Brillian Corp. Reports Second-Quarter Results.TEMPE, Ariz. -- Brillian Corp. (Nasdaq: BRLC), a designer and developer of rear-projection, high-definition televisions high-definition television (HDTV) Any system producing significantly greater picture resolution than that of the ordinary 525-line (625-line in Europe) television screen. Conventional television transmits signals in analog form. based on its proprietary liquid crystal on silicon Liquid crystal on silicon (LCOS or LCoS) is a "micro-projection" or "micro-display" technology typically applied in projection televisions. It is a reflective technology similar to DLP projectors; however, it uses liquid crystals instead of individual mirrors. (LCoS(TM)) microdisplays, today announced its financial results for the second quarter ended June June: see month. 30, 2005. For the quarter ended June 30, 2005, Brillian reported revenue of $1.0 million, down 11% from the year-ago quarter. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. revenue was $1.9 million, up 16% from the first half of 2004. Net loss for the quarter was $7.2 million, compared with a net loss of $4.8 million in the second quarter of 2004. Net loss for the first six months of 2005 was $12.5 million, compared with a net loss of $10.2 million for the first half of 2004. Net loss per share was $1.03 for the second quarter of 2005, compared with $0.78 for the second quarter of 2004. For the first six months of 2005, net loss per share was $1.78 compared with $1.77 for the first half of 2004. Results for the second quarter of 2005 include inventory write-offs of approximately $1.25 million in order to reduce inventory carrying amounts to the lower of cost or market lower of cost or market A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. . Also, Brillian implemented the provisions of Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 123(r) "Accounting for Stock Based Compensation" on April 1, 2005. The provisions of SFAS No. 123(r) require companies to measure the fair value of stock options and other equity-based compensation on the grant date and recognize this value as an expense over the requisite service period. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expense recorded in the second quarter of 2005 as a result of implementing SFAS No. 123(r) was $288,000. Brillian ended the quarter with cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $1.2 million, working capital of $5.1 million, stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $9.7 million, and $2.0 million of debt. Subsequent to June 30, 2005, Brillian issued $5.0 million face value of convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. and $2.075 million of senior secured debentures for total proceeds of $7.0 million. After considering placement agent commissions and offering expenses, net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to Brillian totaled approximately $6.3 million. Had this transaction been completed on June 30, 2005, Brillian would have ended the quarter with cash, cash equivalents and short-term investments of $7.5 million, working capital of $11.4 million, stockholders' equity of $15.8 million, and $2.9 million of debt. "This is a very significant period in Brillian's history," said Vincent F. Sollittor Jr., Brillian's president and chief executive officer. "While we are preparing our new light engine for volume production, preparing our 1080p television for introduction, and building our distribution channel nationwide, we are also preparing for our merger with Syntax syntax: see grammar. syntax Arrangement of words in sentences, clauses, and phrases, and the study of the formation of sentences and the relationship of their component parts. Groups Corp. We are currently preparing a joint proxy statement/prospectus with Syntax. This document, which will be filed with the Securities and Exchange Commission, will contain a description of Syntax's business and include their financial statements. At the same time, integration plans are under way between the two companies to prepare for the merger. With our financing activities successfully behind us, we can concentrate on getting back to building some of the best HDTV (High Definition TV) A set of digital television (DTV) standards that offer the highest resolution and sharpest picture. Although some HDTV sets are available in standard (rather square) screen sizes, the overwhelming majority of sets are wide screen, which eliminates products and technology in the industry." Business Outlook Brillian's efforts in the third quarter are focused on supplying our announced distribution partners with sufficient quantities of HDTVs to support their product roll-out schedule and simultaneously working with our contract manufacturer to ramp production of the Brillian light engine. We anticipate that our revenues for the third quarter will be in the range of $600,000 to $1.0 million with a net loss in the range of $6.5 million to $7.0 million. Our current outlook for the full year of 2005 is based on preliminary forecasts from current customers and anticipated production capacity. We currently anticipate full-year revenue in the range of $4.5 million to $5.5 million with a full-year net loss in the range of $24.5 million to $25.0 million. Brillian will host a conference call today, Aug. 4, to discuss its second-quarter financial results and future outlook. The conference call may include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The call will be webcast and is scheduled