Vancouver, British Columbia--(Newsfile Corp. - November 18, 2020) - Destiny Media Technologies (TSXV: DSY) (OTCQB: DSNY), the makers of Play MPE®, a cloud-based SaaS solution for digital asset management in the music industry, today announced financial results for its fiscal year ended August 31, 2020.
Highlights
Fred Vandenberg, President and CEO, said, "We closed out 2020 with high activity levels, fourth quarter revenue of $1.032 million, and full year revenue of $3.825 million. Play MPE® currency adjusted revenues grew by 5.3% in the fourth quarter, and 2.6% year over year. Foreign currency fluctuations had minor impacts, boosting our Play MPE® revenue in the quarter by 2% but reducing overall annual growth by 1.4%.
We continue to experience strong growth in our independent label revenue, with a foreign currency adjusted increase of 42.2% for the fourth quarter (unadjusted 45.7%), and an annual increase of 17.3% for the year (unadjusted 16.3%).
Gross margin for the fourth quarter, and fiscal year, remained consistent at 92%. Adjusted EBITDA for the fourth quarter grew by 27% to $0.203 million, compared to $0.159 million for 2019. Annual EBITDA decreased to $0.329 million from $0.718 million due primarily to one-time restructuring costs and in part to growing investments in product development for longer term accelerated growth. As at August 31, 2020, we held cash reserves of $2.622 million.
In 2020, Play MPE® made significant progress in several product enhancements, including expanding distribution software languages to Spanish, German, Japanese, and French, and improved recipient platform players to increase ease of access, content management and review. Immediately following year-end we released an updated release creator, which is designed to increase use by our enterprise customers and is the first step to allow non-enterprise customers to fully self-serve."
Mr. Vandenberg continued, "In 2020, to strengthen our team, the Company made significant improvements to its product development, marketing and business development teams. The Company added Sergei Berenson as a new Director of Engineering at the start of 2020. Mid-year we conducted a major restructuring of our business development group and appointed Glenn Mattern as our new Director of Business Development. Following these appointments, the Company expanded restructuring and recruitment efforts and focused on process improvements to further improve results of product and business development."
"2020 was a year of many exciting changes for Play MPE® and for the Company," said Fred Vandenberg, Chief Executive Officer for Destiny Media Technologies. "We have made several significant key additions to the team and invested in our ability to innovate and grow the Play MPE® business leading to positive returns."
Q4 2020 Financial Results
Highlights for the Q4 2020 include (all figures are USD, and comparisons are to Q4 2019):
- Q4 revenue grew by 5.8% to $1.032M (vs. $0.975M in prior year);
- Independent label revenue up 45.7%;
- Gross margin consistent at 92%;
- Adjusted EBITDA increased by 27%;
- Cash reserves as at August 31, 2020 of $2.622M ($0.25/share).
Fiscal 2020 Results
Highlights for fiscal 2020 include (all figures are USD, and comparisons are to fiscal 2019):
- Total revenue grew to $3.825M compared to $3.809M.
- Play MPE® currency adjusted annual revenue growth of 2.6%;
- Sends activity up 15.7%;
- Independent label revenues up by 17.3%;
- Addition of new Director of Engineering, Sergei Berenson and new Director of Business Development, Glenn Mattern, and expanded staffing dedicated to longer term revenue growth and product development;
- Adjusted EBITDA declined to $0.329M from $0.718M due primarily to one-time restructuring costs associated with our business development group;
- Normal course issuer bid successfully completed in the year, repurchasing 550,140 shares (5%) for a total cost of $0.533M.
Fiscal 2020 Earnings Conference Call
Destiny Media Technologies will host a conference call at 5:00 p.m. ET (2:00pm PT) on Wednesday, November 18, 2020, to further discuss its fiscal year 2020 results. Investors and interested parties may participate in the call by dialing 1-416-764-8688 or 1-888-390-0546 and referring to conference ID # 97888560. A written transcript and archived stream will subsequently be made available on Destiny's corporate site at http://www.dsny.com.
Destiny Media Technologies Inc.
