12th Feb 2008 07:01
Arc International PLC12 February 2008 Media Contact: Investor Contact:Lee Garvin Flanagin Juliet ClarkeARC International Financial Dynamics+1 408 437 3433 +44 20 7831 [email protected] [email protected] Platinum Record and 2008 CES Showcase Award Winning Provider of Sound Enhancement Technology SAN JOSE, Calif., and ST. ALBANS, England, February 12, 2008 - ARCInternational (LSE: ARK) today announced that it has acquired Sonic Focus, Inc.,a privately held U.S. company located in Northern California. Sonic Focusprovides award winning audio enhancement technology that already has achieveddesign wins in a number of desktop PCs and laptops, and currently is designedinto a wide range of consumer electronics products. Sonic Focus's productsrecreate studio quality audio when audio fidelity has been degraded due todigital compression. Sonic Focus's products are widely considered to have themost robust audio solutions for music enthusiasts, and bring natural surroundsound to digitally compressed stereo files. See companion announcement releasedtoday, February 12, 2008 from Sonic Focus about the integration of the twocompanies' products. Together with technologies from previous acquisitions, Sonic Focus's audioenhancement software builds on ARC's ability to bring higher quality audio andvideo solutions to companies throughout the consumer electronics value chain.This strategy was outlined at the recently held ConfigConTM Silicon Valleydeveloper conference where 1,000 people registered to listen to ARC and some ofits key partners, including Intel and Microsoft, talk about "Enabling theYouTube Generation." A highlight video is available at: www.youtube.com/watch?v=yW3rlIf0q9c For financial year 2007, Sonic Focus operations were breakeven withapproximately £600,000 ($1.2 million) in revenue. The acquisition is notexpected to negatively impact ARC's 2008 operating results. Sonic Focus has anestablished customer base of "Tier 1" OEMs globally and is gaining significanttraction in the audio post-processing market. Carl Schlachte, president and CEO of ARC International, said, "The acquisitionof Sonic Focus enhances ARC's strategy of increasing its customer base andrevenues by delivering one of the highest value elements of an audio enableddevice - sound enhancement software. Sonic Focus's established revenue streamand growing customer list of leading consumer OEMs will complement ARC'sfinancial and product goals." Tom Paddock, president and CEO of Sonic Focus, said, "The combination of SonicFocus and ARC will offer new, more powerful solutions to OEMs and theirsemiconductor suppliers worldwide. Furthermore, this combination will expandour reach to a broader range of embedded consumer devices thereby bringing therevolution of better music fidelity to a greater number of consumers." Mr.Paddock will join ARC as the Vice President of Audio Systems. The consideration for the acquisition is £3.3 million ($6.5 million), of which£750,000 ($1.5 million) will be paid in ARC International ordinary shares overtwo and a half years based upon achievement of certain milestones. The cashelement will be paid from existing cash balances. After the transaction, ARC'scash balances are £18.7 million ($37 million). Sonic Focus had gross assets ofapproximately £93,000 ($185,000) and generated profits of £42,000 ($83,160) forthe year ended September 30, 2007. These results were unaudited as there is norequirement for such audit of a privately held company in the U.S. To satisfy the equity element of the consideration, application will be made tothe UK Listing Authority and the London Stock Exchange for approximately2,738,000 ordinary shares of 0.1p each to be admitted to trading on the LondonStock Exchange prior to their issuance. The ARC shares will be issued 15 and 30months after closing. The number of shares to be issued was calculated withreference to ARC's 10 day average closing share price prior to the completion ofthe acquisition of Sonic Focus on February 11, 2007, and converted into U.S.dollars using the average interbank exchange rate over the same 10 day period. About Sonic Focus, Inc. Sonic Focus is a leader in digital audio enhancement technology. The company'sgoal is to bring music enthusiasts closer to the original performance with thehighest-quality audio experience possible. Sonic Focus began in the 1990's byworking with pioneering musicians to improve the quality of their live concertsbeing streamed via the Internet. Sonic Focus's artisans and engineers draw upondecades of close partnerships with music icons such as Jerry Garcia, Cher,George Winston, Will Ackerman, Carlos Santana, Grateful Dead, and Windham Hill.Their work also includes partnerships with media companies such as Clear ChannelCommunications and the Walt Disney Company. Additionally, Sonic Focus has anaudio mastering studio where products from OEM companies can be optimally tunedto achieve the maximum sound experience at price points for consumer products. Sonic Focus is working to spread the revolution of higher quality audio beyondPCs and laptops to devices such as MP3 players, cell phones, in-car audio andhome theater systems. This is considered to be one of the hottest trends inconsumer electronics today. At the 2008 Consumer Electronics Show (CES) in LasVegas, Sonic Focus and its OEM customer Bel Canto won an award for their jointlybranded iPod docking station the "ULTRA-DOCK." Hailed as the "premier iPoddocking solution" for the consumer audiophile market, it converts ordinarydigital compressed stereo audio to theater-quality fidelity. A video interviewwith Sonic Focus's CEO Tom Paddock at CES is available at: http://www.youtube.com/watch?v=XWy__PfBJTQ Other jointly branded consumer products from Sonic Focus's OEM customers includeIntel's Audio Studio, which ships as a bundled software package with Intel(R)Desktop Boards. More information is provided at: www.intel.com/go/audiostudio Further Information on the Acquisition of Sonic Focus Slides providing additional overview of the acquisition are available on ARC'sWebsite at www.arc.com. On Tuesday, February 12, 2008 at 15:00 GMT, ARC willhold a conference call for investors and financial analysts. The conferencecall number is +44 1452 562 815 from the United Kingdom and +1 866 629 0054 fromthe United States. An audio replay of the call also will be made available from18:00 GMT starting the afternoon of February 12, 2008. To access the replay,dial +44 1452 550 000 from the United Kingdom or +1 866 247 4222 from the UnitedStates. The access code for the replay is 34931066. Additionally, furtherinformation about the acquisition as well as ARC's full year 2007 financialresults will be disclosed on February 20, 2008. A meeting will be held inLondon for analysts. Interested parties should contact Financial Dynamics orARC International for more information. # # # About ARC International plcARC International is the world leader in configurable multimedia subsystems andCPU/DSP processors. Used by over 140 companies worldwide, ARC's configurablesolutions enable the creation of highly differentiated system-on-chips (SoCs)that ship in hundreds of millions of devices annually. ARC's patentedsubsystems and cores are smaller, consume less power, and are less expensive tomanufacture than competing products. ARC International maintains a worldwide presence with corporate and research anddevelopment offices in California and St. Albans, UK. For more informationvisit www.ARC.com. ARC International is listed on the London Stock Exchange asARC International plc (LSE: ARK). ARC and the ARC logo are trademarks or registered trademarks of ARCInternational. All other brands or product names contained herein are theproperty of their respective owners. This press release may contain certain"forward-looking statements" that involve risks and uncertainties, including thedevelopment, implementation, and release of features described herein. Theseare at the sole discretion of ARC International. Licenses from 3rd parties forcertain software and essential patents may be required depending on licensee'suse/implementation. For other factors that could cause actual results to differ,visit the company's Website as well as the listing particulars filed with theUnited Kingdom Listing Authority and the Registrar of Companies in England andWales. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Arkle Res