to begin at 5 p.m. Eastern time (2 p.m. Pacific). The live audio broadcast and replay of the conference call can be accessed on Brillian's Web site at www.brilliancorp.com under the Investor Relations Investor relations The process by which the corporation communicates with its investors. section. Brillian will maintain an audio replay of this conference call on its Web site through the third quarter of 2005. No other audio replay will be available. Brillian will present at the C.E. Unterberg, Towbin Equity Conference on Aug. 10, 2005, in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . About Brillian Corp. Brillian Corp. designs and develops rear-projection HDTVs targeted at retailers and end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. customers looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. breakthrough performance and image quality that sets a benchmark in HDTV price/performance. The company is the first and only provider of LCoS(TM) Gen II technology used in these products. In addition to its high-definition televisions, Brillian also offers a broad line of LCoS(TM) microdisplay A microminiaturized display, typically with a screen size less than two inches diagonal. They are used in rear-projection TVs and their data projector counterparts, in head mounted displays (HMDs) and in the viewfinders of digital cameras. products and subsystems that original equipment manufacturers (OEMs) integrate into proprietary HDTV products, multimedia projectors, and near-to-eye products such as monocular monocular /mon·oc·u·lar/ (mon-ok´u-ler) 1. pertaining to or having only one eye. 2. having only one eyepiece, as in a microscope. mo·noc·u·lar adj. 1. and binocular binocular, small optical instrument consisting of two similar telescopes mounted on a single frame so that separate images enter each of the viewer's eyes. As with a single telescope, distant objects appear magnified, but the binocular has the additional advantage headsets. Brillian's LCoS(TM) Gen I and LCoS(TM) Gen II microdisplay technologies address the market demand for a high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" display solution with high image fidelity, high-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it , and high contrast ratios. The company's Web site is www.brilliancorp.com. Brillian is a registered trademark and LCoS is a trademark of Brillian Corp. All other trademarks are the property of their respective owners. Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and Brillian intends that such forward-looking statements be subject to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. Such forward-looking statements include expectations regarding (i) the company's manufacturing and marketing plans; (ii) the future operating results of the company, including expectations regarding revenue, gross margin improvements, expenses, and losses for the third quarter of fiscal 2005 and for the entire 2005 fiscal year; and (iii) the proposed merger with Syntax Groups Corp. Brillian cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein. Such factors include (a) changes in markets for the company's products; (b) changes in the market for customer's products; (c) the failure of Brillian products to deliver commercially acceptable performance; (d) the ability of Brillian's management, individually or collectively, to guide the company in a successful manner; and (e) other risks as detailed in Brillian's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. .
BRILLIAN CORP.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ------------------
2005 2004 2005 2004
------- ------- -------- --------
Total net sales $ 1,006 $ 1,134 $ 1,864 $ 1,612
Costs and Expenses:
Cost of sales 4,007 2,653 7,159 5,037
Selling, general, and
administrative 1,195 1,107 2,191 2,193
Research and development 2,764 2,104 4,757 4,558
------- ------- -------- --------
7,966 5,864 14,107 11,788
------- ------- -------- --------
Operating loss (6,960) (4,730) (12,243) (10,716)
Other Income (Expense):
Loss on investment in start-up
company - (131) - (131)
Interest, net (251) 23 (221) 67
------- ------- -------- --------
Net Loss $(7,211) $(4,838) $(12,464) $(10,240)
======= ======= ======== ========
Loss per Common Share:
Basic and diluted $ (1.03) $ (0.78) $ (1.78) $ (1.77)
======= ======= ======== ========
Weighted Average Number of Common
Shares:
Basic and diluted 6,992 6,188 6,988 5,784
======= ======= ======== ========
BRILLIAN CORP.
CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
JUNE 30, DEC. 31,
2005 2004
------------ ------------
ASSETS
------
Current Assets:
Cash, cash equivalents and short-term
investments $ 1,172 $ 8,208
Accounts receivable, net 814 339
Inventories 6,103 5,400
Other current assets 535 368
------------ ------------
Total current assets 8,624 14,315
Property, plant and equipment, net 5,480 6,082
Other investments 1,119 1,119
------------ ------------
$ 15,223 $ 21,516
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 2,798 $ 1,230
Accrued compensation 183 216
Accrued liabilities 564 1,462
------------ ------------
Total current liabilities 3,545 2,908
------------ ------------
Long-term debt 1,973 -
Commitments and Contingencies
Stockholders' Equity:
Common stock 7 7
Additional paid-in capital 60,952 58,007
Deferred stock compensation - (616)
Accumulated deficit (51,254) (38,790)
------------ ------------
Total stockholders' equity 9,705 18,608
------------ ------------
$ 15,223 $ 21,516
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