CONSOLIDATED BALANCE SHEETS
| As at August 31, | (Expressed in United States dollars) | |||||
| 2020 | 2019 | |||||
| $ | $ | |||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 1,841,340 | 2,512,138 | ||||
| Short-term investments | 781,490 | 380,056 | ||||
| Accounts receivable, net of allowance for | ||||||
| doubtful accounts of $23,412 [2019 – $10,106] | 426,832 | 332,271 | ||||
| Other receivables | 26,083 | 14,240 | ||||
| Prepaid expenses | 78,562 | 77,067 | ||||
| Total current assets | 3,154,307 | 3,315,772 | ||||
| Deposits | 34,316 | 33,716 | ||||
| Property and equipment, net | 194,277 | 260,907 | ||||
| Intangible assets, net | 22,952 | 24,695 | ||||
| Right of use assets | 403,961 | — | ||||
| Total assets | 3,809,813 | 3,635,090 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current | ||||||
| Accounts payable | 119,399 | 132,451 | ||||
| Accrued liabilities | 353,235 | 303,470 | ||||
| Deferred leasehold inducement | — | 46,774 | ||||
| Deferred revenue | 19,638 | 23,388 | ||||
| Obligation under capital lease | 238,261 | — | ||||
| Total current liabilities | 730,533 | 506,083 | ||||
| Operating lease liability, net of current portion | 219,063 | — | ||||
| Total liabilities | 949,596 | 506,083 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ equity | ||||||
| Common stock, par value $0.001 | ||||||
| Authorized: 20,000,000 shares | ||||||
| Issued and outstanding: 10,450,646 shares | ||||||
| [2019 – issued and outstanding 11,000,786 shares] | 10,451 | 11,001 | ||||
| Additional paid-in capital | 9,366,290 | 9,850,348 | ||||
| Accumulated deficit | (6,171,068 | ) | (6,340,483 | ) | ||
| Accumulated other comprehensive loss | (345,456 | ) | (391,859 | ) | ||
| Total stockholders’ equity | 2,860,217 | 3,129,007 | ||||
| Total liabilities and stockholders’ equity | 3,809,813 | 3,635,090 | ||||
Destiny Media Technologies Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Years ended August 31, | (Expressed in United States dollars) | |||||||||||
| 2020 | 2019 | Q4 2020 | Q4 2019 | |||||||||
| $ | $ | $ | $ | |||||||||
| Service revenue | 3,824,565 | 3,809,092 | 1,032,107 | 975,274 | ||||||||
| Cost of revenue | ||||||||||||
| Hosting costs | 106,804 | 107,434 | 33,443 | 23,878 | ||||||||
| Internal engineering support | 24,303 | 28,441 | 5,025 | 7,144 | ||||||||
| Customer support | 137,720 | 126,317 | 28,475 | 39,861 | ||||||||
| Third party and transaction costs | 49,806 | 47,840 | 10,304 | 16,821 | ||||||||
| 318,633 | 310,032 | 77,247 | 87,704 | |||||||||
| Gross Margin | 3,505,932 | 3,499,060 | 954,860 | 887,570 | ||||||||
| 92% | 92% | 92% | 91% | |||||||||
| Operating expenses | ||||||||||||
| General and administrative | 798,120 | 770,758 | 89,453 | 214,488 | ||||||||
| Sales and marketing | 1,084,364 | 908,951 | 297,518 | 201,478 | ||||||||
| Product development | 1,343,084 | 1,141,380 | 379,733 | 334,619 | ||||||||
| Depreciation and amortization | 135,385 | 96,846 | 34,641 | 29,747 | ||||||||
| 3,360,953 | 2,917,935 | 801,345 | 780,332 | |||||||||
| Income from operations | 144,979 | 581,125 | 153,515 | 107,238 | ||||||||
| Other income | ||||||||||||
| Interest income | 24,415 | 27,188 | 4,672 | 6,034 | ||||||||
| Other income (expense) | 21 | 2,465 | 2 | 885 | ||||||||
| Income before provision for income taxes | 169,415 | 610,778 | 158,189 | 114,157 | ||||||||
