Sonicblue Narrows Losses31 Jul, 2002 By: Hive News
Strong demand for video products and and lower operating expenses helped personal electronics maker Sonicblue Inc. to $61.7 million in net revenue for the quarter ended June 30, representing a year-over-year increase of more than 80 percent in like kind businesses, the company reported today.
Sonicblue achieved a second quarter gross margin of 21 percent, up from 18.2 percent in the first quarter, and reduced pro forma operating expenses to $18.1 million from $18.8 million in the first quarter.
"Our second quarter results are in line with analysts' expectations and we are pleased with our continued improvements," said Ken Potashner, Sonicblue chairman and CEO. "The expansion of our product offerings, distribution channels and sales in the second quarter has laid a foundation for the second half of the year."
Sonicblue reported a pro forma second quarter operating loss of $5.1 million, or $0.05 per share, meeting consensus estimates. This compares with a pro forma first quarter operating loss of $7.0 million, or ($0.07) per share (excluding a $1.0 million legal charge in the first quarter of 2002 relating to an announced securities litigation settlement).
Pro forma operating results reflect the reported loss from operations less restructuring and impairment charges, in-process research and development and amortization of goodwill, intangibles and deferred compensation. The company's actual net loss for the second quarter was $23.5 million or ($0.24) per share, compared with a net loss of $312.5 million or ($3.88) per share for the second quarter of 2001.
"This quarter's results demonstrate our ability to execute while continuing strong revenue momentum and cost reductions," said Marcus Smith, interim CFO, Sonicblue. "We experienced sharper than expected price declines in the DVD/VCR pricing this quarter. This was offset by the favorable outcome of negotiations with one of our key suppliers relative to outstanding obligations, resulting in $4.8 million in margin contributions this quarter. Although overall economic conditions and market challenges continue to create future uncertainty, we remain optimistic that we can gain efficiencies that will result in improvements to our business metrics."
Growing demand for its products led the company to expand its manufacturing partnership with LG Electronics to keep pace. The additional outside resources enabled Sonicblue to meet demand from existing customers for the Go-Video branded Dual-Deck DVD/VCR players and to expand sales to additional national and regional retailers interested in selling them.
In addition, the Company launched its first venture with the Coca-Cola Company, the COKE Brand SP50C CD/MP3. This product allowed Sonicblue to explore new distribution channels for its technology and is expected to serve as a key promotional item in forthcoming Coca-Cola brand campaigns.
Sonicblue also launched the ReplayTV 4500 series, with retailers including Good Guys, Amazon, The Wiz and Tweeter. The next generation of the company's award-winning ReplayTV 4000 design, the ReplayTV 4500 series maintains the innovative features of the ReplayTV 4000, while adding modem support for standard phone line connections, a redesigned software package and a service-based pricing model.
The company ended the quarter with approximately 105 million shares of UMC, with a market value of approximately $125 million, based on the closing price of UMC shares on the Taiwan Stock Exchange and the prevailing U.S. dollar to New Taiwan Dollar exchange rate June 30. The numbers exclude the 15 percent share dividend the company will receive in August.