Roxio Reports Strong Fourth Quarter and Fiscal 2002 Results
Fourth Quarter and Annual Results Beat Expectations; Over 20% Revenue Growth Expected for Fiscal 2003
Santa Clara, California - (May 1, 2002) - Roxio, Inc. (Nasdaq: ROXI), the Digital Media Company, provider of the best selling digital media software in the world, today reported financial results for its fourth quarter and fiscal year ended March 31, 2002. Net revenue for the fourth quarter was $38.9 million, and pro forma net income was $3.8 million, or $0.21 per basic and $0.19 per diluted share, excluding non-cash charges. These financial figures include the results of MGI Software from January 31, 2002, the date of close of the acquisition of MGI Software by Roxio. This compares with net revenue of $36.3 million and pro forma net income of $4.6 million or $0.28 per basic and diluted share for the fourth quarter of the prior fiscal year.
Net revenue for the fiscal year ended March 31, 2002 was $142.5 million, up 17% compared with net revenue of $121.9 million for the prior fiscal year. Pro forma net income excluding non-cash charges was $16.5 million or $0.96 per basic and $0.94 per diluted share for fiscal 2002, as compared with pro forma net income of $23.9 million or $1.45 per basic and diluted share for the prior fiscal year.
"Fiscal 2002 was one of great progress for Roxio as we exceeded our revenue and profitability targets quarter after quarter and executed across the major strategic objectives we set in our first year as an independent, public company," said Chris Gorog, President and Chief Executive Officer of Roxio. "During the year we succeeded in creating and growing the Roxio brand, continued our leadership in CD burning and expanded our position in digital media by diversifying our product portfolio with the addition of PhotoSuite, the #1 selling photo editing software in the world, and VideoWave, the world's #1 selling video editing software. Additionally, Roxio partnered successfully with pressplay to provide CD recording with the music subscription service for three of the industry's largest record companies. With an established brand and broad digital media product line now in place, we are entering the next phase of growth for Roxio and look forward to not only continuing our momentum in these areas, but achieving new successes in DVD recording and the development of our enterprise business."
Commenting on recent corporate developments, Mr. Gorog continued, "We were pleased during the fourth quarter to begin bundling our popular VideoWave product with DVD recording with key OEM customers IBM and Gateway, as well as our VideoPack DVD authoring software with Memorex. We also delivered Easy CD Creator 5.1 Platinum with DVD support to Dell and Compaq. Lastly, we announced in the fourth quarter a new partnership with Audible to enable consumers to burn CDs of premium spoken-word audio from the world's best selling authors and periodicals."
Reported net income for the fourth quarter of fiscal 2002 was $0.3 million, or $0.02 per basic and diluted share including non-cash charges related to the amortization of goodwill and deferred stock-based compensation and the write off of in-process research and development. This compares with a reported net loss of $1.9 million or $0.12 per basic and diluted share for the fourth quarter of fiscal 2001.
Reported net income for fiscal year 2002 was $2.3 million or $0.14 per basic and $0.13 per diluted share including non-cash charges. This compares with reported net income of $3.6 million or $0.22 per basic and diluted share for the prior fiscal year. For a reconciliation of reported earnings to pro forma earnings, see table below.
Roxio expects its leading market position and expanded product offerings to drive revenue growth in excess of 20% for fiscal 2003 and to result in continued strong profitability. The Company is forecasting fiscal 2003 revenues of approximately $175 million and pro forma net income of approximately $1.09 per diluted share. On a reported basis, diluted earnings per share for fiscal 2003 are expected to be approximately $0.45.
Reconciliation of Reported Earnings to Pro Forma Earnings:
Roxio, a division of Sonic Solutions, develops and markets the best-selling digital media software in the world. Roxio offers award-winning software products for CD/DVD burning, photo editing and video editing and has an installed base of over 150 million users. Roxio distributes its products globally through strategic partnerships with major hardware manufacturers, through leading retailers, through Internet partnerships and through direct sales at www.roxio.com. Roxio's parent company, Sonic Solutions (NASDAQ: SNIC; http://www.sonic.com) is the leader in digital media software and provides a broad range of software tools and applications for creative professionals, business and home users and technology partners. Sonic's products range from professional DVD authoring systems and interactive content delivery technologies that are used to produce the majority of Hollywood movies released on DVD, to the award-winning Roxio- and Sonic-branded CD and DVD creation, playback and backup applications that have become the premiere solutions for consumers and business users worldwide. Sonic's AuthorScript® is the de facto standard for CD and DVD burning and formatting and has been licensed by major software and hardware manufacturers, including Adobe, Broadcom, Microsoft, Scientific-Atlanta, Sony, and many others. Sonic Solutions is headquartered in Marin County, California.
Sonic, the Sonic logo, Sonic Solutions, Roxio, MyDVD, CineMagic, Plug & Burn, LiveShare, Roxio Easy Media Creator, and AuthorScript are trademarks or registered trademarks of Sonic Solutions or its subsidiaries in the United States and/or other countries. Dolby is a trademark of Dolby Laboratories. All other company or product names are trademarks of their respective owners and, in some cases, are used by Sonic Solutions under license. Specifications, pricing and delivery schedules are subject to change without notice.