| Income tax expense - deferred | — | — | — | — | ||||||||
| Net income | 169,415 | 610,778 | 158,189 | 114,157 | ||||||||
| Foreign currency translation adjustments | 46,403 | (38,217 | ) | 126,616 | 62,345 | |||||||
| Total comprehensive income | 215,818 | 572,561 | 284,805 | 176,502 | ||||||||
| Net income per common share, basic and diluted | 0.02 | 0.06 | 0.02 | 0.01 | ||||||||
Q4 and Fiscal Year 2020 Financial Summary
| (millions of U.S. dollars) | Three months Ended August 31, | Twelve Months Ended August 31, | ||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||||
| REVENUE | ||||||||||||||||||
| Play | 1.029 | 0.961 | 7% | 3.798 | 3.753 | 1% | ||||||||||||
| MPE® | ||||||||||||||||||
| Other | 0.003 | 0.014 | (79%) | 0.026 | 0.056 | (54%) | ||||||||||||
| Total Revenue | 1.032 | 0.975 | 6% | 3.824 | 3.809 | 0% | ||||||||||||
| PROFITABILITY | ||||||||||||||||||
| Gross Margin $ | 0.955 | 0.888 | 8% | 3.505 | 3.499 | 0% | ||||||||||||
| Gross Margin % | 93% | 91% | 2% | 92% | 92% | 0% | ||||||||||||
| Operating Expenses | 0.801 | 0.780 | 3% | 3.361 | 2.918 | 15% | ||||||||||||
| Cash Operating Costs | 0.756 | 0.735 | 3% | 3.201 | 2.811 | 14% | ||||||||||||
| Adjusted EBITDA | 0.203 | 0.159 | 28% | 0.329 | 0.718 | (54%) | ||||||||||||
| Net Income | 0.158 | 0.114 | 39% | 0.169 | 0.611 | (72%) | ||||||||||||
| Earnings Per Share | 0.02 | 0.01 | 100% | 0.02 | 0.06 | (67%) | ||||||||||||
| CASH | ||||||||||||||||||
| Cash Operating Income (Loss) | 0.261 | 0.169 | 54% | 0.363 | 0.744 | (51%) | ||||||||||||
| Working Capital | 0.292 | 0.036 | 711% | (0.091 | ) | 0.096 | (195%) | |||||||||||
| Changes | ||||||||||||||||||
| Cash Provided By (Used In) | 0.553 | 0.205 | 170% | 0.272 | 0.840 | (68%) | ||||||||||||
| Operating Activities | ||||||||||||||||||
| Cash Provided By (Used In) Investing | 0.364 | 0.133 | 174% | (0.434 | ) | 0.592 | (173%) | |||||||||||
| Activities | ||||||||||||||||||
| Cash (Used In) Financing Activities | - | (0.002 | ) | - | (0.533 | ) | (0.002 | ) | - | |||||||||
| CASH RESERVES | ||||||||||||||||||
| Cash and cash equivalents | 1.841 | 2.512 | (27%) | |||||||||||||||
| Short-term investments | 0.781 | 0.380 | 106% | |||||||||||||||
| Total Cash Reserves | 2.622 | 2.892 | (9%) | |||||||||||||||
About Destiny Media Technologies Inc.
Destiny Media Technologies ("Destiny") provides software as service (SaaS) solutions to businesses in the music industry solving critical problems in distribution and promotion. The core service, Play MPE® (www.plaympe.com), provides promotional music marketing to engaged networks of decision makers in radio, film, TV, and beyond. More information can be found at www.dsny.com.
Forward-Looking Statements
This release contains forward-looking statements that reflect current views with respect to future events and operating performance. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Destiny Media Technologies is not obligated to update these statements in the future. For more information on the Company's risks and uncertainties relating to those forward-looking statements, please refer to the Risk Factors section in our Annual Form 10-K for the fiscal year ended August 31, 2020, which will be available on www.sedar.com or www.sec.gov.
Contact:
Fred Vandenberg
CEO, Destiny Media Technologies, Inc.
604 609 7736 x236
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/68439