Broadcast International Reports Third Quarter 2012 Results

Broadcast International Reports Third Quarter 2012 Results 
SALT LAKE CITY, UT -- (Marketwire) -- 11/13/12 --  Broadcast
International (OTCQB: BCST) ("BI"), a leading provider of
video-powered broadcast solutions, reported financial results for the
third quarter ended September 30, 2012. 
Q3 2012 Highlights 


 
--  Cayman Islands-based WestStar TV selected CodecSys to provide the
    framework for its new Over-the-Top (OTT) service. Based on BI's
    CodecSys patented multi-codec compression software, the solution
    enables WestStar's subscribers to receive local and global content on
    their mobile devices.
    
    
--  Partnered with netTALK.com to provide a triple play OTT video service
    for netTALK's more than 1 million subscribers. netTALK TV, an
    extension of netTALK's Voice over Internet Protocol (VoIP) service,
    will bring customers a total communications and entertainment
    experience by permitting access to online video content via a
    CodecSys-enabled OTT or Video on Demand (VOD) playback service.
    
    
--  Binbit Group, a global provider of mobile entertainment services,
    selected CodecSys to expand its video on demand web and mobile device
    capabilities. CodecSys encoding and transcoding systems were installed
    in Binbit's Austin, Texas data center to support its regional
    operations.

  
Q3 2012 Financial Results
 Revenue in the third quarter 2012 increased
2% sequentially to $2.05 million from $2.00 million in the prior
quarter, and decreased 10% from $2.3 million in the same year-ago
period. The year-over-year decrease was primarily due to fewer
expansion sites installed for the company's largest digital signage
customer, partially offset by an increase in license fees and other
professional services. 
Gross profit in the third quarter 2012 was $779,000 (a record since
becoming publicly-traded company) or 38% of total revenue. This was
an improvement from $654,000 or 33% of total revenue in the previous
quarter and from $758,800 or 33% of total revenue in the same
year-ago period. 
Total operating expenses in the third quarter 2012 decreased 24%
sequentially to $1.9 million from $2.5 million in the prior quarter,
and decreased 22% from $2.4 million in Q3 2011. 
Operating l
oss in the third quarter 2012 was $1.1 million, an
improvement from an operating loss of $1.8 million in the previous
quarter and an operating loss of $1.7 million in the same year-ago
period. The significant decrease in operating losses is primarily due
to effective cost cutting programs, along with increased gross
profits that have helped to reduce the monthly burn rate by nearly
50% or $239,000. 
Net loss in the third quarter 2012 totaled $711,000 or $(0.01) per
basic and diluted share, compared to a net profit of $847,000 or
$0.01 per basic and diluted share in the prior quarter, and compared
to a net profit of $4.0 million or $0.05 per basic and diluted share
in Q3 2011. The year-over-year decline was primarily due to a $4.8
million change in the fair value of the company's warrants and
convertible notes.  
Management Commentary
 "Our third quarter results reflect our ongoing
efforts to reduce expenses and drive margin expansion," said Jim
Solomon, CFO of Broadcast International. "In fact, we achieved our
highest-ever gross margins since becoming a publicly-traded company.
We continued to see our operating expenses decrease both on a
year-over-year and sequential basis, and anticipate further
optimization going forward. 
"As we wrap up the year and prepare for 2013, we remain focused on
expanding and diversifying our BI Networks and CodecSys customer
base. We are confident that over the course of 2012, we have put in
place the right personnel and resources to handle the anticipated
ramp-up in our business, while continuing to provide our loyal
customers exceptional service and support. Our BI Networks division
continues to gain traction in the financial services industry, and we
remain well positioned to capitalize on the growing opportunity for
CodecSys in the enterprise IP video and OTT markets, both
domestically and overseas." 
Earnings Podcast
 Broadcast International will stream its third
quarter 2012 results podcast tomorrow (Wednesday, November 14) at
9:00 a.m. Eastern time. The video podcast will be available via the
Investor Relations section of the company's website at www.brin.com.  
Broadcast International management will discuss the company's
financial results, and provide an operational update and outlook for
the remainder of 2012. 
Date: Wednesday, November 14, 2012
 Time: 9:00 a.m. Eastern time
(7:00 a.m. Mountain time)
 Podcast: www.brin.com/news/podcast-new  
If you have any difficulty connecting with the podcast, please
contact Liolios Group at 1-949-574-3860.  
About Broadcast International
 Broadcast International is a leading
provider of video-powered broadcast solutions, including IP, digital
satellite, Internet streaming and other types of wired/wireless
network distribution. BI's patented CodecSys software is a
breakthrough, multi-codec video compression technology that cuts
video bandwidth requirements over satellite, cable, IP and wireless
networks. By slashing bandwidth needs, CodecSys enables a new
generation of rich-media applications and offers unprecedented price/
performance benefits for existing applications. Broadcast
International is a public company (OTCQB: BCST) headquartered in Salt
Lake City, UT.  
For more information visit: www.brin.com and www.codecsys.com. 
Forward Looking Statements
 All statements in this news release that
are not based on historical fact are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995 and the provisions of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended (which Sections were adopted as part of the Private
Securities Litigation Reform Act of 1995). While management has based
any forward-looking statements contained herein on its current
expectations, the information on which such expectations were based
may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties, and other factors, many of which are outside of
our control, that could cause actual results to materially differ
from such statements. Such risks, uncertainties, and other factors
include, but are not necessarily limited to, those set forth under
the caption "Additional Factors That May Affect Our Business" in the
Company's most recent Form 10-K and 10-Q filings, and amendments
thereto. In addition, we operate in a highly competitive and rapidly
changing environment, and new risks may arise. Accordingly, investors
should not place any reliance on forward-looking statements as a
prediction of actual results. We disclaim any intention to, and
undertake no obligation to, update or revise any forward-looking
statement. 


