Loudeye Appoints Seasoned Technology Veteran Michael Brochu President and Chief Executive Officer
01 February 2005 - 11:05PM
PR Newswire (US)
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/
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