Loudeye (NASDAQ:LOUD)
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Loudeye Appoints Seasoned Technology Veteran Michael Brochu
President and Chief Executive Officer
Company Expects to Exceed Fourth Quarter 2004 Revenue Guidance Estimates with
Record Quarterly Revenue
SEATTLE, Feb. 1 /PRNewswire-FirstCall/ -- Loudeye Corp. (NASDAQ:LOUD), a
worldwide leader in business-to-business digital media solutions, today
announced its board of directors has appointed Michael A. Brochu as president
and chief executive officer of Loudeye. Mr. Brochu will succeed Jeffrey M.
Cavins, who has resigned to pursue other opportunities. In addition, Loudeye
announced it expects to exceed its fourth quarter 2004 revenue guidance
estimates and expects that its fourth quarter 2004 GAAP net loss will be at or
near the higher end of its GAAP net loss guidance range.
Appointment of Michael Brochu as President and Chief Executive Officer
Mr. Brochu, 51, brings over 20 years of senior level experience to Loudeye,
including senior executive and directorship positions in emerging growth
technology, software and digital entertainment companies, most recently at
Primus Knowledge Solutions and Sierra On-Line. Mr. Brochu has served on
Loudeye's board of directors since December 2003.
"Loudeye is an exciting company and a key participant in a transformative shift
affecting the global digital media and entertainment markets. The shift toward
digital media distribution creates significant opportunities for both new and
traditional players, and Loudeye has developed a unique position that will help
create value for retail partners, content owners, consumers and our
stockholders," said Mr. Brochu. "We are well positioned for the next phase in
our development, and I look forward to help build upon our recent successes."
Prior to joining Loudeye as president and chief executive officer, Mr. Brochu
was chairman, chief executive officer and president of Primus Knowledge
Solutions, Inc., a Nasdaq-traded e-business and e-service solution provider.
Mr. Brochu joined Primus in 1997 and transformed the company from a small
business with a single product into a publicly traded company with a
market-leading software suite, a European presence, and a worldwide customer
base. Mr. Brochu was instrumental in engineering the November 2004 sale of
Primus to Art Technology Group (ATG), creating one of the industry's most
complete e-business solution platforms.
Prior to his tenure at Primus, Mr. Brochu was the president and chief operating
officer of Sierra On-Line Inc., one of the world's largest publishers of
interactive entertainment, educational, and home productivity software. While
at Sierra On-Line, Mr. Brochu led efforts to grow revenues by over 300%,
culminating in the sale of Sierra On-Line to CUC International for $1.1 billion
in 1996.
Mr. Brochu currently serves on the board of directors of ATG, Emphysis Medical
Management, a medical billing and physicians' service firm, Allrecipes.com,
Inc., a leading online food site, and the Washington Software Alliance (WSA),
the largest technology trade association in Washington State. Mr. Brochu also
sits on the advisory board of Voyager Capital, a venture capital firm.
"The board of directors of Loudeye has been fortunate to have worked with Mike
for the past fourteen months and has seen him demonstrate leadership and deep
understanding of managing growth in early stage markets and companies. We have
developed a strong belief that he will be a tremendous asset to lead the
company to future success," said Anthony Bay, chairman of Loudeye's board of
directors. "Mike will be an excellent leader to set and execute on Loudeye's
vision, and represent Loudeye to the board and our stockholders."
"The opportunity for Loudeye has never been more compelling, with our industry
in an early phase of growth, and Loudeye in a position of strength to
capitalize on a global basis. I'm proud of what we've accomplished and excited
about the opportunities ahead under Mike's leadership," said Mr. Cavins. "Mike
has helped build large companies and create stockholder value in emerging
technology and media markets, and he is the right person to lead Loudeye to the
next level of success."
Mr. Cavins leaves Loudeye after leading the company to achieve several notable
successes during his tenure at Loudeye. Under Mr. Cavins' direction Loudeye
positioned itself as a key player in the rapidly growing market for legitimate
digital distribution of music, video and games. Mr. Cavins was appointed chief
executive officer in March 2003 to develop and execute on a strategic plan that
included focusing on a growing opportunity in digital media distribution and
related services, and restructuring Loudeye's financial and operating
performance. During his tenure, Loudeye developed its product offering
significantly to offer online and mobile private-labeled digital music store
solutions and expanded its reach to over 20 countries worldwide. In addition,
Loudeye strengthened its balance sheet and grew revenue significantly,
delivering successive record quarters of revenue performance in the third and
fourth quarters of 2004.
"Jeff was instrumental in Loudeye becoming a global platform, poised to
capitalize upon the opportunities in digital media distribution. Mike inherits
a stronger company due to Jeff's efforts and leadership," said Mr. Bay. "We
wish the best for Jeff in his future endeavors."
Mr. Brochu entered into an executive employment agreement with Loudeye in
connection with his appointment as chief executive officer and Mr. Cavins
entered into a separation agreement with Loudeye in connection with his
resignation. Copies of these agreements will be filed with the Securities and
Exchange Commission in a current report on Form 8-K and will be available
through EDGAR at http://www.sec.gov/.
