Digimarc Corporation · NASDAQ:DMRC

Digimarc — Needham Growth Stock Conference 2008

24 slides from Digimarc's conference presentation, Jan 11, 2008

  1. Slide 1: Enabling Trusted Relationships

    Enabling Trusted Relationships Needham Growth Stock Conference January 11, 2008 Copyright © 2008 Digimarc Corporation

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement With the exception of historical information contained in this presentation, the matters described herein contain certain “forward-looking statements” that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statement

  3. Slide 3: Our Mission: Enabling Trusted Relationships

    Our Mission Enabling Trusted Relationships Leading provider and innovator of technologies and solutions to secure and advance important economic and social relationships. Digital watermarking Secure ID solutions - Prevent counterfeiting - Enhance transportation safety - Protect media content from -

  4. Slide 4: A Customer-Focused Company

    Digimarc Values Drive Profitable Growth A Customer-Focused Company Earn lifetime relationships | Exhibit honesty and integrity | Train our employees Accept personal accountability for commitments | Maintain respectful relationships Experts in our field | Leading innovator in technology and processes

  5. Slide 5: Intellectual and Credentials Strengths

    Secure Media and Identity Management Digital Watermarking INTELLECTUAL ƒ Pioneer and worldwide leader in digital PROPERTY watermarking Anti-counterfeiting Systems ƒ Banknote counterfeit deterrence system ƒ Foster large-scale adoption under license to DMRC patents ƒ More than 350 U.S. patents Movies

  6. Slide 6: Digital Watermark Identification for Media Objects

    Digital Watermark Identification for Media Objects ƒ Imperceptible, pervasive, persistent Banknotes ƒ Machine-readable data and Secure IDs ƒ For video, audio, images and print ƒ Format and domain Music, Movies and Photos independent ƒ Communicate, authenticate, and identify media objects ƒ Provide s

  7. Slide 7: Digital Watermarking Strategy

    Digital Watermarking Strategy ƒ Built world class licensable IP asset ƒ Assembled highly skilled licensing organization Mobile ƒ Established reputation Images & Print ƒ Licensed numerous business partners ƒ Seeded the market Music & ƒ Time to harvest ROI, while Radio continuing IP and market Counter

  8. Slide 8: New Macro Economic Model of Entertainment

    New Macro Economic Model of Entertainment ƒ Consumer less inclined to buy “copies” of entertainment ƒ Real thing they pay for is “entertainment experience” ƒ They want minimal restrictions on when, where, and how ƒ Tech industry is delivering increased entertainment value by mitigating these inhibit

  9. Slide 9: Nielsen/DMRC to Deliver 21st Century DRM

    Nielsen/DMRC to Deliver 21st Century “DRM” ƒ 1st generation DRM failure ƒ Entertainment media distribution has gone “non- linear” ƒ Entertainment industry gravitating to digital watermarking across production and distribution ƒ Social networking and P2P pose great threats and opportunities for media

  10. Slide 10: Digital Watermarking Investment Opportunity

    Digital Watermarking Investment Opportunity ƒ Industry leading technology and IP portfolio ƒ Rate of adoption is accelerating across various applications ƒ Favorable market conditions in media production, distribution and consumption ƒ Partnership with Nielsen ƒ Possible other new large IP licenses

  11. Slide 11: Leading Supplier of Secure Government-issued Credentials

    Leading Supplier of Secure Government-issued Credentials ƒ Leading supplier of government-issued credentials in North America ƒ 2/3 of all US driver licenses; prime beneficiary of REAL ID in America ƒ Driver licenses, voter IDs, national IDs, etc. in more than 25 countries ƒ Our IDs enable many serv

  12. Slide 12: Digimarc Identity Mgmt Solutions Offers Value & Growth

    Digimarc Identity Mgmt Solutions Offers Value & Growth ƒ Acquired basic assets from Polaroid in bankruptcy sale December 2001 ƒ Millions invested to improve quality of assets and build financial infrastructure ƒ Built marketing and product strategy from bottom up ƒ Displaced old model of contract en

