Faroudja Inc. Announces Strong Growth In Home Theatre And Broadcast Sales
Faroudja, Inc. (NASDAQ: FDJA) has reported results of operations for the third quarter ended September 30, 1999. Revenues for the third quarter of 1999 were $3,856,000, a 28 percent increase over the third quarter of 1998 and a 17 percent increase over the prior quarter. For the third quarter of 1999 the Company reported net income of $23,000, or $.00 per share, on 12.5 million diluted shares. For the third quarter of 1998 Faroudja posted revenues of $3,005,000 and net loss of $1,821,000 or $.15 per share on 12.2 million diluted shares. As of September 30,1999 the Company's balance sheet showed cash and cash equivalent balances of $19,063,000 with net assets of $24,610,000. The balance sheet reflects the Company's $2.9 million investment in Sage, Inc. stock and deferred revenue of $2.4 million relating to Sage stock received as consideration for the Company's license of technology to Sage. The Company expects to complete all material technology transfer and joint development obligations under its license and joint development agreement with Sage in the fourth quarter and recognize the deferred revenue at that time. ""Our financial results in the third quarter were significantly better than results over the past several quarters in terms of revenue growth, improved gross margins and income,"" said Glenn W. Marschel, Jr., President and CEO. ""Revenue growth came from continuing improvement in our Home Theatre business and a significant increase in Broadcast product sales. ""New products introduced into our home theatre line in the second quarter, the DVP2200 and DVP3000 digital video processor/scalers, continue to perform well. We believe that the market for these products, as well as our market share, is growing. ""Sales of our Digital Format Translatorô (DFT) upconverter products almost doubled over the second quarter. DFTs were shipped to station groups that had previously purchased DFTs and to some new station groups. If the pattern of follow-on orders from these new station groups is consistent with our experience with existing customers, we will be very pleased. ""Our strategy for developing and marketing highly integrated, high performance integrated circuit (IC) solutions for the emerging digital video display and computer/television convergence markets is on track. Our results reflect the second shipment of FLI 9000 video processing chip sets to Mitsubishi Electric Corporation (Japan). Development of our next generation chip set continues and preliminary discussions with potential customers are very encouraging. ""Last week we announced the Company's entry into a letter of intent for the merger of FOCUS Enhancements, Inc., a provider of video conversion products for the PC/TV convergence market, into Faroudja (see October 7 Todayís News). We continue with plans to complete a definitive merger agreement with FOCUS by Thanksgiving, subject to satisfactory completion of due diligence. A larger, growing, combined company will benefit from many economies of scale. With consolidation and cost reductions, it is expected that the transaction will be accretive in the first year. The combined company presents exciting possibilities for short and long term financial performance. A more complete product line, access to new markets and distribution channels and opportunities for cross-fertilizing the companies' technologies are expected to result in a much stronger Faroudja, from marketing, distribution, technology and financial perspectives,"" concluded Mr. Marschel. Faroudja, Inc (NASDAQ: FDJA) is a world leader in high performance video processing technologies for markets requiring superior image quality solutions. The company provides innovative products for the HDTV broadcast, home theatre, digital television and PC/TV convergence markets. Faroudja's technologies are protected by more than 60 patents. Faroudja has received numerous awards, including an Emmy award for Engineering Development and a Lifetime Achievement Emmy presented in June 1998 to its founder, Yves Faroudja.