Realnetworks Inc. has a market cap of $546 million; its shares were traded at around $4.04 with and P/S ratio of 1. RNWK is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:In the quarter ended March 31, 2010, our total revenue declined 8.7%, or $12.2 million, to $128.6 million compared with $140.8 million in the quarter ended March 31, 2009. This decrease was due to declines in revenue in our TPS, Games and Music segments totaling $1.7 million, $2.6 million and $8.3 million, respectively. We also recorded net income available to common shareholders of $3.2 million for the quarter ended March 31, 2010 compared with a net loss of $12.1 million for the quarter ended March 31, 2009. Net income available to common shareholders for the current quarter was significantly impacted by a one-time gain of $10.9 million on the deconsolidation of our Rhapsody joint venture. Our operating expenses for the quarter declined 9%, or $9.2 million, compared with the year-earlier period. The decline in operating expenses was a result of our continued focus on simplifying our business and reducing headcount. While we achieved a reduction in operating expenses, we also incurred a total of $5.6 million in restructuring charges compared with restructuring charges of $0.8 million in the quarter ended March 31, 2009, and we continued to invest in research and development of new and existing products. Cash, cash equivalents, restricted cash and short-term investments declined to $348.9 million from $398.6 million at December 31, 2009, principally due to the $18.0 million in cash used in connection with the restructuring of Rhapsody, the $20.7 million in cash used to pay Rhapsody-related payables and the $5.5 million in cash used to settle the RealDVD lawsuit and to pay related legal expenses, as well as ordinary course fluctuation in working capital. See Results of Operations-Revenue by Segment below for further explanations of changes in our segment revenue for the quarter ended March 31, 2010.
Total TPS revenue declined $1.7 million, or 4%, in the quarter ended March 31, 2010, compared with the year-earlier period. This decline was primarily due to a one-time benefit recorded in the first quarter of 2009 from resolution of a dispute with a customer of approximately $2.9 million. Also contributing to the decline was a reduction in sales of our Helix-system services of approximately $0.9 million. These declines were partially offset by an increase in service revenue from our SaaS offerings of approximately $2.2 million. No other single factor contributed materially to the change in total TPS revenue during 2010.
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