Brilliant Digital Entertainment Reports Second Quarter 2004 Results.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- Brilliant Digital Entertainment, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :BDEI BDEI Biodiversity and Ecosystem Informatics (workshop) ), the leading provider of secure digital media via peer-to-peer From user to user. Peer-to-peer implies that either side can initiate a session and has equal responsibility. Peer-to-peer is a somewhat confusing term, because it has always been contrasted to a central system that initiates and controls everything. technology, today reported results for the second quarter ended June June: see month. 30, 2004. Brilliant Digital reported net revenues for the second quarter ended June 30, 2004 increased 31% to $2,215,000 from $1,694,000 in the comparable second quarter of 2003. The company reported a net loss of ($2,198,000), or ($0.05) per share, for the second quarter ended June 30, 2004, compared to net income of $883,000, or $0.01 per share for the second quarter of 2003. For the six month period ended June 30, 2004, Brilliant Digital reported a net loss of ($2,552,000) or ($0.06) per share, compared to a net loss of ($53,000) or ($0.00) per share for the six month period ended June 30, 2003. Loss from operations was ($191,000) for the second quarter ended June 30, 2004, compared with a loss of ($459,000) for the comparable period in the previous year and ($115,000) for the six month period ended June 30, 2004, compared with ($949,000) for the comparable period in 2003. "We continue to build the size of our catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. through our focus on acquiring quality, digital content for distribution. We believe our efforts in this area, together with revenue from our search agreement with The Excite Network and patent license agreement with Sharman Networks Sharman Networks is a company headquartered in Australia and incorporated in Vanuatu. It owns the rights to the KaZaA file sharing software. It was created for this purpose in 2001 when the original owners of KaZaA were sued in the Netherlands. , will continue to provide a stable base from which the future growth of Brilliant Digital will develop," 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. , 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. is the parent company of Altnet Inc. and a developer of advertising, transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. and content creation technologies for the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Find out more at http://www.brilliantdigital.com. About Altnet Altnet provides content owners a secure platform to sell their files and rewards consumers with easy access to legal content. Through its TopSearch preferred search listings, Altnet reaches an estimated 70 million users and is the #1 issuer of rights managed content in the world. Altnet technology inter-operates with affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. websites and peer-to-peer applications to allow Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f to simply and easily locate, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , sample, and purchase digital content. Software, game, music and film companies distribute with Altnet to generate new revenue streams while curbing piracy piracy, robbery committed or attempted on the high seas. It is distinguished from privateering in that the pirate holds no commission from and receives the protection of no nation but usually attacks vessels of all nations. . Altnet is a subsidiary of Brilliant Digital Entertainment. Find out more at http://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 projections, events or performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Act of 1934, as amended. Actual results may differ materially due to a variety of factors, including 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 X512 or rgore@bde3d.com.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
June 30,
2004
------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 509
Restricted cash 75
Accounts receivable, net 2,048
Debt Issuance Costs 1,913
Note Receivable 60
Other assets, net 152
-----------
Total current assets 4,757
Property, plant and equipment, net 118
License Rights 1,396
-----------
Total assets $ 6,271
===========
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable 836
Accrued expenses, related parties 2,872
Accrued expenses 594
Guaranteed minimum payments, related party 360
Deferred revenue 111
Secured convertible promissory notes, including
accrued interest 4,133
-----------
Total current liabilities 8,906
Other long term liabilities 142
Long-term Guaranteed Minimum Payments, related party 390
-----------
Total liabilities 9,438
Stockholders' deficit:
Common stock 47
Additional paid-in capital 69,703
Accumulated deficit (72,999)
Unrealized gain on marketable securities and
foreign exchange transactions 82
-----------
Total stockholders' deficit (3,167)
-----------
Total liabilities and stockholders' deficit $ 6,271
===========
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
2003 2004 2003 2004
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Marketing services $ 564 $ 1,588 $ 564 $ 3,428
Licensing and other
services 724 523 890 1,065
Distribution and
technology from
related
party 229 - 458 -
Digital content 177 104 368 229
---------- ---------- ---------- ----------
Total revenues 1,694 2,215 2,280 4,722
Costs and expenses:
Costs of revenues 229 265 289 589
Sales and marketing 308 286 397 664
General and
administrative 1,458 1,731 2,183 3,331
Research and
development 123 116 307 231
Depreciation and
amortization 35 8 53 22
---------- ---------- ---------- ----------
2,153 2,406 3,229 4,837
---------- ---------- ---------- ----------
Income (loss) from
operations (459) (191) (949) (115)
Other income
(expense):
Other Income 2,097 2 2,097 4
Loss on write off of
deferred fees (206) - (206) -
Interest expense (549) (2,009) (995) (2,441)
---------- ----------- ---------- ----------
Total other income
(expense) 1,342 (2,007) 896 (2,437)
---------- ---------- ---------- ----------
Net income (loss) 883 (2,198) (53) (2,552)
Unrealized Gain
Marketable Securities -- 31 -
Foreign currency
translation
adjustment (net of
tax effects) -- 15 -- 82
---------- ---------- ---------- ----------
Comprehensive income
(loss) $ 883 (2,183) (22) (2,470)
========== ========== ========== ==========
Basic and fully-
diluted net income
(loss) per share $ 0.01 $ (0.05) $ -- $ (0.06)
========== ========== ========== ==========
Weighted average
number of shares used
in computing basic
and fully-diluted net
income (loss) per
share 97,425 42,857 35,596 42,601
========== ========== ========== ==========
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