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"Napster [is] expected to help propel Roxio to significant year-over-year revenue growth in fiscal 2005."
——Chris Gorog, Roxio Chairman/CEO
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Roxio insists things will get better, especially once Napster kicks in.

The self-described "Digital Media Company" announced Q4 and year-end results today, as well as a multi-year marketing partnership with U.K.’s largest electronics retailer Dixons Group plc for Napster. The company will promote Napster as its only on-line music service, encompassing 1,100 Dixons, PC World, The Link and Currys storefronts. Roxio also made a deal this week to offer a Canadian version of the service.

Roxio's net revenues for Q4 2004 were $33.6 million, compared to $33.8 million in the prior fiscal year. Roxio's reported net loss for the fourth quarter was $6.6 million, or $0.20 per basic and diluted share, as compared to net income of $2.3 million, or $0.12 per basic and diluted share, in Q4 the fiscal year before.

Net revenue for the fiscal year ended March 31, 2004 was $99.3 million, as compared to net revenue of $120.4 million for fiscal 2003. Roxio's net loss for fiscal 2004 was $44.4 million, or $1.62 per basic and diluted share, compared to a net loss of $9.9 million, or $0.51 per basic and diluted share, in fiscal 2003.

For the fourth quarter, Roxio's digital media software division recorded revenues of $27.5 million and pretax income of $4.8 million, including restructuring charges of $2.9 million. Revenues for the company's online music division totaled $6.1 million, and pretax loss was $9.8 million. Combined pretax loss for the two divisions was approximately $5.0 million.

Roxio Chairman/CEO Chris Gorog put on his rose-colored glasses to proclaim: "Roxio posted a strong finish to fiscal 2004, with fourth quarter results that surpassed our expectations for both our software and Napster divisions, as well as better than anticipated expense management and a cash and short-term investments position of $67.1 million at the end of March. We have returned the software division to profitability and are very pleased with the strong debut of Roxio Easy Media Creator 7. Napster continues to lead the Windows-only music download market and its improving results are expected to help propel Roxio to significant year-over-year revenue growth in fiscal 2005."

For the first quarter of fiscal 2005, Roxio expects total revenues of approximately $28 million, with roughly $21 million from the software division and $7 million from Napster. Net loss per share for the quarter is expected to be approximately $0.26.

For the fiscal year, the software division is expected to generate revenues in the range of $75 million to $80 million and continued positive operating margins, reflecting continued growth in retail revenues offset by the anticipated decrease in OEM revenues. Expenses related to Napster are expected to decrease as a percentage of sales over the next several quarters, and Napster is expected to deliver double-digit sequential revenue growth throughout fiscal 2005, resulting in a revenue contribution of $30 million to $40 million.

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