Diverse Product Lines Help Brighten Tech Firm's Future.DESPITE the continued financial instability plaguing the Internet sector, there are indications that a small Woodland Hills-based Internet content producer may finally be heading toward profitability. And that's bringing some life back to the badly pummeled shares of Brilliant Digital Entertainment Inc. Brilliant's stock price, trading last week at about $1.75 a share, is slowly creeping up from its 52-week low of 62 cents in December, after closing as high as $14.93 last March. The company went public in November 1996 at $5 a share. "What we saw last year and early this year was technology companies get hammered on Wall Street," said Catherine Skelly Skel´ly v. i. 1. To squint. n. 1. A squint. , an analyst with Gruntal & Co. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . "Even those companies that have a better business model got beaten up." Skelly said that Brilliant's solid business plan allows it to earn revenues from the licensing of its software, as well as by selling advertising. "It's always better to have multiple revenue streams," she said. "The advertising market may have contracted, but there is still a need for content. It's a very effective business model." Founded in 1996, Brilliant develops and distributes five-to-10-minute programs for the Internet. Known as Multipath Movies, they include "Xena Warrior Princess The concept of warrior princesses is relatively new in fiction but it became increasingly popular with the feminist movement's successes in female empowerment, gradually pushing the stereotype of a "damsel in distress" to the background. " and "Ace Ventura Pet Detective" and are available through the company's Web site (www.brilliantdigital.com). The company also distributes its Brilliant Banner software, which is used to create television-like commercials for the Internet, rather than mere banner ads that sit passively at the top of a Web page. 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. , the company's president, attributed the decline in the company's stock price to Brilliant's concentration on product development rather than on promoting itself to Wall Street. "This quarter we will begin to produce tangible results that will have investors following our company," he said. "We have started the momentum where revenues will lead to profits within a 12-month period." Brilliant Digital reported a net loss of $4.3 million (29 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) for the third quarter ended Sept. 30, compared to a net loss of $2.8 million (23 cents a share) in the year-earlier period. Third-quarter revenues increased to $477,000 from $299,000 in the third quarter of 1999. The company expects to release its fourth-quarter and year-end earnings for 2000 in March. Bermeister said the near doubling of revenues reflects increased 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 licensing of its proprietary "b3d" animation software, which enables the creation and presentation of interactive streaming 3-D Web programming. The net loss reflects the ongoing investment in research and development, content development and increased tradeshow-related expenses. "I'm optimistic that the company will turn a profit," said Lou Mazzucahelli, an analyst with Girard, Clauer, Mattison & Co. in New York. "The company is tuning up its organization and, with a plausible business model, if they get some breaks, it can succeed." Last month, Brilliant Digital introduced Brilliant Banner, which it is touting as a rich-media solution to declining ad click-through rates. Rich media uses or combines video, voice, data and other elements, such as animation, over the Internet to create an enhanced user experience. The company hopes this technology will prove to be an alternative to traditional online advertising banners. The first Brilliant Banner ad campaign has been purchased by Infogrames Inc., an entertainment software company, to support the release of its upcoming game titles. Online ad agencies have also agreed to sell Brilliant Banners to their clients. John Bowen John Bowen is the name of:
"It's a very clever approach," said Mazzucahelli. "There are a lot of Web users who are used to seeing 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. . The trick is to make these ads more compelling." Brilliant Digital spokesman Anthony Newman Anthony Newman (born November 21, 1965 in Bellingham, Washington) is a retired defensive back for the NFL. Newman played for the Los Angeles Rams from 1988-1994, New Orleans Saints from 1995-1997, and the Oakland Raiders from 1998-1999. said the first advertising campaign by Infogrames is scheduled to begin within a couple of weeks. The company's Digital Projector See data projector. software allows Internet users to view three-dimensional animated content, with current offerings including Superman cartoons, rap music rap music or hip-hop, genre originating in the mid-1970s among black and Hispanic performers in New York City, at first associated with an athletic style of dancing, known as breakdancing. videos and advertising. Mazzucahelli said the company's online rap music videos have solid profit potential. "Once the music business sees this stuff, they will find it to be a great way to expose new artists to a large audience," he said.
Brilliant Digital Entertainment Inc.
Stock Prices
YEAR (Dec. 31) 1999 1998
Revenue $730,000 $431,000
Operating Expenses (millions) 10.5 8.9
Operating Loss (millions) (10.7) (9.9)
Net Loss (millions) (10.6) (9.4)
Loss Per Share (diluted) ($0.94) ($1.00)
Quarterly Net Loss (millions) SUMMARY Business: Internet entertainment content provider Headquarters: Woodland Hills 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. : Mark Dyne Market Cap: $28.6 million Dividend Yield: N/A [*] Total Liabilities: $6.8 million P/E Ratio P/E ratio Current stock price divided by trailing annual earnings per share or expected annual earnings per share. Assume XYZ Co. sells for $25.50 per share and has earned $2.55 per share this year; $25.50 = 10 times $2.55. XYZ stock sells for ten times earnings. : N/A [*] Long-Term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. : $98,800 (*.) Brilliant Digital Entertainment does not pay dividends and has not reported any earnings to date. |
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