Sonic Foundry Inc. (SOFO, Financial) filed Quarterly Report for the period ended 2010-03-31.
Sonic Foundry Inc. has a market cap of $26.4 million; its shares were traded at around $7.2999 with and P/S ratio of 1.42. SOFO is in the portfolios of Jim Simons of Renaissance Technologies LLC.
G&A decreased $119 thousand or 8% from $1.5 million in YTD-2009 to $1.4 million in YTD-2010. The decrease is primarily due to a decrease in salaries and benefits associated with headcount reductions and changes made to the Companys benefit plan.
Product development expenses decreased $82 thousand, or 9% from $887 thousand in Q2-2009 to $805 thousand in Q2-2010. Some significant differences between the periods include:
On the September 30, 2009, 10-K filing, the Company recorded a non-cash deferred tax liability related to goodwill acquired in 2001 and made corresponding revisions to earlier results. The net impact was to record a $142 thousand non-cash provision for taxes and an increase to a long-term deferred tax liability of $142 thousand in fiscal 2009 and to record a $256 thousand non-cash provision for taxes in fiscal 2008 as well as the accumulated impact of prior period amortization of goodwill. This liability had historically been presented net of deferred tax assets and associated valuation allowances. Management determined that due to the nature of the deferred tax liability and future growth of such non-cash liability it was more prudent to present separately. Q2-2009 and YTD-2009 numbers have been revised to match this presentation.
Cash used in operating activities was $346 thousand in YTD-2010 compared to YTD-2009 of $1.4 million. Cash used in 2010 was impacted by a decrease in the net loss of $1.0 million from $1.5 million to $451 thousand, a partially offsetting decrease in the add-back for non-cash stock compensation from $368 thousand in YTD-2009 to $63 thousand in YTD-2010 and by a reduced need for cash to fund working capital of $333 thousand. Working capital changes included the positive effects of reductions in inventory of $332 thousand and reductions in other current assets of $33 thousand. These were offset by the negative effects of a $383 thousand decrease in unearned revenue and a $222 thousand increase in accounts receivable. YTD-2009 had similar changes in working capital components. Positive effects in YTD-2009 included a reduction in inventory of $202 thousand and an increase in unearned revenue of $64 thousand. Negative effects included a decrease in accounts payable and accrued liabilities of $507 thousand, an increase in accounts receivable of $103 thousand and an increase other current assets of $309 thousand.
On March 5, 2010, the Company executed the $1,250,000 Loan and Security Agreement (the Term Loan) with Partners for Growth II. L.P. (PFG). The Term Loan bears interest at 11.75% per annum with principal due in 36 equal monthly payments of $34,722 beginning April 1, 20100 and continuing through March 1, 2014 unless the combination of the Companys cash and availability falls below certain levels, at which point the principal will be due in equal payments over the remaining months left in the period ending 36 months from the date of the Term Loan. Coincident with closing of the Term Loan the Company repaid the outstanding balance of its revolving line of credit with Silicon Valley Bank (SVB). The Company maintains the revolving line of credit with SVB and has $1.6 million available for borrowing at March 31, 2010.
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Sonic Foundry Inc. has a market cap of $26.4 million; its shares were traded at around $7.2999 with and P/S ratio of 1.42. SOFO is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
G&A expenses decreased $139 thousand or 19% over the prior period from $733 thousand in Q2-2009 to $594 thousand in Q2-2010. Decreased salaries and benefits expense of $170 thousand, associated with reduced headcount and changes made to the Companys benefit plan, was the primary reason for the overall decrease.G&A decreased $119 thousand or 8% from $1.5 million in YTD-2009 to $1.4 million in YTD-2010. The decrease is primarily due to a decrease in salaries and benefits associated with headcount reductions and changes made to the Companys benefit plan.
Product development expenses decreased $82 thousand, or 9% from $887 thousand in Q2-2009 to $805 thousand in Q2-2010. Some significant differences between the periods include:
On the September 30, 2009, 10-K filing, the Company recorded a non-cash deferred tax liability related to goodwill acquired in 2001 and made corresponding revisions to earlier results. The net impact was to record a $142 thousand non-cash provision for taxes and an increase to a long-term deferred tax liability of $142 thousand in fiscal 2009 and to record a $256 thousand non-cash provision for taxes in fiscal 2008 as well as the accumulated impact of prior period amortization of goodwill. This liability had historically been presented net of deferred tax assets and associated valuation allowances. Management determined that due to the nature of the deferred tax liability and future growth of such non-cash liability it was more prudent to present separately. Q2-2009 and YTD-2009 numbers have been revised to match this presentation.
Cash used in operating activities was $346 thousand in YTD-2010 compared to YTD-2009 of $1.4 million. Cash used in 2010 was impacted by a decrease in the net loss of $1.0 million from $1.5 million to $451 thousand, a partially offsetting decrease in the add-back for non-cash stock compensation from $368 thousand in YTD-2009 to $63 thousand in YTD-2010 and by a reduced need for cash to fund working capital of $333 thousand. Working capital changes included the positive effects of reductions in inventory of $332 thousand and reductions in other current assets of $33 thousand. These were offset by the negative effects of a $383 thousand decrease in unearned revenue and a $222 thousand increase in accounts receivable. YTD-2009 had similar changes in working capital components. Positive effects in YTD-2009 included a reduction in inventory of $202 thousand and an increase in unearned revenue of $64 thousand. Negative effects included a decrease in accounts payable and accrued liabilities of $507 thousand, an increase in accounts receivable of $103 thousand and an increase other current assets of $309 thousand.
On March 5, 2010, the Company executed the $1,250,000 Loan and Security Agreement (the Term Loan) with Partners for Growth II. L.P. (PFG). The Term Loan bears interest at 11.75% per annum with principal due in 36 equal monthly payments of $34,722 beginning April 1, 20100 and continuing through March 1, 2014 unless the combination of the Companys cash and availability falls below certain levels, at which point the principal will be due in equal payments over the remaining months left in the period ending 36 months from the date of the Term Loan. Coincident with closing of the Term Loan the Company repaid the outstanding balance of its revolving line of credit with Silicon Valley Bank (SVB). The Company maintains the revolving line of credit with SVB and has $1.6 million available for borrowing at March 31, 2010.
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