RealNetworks Announces Fourth Quarter And Full-Year 2012 Results

06 Feb, 2013, 16:00 ET from RealNetworks, Inc.

SEATTLE, Feb. 6, 2013 /PRNewswire/ -- RealNetworks, Inc. (Nasdaq: RNWK) today announced results for the fourth quarter and fiscal year ended Dec. 31, 2012.

Quarterly Summary:

  • Revenue of $67.3 million
  • Net income of $3.1 million or $0.09 per diluted share
  • Adjusted EBITDA of $3.3 million

Full Year Summary:

  • Revenue of $258.8 million
  • Net income of $44.8 million or $1.28 per diluted share
  • Adjusted EBITDA loss of $(16.7) million
  • Cash and short term investments of $271.4 million as of Dec. 31, 2012

"We are pleased that we returned RealNetworks to profitability in the fourth quarter," said Rob Glaser, Chairman and interim CEO of RealNetworks. "Having said that, we still have considerable work to do to achieve sustained growth and profitability."

Fourth Quarter Results

For the fourth quarter of 2012, revenue was $67.3 million, a sequential increase of 14% from the third quarter, and a decrease of 16% compared with the fourth quarter of 2011. Revenue trends in each of RealNetworks' businesses in the fourth quarter of 2012 compared with the year-earlier quarter were: a 3% increase in Emerging Products revenue to $12.4 million, a 16% decrease in Core Products revenue to $39.2 million and a 27% decrease in Games revenue to $15.7 million.  

Net income for the fourth quarter of 2012 was $3.1 million, or $0.09 per diluted share, compared with net loss of $(2.8) million, or $(0.08) per share, in the fourth quarter of 2011. Income in the quarter was affected by restructuring expenses of $(4.4) million and an income tax benefit of $12.1 million. The loss for the year-ago quarter was affected by a $(20.0) million impairment charge for deferred SaaS costs and a tax benefit of $22.7 million

Adjusted EBITDA for the fourth quarter of 2012 was $3.3 million, compared with $3.8 million for the fourth quarter of 2011. A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.

As of Dec. 31, 2012, RealNetworks had $271.4 million in unrestricted cash, cash equivalents and short-term investments compared with $185.1 million as of Dec. 31, 2011, of which approximately $44.9 million is held in foreign jurisdictions. The increase in cash in 2012 was largely due to proceeds from the sale of patents and other assets to Intel Corp. for $120 million in the second quarter of the year, partially offset by cash used in operations and restructuring activities over the year. In addition, RealNetworks had $44.3 million in restricted cash and available-for-sale securities as of Dec. 31, 2012, compared with $47.4 million as of Dec. 31, 2011.

Segment Operating Results

2012

2012

2011

Q4

Q3

Q4

(in thousands)

Revenue

Core Products

$ 39,186

$ 34,078

$ 46,693

Emerging Products

12,370

10,134

11,974

Games

15,708

14,876

21,552

Corporate

-

-

-

Total

$ 67,264

$ 59,088

$ 80,219

Operating Income (loss)

Core Products

$ 6,334

$ 1,180

$(10,733)

Emerging Products

2,425

(152)

26

Games

(369)

(1,708)

228

Corporate

(15,278)

(22,495)

(13,198)

Total

$ (6,888)

$(23,175)

$(23,677)

Adjusted EBITDA

Core Products

$ 9,244

$ 3,736

$ 11,382

Emerging Products

2,732

158

986

Games

276

(894)

883

Corporate

(8,988)

(9,042)

(9,411)

Total

$ 3,264

$ (6,042)

$ 3,840

Full Year Results

For 2012, revenue was $258.8 million, a decrease of 23% compared with $335.7 million for 2011.  Foreign currency exchange rate fluctuations negatively affected 2012 revenue by approximately $5.6 million compared with 2011.  Revenue trends in each of RealNetworks' businesses for the full year 2012 compared with 2011 were: a 9% decrease in Emerging Products revenue to $42.6 million, a 22% decrease in Core Products revenue to $149.2 million and a 31% decrease in Games revenue to $67.1 million.

Net income for the year was $44.8 million, or $1.28 per diluted share, compared with net loss of $(27.1) million, or $(0.79) per share, in 2011.  Net income in 2012 included restructuring charges of $(18.5) million, income tax expense of $(12.5) million and a net gain of $116.4 million from the sale of patents and other assets to Intel Corp. The year-ago loss included the $(20.0) million impairment for deferred SaaS costs and an income tax benefit of $17.3 million

In 2012, adjusted EBITDA was $(16.7) million compared with $17.7 million in 2011.  A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.

Segment Reorganization

Beginning with the first quarter of 2013, RealNetworks is reorganizing its financial reporting to reflect changes in how we intend to manage the businesses and is changing the way we allocate operating expenses within the company to increase efficiency and accountability for financial and operational performance within each business. Therefore, starting with the first quarter of 2013, RealNetworks' 2013 financial results will reflect the new corporate organization with the following reporting segments: (1) the RealPlayer Group, which will include RealPlayer, SuperPass and mobile IP sales; (2) Mobile Entertainment, which will include the existing and evolving SaaS services of ringback tones, music on demand, and intercarrier messaging; professional services and systems integration; and Helix software; and (3) Games.

Additionally, going forward more of RealNetworks' corporate costs – such as finance, HR, legal and facilities – will be assigned to each business unit, although certain costs will be retained at the corporate level.  

Prior to reporting our first quarter 2013 results in May, RealNetworks expects to file a report on Form 8-K with a description of the new segments and historical results that reflect those new segments.  

Business Outlook

For the first quarter of 2013, RealNetworks expects total revenue of $50 million to $53 million, with all segments declining sequentially and year over year. We expect adjusted EBITDA for the quarter to be a loss of $(7) million to $(10) million.     

The foregoing forward-looking statements reflect RealNetworks' expectations as of Feb. 6, 2013.  It is not RealNetworks' general practice to update these forward-looking statements until its next quarterly results announcement.

Webcast and Conference Call Information

The company will host an audio Webcast conference call to review results and discuss the company's operations for the fourth quarter at 5:00 p.m. ET on Feb. 6.  The Webcast will be available at:  http://investor.realnetworks.com

The on-demand Webcast will be available beginning approximately two hours following the conclusion of the live Webcast.

Conference Call Details 5 p.m. ET / 2 p.m. PT Dial in: 888-790-3162 Domestic 415-228-4854 International Passcode: Fourth Quarter Earnings Leader: Rob Glaser

Telephonic replay will be available until 8 p.m. ET, Feb. 20, 2013. Replay dial in: 866-425-0182 Domestic 203-369-0874 International

About RealNetworks:  

RealNetworks creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network. RealNetworks' corporate information is located at http://www.realnetworks.com/about-us

About Non-GAAP Financial Measures

To supplement RealNetworks' consolidated financial information presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA by reporting segment, which management believes provide investors with useful information. 

In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP operating income (loss) to adjusted EBITDA and to adjusted EBITDA by reporting segment.

The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the fourth quarter earnings materials.  Please refer to Exhibit 99.2 ("Information Regarding Non-GAAP Financial Measures") to the company's report on Form 8-K, which is being submitted today to the SEC.

Forward-Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to RealNetworks' current expectations for future revenue, adjusted EBITDA, plans to undertake, as well as results and benefits from its business restructuring activities and strategic initiatives. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements.  Actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: fluctuations in foreign currencies; RealNetworks' ability to realize operating efficiencies, growth and other benefits from the implementation of its strategic initiatives; the emergence of new entrants and competition in the market for digital media products and services; other competitive risks, including the growth of competing technologies, products and services; the potential outcomes and effects of claims and legal proceedings on RealNetworks' business, prospects, financial condition or results of operations; risks associated with key customer or strategic relationships, business acquisitions and the introduction of new products and services; changes in consumer and advertising spending in response to disruptions in the global financial markets; and changes in RealNetworks' effective tax rate. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks' financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period.  Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.

RealNetworks, RealPlayer and GameHouse are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries.  All other companies or products listed herein are trademarks or registered trademarks of their respective owners.

RealNetworks, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 Quarters Ended

December 31, 

 Years Ended

December 31, 

2012

2011

2012

2011

 (in thousands, except per share data) 

 Net revenue 

$ 67,264

$ 80,219

$ 258,842

$ 335,686

 Cost of revenue 

25,098

32,089

103,731

126,637

 Impairment of deferred costs 

-

19,962

-

19,962

 Gross profit 

42,166

28,168

155,111

189,087

Sale of patents and other technology assets, net of costs (A) 

-

-

116,353

-

 Operating expenses: 

 Research and development 

14,027

16,012

63,194

70,212

 Sales and marketing 

21,839

25,342

90,301

111,300

 General and administrative 

8,788

10,163

43,891

37,181

 Restructuring and other charges 

1,353

800

15,225

8,650

 Loss (gain) on excess office facilities 

3,047

(472)

