First Quarter Earnings & a broadband distribution agreement with @Home Benelux, a European joint-venture of the @Home Network...
BUSINESS WIRE -May 12, 1999--Brilliant(TM) Digital Entertainment, Inc. (AMEX: BDE; multipathmovies.com), a leading interactive entertainment content and tools developer, announced results today for the first quarter ended March 31, 1999.
The Company also announced that it has entered into a broadband distribution agreement with @Home Benelux, a European joint-venture of the @Home Network (NASDAQ: ATHM), the leading provider of high-speed Internet services via the cable infrastructure. Under the agreement Brilliant will provide @Home Benelux with Multipath(TM) Movie previews and Webisodes(TM) under a revenue sharing arrangement. Separately, Brilliant announced today that it has completed a $4.3 million strategic equity private placement to media investors.
Brilliant's operating results continue to reflect ongoing investment in the development of its Internet capabilities, the production of Multipath Movie episodes/Webisodes, the continued enhancement of its proprietary software tools and Internet Digital Projector(TM) technology and the formation of new distribution and product development relationships. Results for the first quarter of 1999 reflect the expensing of Multipath Movie episode/Webisode production costs.
Brilliant Digital reported a first quarter net loss of $(1,890,000), or $(0.20) per share, compared with a net loss of $(1,267,000), or $(0.13) per share, for the same period a year ago. Net revenues for the first quarter of 1999 were $206,000, primarily reflecting retail sales of $152,000 of the Company's newest Multipath Movies to domestic retailers and $54,000 in technology revenues. Brilliant's CD-ROM products demonstrated the strongest retail response at mass-market retailers such as K-Mart and Wal-Mart and initial reorders have been received. Net revenues for the first quarter of 1998 were $31,000, reflecting retail sales of earlier-generation Multipath Movies in an initial market trial.
Commenting on the Company's progress, Kevin Bermeister, president, stated: "Our Internet strategy remains focused on reducing content file sizes, building awareness through traffic and usage of our content, as well as increasing the installed base of our Digital Projector technology. We see these goals as the strategic first steps toward positioning Brilliant for a range of Internet-based revenues, including revenues from the distribution and syndication of our content to Internet sites worldwide, Exposure for our content is being fueled by previously announced relationships including @Home, which launched Brilliant content on its @Home Showcase at the end of March, and we have reached an agreement to bring a comparable service to Europe through @Home Benelux.
"On the retail front, our CD-ROM products first reached stores in early January. The initial sales performance has been encouraging with reorders on certain titles and seems to validate our strategy and content production capabilities. DVD versions of our products will ship to the retail markets during the second half of 1999 pursuant to our SlingShot relationship and are expected to perform well in this rapidly growing format.
"Also on the content front, we had significant interest in the high resolution broadcast version of Gravity Angels at the recent international film convention, MIP, in Cannes. Our distributor is currently working to convert that interest into international broadcast clearances in the coming weeks and months, such as a recently concluded agreement for the Sun Movie Channel in Taiwan.
"I am pleased to report that the release of our tool suite, B3D Max, is generating very strong interest and endorsements by leading digital animators. Brilliant's tools provide a power platform for the production of interactive digital content, and our proprietary B3D format provides a very efficient storage and distribution format for digital content. Based on the response to-date to our 30-day free trial and other marketing initiatives, we are optimistic about revenue opportunities from this tool suite. We see the opportunity to develop a real-time digital animation standard, based on our technology, through the spawning of B3D animated content."
About Brilliant Digital Entertainment
Brilliant Digital Entertainment (http://www.multipathmovies.com) is the production studio and technology developer responsible for creating Multipath Movies, a new generation of 3-D digital entertainment to be distributed over the Internet, on CD-ROM and DVD, as television programming and for home video. Multipath Movies are developed using Brilliant's proprietary, technologically advanced software tools that produce three-dimensional, digitally animated stories, each with multiple user-influenced plot alternatives or paths that lead to a variety of distinct conclusions.
