Roxio Restructures; Sells Consumer S/W Division; To Change Name To Napster

(Conference call at 5:30 PM EST..link here)
(developing..more later): Roxio, the digital media software and consumer company and parent of Napster, has sold its consumer software division to Sonic Solutions for $80 million, and plans to change its name to Napster, focusing entirely on online music market…(With heavy losses in Napster division, it that a wise move? More on this later..)
According to Chris Gorog, CEO of Roxio, in a statement:”This transaction will significantly enhance our balance sheet resulting in a net cash position well in excess of $100 million, which will support our efforts to drive subscriber growth and accelerate Napster’s competitive position.”

Roxio’s sale: Roxio will receive $70 million in cash and shares of Sonic common stock valued at $10 million. Roxio plans to focus its business on the digital music market and will change its corporate name to Napster and trade under the ticker “NAPS” on NASDAQ, assuming the successful completion of this transaction.

Sonic will purchase the entire Roxio software operation including Roxio’s CD and DVD recording, authoring, photo and video editing application products including Easy Media Creator, PhotoSuite, VideoWave, Easy DVD Copy and Toast. Sonic expects to retain most of the current employees of the Roxio organization. Sonic intends to continue the Roxio brands, and current distribution and OEM relationships.

Q2 Earnings: For Q2, it posted a net loss of $2.6 million; Revenues were $29.9 million compared to $24.2 million for year-ago quarter. The Napster business accounted for $7.9 million in Q2, which includes $1.1 million from hardware sales of MP3 players to partners. The unit lost $8.1 million during the quarter, minus certain charges. In Q3, revenues from Napster are “expected to show strong double-digit growth relative to first quarter revenues excluding hardware and are projected to be approximately $8.0 million“.

Roxio ended the first quarter with approximately $63.4 million in cash, restricted cash and short-term investments, which is ahead of prior forecasts.

10-Q report for Roxio…filed today…some more interesting details…

Comments have been disabled for this post