The rest of the story:
Thursday May 21, 7:04 am Eastern Time
Company Press Release
Nimbus CD International Reports Fiscal 1998 Fourth
Quarter and Year End Financial Results
CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--May 21, 1998--Nimbus CD International,
Inc. (Nasdaq:NMBS - news) today reported financial results for the fourth quarter and twelve
months ended March 31, 1998.
Net sales for the fourth quarter of fiscal 1998 were $30.1 million as compared to $28.5 million
reported in the fourth quarter of fiscal 1997. Net income for the quarter increased to $2.6 million, or
$0.11 per diluted share, versus a net loss of $1.9 million, or a loss of $0.08 per diluted share,
reported in the fourth quarter of fiscal 1997. Before accounting for the one-time provision for the
closing of Nimbus' Sunnyvale, CA. facility, net income for the fourth quarter of fiscal 1997 was $1.8
million, or $0.08 per diluted share.
Net sales for fiscal 1998 increased to $132.3 million versus $129.5 million reported in fiscal 1997.
Net income for fiscal 1998 was $13.8 million, or $0.60 per diluted share, as compared to net
income of $9.2 million, or $0.40 per diluted share for last fiscal year, after accounting for the
Sunnyvale closing.
Mr. Lyndon J. Faulkner, Chairman and Chief Executive Officer, commented, ''We are pleased with
the 44.4% growth in earnings in the fourth quarter. DVD unit sales have continued to increase in
each consecutive quarter since we initiated commercial production in March 1997. Nimbus sold 1
million DVD discs in the fourth fiscal quarter of 1998, bringing the total units sold for the first full
year of DVD production to 2.2 million discs. For the year, we continued to experience growth in
CD-ROM unit sales, which increased 24.5% from last fiscal year. The UK CD-ROM market, with
unit sales increasing 63.7% for the year, was exceptionally strong, while company-wide CD-audio
disc sales for the year increased 5.9%.''
Mr. Faulkner continued, ''It is anticipated that 1,000 DVD titles will be available by June 1998.
Consumers purchased approximately 200,000 DVD players in the U.S. in 1997. By comparison,
sales of VCRs took two years to reach this level of market penetration when this medium was
introduced in 1975. The number of DVD players shipped by manufacturers during 1997 was nearly
10 times the 35,000 CD players sold in 1983, the first year that the CD format was available to
consumers. As the movie industry continues to accelerate its DVD release schedules, Nimbus
expects that it will become a significant provider of DVD products to a number of the most
prominent names in the movie industry. Nimbus currently is the leading supplier of DVD product to
Buena Vista Home Entertainment (Disney), and produces DVD discs for a number of major and
independent studios.''
Mr. Faulkner added, ''Nimbus also recently signed a five-year agreement with Digital Video
Express, LP, to replicate what the companies estimate could exceed 150 million Divx discs over the
term of the contract. The number of units anticipated to be produced per year are scheduled to
increase over the term of the agreement. The actual number of discs produced will depend upon the
ongoing growth of Divx in the consumer marketplace. In the first year alone, the Company
anticipates that its Divx production volumes could be as large as for open DVD. We are delighted to
be the first of only a few suppliers in our industry to be selected to bring this exciting new disc format
to market. Divx uses a unique encryption technology to create discs which can be used either on a
pay per use or an unlimited play basis. Unlike the VHS rental market where a single tape is rented
multiple times, the Divx retail market will require one disc for each transaction. As a result, the
Company anticipates that Divx requirements will increase the overall demand for discs.''
Mr. Faulkner continued, ''In fiscal 1998, we established a series of formal relationships with
Microsoft Corporation [Nasdaq:MSFT - news]. Nimbus has been designated as an Authorized
Replicator of Microsoft products, qualified to supply complete CD-ROM software manufacturing
services for major PC manufacturers who are licensed to bundle Microsoft product. In addition,
Nimbus is currently the only Microsoft Authorized Replicator for DVD-ROM products for the
North American OEM market. Also, our 3dcd, L.L.C. joint venture with Applied Holographics,
plc, signed an agreement to license the Security Band application of its 3-D id(TM) holographic
technology to Microsoft on an exclusive worldwide basis. We believe that these important
relationships with Microsoft will place us in a strong position to manufacture product directly for
Microsoft, as well as be a supplier of Microsoft product to the OEM business sector.''
Mr. Faulkner concluded, ''In order to maximize the many opportunities we anticipate from these
significant business relationships, the Company recently announced a $22 million investment in plant
upgrades and facility expansion. The investment, which will be funded through operating cash flow,
will nearly double Nimbus' worldwide DVD capacity to 28 million discs, as well as enhance DVD
mastering and packaging capability. In addition, we have committed capital to expand our
Luxembourg facility to meet expected demand for CD products and further support its role as a key
supplier in the Microsoft Authorized Stamper Program.''
Nimbus is one of the world's leading independent manufacturers of optical discs distributed
throughout North America, the United Kingdom and continental Europe. The Company is at the
forefront of optical disc manufacturing technologies and provides complete DVD, software, and
audio production services. |