3,290

(646)

 Total operating expenses 

49,054

51,845

215,901

226,697

 Operating income (loss) 

(6,888)

(23,677)

55,563

(37,610)

 Other income (expenses): 

 Interest income, net 

159

190

1,192

1,552

 Gain (loss) on sale of equity and other investments, net 

(216)

-

5,072

-

 Equity in net loss of Rhapsody investment 

(1,614)

(2,159)

(5,709)

(7,898)

 Other income (expense), net 

(433)

188

1,241

(473)

 Total other income (expense), net 

(2,104)

(1,781)

1,796

(6,819)

 Income (loss) before income taxes 

(8,992)

(25,458)

57,359

(44,429)

 Income tax (expense) benefit  

12,065

22,694

(12,518)

17,329

 Net income (loss) 

$   3,073

$ (2,764)

$   44,841

$ (27,100)

 Basic net income (loss) per share 

$     0.09

$    (0.08)

$       1.29

$      (0.79)

 Diluted net income (loss) per share 

$     0.09

$    (0.08)

$       1.28

$      (0.79)

 Shares used to compute basic net income (loss) per share 

35,250

34,258

34,873

34,185

 Shares used to compute diluted net income (loss) per share 

35,450

34,258

35,122

34,185

(A) On April 5, 2012, RealNetworks completed the sale of certain patents and other technology assets to Intel for a cash purchase of $120.0 million.

 RealNetworks, Inc. and Subsidiaries 

 Condensed Consolidated Balance Sheets 

 (Unaudited) 

 December 31, 

 December 31, 

2012

2011

 (in thousands) 

 ASSETS 

 Current assets: 

 Cash and cash equivalents  

$            163,198

$            106,333

 Short-term investments 

108,216

78,739

 Trade accounts receivable, net 

30,754

41,165

 Deferred costs, current portion 

825

1,424

 Prepaid expenses and other current assets 

19,871

21,902

 Total current assets 

322,864

249,563

 Equipment, software, and leasehold improvements, at cost: 

 Equipment and software 

98,041

104,352

 Leasehold improvements 

22,767

25,947

 Total equipment, software, and leasehold improvements 

120,808

130,299

 Less accumulated depreciation and amortization 

91,492

92,825

 Net equipment, software, and leasehold improvements 

29,316

37,474

 Restricted cash equivalents and investments 

10,000

10,168

 Equity method investments 

3,597

7,798

 Available for sale securities 

34,334

37,204

 Other assets 

3,153

2,954

 Deferred costs, non-current portion 

531

843

 Deferred tax assets, net, non-current portion 

4,911

18,419

 Other intangible assets, net 

3,275

7,169

 Goodwill 

6,309

6,198

 Total assets 

$            418,290

$            377,790

 LIABILITIES AND SHAREHOLDERS' EQUITY 

 Current liabilities: 

 Accounts payable 

$              19,013

$              17,151

 Accrued and other liabilities 

57,380

59,790

 Deferred revenue, current portion 

8,675

11,835

 Total current liabilities 

85,068

88,776

 Deferred revenue, non-current portion 

169

195

 Deferred rent 

2,250

2,944

 Deferred tax liabilities, net, non-current portion 

432

1,443

 Other long-term liabilities 

3,250

13,145

 Total liabilities 

91,169

106,503

 Shareholders' equity 

327,121

271,287

 Total liabilities and shareholders' equity  

$           418,290

$            377,790

 

 RealNetworks, Inc. and Subsidiaries 

 Condensed Consolidated Statements of Cash Flows 

 (Unaudited) 

 Years Ended December 31,  

2012

2011

 (in thousands) 

 Cash flows from operating activities: 

 Net income (loss) 

$                       44,841

$                     (27,100)

 Adjustments to reconcile net income (loss) to net cash used in operating activities: 

 Depreciation and amortization 

16,959

16,895

 Stock-based compensation 

8,123

11,747

 Loss (gain) on equipment, software, and leasehold improvements 

2,509

(62)

 Equity in net loss of Rhapsody investment 

5,709

7,898

 Excess tax benefit from stock option exercises 

-

(74)

 Accrued loss (gain) on excess office facilities 

3,290

(646)

 Deferred income taxes, net 

20,324

(23,985)

 Gain on sale of patent and other technology assets, net of costs 

(116,353)

-

 Gain on sale of equity and other investments, net 

(5,072)

-

 Realized translation gain 

(1,966)