 
                                                                            
                        BROADCAST INTERNATIONAL, INC.                       
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                                                            
                                                  December 31, September 30,
                                                      2011          2012    
                                              
   ------------- -------------
                                                                (Unaudited) 
ASSETS:                                                                     
  Current Assets                                                            
    Cash                                         $     961,265 $     373,119
    Trade accounts receivable, net                   1,239,903     1,161,101
    Inventory                                           60,851       362,335
    Prepaid expenses                                   203,973       178,008
                                                 ------------- -------------
    Total current assets                             2,465,992     2,074,563
                                                 ------------- -------------
  Property and equipment, net                        1,417,134       664,750
                                                 ------------- -------------
  Other Assets, non current                                                 
    Debt offering costs                                123,278        61,643
    Patents, net                                       131,079       123,466
    Deposits and other assets                          406,004       226,794
                                                 ------------- -------------
    Total other assets, non current                    660,361       411,903
                                                 ------------- -------------
                                                                            
  Total assets                                   $   4,543,487 $   3,151,216
                                                 ============= =============
                                                                            
LIABILITIES AND STOCKHOLDERS DEFICIT:                                       
                                                                            
  Current Liabilities                                                       
    Accounts payable                             $   1,252,538 $   2,002,821
    Payroll and related expenses                       390,206       329,203
    Other accrued expenses                             175,008       221,031
    Unearned revenue                                    10,449        30,521
      Current portion of notes payable (net of                              
       discount of $103,859 and $861,335,                                   
       respectively)                                 2,068,016     1,938,665
    Other current obligations                        1,067,649            --
    Derivative valuation                             3,760,200     4,346,021
                                                 ------------- -------------
    Total current liabilities                        8,724,066     8,868,262
                                                 ------------- -------------
  Long-term Liabilities                                                     
      Long-term portion of notes payable (net of                            
       discount of $659,496 and $409,494,                                   
       respectively)                                 6,349,445       590,506
                                                 ------------- -------------
    Total long-term liabilities                      6,349,445       590,506
                                                 ------------- -------------
  Total liabilities                                 15,073,511     9,458,768
                                                 ------------- -------------
  Commitments and contingencies                                             
  STOCKHOLDERS' DEFICIT:                                                    
        Preferred stock, no par value,                                      
         20,000,000 shares authorized; none                                 
         issued                                             --            --
        Common stock, $.05 par value,                                       
         180,000,000 shares authorized;                                     
         75,975,656 and 107,405,328 shares                                  
         issued as of December 31, 2011 and                                 
         September 30, 2012, respectively            3,798,783     5,370,266
    Additional paid-in capital                      96,859,058    99,559,404
    Accumulated deficit                           -111,187,865  -111,237,222
                                                 ------------- -------------
    Total stockholders' deficit                    -10,530,024    -6,307,552
                                                 ------------- -------------
                                                                            
