GG: GMST EARNINGS
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PASADENA, Calif.--(BUSINESS WIRE)--Feb. 9, 2000--Gemstar International Group Limited (Nasdaq:GMST - news) reported its results of operations for the third quarter ended December 31, 1999.
Revenues for the third quarter were $61.8 million. Operating income was $40.3 million. Net income was $32.0 million. Diluted earnings per share were $0.13 based on 244.0 million shares.
For the third quarter of last year, the Company reported revenues of $41.5 million, operating income of $24.4 million, net income of $18.8 million, and diluted earnings per share of $0.08 based on 227.4 million shares. Compared to these results, revenues increased 49%, operating income increased 65%, net income increased 70% and diluted earnings per share increased 63% despite an increase in share count of 7%.
The increase in revenues is due to the continued growth in worldwide licensing income derived from the Company's proprietary technologies and intellectual property associated with the VCR Plus+© system and the electronic program guide, including a partial recognition of previously owed fees from General Instrument Corp. in the amount of $18 million, following a favorable American Arbitration Association panel ruling.
On Oct. 4, 1999, Gemstar announced that it had entered into a merger agreement with TV Guide, Inc. (Nasdaq:TVGIA - news) in a stock-for-stock purchase transaction under which TV Guide will become a wholly owned subsidiary of Gemstar. The transaction is expected to close in the second quarter of 2000 subject to governmental approval.
In October 1999, StarSight Telecast, Inc., a wholly owned subsidiary of Gemstar, won an arbitration ruling against General Instrument Corp. for breach of contract pertaining to electronic program guides incorporated in General Instrument analog set top boxes.
In addition to amounts due under the contract, the award also includes a punitive damage of an additional 50% of the contract amount. Certain details of the awarded amount are still being finalized by the arbitration panel. The second phase of the arbitration, focusing on digital set top boxes, is scheduled to proceed later this year.
In November 1999, the Company's Board of Directors approved a two-for-one stock split in the form of a stock dividend which was paid in December 1999 to shareholders of record as of Nov. 29, 1999. The Company had also effectuated a two-for-one stock split in May 1999.
Effective Dec. 30, 1999, the Company became a component of the Nasdaq-100 Index©. The Company's shares are also included in the Nasdaq-100 Index Tracking Stock(SM) (Amex:QQQ - news).
In January 2000, the Company entered the electronic book (``eBook') business through the acquisition of the two leading eBook companies, NuvoMedia© Inc. of Mountain View, Calif., maker of the Rocket eBook(TM), and SoftBook© Press Inc. of Menlo Park, Calif., maker of the SoftBook Reader. Both acquisitions were stock-for-stock transactions and will be accounted for as a pooling of interests.
Also in January 2000, the Company entered into a long-term agreement with Thomson Multimedia (NYSE:TMS - news) to jointly pursue opportunities in interactive televisions, including an extended and expanded long-term licensing agreement calling for the incorporation of over 30 million Gemstar EPG by year 2010, and a new joint venture for the introduction of two-way-wireless-paging-based interactive televisions in North America.
The Company and Thomson Multimedia also entered into a long-term agreement to jointly pursue opportunities in electronic program guides in Europe.
Consistent with its continuing practice of building and defending the value of its intellectual property, the Company recently filed a patent infringement lawsuit against TiVo Inc. (Nasdaq:TIVO - news) in the U.S. District Court for the Northern District of California.
``We are pleased with our financial performance for the third quarter of fiscal year 2000,' said Henry Yuen, chairman and chief executive officer. ``We are also happy with our business development, and particularly excited about the prospects associated with the eBook business and the Thomson Multimedia agreements.'
Gemstar develops, markets and licenses proprietary technologies and systems aimed at making technology user-friendly for consumers. Gemstar's technology and intellectual property are licensed to major companies in the consumer electronics, satellite, cable and personal computer industries, including Aiwa, Akai, America Online (AOL), Americast, Cox, Daewoo, Funai, GTE, Hitachi, Hughes Network Systems, JVC, LG Electronics (Goldstar), Matsushita (Panasonic, Quasar), Microsoft Corp., Mitsubishi, Orion, Philips (Magnavox, Philips), Quadravision, Samsung, Sanyo, Sharp, Shintom, Sony, Thomson Multimedia (GE, Proscan, RCA, Thomson), Toshiba, Uniden, US West and Zenith.
Gemstar has more than 85 issued U.S. patents in the general area of audio-visual technologies containing 1,850 claims and more than 90 issued foreign patents. The Company continues to pursue a worldwide patent prosecution program and has more than 110 pending U.S. patent applications and more than 300 pending foreign patent applications.
Gemstar is a leading provider of electronic program guide services, which allows users to view a television program guide on screen, obtain details about a show, sort shows by themes or categories, and select shows for tuning or recording, all through the remote control.
In the United States, data for Gemstar's electronic program guide services are carried on the ABC, FOX, CBS, NBC, UPN and PBS networks. Gemstar's electronic program guide has been built into a number of models of new televisions, VCRs and TV/VCR combination units.
Gemstar's electronic program guide is also licensed to cable, telco and MMDS service providers, and has been integrated into direct broadcast satellite receivers, digital and advanced analog cable set-top boxes, PCTV and other Internet devices and computer operating systems such as Windows 98.
Gemstar's VCR Plus+© instant programming system is a world standard for VCR programming. The VCR Plus+ system allows a user to record a television show simply by entering a number -- the PlusCode© number -- printed in television program guides. The PlusCode numbers are published by more than 1,800 newspapers and television program guides worldwide, with a combined circulation of over 330 million.
The VCR Plus+ system has been licensed to virtually every major television and VCR manufacturer and is now available in 40 countries and on six continents, including the United States, Canada, United Kingdom, continental Europe, Japan, Southeast Asia, Australia, New Zealand, South America and South Africa.
Except for historical information contained here, the matters discussed in this news release contain forward-looking statements which involve risks and uncertainties, including the timely availability and acceptance of new products, the impact of competitive products and pricing, the management of growth, and the other risks detailed from time to time in the Company's Securities and Exchange Commission reports, including the reports on Form 10-K and Form 10-Q.
Note to Editors: GUIDE Plus+, VCR Plus+ and PlusCode are trademarks of Gemstar. Other product names used herein are for identification purposes only and may be trademarks of their respective companies.
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