-

 Other 

-

114

 Net change in certain operating assets and liabilities 

(11,677)

14,505

 Net cash provided by (used in) operating activities 

(33,313)

(708)

 Cash flows from investing activities: 

 Purchases of equipment, software, and leasehold improvements 

(7,170)

(9,873)

 Proceeds from sale of patents and other technology assets, net of costs 

116,353

-

 Proceeds from sale of equity and other investments 

7,261

-

 Purchases of short-term investments 

(116,963)

(96,841)

 Proceeds from sales and maturities of short-term investments 

87,487

116,405

 Decrease (increase) in restricted cash equivalents and investments, net 

167

(179)

 Payment of acquisition costs, net of cash acquired 

-

(2,888)

 Net cash provided by (used in) investing activities 

87,135

6,624

 Cash flows from financing activities: 

 Proceeds from issuance of common stock (stock options and stock purchase plan) 

3,802

3,177

 Tax payments from shares withheld upon vesting of restricted stock 

(995)

-

 Excess tax benefit from stock option exercises 

-

74

 Payment of common stock cash dividend 

-

(136,793)

 Net cash provided by (used in) financing activities 

2,807

(133,542)

 Effect of exchange rate changes on cash and cash equivalents 

236

(2,059)

 Net increase (decrease) in cash and cash equivalents 

56,865

(129,685)

 Cash and cash equivalents, beginning of period 

106,333

236,018

 Cash and cash equivalents, end of period 

$                     163,198

$                     106,333

 

 RealNetworks, Inc. and Subsidiaries

 Supplemental Financial Information

 (Unaudited)

2012

 YTD

 Q4

 Q3

 Q2

 Q1

(in thousands)

 Net Revenue by Line of Business: 

 Core Products (A) 

$149,211

$39,186

$34,078

$38,250

$37,697

 Emerging Products (B) 

42,576

12,370

10,134

9,913

10,159

 Games (C)  

67,055

15,708

14,876

17,363

19,108

  Total net revenue 

$258,842

$67,264

$59,088

$65,526

$66,964

 Core Products Revenue by Product: 

 SaaS (D) 

$  90,239

$22,793

$20,697

$23,286

$23,463

 Systems Integration / Professional Services (E) 

2,933

1,295

247

965

426

 Technology Licensing (F) 

28,381

8,906

6,079

7,189

6,207

 Consumer Subscriptions (G) 

27,658

6,192

7,055

6,810

7,601

 Total Core Products net revenue 

$149,211

$39,186

$34,078

$38,250

$37,697

 Net Revenue by Geography: 

 United States 

$117,844

$28,315

$29,101

$28,614

$31,814

 Rest of world 

140,998

38,949

29,987

36,912

35,150

 Total net revenue 

$258,842

$67,264

$59,088

$65,526

$66,964

Product Metrics (subscribers and ICM presented as greater than):

Addressable subscribers of mobile operators under contract (H)

675,000

700,000

725,000

725,000

SaaS subscribers (I)

27,450

26,500

30,600

30,500

Monthly SaaS ARPU (in cents) (J)

$    0.19

$    0.17

$    0.16

$    0.15

ICM delivered in billions (K)

171

173

162

166

Consumer subscribers (L)

300

350

350

400

2011

 YTD 

 Q4 

 Q3 

 Q2 

 Q1 

(in thousands)

 Net Revenue by Line of Business: 

 Core Products (A) 

$191,240

$46,693

$50,705

$45,735

$48,107

 Emerging Products (B) 

46,590

11,974

10,764

12,717

11,135

 Games (C)  

97,856

21,552

22,945

25,300

28,059

  Total net revenue 

$335,686

$80,219

$84,414

$83,752

$87,301

 Core Products Revenue by Product: 

 SaaS (D) 

$119,378

$28,255

$30,381

$30,216

$30,526

 Systems Integration / Professional Services (E) 

6,843

771

3,844

388

1,840

 Technology Licensing (F) 

28,429

9,246

6,250

6,508

6,425

 Consumer Subscriptions (G) 

36,590

8,421

10,230

8,623

9,316

 Total Core Products net revenue 

$191,240

$46,693

$50,705

$45,735

$48,107

 Net Revenue by Geography: 

 United States 

$162,720

$37,298

$38,969

$41,984

$44,469

 Rest of world 

172,966

42,921

45,445

41,768

42,832

 Total net revenue 

$335,686

$80,219

$84,414

$83,752

$87,301

Product Metrics (subscribers and ICM presented as greater than):

Addressable subscribers of mobile operators under contract (H)

725,000

700,000

775,000

775,000

SaaS subscribers (I)

30,050

34,000

34,550

35,900

Monthly SaaS ARPU (in cents) (J)

$    0.19

$    0.17

$    0.18

$    0.18

ICM delivered in billions (K)

165

162

157

151

Consumer subscribers (L)

425

500

475

500

Net Revenue by Line of Business:

(A) The Core Products segment primarily includes revenue from SaaS services, system integration and professional services to carriers and mobile handset companies, sales of technology licenses of our software products such as Helix for handsets, consumer subscriptions such as SuperPass and our international radio subscription services.

