DIGITAL VIDEO SYSTEMS FINALIZES JOINT VENTURE FOR DVD AND VIDEO CD MANUFACTURING FACILITY IN CHINA
Business Wire via Dow Jones
SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 4, 1997--Digital Video Systems,
Inc. (DVS) (Nasdaq:DVID), a developer and manufacturer of Video CD products and
Digital Versatile Disc (DVD) products, has entered into a joint venture
arrangement with Panyu Tian Le Electrical Appliance Manufacturing Co, Ltd. of
Guangdong Province, China. Panyu is a developer and manufacturer of digital and
home electronics. The joint venture provides DVS with a manufacturing facility
in China to produce Video CD players and DVD players for worldwide distribution,
and provides the opportunity for low cost production options necessary to
compete in Asian and world markets.
DVS has contributed cash to the joint venture and has committed to contribute
additional working capital, while Panyu contributed substantially all of its
assets, including a 200,000 square foot manufacturing facility and 500
employees. Panyu revenues totaled approximately $16 million in 1996. In
addition, Panyu has contributed a backlog of orders for over 100,000 units,
totaling approximately $14 million.
Tom Parkinson, president and COO of Digital Video Systems said, "Panyu's
established distribution and OEM channels uniquely position us to develop large
OEM manufacturing opportunities for Video CD and DVD in mainland China." He
adds, "Our CEO, Dr. Sun, introduced the first Video CD's to China in October of
1993, and his prestige throughout Asia is expected to continue to drive sales."
The Company believes that the Video CD market in China is growing rapidly. An
estimated eight million Video CD units were sold in 1996, and the Company
believes that this number could double this year.
Dr. Edmund Sun, the founder and CEO of DVS, stated, "In addition to creating
additional market share in the China Video CD market, the Panyu facility also
provides a low cost, competitive solution for manufacturing our DVD players for
worldwide distribution."
DVS plans to introduce its DVD players by the end of the year.
The joint venture, "Panyu DVS Electrical Appliances Manufacturing Co., Ltd.,"
will be owned DVS (51%) and Panyu (49%).
DVS develops and markets Video CD players, including subassemblies and
components, DVD products, Video on Demand network products, Kiosk products, and
MPEG encoding and authoring products for entertainment, business, and
educational uses. Established in 1992, DVS is a publicly held company based in
Santa Clara, California, with branch offices in Taipei, Tokyo, and Hong Kong.
This release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of 1995
that involve various risks and uncertainties, including, without limitation,
statements with respect to the joint venture's ability to produce Video CD
players and DVD players for worldwide distribution and to compete in Asian and
world markets, the joint venture's ability to successfully collect its backlog
of orders, the growth of the Video CD market in China, and the timing of the
introduction of DVS's own DVD players. The Company's actual results may differ
materially from those described in those forward-looking statements due to a
number of factors, including, but not limited to risks of competition in the
Video CD and DVD markets and the enforceability of patents and other
intellectual property rights, risks relating to the development and market
acceptance of products of DVS, and risks relating to the planned rapid growth of
the business of DVS and the conduct business by DVS in foreign countries, which
factors and others described in documents that DVS files from time to time with
the Securities and Exchange Commission, including its Current Report on Form 8-K
dated January 7, 1997. |
