NEW YORK (Hypebot) – Music distributor The Orchard posted a 16.5% increase in revenues compared to the previous quarter last year. For the first quarter of 2009, revenues were $15.3 million, compared to $13.2 million in '08. Net cash provided by operations also increased to $2 million from $0.6 million for the first quarter of last year. Cash and cash equivalents were $5.4 million at the close of the quarter, and the company had no debt.
LOSSES CONTINUE
Net losses for the quarter matched the previous year at $1.1 million and gross profit margins remained flat at 27.7%. Operating expenses increased 20.3% from $5.7 million for the first quarter of 2009 compared to $4.7 million for the first quarter of 2008.
Part of the increase comes from ramping up a physical distribution division that has recently helped The Orchard land more major clients like jazz legend Wynton Marsalis who want keep their record output business under a single roof. But brick and mortar distribution is ultimately still a sinking sector and The Orchard's core digital distribution business is facing downward price pressure from competitors.
But commenting on the first quarter results, Greg Scholl President and Chief Executive Officer of The Orchard said, “Despite a difficult economic environment, we once again report revenue growth we believe is in excess of the market, gross margin improvement as compared to the same quarter last year, positive cash flow, and continued catalogue growth for the quarter.”
Scholl continued, “The second quarter, cyclically the weakest of our fiscal year, will challenge us to close deals in our pipeline while keeping our focus on cost management. We believe that the premium offerings that we are scheduled to roll out during the balance of 2009, in addition to our core services, will bolster our ability to close these deals and maintain our position as the premier partner in the independent sector.”