Preliminary Fourth Quarter 2004 Results
Loudeye expects to exceed its previously announced fourth quarter revenue
guidance and anticipates revenue of approximately $6.3 million for the fourth
quarter 2004, which represents record quarterly revenue. The increase in
revenue from the third quarter is primarily attributable to increased digital
distribution services revenue, principally from Loudeye's digital music stores.
Loudeye expects GAAP net loss for the fourth quarter 2004 to be at or near the
higher end of its previously announced guidance range of $4.8 million to $5.2
million of net losses. Loudeye had approximately $44 million of cash and
investments at December 31, 2004.
"We generated record revenues in the fourth quarter due to strong performance
in our digital music store business where we experienced a significant increase
in transaction volumes. We directly benefited in the fourth quarter from new
stores launched worldwide, increased marketing by our partners of existing
stores, and increased user adoption of digital music download services," stated
Larry Madden, executive vice president and chief financial officer of Loudeye.
"The opportunity for Loudeye is significant, and our recent performance
combined with positive industry trends leads us to anticipate continued growth
in our business in 2005."
The preliminary results discussed above represent management's current
expectations, are based on management's preliminary internal analysis, and are
subject to change. The preliminary results have not been audited by our
independent registered public accounting firm.
Loudeye intends to report actual results for the quarter and year ended
December 31, 2004, on March 1, 2005. At that time it will host an audio
Webcast with Michael Brochu and Larry Madden, followed by a live question and
answer session to discuss its fourth quarter and year end 2004 financial
results. The Webcast will be held live at 2:00 p.m. PT and available from
http://www.loudeye.com/.
About Loudeye Corp.
Loudeye is a worldwide leader in business-to-business digital media solutions
and the outsourcing provider of choice for companies looking to maximize the
return on their digital media investment. Loudeye combines innovative products
and services with the world's largest digital music archive, a broad catalog of
licensed digital music and the industry's leading digital media infrastructure
enabling partners to rapidly and cost effectively launch complete, customized
digital media stores and services. For more information, visit
http://www.loudeye.com/.
Forward Looking Statements
This release contains forward-looking information within the meaning of the
Private Securities Litigation Reform Act of 1995, including forward-looking
financial guidance such as statements about expected revenues, losses and cash
and investment balances for the fourth quarter and year ended December 31,
2004. The words or phrases "expects" and "anticipates" and similar words and
phrases are intended to identify such forward-looking statements. As disclosed
in our quarterly report on Form 10-Q for the quarter ended September 30, 2004,
we have identified material weaknesses in our internal control over financial
reporting. These material weaknesses relate to staffing, competence and
segregation of duties in our accounting and financial reporting functions and
insufficient analysis, documentation and review of the selection and
application of generally accepted accounting principles to significant
non-routine transactions. We also expect to conclude that our inability to
test the operating effectiveness of our internal controls as of December 31,
2004 constitutes a material weakness. We have identified additional
deficiencies in internal control over financial reporting which we have not yet
determined to constitute significant deficiencies or material weaknesses, and
we may identify further material weaknesses during the course of management's
assessment of our internal control over financial reporting. The existence of
a material weakness or weaknesses is an indication that there is more than a
remote likelihood that a material misstatement of our financial statements will
not be prevented or detected in a future period. The forward-looking
statements contained in this press release are based on current estimates and
actual results may differ materially due to risks, including the completion of
Loudeye's review of its financial performance for the fourth quarter and year
ended December 31, 2004, and completion of Loudeye's audit for the fiscal year
ended December 31, 2004; performance and integration of our new president and
chief executive officer; the possibility of adverse changes in the market for
distribution of digital audio and video that Loudeye serves; adverse or
uncertain legal developments with respect to copyrights surrounding the
creation and distribution of digital content; pricing pressures and other
activities by competitors; the failure of Loudeye's hosting infrastructure; the
complexity of Loudeye's services and delivery networks; any problems or
failures in the structure, complexities or redundancies of Loudeye's network
infrastructure; failures in third party telecommunication and network providers
to provide required transmission capacity; lack of market acceptance for
Loudeye's products and services; the possible delay in the adoption of digital
media or related applications on the web in general; and other risks set forth
in Loudeye's most recent Form 10-Q, Form 10-K and other SEC filings which are
available through EDGAR at http://www.sec.gov/. Loudeye assumes no obligation
to update the forward-looking statements.
DATASOURCE: Loudeye Corp.
CONTACT: media (U.S.), Karen DeMarco of mPRm Public Relations,
+1-323-933-3399, or , for Loudeye Corp.; or media (Europe),
Simon Hill of Trimedia Communications UK, +44 (0)207 471 6826, or +44 (0)7776
251192, or , for Loudeye Corp.; or investors,
Michael Dougherty of Loudeye Corp., +1-206-832-4000, or
Web site: http://www.loudeye.com/