Genesis Microchip And Meridian Audio Announce Strategic Alliance; Companies Enter Licensing Agreement To Promote Faroudja Brand And Video Processing Worldwide

30-Jun-05

GenesisÆ Microchip Inc. and Meridian Audio Limited announced that the two companies have entered into a strategic licensing agreement that gives Meridian the right to promote Genesis' Faroudja technologies, products and brand on a worldwide basis. The agreement authorizes Meridian to integrate, manufacture and distribute home theater solutions under the Faroudja brand as part of Meridian's audio/video product portfolio, using Genesis Microchip's most advanced Faroudja video technologies. These products will be available effective immediately through Meridian and its global distribution network. Genesis Microchip will cease the manufacture and distribution of Faroudja home theater solutions, but will continue to develop advanced video processing algorithms in cooperation with Meridian for its Faroudja-based products. ""Faroudja is at the forefront of video technology. Combining their video processing algorithms with Meridian's own award-winning audio technologies presents an ideal strategy of offering extremely high-quality home theater solutions to the worldwide market,"" said Robert Stuart, Meridian chairman, co-founder and technical director. ""We are pleased to bring our audio/video expertise, manufacturing and marketing capabilities to bear on developing this renowned brand internationally. In addition to promoting the existing Faroudja product line, we will create new products in collaboration with Genesis that will complement our already advanced optical disc player technology."" ""This agreement enables Genesis Microchip to sharpen its focus on our core competency of developing advanced video processing algorithms for our IC customers,"" said Anders Frisk, executive vice president of Genesis Microchip. ""At the same time, it expands Faroudja's global branding presence in the high-end consumer electronics market via Meridian's worldwide distribution network. Consumers looking for best-of-class audio and video quality in their home theater installations will appreciate this technological match."" Genesis recorded Faroudja-related revenue of $4.9 million for the year ended March 31, 2005, which represented approximately 2% of the total revenue recorded for the year. Genesis expects to record a charge of less than $500,000 related to severance payments to employees and other transaction-related costs in the quarter ended June 30, 2005. The future impact of this transaction on quarterly GAAP earnings per share is expected to be immaterial.

Read More: