5/31...GMST $.11 vs $.09
PASADENA, Calif.--(BUSINESS WIRE)--May 31, 2000--Gemstar International Group Limited (Nasdaq:GMST - news) reported its results of operations for the fourth quarter and fiscal year ended March 31, 2000.
Revenues for the fourth quarter were $84.0 million. Before a $15.9 million non-recurring charge for merger-related costs associated with the Company's acquisitions of two electronic book companies, NuvoMedia(TM) Inc. and SoftBook© Press Inc. in January 2000, operating income was $55.4 million, net income was $43.2 million and diluted earnings per share were $0.17 based on 252.6 million shares.
Including this non-recurring charge, operating income was $39.5 million, net income was $27.3 million and diluted earnings per share were $0.11.
Revenues for the fiscal year ended March 31, 2000 were $241.4 million. Before the $15.9 million merger-related charge, operating income was $126.8 million, net income was $97.2 million, and diluted earnings per share were $0.39 based on 247.9 million shares. Including this non-recurring charge, operating income was $110.9 million, net income was $81.3 million and diluted earnings per share were $0.33.
In January 2000, the Company completed its mergers with NuvoMedia and SoftBook Press. These transactions were accounted for as a pooling of interests, and accordingly, all historical financial information has been restated to include past operating results of NuvoMedia and SoftBook Press.
As a result of restatement, the fourth quarter of last fiscal year showed revenues of $55.1 million, operating income of $30.7 million, net income of $22.2 million and diluted earnings per share of $0.09 based on 233.9 million shares.
Compared to these results, the fourth quarter ended March 31, 2000, excluding the $15.9 million merger related charge, reflects an increase of 53% in revenues, 81% increase in operating income, 95% increase in net income and 89% increase in diluted earnings per share.
The restated results for the past fiscal year ended March 31, 1999, excluding a $1.9 million charge associated with the cost of defending against a hostile takeover attempt, showed revenues of $168.2 million, operating income of $83.4 million, net income of $62.0 million and diluted earnings per share of $0.27 based on 229.2 million shares.
Compared to these results, the fiscal year ended March 31, 2000, excluding the $15.9 million merger related charge, reflects an increase of 44% in revenues, 52% increase in operating income, 57% increase in net income, and 44% increase in diluted earnings per share.
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.
Revenues in the fourth quarter and for the year ended March 31, 2000 were positively impacted by the recognition of revenue totaling $22 million and $40 million, respectively, as a result of the resolution of certain contingencies related to royalties earned on prior shipments of products incorporating the Company's electronic program guide technologies.
``Fiscal year 2000 has been a landmark year for Gemstar,'' said Henry Yuen, chairman and chief executive officer. ``Our financial performance in the last quarter and for the year reflects our continuing ability to meet our strategic and financial objectives. From a strategic standpoint, Gemstar's merger with TV Guide, pending governmental approval, and its entry into the electronic book business, have significantly expanded our recurring revenue opportunities and raised Gemstar to a higher business horizon.''
During the past year, the Company effectuated a two-for-one stock split twice, in May and in December 1999, and was selected by The Nasdaq Stock Market to be a component of the Nasdaq-100 Index©, effective Dec. 30, 1999. The Company also effectuated its domestication as a U.S. corporation under the laws of the State of Delaware.
The Company significantly expanded its electronic program guide activities this past year through the following: entering into a joint venture with THOMSON multimedia for the introduction of two-way-wireless-paging-based interactive televisions in North America; entering into a licensing agreement with America Online for the deployment of AOL TV EPGs; entering into a long-term license agreement with Americast for providing Gemstar's EPG in its digital services; entering into a long-term licensing agreement with ATI Technologies, the world's largest supplier of 3-D graphics and multimedia technology, for the incorporation of Gemstar's EPG technology into ATI's line of PC-TV tuner cards; and the acquisition of Electronic TV Host, a Web-based, on-line EPG service.
The Company also announced an agreement with THOMSON multimedia to launch the Gemstar EPG in Thomson televisions across Europe beginning in 2001, and an agreement with Axel Springer to collaborate over broadcasts of subscription-free EPG services to consumers throughout Germany.
In the past year, the Company received a key patent covering the concept of displaying advertisements in EPGs. The Company's subsidiary, StarSight Telecast Inc., won the first phase of a contract arbitration against Motorola pertaining to the deployment of EPGs on General Instrument analog cable set top boxes.