  13. Slide 13: Virtuous Circle of Driver License Investment and Value

    Virtuous Circle of Driver License Investment and Value Value Investment Copyright © 2008 Digimarc Corporation 13

  14. Slide 14: State of the Art in Driver Licenses

    State of the Art in Driver Licenses Popular Science | April 2007 Copyright © 2008 Digimarc Corporation 14

  15. Slide 15: Digital Watermarking Enhances Driver License Inspection

    Digital Watermarking Enhances Driver License Inspection ƒ Unaided visual inspection is inadequate due to: • More than 200 different U.S. DL designs • Unfamiliarity with out-of-state licenses • Skill and experience required to be able to spot a fake ID • Darkness or areas with limited visibility • St

  16. Slide 16: Secure ID Lifecycle

    Secure ID Lifecycle Registration and Proofing Æ Multiple perspectives on the applicant Æ Applicant data verification Æ Document authentication and archiving Æ Biometric identification ƒ Secure Credential Æ Automated knowledge • Advanced card materials testing • Secure card architecture • Digital wat

  17. Slide 17: REAL ID: Increased Investment in Driver License

    REAL ID: Increased Investment in Driver License Based on Sound Identity Management Principles Enhances Homeland Security, Transportation Safety and Economic Security ƒ Law passed May 2005; regulations being DWM finalized DWM ƒ Mandates minimum standards for all DWM DWM DWM DWM aspects of DL issuance

  18. Slide 18: DHS REAL ID Concept of Operation

    DHS REAL ID Concept of Operation REFERENCE CLEARANCE DATABASES EMPLOYEE CLEARANCE CHECKS TRAINING IAFIS DOJ/FBI EMPLOYEES NCIC EVVE NAPHSIS FACILITIES PRODUCTION CARD STOCK SAVE DHS/USCIS SECURITY ISSUANCE CCD/ DoS PIERS CUSTOMERS REAL ID CARD SSOLV SSA DATA CUSTOMER DATA AUTHENTICATION VERIFICATION

  19. Slide 19: Enhanced Driver License for Border Crossing

    Enhanced Driver License for Border Crossing ƒ DHS and Washington DOL pilot to allow Enhanced Driver License (EDL) to be used instead of Passport to re-enter US through sea and land border crossings ƒ Explicit recognition of National Security role of DL ƒ Washington DOL selected Digimarc to implement

  20. Slide 20: Secure Credential Investment Opportunity

    Secure Credential Investment Opportunity ƒ Leading supplier of government- issued credentials in North America ƒ Value of, and funding for, Secure IDs is increasing ƒ REAL ID may dramatically increase U.S. market ƒ Gain greater “share of pocket” by expanding portfolio of products and This credential

  21. Slide 21: Financial Projections: 2007

    Financial Projections: 2007 ƒ Revenues of $109-$111 million, up 5%-7% over 2006 ƒ Revenue allocation: Watermarking revenues ~12% and ID ~88% of total ƒ Watermarking revenues up 15% vs. 4% for ID ƒ Adjusted EBITDA nearly triples over prior year results to ~$17.5-18.5 million, at ~16% of revenues ƒ Op

  22. Slide 22: Financial Projections: 2008 and Beyond

    Financial Projections: 2008 and Beyond ƒ 2008 • Watermarking revenue growth rate should more than double • ID growth is largely dependent on REAL ID resolution • EDL may be significant opportunity • Operating Cash Flow should continue to improve • EPS will lag due to increases in depreciation, stock

  23. Slide 23: Financial Highlights

    Financial Highlights Stock Symbol: Nasdaq: DMRC Principal Locations: Beaverton, OR; Burlington, MA; Fort Wayne, IN Revenue Run Rate: $110 million Leading Indicators: ƒ EBITDA and other measures of cash flow ƒ Increasing financial leverage ƒ Growing “share of pocket” ƒ Competitive wins in secure ID ƒ

  24. Slide 24: Enabling Trusted Relationships

    Enabling Trusted Relationships Needham Growth Stock Conference January 11, 2008 Copyright © 2008 Digimarc Corporation

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