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Loudeye Corp.

Loudeye Appoints Seasoned Technology Veteran Michael Brochu President and Chief Executive Officer

Seattle, Washington (ots/PRNewswire)

- Company Expects to Exceed Fourth Quarter 2004 Revenue Guidance
Estimates with Record Quarterly Revenue
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 US$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 www.sec.gov.
Preliminary Fourth Quarter 2004 Results
Loudeye expects to exceed its previously announced fourth quarter
revenue guidance and anticipates revenue of approximately US$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 US$4.8
million to US$5.2 million of net losses. Loudeye had approximately
US$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 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 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 www.sec.gov. Loudeye
assumes no obligation to update the forward-looking statements.
Web site: http://www.loudeye.com

Contact:

media (U.S.), Karen DeMarco of mPRm Public Relations,
+1-323-933-3399, or kdemarco@mprm.com, for Loudeye Corp.; or media
(Europe), Simon Hill of Trimedia Communications UK,
+44-(0)207-471-6826, or +44-(0)7776 -251192, or
simon.hill@trimediauk.com, for Loudeye Corp.; or investors, Michael
Dougherty of Loudeye Corp., +1-206-832-4000, or ir@loudeye.com

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