Press Releases
SONICblue Reports Year Over Year Revenue Growth of More Than 80 Percent
Substantial Year over Year Revenue Growth, Continued Reduction of Operating Expenses, Results Meet Expectations
SANTA CLARA, Calif., - July 31, 2002 - SONICblue™ Incorporated (Nasdaq: SBLU) reported second quarter results led by strong demand for its video product line and its continued ability to reduce operating expenses. Net revenue for the quarter was $61.7 million representing a year-over-year increase of more than 80 percent in like kind businesses.
The Company achieved a second quarter gross margin of 21.0 percent, up from 18.2 percent in the first quarter, and reduced pro forma operating expenses to $18.1 million from $18.8 million in the first quarter.
SONICblue reported a pro forma second quarter operating loss of $5.1 million, or ($0.05) per share, meeting consensus estimates. This compares with a pro forma first quarter operating loss of $7.0 million, or ($0.07) per share (excluding a $1.0 million legal charge in the first quarter of 2002 relating to the announced securities litigation settlement). Pro forma operating results reflect the reported loss from operations less restructuring and impairment charges, in-process research and development and amortization of goodwill, intangibles and deferred compensation. The Company’s actual net loss for the second quarter was $23.5 million or ($0.24) per share. This compares with a net loss of $312.5 million or ($3.88) per share for the second quarter of 2001.
“Our second quarter results are in line with analysts’ expectations and we are pleased with our continued improvements,” said Ken Potashner, chairman and CEO, SONICblue. “The expansion of our product offerings, distribution channels, and sales in the second quarter, has laid a foundation for the second half of the year.”
“This quarter’s results demonstrate our ability to execute while continuing strong revenue momentum and cost reductions,” said Marcus Smith, interim chief financial officer, SONICblue. “We experienced sharper than expected price declines in the DVD/VCR pricing this quarter. This was offset by the favorable outcome of negotiations with one of our key suppliers relative to outstanding obligations, resulting in $4.8 million in margin contributions this quarter. Although overall economic conditions and market challenges continue to create future uncertainty, we remain optimistic that we can gain efficiencies that will result in improvements to our business metrics.”
The Company ended the quarter with approximately 105 million shares of UMC, with a market value of approximately $125 million, based on the closing price of UMC shares on the Taiwan Stock Exchange and the prevailing U.S. dollar to New Taiwan Dollar exchange rate on June 30, 2002. These numbers exclude the 15% share dividend the Company will receive in August 2002.
Growing demand for SONICblue’s products led the Company to expand its manufacturing partnership with LG Electronics to keep pace with the heavy demand. These additional outside resources enabled SONICblue to meet demand from existing customers for the Go-Video branded Dual-Deck? DVD/VCR players, and to expand sales to additional national and regional retailers interested in selling these products. In addition, the Company launched its first venture with the Coca-Cola Company, the COKE® Brand SP50C CD/MP3. This product allowed SONICblue to explore new distribution channels for its technology and is expected to serve as a key promotional item in forthcoming Coca-Cola brand campaigns.
SONICblue also launched the ReplayTV™ 4500 series, with retailers including Good Guys, Amazon, The Wiz and Tweeter. The next generation of the Company’s award-winning ReplayTV 4000 design, the ReplayTV 4500 series maintains the innovative features of the ReplayTV 4000, while adding modem support for standard phone line connections, a redesigned software package and a service-based pricing model.
View the SONICblue Q2 2002 Condensed Consolidated Balance Sheets in Microsoft Excel format.
About SONICblue Incorporated (www.SONICblue.com) SONICblue is a leader in the converging Internet, digital media, entertainment and consumer electronics markets. Working with partners that include some of the biggest brands in consumer electronics, SONICblue creates and markets products that let consumers enjoy all the benefits of a digital home and connected lifestyle. SONICblue holds significant financial assets, global marketing capabilities and a focused technology portfolio that includes Rio® digital audio players; ReplayTV® personal television technology and software solutions; and Go-Video® integrated DVD+VCRs, Dual-Deck™ VCRs, and digital home theater systems.
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FOR MORE INFORMATION:
Press Contact:
Amanda Sanyal
SONICblue
(408) 588-8060
asanyal@sonicblue.com
Investor Relations:
Ian Shea
SONICblue
(408) 588-8242
ir@sonicblue.com
Except for the historical information contained herein, the matters set forth in this press release, including statements as to growing demand for the Company’s products, expected introductions of and release and shipment dates for new products and services and their expected features and benefits to consumers, the Company’s ability to reduce operating expenses, gain efficiencies and maintain strong revenue momentum, expected benefits of cost reduction efforts, the Company’s expectations regarding the second half of 2002, the Company’s future prospects, and the expected promotional position of the COKE® Brand SP50C CD/MP3, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the Company’s ability to implement its business plan and reduce expenses, including supplier costs, the impact of competitive products and pricing and of alternative technological advances, manufacturing difficulties, fluctuations in consumer demand due to economic developments and uncertainties, and other risks detailed from time to time in the SEC reports of SONICblue Incorporated, including its annual report on Form 10-K for the period ended December 31, 2001 and its quarterly report on Form 10-Q for the quarter ended March 31, 2002. These forward-looking statements speak only as of the date hereof. SONICblue disclaims any obligation to update these forward-looking statements. SONICblue and Dual-Deck are trademarks of SONICblue Incorporated. ReplayTV, Go-Video and Rio are registered trademarks of SONICblue Incorporated. All other products and brand names as they appear in this release are trademarks or registered trademarks of their respective holders. |
