May 19, 2020

Rimage acquires Qumu to lead disc publishing market

strategic acquisitions
DVD Blu-Ray
Bizclik Editor
4 min
Rimage acquires Qumu to lead disc publishing market


Qumu, the leader in enterprise video communications, announced yesterday that it was acquired by Rimage Corporation (NASDAQ: RIMG), a publicly-traded leader in optical disc publishing. This cornerstone acquisition for Minneapolis-based Rimage shows Qumu’s proven product in a hot market.  The transaction is valued at $52 million, with $39 million consisting of cash and one million shares of Rimage common stock.

San Francisco-based Rimage brings cash flow, global infrastructure and an extensive customer base that will give Qumu an international presence. Rimage is an industry-leading provider of on-demand CD/DVD/Blu-ray Disc publishing systems. The acquisition provides Rimage with a strong presence in the rapidly growing video communications market with an established partner, serving 100 Global 1000 customers and generating strong revenue growth.

"Qumu is a cornerstone acquisition for Rimage and immediately positions us as a leader in the growing market for video communications and social enterprise applications for business," said Sherman Black, president and chief executive officer of Rimage Corporation. "The Qumu acquisition accelerates Rimage's strategy to distribute live, on-demand, downloaded and optical media content for a broad range of applications, on any mobile or desktop device. This acquisition significantly expands our market to new enterprise customers and offers opportunities for cross-selling to the installed base of customers of both Rimage and Qumu."

Qumu helps corporations create, manage and securely distribute video and related content and provides analytics on content usage. With an estimated total available market of $2 billion, it serves companies in banking, technology, and telecom, among other industries, as well as universities and government agencies. It sells its products through a direct sales force and through premier distribution partners, including Sony and AT&T.

Qumu's revenue has increased more than 45 percent per year over the past three years. In 2010, it generated $10.3 million in revenue and it is on track to achieve approximately $15 million in 2011. Based on current opportunities and expectations, Qumu is expected to generate approximately $21 million in revenue in 2012.

"The Qumu acquisition provides customer and technology synergies with our disc publishing business and virtual publishing initiative," continued Mr. Black. "We will continue to invest in disc publishing to provide our customers with the leading edge solutions they expect from us. The beta testing of our virtual publishing technology, a secure 'push-based' delivery platform, continues to proceed well and we remain on track with validating the concept."

With Qumu, Rimage will be able to provide its customers with comprehensive solutions for all content distribution applications. Qumu allows customers to reliably and securely offer their content across multiple platforms including the desktop, smart phones and tablets. Qumu customers will benefit from Rimage's virtual publishing technology which will add secure push delivery capabilities to Qumu's "pull-based" streaming solution. Rimage's net free cash flow, global footprint and infrastructure will enable Qumu to accelerate its expansion into new markets.

Qumu will be integrated into Rimage. Its operations will remain in San Bruno, California. Ray Hood, president and chief executive officer of Qumu, will remain the leader of the Qumu team and will become a senior vice president of Rimage.

Dividend Increase

The Rimage Board of Directors today announced an increase in the cash dividend in the fourth quarter to $0.17 per share. This will be payable on December 15, 2011 to shareholders of record on November 30, 2011. Based on the closing price on Friday, October 7, 2011, this represents a 5.0% dividend yield.

"As a result of the Qumu acquisition, Rimage is positioned to generate double digit top line growth in 2012. Overall, we anticipate cash from operations in 2012 to match the level of cash generated in 2011. Given our expected cash position post-acquisition and our confidence in generating overall growth in 2012, we believe a 70% dividend increase is warranted," Mr. Black concluded.

Financial Outlook

With the acquisition of Qumu, the Company now expects 2011 revenues of $86 million to $88 million and earnings per share of $0.42 to $0.45. Excluding fourth quarter Qumu revenue and Qumu transaction and restructuring costs of $2.0 million, both revenue and earnings per share are in line with the financial guidance provided last quarter and at the beginning of 2011.

For 2012, the Company expects Qumu annual revenue growth to continue at greater than 40%. It also anticipates that Qumu will contribute slightly to cash flow in 2012. In disc publishing, the Company expects continued solid execution and cash generation. Technology substitution and softness in the retail segment will continue to negatively impact 2012 revenues and will only be partially offset by growth in disc publishing solutions and geographic expansion. The Company expects disc publishing revenues to decline in the low single digits over this period and to be able to maintain low double digit operating margins.

Overall, Rimage revenues are expected to increase more than 15 percent in 2012. The Company will continue to optimize its expense structure in disc publishing and leverage the Rimage global infrastructure to accelerate the Qumu opportunity.

Share article

Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

Share article