Webcasting

4,539,336


4,694,866


1,601,266


1,686,296

    DMSP and hosting

1,439,437


1,532,467


517,883


474,314

    Network usage

1,472,305


1,442,542


523,190


495,432

    Other

133,343


83,789


34,265


21,556

Total revenue

13,978,176


13,351,782


4,807,722


4,625,200









COSTS OF REVENUE:








    Audio and web conferencing

1,906,838


1,743,590


583,094


576,290

    Webcasting

1,351,731


1,206,779


482,172


412,806

    DMSP and hosting

758,965


727,251


297,231


210,651

    Network usage

697,688


645,050


234,117


216,565

    Other

41,970


71,367


7,235


17,430

 Total costs of revenue

4,757,192


4,394,037


1,603,849


1,433,742









GROSS MARGIN

9,220,984


8,957,745


3,203,873


3,191,458









OPERATING EXPENSES:








    General and administrative:








         Compensation

6,046,069


6,558,735


1,939,800


2,162,279

         Professional fees

1,568,340


1,434,726


421,817


424,863

         Other           

1,692,581


1,629,460


610,145


571,877

    Depreciation and amortization

1,054,721


1,117,425


340,099


363,987

Total operating expenses

10,361,711


10,740,346


3,311,861


3,523,006









Loss from operations

(1,140,727)


(1,782,601)


(107,988)


(331,548)









OTHER EXPENSE, NET:








    Interest expense

(565,795)


(1,024,117)


(180,598)


(480,265)

    Gain from adjustment of

       derivative liability to fair value

 

46,818


 

81,138


 

31,867


 

283,144

    Other income, net

42,210


51,627


12,657


42,958









Total other expense, net

(476,767)


(891,352)


(136,074)


(154,163)









Net loss

$      (1,617,494)


$     (2,673,953)


$        (244,062)


$         (485,711)









Loss per share – basic and diluted:
















Net loss per share

$               (0.13)


$              (0.28)


$              (0.02)


$               (0.05)

Weighted average shares of common
stock outstanding – basic and diluted

 

12,064,398


 

9,514,683


 

12,344,727


 

10,307,645










 

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO EBITDA AND EBITDA, AS ADJUSTED






 

Nine months ended

June 30,


Three months ended

June 30,


2012


2011


2012


2011


(unaudited)


(unaudited)

Net loss

$     (1,617,494)


$     (2,673,953)


$        (244,062)


$         (485,711)

Add: Depreciation and amortization

1,054,721


1,117,425


340,099


363,987

Add: Interest expense

565,795


1,024,117


180,598


480,265

EBITDA

$               3,022


$        (529,389)


$          276,635


$           358,541









EBITDA

$               3,022


$        (529,389)


$          276,635


$           358,541

Gain from adjustment of derivative liability to fair value

 

(46,818)


 

(81,138)


 

(31,867)


 

(283,144)

EBITDA, as adjusted

$           (43,796)


$        (610,527)


$          244,768


$             75,397

 

 

 

EBITDA is defined as earnings before interest, depreciation, income taxes and amortization.

 

EBITDA, as adjusted, represents EBITDA, as defined above, adjusted for gain from adjustment of derivative liability to fair value.

 

EBITDA and EBITDA, as adjusted, are non-U.S. GAAP financial measures.

 

Management believes EBITDA and EBITDA, as adjusted, to be meaningful indicators of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted, is commonly used by financial analysts and others who follow our industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted, to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (GAAP). EBITDA and EBITDA, as adjusted, do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA or EBITDA, as adjusted, in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.

 













 

ONSTREAM MEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS







June 30,

2012

(unaudited)


September 30,

2011

 

ASSETS




CURRENT ASSETS:




    Cash and cash equivalents

$             362,724


$             290,865

    Accounts receivable, net of allowance for doubtful accounts

2,397,539


2,453,390

    Prepaid expenses

367,487


580,185

    Inventories and other current assets

143,928


139,099

Total current assets

3,271,678


3,463,539

PROPERTY AND EQUIPMENT, net

2,709,828


2,714,676

INTANGIBLE ASSETS, net

404,603


785,927

GOODWILL, net

10,696,948


10,696,948

OTHER NON-CURRENT ASSETS

146,215


104,274

Total assets

$       17,229,272


$      17,765,364



LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:




    Accounts payable

$         1,532,936


$         1,573,703

    Accrued liabilities

1,359,212


1,193,473

    Amounts due to directors and officers

624,859


396,392

    Deferred revenue

60,025


96,437

    Notes and leases payable –  current portion, net of discount

1,837,984


1,533,966

    Convertible debentures, net of discount

432,379


407,790

Total current liabilities

5,847,395


5,201,761

Notes and leases payable, net of current portion

4,465


11,962

Convertible debentures, net of discount

807,784


1,031,870

Detachable warrants, associated with sale of common shares

    and Series A-14 Preferred

 

141,393


 

188,211

Total liabilities

6,801, 037


6,433,804





COMMITMENTS AND CONTINGENCIES








STOCKHOLDERS' EQUITY:




Series A-13 Convertible Preferred stock, par value $.0001 per
   share,
authorized 170,000 shares, 17,500 and 35,000 issued and
   outstanding, respectively

 

2


 

3

Series A-14 Convertible Preferred stock, par value $.0001 per
   share,
authorized 420,000 shares, 420,000 issued and
   outstanding

 

42


 

42

Common stock, par value $.0001 per share; authorized 75,000,000
   shares, 12,492,217 and 11,779,521 issued and outstanding,
   respectively

 

1,248


 

1,177

Additional paid-in capital

141,013,138


140,291,514

Unamortized discount

(62,536)


(146,418)

Accumulated deficit

(130,523,659)


(128,814,758)

Total stockholders' equity

10,428,235


11,331,560

Total liabilities and stockholders' equity

$       17,229,272


$      17,765,364

 

 

SOURCE Onstream Media Corporation



RELATED LINKS
http://www.onstreammedia.com

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