(B) The Emerging Products segment primarily includes revenue from RealPlayer and related products, such as the distribution of third party software products, advertising on RealPlayer websites and sales of RealPlayerPlus software licenses to consumers.

(C) The Games segment primarily includes revenue from sales of games licenses, online games subscription services, advertising on game sites and social network sites, games syndication services, microtransactions from online and social games and sales of mobile games.

Core Products Revenue by Product:

(D) SaaS revenue includes revenue from music on demand (MOD), video on demand (VOD), ringtones, ringback tones (RBT) and intercarrier messaging services provided to network service providers, who are largely mobile phone networks.

(E) Systems Integration / Professional Services revenue includes professional services, other than those associated with software sales, provided to mobile carriers and handset manufacturers.

(F) Technology Licensing includes revenue from sales of software and other intellectual property licenses such as Helix server licenses and Helix software licenses for handsets.

(G) Consumer Subscriptions includes revenue from SuperPass as well as our international radio subscription services.

Product Metrics:

(H) Total subscribers reported at the end of the quarter of mobile carriers that offer one or more of our SaaS services, other than intercarrier messaging services, to their customers.

(I) SaaS subscribers include RBT, MOD and VOD services, measured at the end of the quarter.

(J) Monthly SaaS ARPU (Average Revenue Per User) is calculated by dividing (a) the total quarterly revenue from SaaS subscription services, including RBT, MOD, VOD, by (b) the number of SaaS subscribers at the end of the quarter, and dividing the resulting quotient by three.

(K) ICM (Intercarrier message) represents the total number of messages delivered across our messaging platform during the quarter.

(L) Consumer subscribers primarily includes our SuperPass and GamePass products.

 

 RealNetworks, Inc. and Subsidiaries 

 Segment Results of Operations 

 (Unaudited) 

2012

2011

2012

2011

 Q4 

 Q3 

 Q4 

 YTD 

 YTD 

 (in thousands) 

Core Products

Net revenue

$ 39,186

$ 34,078

$ 46,693

$149,211

$191,240

Cost of revenue

17,964

17,323

20,867

70,796

83,696

Impairment of deferred costs

-

-

19,329

-

19,329

Gross profit

21,222

16,755

6,497

78,415

88,215

Gross margin

54%

49%

14%

53%

46%

Operating expenses

14,888

15,575

17,230

64,960

75,188

Operating income (loss)  

$   6,334

$   1,180

$(10,733)

$  13,455

$  13,027

 Adjusted EBITDA  

$   9,244

$   3,736

$ 11,382

$  24,008

$  43,159

Emerging Products

Net revenue

$ 12,370

$ 10,134

$ 11,974

$  42,576

$  46,590

Cost of revenue

2,019

2,041

3,448

7,965

11,879

Impairment of deferred costs

-

-

633

-

633

Gross profit

10,351

8,093

7,893

34,611

34,078

Gross margin

84%

80%

66%

81%

73%

Operating expenses

7,926

8,245

7,867

30,809

36,011

Operating income (loss)  

$   2,425

$     (152)

$       26

$    3,802

$   (1,933)

 Adjusted EBITDA  

$   2,732

$      158

$      986

$    4,910

$     (206)

Games 

Net revenue

$ 15,708

$ 14,876

$ 21,552

$  67,055

$  97,856

Cost of revenue

4,444

4,936

6,875

21,613

30,646

Gross profit

11,264

9,940

14,677

45,442

67,210

Gross margin

72%

67%

68%

68%

69%

Operating expenses

11,633

11,648

14,449

49,804

60,633

Operating income (loss)  

$     (369)

$  (1,708)

$      228

$   (4,362)

$    6,577

 Adjusted EBITDA  

$      276

$     (894)

$      883

$   (1,561)

$    9,246

Corporate

Net revenue

$        -

$        -

$        -

$         -

$         -

Cost of revenue

671

944

899

3,357

416

Gross profit

(671)

