Brilliant Digital Entertainment Reports Second Quarter 2002 Results.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Aug. 15, 2002 Company Focuses Effort on More Profitable Revenue Streams From Advertising and Secure Peer-to-Peer Search and Distribution Brilliant Digital Entertainment, Inc. (AMEX AMEX See: American Stock Exchange :BDE See Borland Database Engine. ), a developer and distributor of rich media advertising technologies and, through its Altnet subsidiary, secure peer-to-peer solutions, today reported net revenues for the second quarter ended June 30, 2002 declined 42% to $375,000 from $652,000 in the comparable second quarter of 2001. Brilliant Digital reported a net loss of ($2,084,000), or ($0.09) per share, for the second quarter ended June 30, 2002, compared to a net loss of ($1,219,000), or ($0.08) per share for the second quarter of 2001. The 2002 quarter loss was impacted by non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of approximately $1,519,000. The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , excluding the operations of The Auction Channel, was ($2,084,000), or ($0.09) per share, for the second quarter ended June 30, 2002, compared to a loss of ($1,703,000), or ($0.11) per share for the second quarter of 2001. "The drop in revenues from the comparative second quarter of 2001 can be attributed to our move away from the production of character based Refers to the use of fixed size fonts or to using text commands, all of which are in contrast to a graphical interface (graphics based). See text based. 3D animation and animated music videos, to our continuing focus on sales of advertising campaigns and content distribution services offered through Altnet's secure peer-to-peer network (1) A network of computers configured to allow certain files and folders to be shared with everyone or with selected users. Peer-to-peer networks are quite common in small offices that do not use a dedicated file server. . We believe our focus in these areas offers us significantly higher revenue potential and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: compared with animation production," said Kevin Bermeister Kevin Bermeister has developed substantial businesses in the computers, video games and multimedia industries. He established Ozisoft in 1982, based in Sydney, Australia, which was one of the first interactive multimedia companies. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Brilliant Digital Entertainment. About Brilliant Digital Entertainment Brilliant Digital Entertainment, Inc. (AMEX:BDE) is a developer of 3D rich media advertising and content creation technologies for the Internet. It licenses its ad serving technology to the content and advertising communities. The b3d Studio toolset is targeted for use by studios, production houses, web content suppliers and advertising agencies. Brilliant also licenses its Brilliant Banner ad A graphic image used on Web sites to advertise a product or service. Banner ads come in numerous sizes, but are often rectangles 460 pixels wide by 60 pixels high. Also 460 x 55 and 392 x 72 sizes are commonly used. serving technology to the web based Coming from a Web server. See Web application. advertising industry. Find out more at www.brilliantdigital.com. For further information, please contact Robin Gore at 818/615-1500 X528 or rgore@bde3d.com. About Altnet Altnet is the industry's first secure, opt-in, peer-to-peer network created to promote and distribute secure content and cost-effectively perform distributed processing The first term used to describe the distribution of multiple computers throughout an organization in contrast to a centralized system. It started with the first minicomputers. Today, distributed processing is called "distributed computing." See also client/server. and storage functions for the enterprise and consumer markets. Altnet is a subsidiary of Brilliant Digital Entertainment. Find out more at www.altnet.com. Information about 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. Statements in this news release that relate to (i) Brilliant's future cost-cutting initiatives, (ii) sales of Brilliant Banner advertising Banner Advertising A common form of advertising on the internet. The banner is an advertisement of 460x68 pixels, usually placed at the top of the page Notes: For an example, just look at the top of a page on almost any popular web site. , (iii) development of Altnet's peer-to-peer network, (iv) revenue potential and operating margins on sales from advertising campaigns and content distribution services, and (v) other 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, including (a) our ability to raise additional funding, (b) consumer and advertiser demand for Brilliant Banners, (c) Brilliant's ability to continue to distribute its digital projector See data projector. pursuant to third party agreements, (d) the release of competing technology, (e) the market for Internet advertising Delivering ads to Internet users via Web sites, e-mail, ad-supported software and Internet-enabled cellphones. Also called an "ad network," Internet advertising organizations act as a middleman between the advertiser and the Web sites and software publishers that display the ads. , and (f) those factors set forth in Brilliant's most recently filed Form 10-KSB and Form 10-QSB reports which are available from Brilliant Digital Entertainment's Investor Relations Investor relations The process by which the corporation communicates with its investors. department and may be obtained by calling or writing to Robin Gore, at 818/615-1500 X528 or rgore@bde3d.com.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited, in thousands)
June 30,
2002
Assets
Cash and cash equivalents $ 330
Accounts receivable, net 213
Other current assets 180
Total current assets 723
Other assets 506
Total assets $ 1,229
Liabilities and stockholders' equity
Current liabilities $ 952
Deferred revenue 3,014
Long term debt 1,067
Capital financing, net of discount 1,979
Other long-term liabilities 59
Total liabilities 7,071
Total stockholders' deficit (5,842)
Total liabilities and stockholders' deficit $ 1,229
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
3 months 3 months 6 months 6 months
ended ended ended ended
6/30/01 6/30/02 6/30/01 6/30/02
(unaudited)(unaudited)(unaudited)(unaudited)
Revenue:
Total revenues $ 652 $ 375 $ 1,042 $ 668
Cost of revenues and
expenses:
Cost of revenues 384 39 417 91
Sales & marketing 223 103 520 125
Website development 20 97 87 97
General and
administrative 1,416 1,251 2,423 1,808
Research and development 299 46 909 136
Depreciation and
amortization 58 14 178 31
Total cost of revenues
and expenses 2,400 1,550 4,534 2,288
Income (loss) from
operations (1,748) (1,175) (3,492) (1,620)
Other income (expense):
Export market development
grant -- -- 31 --
Other income (expense) 45 (909) 84 (1,775)
Total other income
(expense) 45 (909) 115 (1,775)
Loss from continuing
operations (1,703) (2,084) (3,377) (3,395)
Gain (loss) from
discontinued operations 484 -- 23 --
Net loss before income
taxes (1,219) (2,084) (3,354) (3,395)
Provision for income
taxes (0) (0) (0) (0)
Net (loss) $ (1,219) $ (2,084) $ (3,354) $ (3,395)
Comprehensive income
(loss) $ (1,237) $ (2,072) $ (3,434) $ (3,387)
Basic and diluted net
loss per share on
continued operations (0.11) (0.09) (0.21) (0.16)
Basic and diluted net
loss per share on
discontinued operations 0.03 -- (0.00) --
Basic and diluted net
loss per share $ (0.08) $ (0.09) $ (0.21) $ (0.16)
Common shares used in
computing basic (loss)
per share 16,054 24,317 16,054 21,197
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