  Total liabilities and stockholders' deficit    $   4,543,487 $   3,151,216
                                                 ============= =============
                                                                            
                                                                            
                                                                            
                        BROADCAST INTERNATIONAL, INC.                       
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS              
                                 (Unaudited)                                
                                                                            
                              For the three months     For the nine months  
                                      ended                   ended         
                                  September 30,           September 30,     
                            ------------------------ -----------------------
                                2011        2012         2011        2012   
                            ----------- ------------ ----------- -----------
                                                                            
Net sales                   $ 2,277,074 $  2,045,278 $ 6,321,495 $ 5,790,363
Cost of sales                 1,518,310    1,266,224   4,414,402   3,857,682
                            ----------- ------------ ----------- -----------
Gross profit                    758,764      779,054   1,907,093   1,932,681
                            ----------- ------------ ----------- -----------
                                                                            
Operating expenses:                                                         
  Administrative and                                                        
   general                    1,280,183    1,001,001   5,124,883   3,589,602
  Selling and marketing         401,826      442,495     824,771   1,557,735
  Research and development      570,197      325,126   1,793,596   1,346,540
  Depreciation and                                                          
   amortization                 169,592      127,334     517,751     454,009
                            ----------- ------------ ----------- -----------
  Total operating expenses    2,421,798    1,895,956   8,261,001   6,947,886
                            ----------- ------------ ----------- -----------
Total operating loss         -1,663,034   -1,116,902  -6,353,908  -5,015,205
                            ----------- ------------ ----------- -----------
                                                                            
Other income:                                                               
  Interest income                   338           --       2,324           1
  Interest expense             -176,047     -460,388    -745,925  -1,066,599
  Gain (loss) on derivative                                                 
   valuation                  5,851,300    1,051,516  12,257,500   5,639,996
  Equity issuance costs                                                     
   related to warrants               --           --    -476,234  -1,095,309
  Loss on note conversion                                                   
   offering expense                  --      -47,348          --     -47,348
  Gain (loss) on                                                            
   extinguishment of debt        16,000      -83,754    -954,033   1,588,821
  Loss on retirement of                                                     
   debt offering costs               --      -53,150          --     -53,150
  Gain (loss) on sale of                                                    
   assets                            --        2,421        -362         781
  Other income (expense),                                                   
   net                            5,597       -3,467         151      -1,345
                            ----------- ------------ ----------- -----------
  Total other income          5,697,188      405,830  10,083,421   4,965,848
                            ----------- ------------ ----------- -----------
                                                                            
Profit (loss) before income                                                 
 taxes                        4,034,154     -711,072   3,729,513     -49,357
Provision for income taxes           --           --          --          --
                            ----------- ------------ ----------- -----------
Net profit (loss)           $ 4,034,154 $   -711,072 $ 3,729,513     -49,357
                            =========== ============ =========== ===========
                                                                            
Net profit (loss) per share                                                 
 - basic                    $      0.05 $      -0.01 $      0.05           0
                            =========== ============ =========== ===========
Net profit (loss) per share                                                 
 - diluted                  $      0.05 $      -0.01 $      0.05           0
                            =========== ============ =========== ===========
                                                                            
Weighted average shares -                                                   
 basic                       75,844,526  107,263,073  75,240,313  98,564,531
                            =========== ============ =========== ===========
Weighted average shares -                                                   
 diluted                     78,414,453  107,263,073  77,970,216  98,564,531
                            =========== ============ =========== ===========

  
Company Contact:
Cameron Francis
Vice President Products
Broadcast International
801-562-2252
pr@Brin.com  
Investor Relations Contact:
Michael Koehler or Matt Glover 
Liolios Group, Inc.
949-574-3860
BCST@liolios.com 
 
 
Press spacebar to pause and continue. Press esc to stop.