Brilliant Digital Entertainment Reports Second Quarter Results; Packard Bell NEC Commences Domestic Shipments of PCs Bundled with Brilliant Digital's Multipath Movies.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Aug. 3, 1998--Brilliant(TM) Digital Entertainment, Inc. (AMEX AMEX See: American Stock Exchange :BDE See Borland Database Engine. ; http://www.bde3d.com) today announced results for the second quarter and six months ended June June: see month. 30, 1998. Separately, Brilliant Digital announced today that Packard Bell NEC (Packard Bell, The Netherlands, www.packardbell.com) A major PC manufacturer that is the consumer brand of NEC Computers International and the home computing market leader in the U.K. and much of Western Europe. has commenced shipments to U.S. retailers of multimedia PCs bundled with four Multipath(TM) Movies. The shipments are pursuant to bundling agreements for up to six million computers. The Company plans to release its 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 Digital Projector See data projector. as well as its Internet pay-to-view system in the fall in conjunction with its planned October October: see month. Multipath Movies product launch. In anticipation of the release of the new Internet See Web 2.0 and Internet2. Digital Projector the Company has written off amounts incurred during the second quarter in the production of Multipath Movies developed to be viewed on the new projector. Primarily as a result of the expensing of these production costs as well as costs associated with the Company's sales and marketing efforts, Brilliant Digital reported a second quarter net loss of $(2,758,000), or $(0.29) per share, compared with a net loss of $(765,000), or $(0.11) per share, for the same period a year ago. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the planned product launch, Brilliant Digital did not generate any retail revenue in the second quarter of 1998 and expects only limited product revenues in the third quarter of 1998. Net revenues for the second quarter of 1997 were $248,000. For the first six months of 1998, Brilliant Digital reported a net loss of $(4,049,000), or $(0.43) per share, compared with a net loss of $(1,759,000), or $(0.24) per share, for the same period a year ago. Net revenues for the first six months of 1998 were $32,000, compared to $322,000 in the comparable year-ago period. During the second quarter, the Company completed production of six Multipath Movie episodes, increasing to ten the library of Multipath Movies. In addition, Brilliant Digital announced recently the launch of its newly upgraded Multipath Movie pay-to-view entertainment system to 150,000 subscribers of GeoCities, a leading Web community, as well as the launch of the CompuServe Multipath Movie Forum which offers CompuServe members Multipath Movies over the Internet. As part of its planned move into the broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). and mid-band arena, Brilliant also recently announced a trial with British Telecom The telephone and communications carrier that provides services in Great Britain and Northern Ireland. It used to be a division of the British Post Office, but was privatized in 1984 under Margaret Thatcher's administration. in the United Kingdom. Mark Dyne Mark Dyne is a merchant banker based in Los Angeles. He is the Chairman and CEO of Europlay Capital Advisors. Mr. Dyne's career as a merchant banker dates back to around the year 2000. , Chairman 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, commented, "To date in 1998, BDE has focused and made substantial progress on technology developments, Multipath Movie production and the expansion of our base of strategic and distribution relationships. In particular, the development of our new Internet Digital Projector and Internet `pay-to-view' technologies represent key components of our Internet distribution strategy. We are also beginning to benefit from strategically important distribution relationships with CompuServe and Packard Bell NEC. These relationships should serve to significantly expand awareness and usage of Multipath Movies in coming quarters. "With the rapid evolution of the Internet as a broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased consumer medium, we see increasing opportunities to further build awareness, trial and repeat usage of our interactive entertainment products through development partnerships with demographically appropriate high-traffic web sites and with major players in the broadband and narrowband In communications, transmission rates up to T1 speeds (1.544 Mbps). The upper limit is moving target. At one time, narrowband meant 150 bps (that is 150 bits per second!). Then, the upper limit became 2,400 bps. Later, it moved to 64 Kbps. Contrast with wideband and broadband. marketplace. Such relationships will generally incorporate a revenue sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. structure for the partner and are a leading priority of our marketing efforts. To meet this market