Brilliant Digital has formed alliances with DVD EXPRESS, Kesmai's GameStorm, @Home and SlingShot to distribute its Multipath Movies in varying venues including the Internet's World Wide Web, CD-ROM and DVD and has acquired the exclusive worldwide interactive rights to Bantam Doubleday Dell Books for Young Readers for the Choose Your Own Adventure series of interactive books. Brilliant has also signed content license agreements for the following properties: Ace Ventura (Morgan Creek Productions), the legendary rock band KISS, Popeye (King Features), Superman (DC Comics) and Xena (Universal Studios). The Company is headquartered in Los Angeles, CA with offices in Bondi Junction and Double Bay, Australia and Middlesex, England. Information about Forward Looking Statements
Statements in this news release that relate to future plans, financial results or projections, events or performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Actual results may differ materially due to a variety of factors. Forward looking statements include (i) Brilliant's stated expectation that DVD versions of its products will ship to the retail markets during the second half of 1999 pursuant to the SlingShot relationship and that such products are expected to perform well in this rapidly growing format, (ii) Brilliant's optimism about revenue opportunities from the B3D tool suite and Brilliant's expectation of the opportunity to develop a real-time digital animation standard, based on its technology, through the spawning of B3D animated content, and (iii) Brilliant's expectation that achievement of its Internet strategy goals will constitute the first step to positioning Brilliant for a range of Internet-based revenues, including revenues from the distribution and syndication of its content to Internet sites worldwide. Brilliant's ability to achieve the objectives included in these forward looking statements is subject to (i) the negotiation and/or implementation of distribution and marketing arrangements which are not certain of success, (ii) in the case of release of DVD versions of Brilliant's products, timely conversion of the products to DVD format by SlingShot and successful implementation by SlingShot of its marketing and distribution plans and consumer acceptance of such DVD versions, (iii) with respect to Internet distribution, overcoming consumer reluctance to initiate large downloads over currently prevalent low bandwidth Internet connections, and (iv) many other risks described in the Company's most recently filed Form 10-KSB report and 10-QSB. If Brilliant is unable to successfully implement its Internet strategies, timely release, market and distribute its new products, or if the products are not commercially successful, Brilliant's results will be materially adversely affected. Information about certain additional risk factors is contained in the Company's most recently filed Form 10-KSB report and 10-QSB report and are available from Brilliant Digital Entertainment's Investor Relations department and may be obtained by calling or writing to our investor relations company, Jaffoni & Collins at 212-835-8500 or bde@jcir.com.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)
March 31,
1999
Assets
Cash and cash equivalents $1,632
Other current assets 2,342
------
Total current assets 3,974
Other assets 1,601
------
Total assets $5,575
======
Liabilities and stockholders' equity
Current liabilities 1,584
Long-term liabilities 301
------
Total liabilities 1,885
Total stockholders' equity 3,690
======Total liabilities and stockholders' equity $5,575
======
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
3 months 3 months
ended ended
3/31/99 3/31/98
-------------- -------------
(unaudited) (unaudited)
Revenue:
Total revenues $ 206 $ 31
-------------- -------------
Cost of revenues and expenses:
Cost of revenues 205 266
Sales & marketing 222 305
General and administrative 619 524
Research and development 981 317
Depreciation 130 18
-------------- -------------
Total cost of revenues and expenses 2,157 1,430
-------------- -------------
Income (loss) from operations (1,951 ) (1,399 )
Other income (expense):
Gain (loss) on foreign exchange -- (8 )
Export market development grant 37 --
Interest income (expense), net 24 140
-------------- -------------
Total other income (expense) 61 132
-------------- -------------
Income (loss) before income taxes (1,890 ) (1,267 )
Provision for income taxes -- --
-------------- -------------
Net income (loss) $ (1,890 ) $ (1,267 )
============== =============Basic and diluted net income
(loss) per share $ (0.20 ) $ (0.13 )
============== =============Common shares used in computing
income (loss) per share 9,409 9,403
============== =============
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nmb/ny*
CONTACT: Brilliant Digital Entertainment, Los Angeles
Kevin Bermeister, President
Michael Ozen, Chief Financial Officer
818/615-1500
info@bde3d.com
or
Jaffoni & Collins Incorporated, New York
David C. Collins, 212/835-8500
bde@jcir.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: ENTERTAINMENT COMPUTERS/ELECTRONICS COMED
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