7th Feb 2005 07:00
Emblaze Ltd07 February 2005 Emblaze Ltd. Trading Statement Ra'anana, Israel, 7 February 2004: Emblaze Ltd (Emblaze or "the Group") (LSE:BLZ) provides an audited trading update for the 12 month period ended 31December 2004: Highlights • Revenues up over seven-fold to $45.1m and projecting more than doubling of revenues to $120m in 2005 • Moved to profit in H2 of 2004 with losses for the year halved to $23.2m and projecting profitability for the full year 2005 • Stopped cash burn with $345.3m in total assets and $1.5 increase in net cash • Strong business growth across all group business units Financials and Operations • Full year 2004 revenues increased to $45.1m (FY 2003: $6.5 million, net of revenues from discontinued operations) • Following reorganization steps and rise in telecom sector business, the Group has stopped its cash burn and generated net profit of $6.3m in the second half thus reducing the Group net loss for the full year to $23.2m (H1 2004 loss: $29.4m) and halved the loss from $46.0m in financial year 2003 • Strong balance sheet with $345.3m in total assets (FY 2003: $289.3m) • The Group confirms that it sees a continuation in profitability from the last two quarters and it expects to be profitable for the full year 2005 • Group restructured, streamed lined and positioned to take advantage of the expected upturn in the telecom sector - Emblaze Semiconductor was sold to Zoran Corporation; acquired a majority interest in Innostream, a Korean mobile phone manufacturer to substantially increase and secure production capacity for Emblaze Mobile handsets in order to meet demand for 2005 and beyond • Following the change in strategy, Emblaze Mobile sold 200,000 mobile handsets through channels in the far east, 50,000 better than first expected • Successful listing of Orca on AIM. Deals in India and Ireland together with successful subscriber benchmarking establishes it as a leading middleware player in the IPTV market • Merged Emblaze Transcoding with the Transcoding business of Philips to create Adamind, a global leader media adaptation software provider • Merged Emblaze Defence with Canadian Girit Projects Inc. and AVLogic Inc. to create Visual Defence Inc. as a global leader in visual security solutions over wireless and fixed IP networks Eli Reifman, Chief Executive Officer of Emblaze said: "The numbers speak forthemselves. The telecom downturn is over and we are now back in business. Iwant to thank my Investors, partners and board of directors for the long-termsupport and faith in our way through the difficult times. We remain optimisticas always and fully committed to the growth of our business and shareholders'value." Emblaze Mobile During 2004 the company has undergone re-focus of the business into newgeographies, customer profiles and channel strategy. Emblaze Mobile providesend-to-end server and handset solutions to global operators for the introductionof rich-media value added services over 2.5G and 3G networks. It's unique newbusiness model addresses directly the needs of the operators for ARPU-generatingdevices built around next generation applications, operators' requirements andspecific market segments. This approach provides operators specific added valueand higher ARPU per handset that in-turn enables Emblaze Mobile to sustainhealthy margins over time without going into "price wars" with competitors.Emblaze Mobile is a unique combination of Israeli and Korean technology, designand manufacturing with highly experienced European management. The company has achieved penetration in the Far East via distribution partnersand looking to penetrate predominantly European markets over the next year. In October 2004, Emblaze Mobile acquired a majority of the shares of a handsetdesign and manufacturing factory in Korea in order to secure production anddesign capacity for 2005 against growth in demand and the need for lower unitcosts. Laurence Alexander, the former UK Director of products at O2, wasrecruited to become CEO of Emblaze Mobile and expand the business into Europeand other regions. In parallel to the establishment of the company's clienteleand brand the division is anticipated to move into operational profitabilityduring next year. Orca Interactive Orca's provides a software solution that enables fixed-line telecom operators tooffer TV entertainment services such as broadcast TV, video-on-demand, games andother interactive services over telephone lines (xDSL, FTTH etc.). This markethas emerged as a consequence of cable operators moving into the telephonybusiness on top of TV and data/internet (all three services combined are calledthe "Triple Play") and thus taking away business and subscribers from thetelecom operators. The operators, that historically provide telephony and data/internet services now need to match their offer to the cable companies with afull triple play solution that includes TV services as well. Orca's products areeffectively the management software ("Middleware") of all the components in thesolution such as set-top boxes, video servers, billing, electronic programmingguide (EPG), xDSL modems, conditional access technologies etc. The company'ssolutions are embedded in the heart of the IPTV infrastructure and manage manythird party vendor components to provide a one comprehensive solution for TelcoIPTV. Orca works with numerous technology and IPTV component vendors and hasstrong alliances with top tier players in the filed such as HP, Nokia, Samsungand many others. 2004 was a significant year in the ongoing growth of Orca culminating in oursuccessful listing and fundraising in October. It was also the year that theIPTV market began to experience significant growth and, as one of the leadingproviders of middleware solutions to this market, we were well positioned tobenefit. Three new customers were won during the year, including one for which Orca actedas the prime contractor. This emphasizes the strong positioning of its productoffering and provides further evidence of the exciting and rapid growth in ourmarket place. Their partner programme has also continued to develop and includessome of the most high profile names in the industry. Adamind (formerly known as Emblaze Transcoding) In September 2004, the Group announced the merger of Emblaze Transcoding withPhilips Transcoding business unit (MP4NET Ltd.) to create Adamind at a 70/30holding structure respectively. Multimedia Messaging (MMS) is the natural evolution from SMS text messagingwhere you can send messages between mobile phones that include images, audio andvideo on top of text. SMS was an extremely successful service adopted byhundreds of millions of users worldwide generating billions of dollars inrevenue for the operators and increasing ARPU (Average Revenue Per User).Operators believe that MMS is the next revenue and ARPU driver for the next 10years. However, sending images or other media between mobile devices is not assimple technologically as establishing a voice call primarily because of lack ofinteroperability between the handsets. Different phones have different screens,different resolutions and support different media formats. This creates "misunderstanding" between the devices where the receiving device cannot displayan MMS message sent by another. The need rising from this conflict is for a sortof "translation" in the middle where a mechanism will intercept each and everyMMS message in mid-way and "convert" or "translate" it in a way that thereceiving phone will be able to "understand" and display the message. This type of a technology is named Transcoding or Media Adaptation and it has toreside at the heart of each and every MMSC (MMS center) to effectively enableMMS. Adamind is the global leader in Media Adaptation software with over 40%market share, over 80 commercial deployments with global operators and top tierMMSC vendors and OEM partners such as Ericsson, LogicaCMG and OpenWave. Visual Defence In January 2005, Emblaze Ltd. announced the merger of its defence wireless videodivision, Emblaze Defence, with Girit Projects Inc. and AVLogic Inc. ("Girit"),the security and surveillance divisions of Canadian based GiritHoldCo. By thecombination of the two complementary divisions, Visual Defence provides the nextgeneration in visual security solutions specialized in the convergence ofsecurity video systems from analog to digital platforms. Current projects include, among others, Toronto's and Zurich Internationalairports. Similar systems are being deployed at other major European and USpublic transport centres. Visual Defence has won multi-million dollar key tenders in European airports,Israeli Defence Forces and US Homeland Security for the management and provisionof secured video surveillance over wireless and fixed IP networks. The groupexpects further significant growth in this business over the year. Enquiries: Emblaze LtdDoron Cohen/Hagit Gal +972 9 7699831/339 Corfin CommunicationsHarry Chathli +44 20 7645 2990 Shared ValueAlex Dee +44 20 7321 5013 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BSD.L