(944)

(899)

(3,357)

(416)

Gross margin

 N/A 

 N/A 

 N/A 

 N/A 

 N/A 

Gain on sale of patents and other technology assets, net of costs

-

-

-

116,353

-

Operating expenses

14,607

21,551

12,299

70,328

54,865

Operating income (loss)  

$(15,278)

$(22,495)

$(13,198)

$  42,668

$ (55,281)

 Adjusted EBITDA  

$  (8,988)

$  (9,042)

$  (9,411)

$ (44,061)

$ (34,508)

Total

Net revenue

$ 67,264

$ 59,088

$ 80,219

$258,842

$335,686

Cost of revenue

25,098

25,244

32,089

103,731

126,637

Impairment of deferred costs

-

-

19,962

-

19,962

Gross profit

42,166

33,844

28,168

155,111

189,087

Gross margin

63%

57%

35%

60%

56%

Gain on sale of patents and other technology assets, net of costs

-

-

-

116,353

-

Operating expenses

49,054

57,019

51,845

215,901

226,697

Operating income (loss)  

$  (6,888)

$(23,175)

$(23,677)

$  55,563

$ (37,610)

 Adjusted EBITDA  

$   3,264

$  (6,042)

$   3,840

$ (16,704)

$  17,691

 

 RealNetworks, Inc. and Subsidiaries 

 Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment  

 (Unaudited) 

2012

2011

2012

2011

 Q4 

 Q3 

 Q4 

 YTD 

 YTD 

 (in thousands) 

Core Products

Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment:

Operating income (loss) 

$   6,334

$    1,180

$ (10,733)

$  13,455

$  13,027

Acquisitions related intangible asset amortization 

809

796

789

3,193

2,806

Depreciation and amortization 

2,101

1,760

1,997

7,360

7,997

Impairment of deferred costs

-

-

19,329

-

19,329

 Adjusted EBITDA  

$   9,244

$    3,736

$  11,382

$  24,008

$  43,159

Emerging Products

Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment:

Operating income (loss)  

$   2,425

$      (152)

$         26

$   3,802

$   (1,933)

Acquisitions related intangible asset amortization 

62

62

79

282

211

Depreciation and amortization 

245

248

248

826

883

Impairment of deferred costs

-

-

633

-

633

 Adjusted EBITDA  

$   2,732

$       158

$       986

$   4,910

$      (206)

Games 

Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment:

Operating income (loss)  

$     (369)

$   (1,708)

$       228

$  (4,362)

$    6,577

Acquisitions related intangible asset amortization 

-

171

229

587

996

Depreciation and amortization 

645

643

426

2,214

1,673

 Adjusted EBITDA  

$      276

$      (894)

$       883

$  (1,561)

$    9,246

Corporate

Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by reporting segment:

Operating income (loss)  

$ (15,278)

$ (22,495)

$ (13,198)

$  42,668

$ (55,281)

Other income (expense), net

(433)

248

188

1,241

(473)

Depreciation and amortization 

619

636

608

2,497

2,329

Restructuring and other charges

1,353

10,724

800

15,225

8,650

Stock-based compensation

1,704

1,602

2,663

7,371

10,913

Gain on sale of patents and other technology assets, net of costs

-

-

-

(116,353)

-

Loss (Gain) on excess office facilities

3,047

243

(472)

3,290

(646)

 Adjusted EBITDA  

$  (8,988)

$   (9,042)

$   (9,411)

$ (44,061)

$ (34,508)

 Total  

Reconciliation of GAAP operating income (loss) to adjusted EBITDA:

Operating income (loss)  

$  (6,888)

$ (23,175)

$ (23,677)

$  55,563

$ (37,610)

Other income (expense), net

(433)

248

188

1,241

(473)

Acquisitions related intangible asset amortization

871

1,029

1,097

4,062

4,013

Depreciation and amortization

3,610

3,287

3,279

12,897

12,882

Loss (Gain) on excess office facilities

3,047

243

(472)

3,290

(646)

Restructuring and other charges

1,353

10,724

800

15,225

8,650

Stock-based compensation

1,704

1,602

2,663

7,371

10,913

Impairment of deferred costs

-

-

19,962

-

19,962

Gain on sale of patents and other technology assets, net of costs

-

-

-

(116,353)

-

 Adjusted EBITDA  

$   3,264

$   (6,042)

$    3,840

$ (16,704)

$  17,691

SOURCE RealNetworks, Inc.



RELATED LINKS

http://www.realnetworks.com