opportunity, our Digital Projector and Internet distribution technologies have been redesigned to improve their performance and to cover the full spectrum of Internet connections, from narrow-band, low-speed connections to broadband, high-speed connections." Brilliant Digital Entertainment is the creator and producer of a unique new generation of interactive digital entertainment called Multipath Movies. Multipath Movies utilize Brilliant's proprietary software tools to produce three-dimensional, digitally animated stories, each with many user-influenced plot alternatives that lead to multiple, distinct conclusions. Multipath Movies, which combine the interactivity of computer software with the plot and character development of feature films and television, are currently distributed over the Internet and on CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). . They can also be produced in non-interactive form for distribution on television and home video. Forward-Looking Statement 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. Disclosure With the exception of the historical information, the matters discussed above include 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. Forward-looking statements set forth above include those statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc (i) the Company's expectation of revenues in the third quarter of 1998, (ii) the Company's strategic focus on online revenues, including the adoption of the new Digital Projector and Internet distribution technology, (iii) Brilliant's plans for a broad product launch, supported by a promotional and marketing campaign, in October 1998, in time for the holiday shopping season, and (iv) the Company's plans to enter into development partnerships with demographically appropriate high-traffic web sites which are expected to generally incorporate a revenue sharing structure. Actual results may differ materially due to a variety of factors. The ability of Brilliant to achieve its expectations expressed in all forward looking statements is subject to risks and uncertainties, many of which are beyond the control of Brilliant. For example, successful roll-out of Brilliant's Internet distribution channel through Packard Bell NEC, and approvals of commercial release of Multipath Movies featuring licensed characters are subject to decisions made by other parties to agreements with Brilliant and to technical issues not related to the Company's products that may defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. distribution schedules for the computers and other products with which bundled Multipath Movies are distributed. Information about other important risks and uncertainties is contained in the Company'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. If some or all of the expectations set forth in these forward looking statements are not achieved, the business of Brilliant could be materially adversely effected. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any statement is based.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)
June 30,
1998
Assets
Current assets:
Cash and cash equivalents $ 7,419
Accounts receivable, net 1,967
Inventory 106
Other assets 142
Total current assets 9,634
Property, plant and equipment, net 928
Movie Software costs 1,496
Other assets 369
Total assets $ 12,427
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
expenses $ 1,651
Total current liabilities 1,651
Stockholders' equity:
Common Stock 9
Additional paid-in capital 21,269
Accumulated deficit (10,311)
Cumulative translation adjustment (191)
Total stockholders' equity 10,776
Total liabilities and stockholders'
equity $ 12,427
-0-
BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
3 months 3 months 6 months 6 months
ended ended ended ended
6/30/98 6/30/97 6/30/98 6/30/97
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Total revenues $ 1 $ 248 $ 32 $ 322
Cost of revenues
and expenses:
Cost of revenues 80 10 346 17
Sales & marketing 670 142 991 205
General and
administrative 720 459 1,228 999
Research and
development 1,314 572 1,651 1,060
Depreciation 112 66 132 117
Total cost of revenues
and Expenses 2,896 1,249 4,348 2,398
Income (loss)
from operations (2,895) (1,001) (4,316) (2,076)
Other income(expense):
Export market
development grant 32 154 33 155
Gain (loss) on
foreign exchange 2 5 (6) (5)
Interest income
(expense), net 116 78 256 169
Total other income
(expense) 150 237 283 319
Income (loss) before
income taxes (2,745) (764) (4,033) (1,757)
Provision for
income taxes (13) (1) (16) (2)
Net income (loss) $ (2,758) $ (765) $(4,049) $(1,759)
Basic and diluted net
income (loss)
per share $ (0.29) $ (0.11) $ (0.43) $ (0.24)
Common shares used
in computing income
(loss) per share 9,400 7,200 9,400 7,200
CONTACT: Brilliant Digital Entertainment Mark Dyne, Chairman and CEO Michael Ozen, Chief Financial Officer 818/615-1500 or info@bde3d.com or Jaffoni & Collins Incorporated David Collins, Vicki Siegel 212/835-8500 or bde@jcir.com |
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