TORONTO – Makers of the popular DMDS digital music file transfer software primarily used by radio stations, Musicrypt Inc., reported increased revenue and a sharply pared loss in the second quarter of 2005.
Revenues for first half of the year, ended June 30th 2005, were over four times the revenues for the first half of 2004, coming in at $150,126. And, during the same period, the net loss decreased by over 40%, to $797,000, over the same period last year. Revenues for the second quarter of 2005 increased 195% over the second quarter of 2004.
The dip in losses didn’t come without a price, however, said the company.
Cost-cutting included: A reduction in salaries and benefits of $285,000 (or 43%) and in consulting fees of $164,000 (63%); research and development expense decreased by $130,000, or 87%, primarily due to the capitalization of $99,748 of these expenses as product development costs, which produced a credit balance of $22,000 in R&D expense for the second quarter. “The commercial acceptance of the company’s product (DMDS) by the marketplace indicated that expenditures for product development should be recognized as an asset because these are expected to yield future economic benefits. These expenditures are shown on the balance sheet as development costs of $200,844,” says the release.
Marketing expenses in the six months increased by $116,000 to $144,000, or 409%, reflecting increased trade show attendance and advertising, particularly for the US market. Other decreases in expenses for the first half of 2005 were seen in general and administration expense by $35,000 (36%) and professional fees by $19,000 (36%)
"The first six months of 2005 saw Musicrypt increase revenues, reduce expenses, and establish key partnerships with Billboard Radio Monitor and Nielsen BDS. We also received the grant of the Canadian patent for our technology, as well as endorsements from Clear Channel Radio and XM Satellite Radio in the United States," said Musicrypt CEO John Heaven. "These relationships, along with our strengthened financial picture, position us to become the global standard for secure digital delivery through our DMDS service platform."