The next phase of the arbitration, which will focus on satellite boxes and digital cable boxes, is expected to take place later this year. The Company through its subsidiary, StarSight Telecast, also filed a patent infringement suit against TiVo Inc. for its deployment and marketing of personalized video recorder devices containing an unlicensed interactive program guide.
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. Shareholders of both companies approved the merger at their respective shareholder meetings held in March 2000. The transaction is pending government approval.
In January 2000, the Company announced its plan to enter the electronic book business through the acquisition of the two leading eBook companies, NuvoMedia and SoftBook Press. The Company also announced a long-term license agreement and strategic alliance with THOMSON multimedia to market popularly priced, dedicated electronic books and to expand the existing eBook service offerings.
Under this agreement, Thomson will ship millions of eBook devices per annum, with the first next-generation units to be introduced to the U.S. market later this year.
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, American Online (AOL), Americast, Cox, Daewoo, Funai, GTE, Hitachi, Hughes Network Systems, JVC, LG Electronics (Goldstar), Matsushita (Panasonic, Quasar), Microsoft Corporation, Mitsubishi, Orion, Philips (Magnavox, Philips), Quadravision, Samsung, Sanyo, Sharp, Shintom, Sony, Southern New England Telephone, THOMSON multimedia (GE, Proscan, RCA, Thomson), Toshiba, Uniden, U S WEST and Zenith.
Gemstar has more than 90 issued U.S. patents in the general area of audio-visual technologies with over 1,900 claims, and over 90 issued foreign patents. The Company continues to pursue a worldwide patent-prosecution program and has more than 115 pending U.S. patent applications and more than 320 pending foreign patent applications.
Gemstar is a leading provider of electronic program guide services, which allow a user 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, the United Kingdom, continental Europe, Japan, Southeast Asia, Australia, New Zealand, South America and South Africa.
Gemstar recently announced its entry into the electronic book (``eBook'') business through the acquisition of the two leading eBook companies, NuvoMedia and SoftBook Press. Gemstar's eBook technology has been licensed to THOMSON multimedia, manufacturer and marketer of the RCA, GE and PROSCAN-brand home electronics products in North America.
Gemstar currently has agreements with all of the major book publishers including Random House, Simon & Schuster, Penguin Putnam, Time Warner Trade Publishing, HarperCollins and St. Martin's Press; major electronic book sellers including barnesandnoble.com and Powell's Books; major newspapers including The New York Times, The Wall Street Journal and The Washingon Post; and major consumer magazines including Time, Newsweek, Fortune, Forbes, Esquire, Fast Company and Industry Standard.
Gemstar's Rocket eBook and SoftBook Reader are the only two dedicated electronic reading devices currently available to consumers on the market.
Except for historical information contained herein, the matters discussed in this news release contain forward-looking statements that 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.
GEMSTAR INTERNATIONAL GROUP LIMITED
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Three months ended Year ended
March 31, March 31,
2000 1999 2000 1999
Revenues $ 83,993 $ 55,077 $241,439 $168,166
Operating costs and
expenses:
Selling and marketing 14,473 11,833 58,930 38,821
Research and development 6,533 5,725 24,273 21,648
General and administrative 7,614 6,843 31,416 24,248
Nonrecurring expenses 15,895 0 15,895 1,851
Operating income 39,478 30,676 110,925 81,598
Other income, net 3,840 2,427 13,688 8,736
Income before income taxes 43,318 33,103 124,613 90,334
Income taxes 15,987 10,893 43,296 30,189
Net income $ 27,331 $ 22,210 $ 81,317 $ 60,145
Basic earnings per share $ 0.13 $ 0.11 $ 0.40 $ 0.30
Diluted earnings per share $ 0.11 $ 0.09 $ 0.33 $ 0.26
Weighted average
shares outstanding 207,020 200,886 205,635 198,568
Weighted average
shares outstanding,
assuming dilution 252,611 233,946 247,876 229,182
Note: All historical financial information has been restated to
include NuvoMedia Inc. and SoftBook Press Inc.
SUMMARY BALANCE SHEET DATA
(unaudited)
(In thousands)
March 31, March 31,
2000 1999
Cash and cash equivalents $237,046 $185,723
Marketable securities 112,868 33,713
Total assets 467,171 256,979
Total liabilities 81,514 71,819
Net shareholders' equity 385,657 185,160
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Contact:
Gemstar International Group Limited
Elsie Leung/Linda Lloyd da Silva, 626/792-5700 |
