-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KwnSlBhX/e1aH6fE96ifbECxcmG/1AiP0ercrgW7qxms1zGASI5K67u2TQW070m+ zzxYKnv4JYiZ+J3rJuKmBA== 0001157523-06-010771.txt : 20061102 0001157523-06-010771.hdr.sgml : 20061102 20061102160533 ACCESSION NUMBER: 0001157523-06-010771 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061102 DATE AS OF CHANGE: 20061102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNTAX-BRILLIAN CORP CENTRAL INDEX KEY: 0001232229 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 050567906 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50289 FILM NUMBER: 061182795 BUSINESS ADDRESS: STREET 1: 1600 NORTH DESERT DRIVE CITY: TEMPE STATE: AZ ZIP: 85281-1230 BUSINESS PHONE: 6023898888 MAIL ADDRESS: STREET 1: 1600 NORTH DESERT DRIVE CITY: TEMPE STATE: AZ ZIP: 85281-1230 FORMER COMPANY: FORMER CONFORMED NAME: BRILLIAN CORP DATE OF NAME CHANGE: 20030512 8-K 1 a5265150.txt SYNTAX-BRILLIAN CORPORATION 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 November 2, 2006 ------------------------------------------------------------- Date of Report (Date of earliest event reported) SYNTAX-BRILLIAN CORPORATION ------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 000-50289 05-0567906 - ------------------------------ ------------------------ ------------------- (State or Other (Commission File Number) (IRS Employer Jurisdiction of Incorporation) Identification No.) 1600 N. DESERT DRIVE TEMPE, ARIZONA 85281 --------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (602) 389-8888 --------------------------------------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. The registrant is furnishing this Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a press release released on November 2, 2006. The information in this Report on Form 8-K (including the exhibit) is furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. The registrant does not have, and expressly disclaims, any obligation to release publicly any updates or any changes in the registrant's expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based. The text included with this Report is available on the registrant's website located at www.syntaxbrillian.com, although the registrant reserves the right to discontinue that availability at any time. Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Shell Company Transactions. Not applicable. (d) Exhibits. Exhibit Number ------ 99.1 Press release from Syntax-Brillian Corporation, dated November 2, 2006, entitled "Syntax-Brillian Corporation Reports Record Revenue and Earnings for its First Fiscal Quarter Ended September 30, 2006" SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SYNTAX-BRILLIAN CORPORATION Date: November 2, 2006 By: /s/ Wayne A. Pratt ---------------------------------------- Wayne A. Pratt Executive Vice President and Chief Financial Officer 2 EXHIBIT INDEX 99.1 Press release from Syntax-Brillian Corporation, dated November 2, 2006, entitled "Syntax-Brillian Corporation Reports Record Revenue and Earnings for its First Fiscal Quarter Ended September 30, 2006" EX-99.1 2 a5265150ex99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 Syntax-Brillian Corporation Reports Record Revenue and Earnings for Its First Fiscal Quarter Ended September 30, 2006 Unit Shipment Volume Reaches All Time High, Gross Margins Improve 595bp Over June Quarter, and Profitability is Reached TEMPE, Ariz.--(BUSINESS WIRE)--Nov. 2, 2006--Syntax-Brillian Corporation (Nasdaq:BRLC), a manufacturer and marketer of LCD and LCoS(TM) HDTVs and digital entertainment products, today announced its financial results for its first fiscal quarter ended September 30, 2006. For the quarter ended September 30, 2006, Syntax-Brillian reported record revenue of $87.0 million, up 218% from the year-ago quarter. Net income in accordance with U.S. generally accepted accounting principles, or GAAP, for the first quarter of fiscal 2007 was $3.8 million compared with net loss of $658,000 for the first quarter of fiscal 2006. Diluted net income per share was $0.07 for the first quarter of fiscal 2007 compared with diluted net loss per share of $0.02 for the first quarter of fiscal 2006. Results for the first quarter of fiscal 2007 include non-cash compensation charges of $481,000 related to employee stock options, depreciation and amortization expense of $1.0 million, and non-cash interest expense of $2.5 million. Adjusted EBITDA (a) for the first quarter of fiscal 2007 was $8.5 million compared with $1.9 million for the first quarter of fiscal 2006. The merger of Syntax Groups Corporation and Brillian Corporation was completed on November 30, 2005. As such, the results of operations for the quarter ended September 30, 2005 did not include the operations conducted by Brillian. Syntax-Brillian ended the quarter with cash, cash equivalents, and short-term investments of $8.3 million, working capital of $28.1 million, stockholders' equity of $70.7 million, and $12.2 million of long-term debt and redeemable convertible preferred stock, net of discount, including current portion. "We are very pleased with the company's performance as we continue to execute to our plan," said Vincent F. Sollitto, Jr., Chairman and CEO of Syntax-Brillian. "Our technology, product, manufacturing, marketing, and distribution activities are beginning to bear fruit as we complete our first year as Syntax-Brillian. The strategic partnerships we have forged this year put us in an excellent position as we enter what promises to be the most exciting quarter in the company's history," he continued. Highlights for the quarter ended September 30, 2006 The highlights and accomplishments for the quarter ended September 30, 2006 include the following: -- Record quarterly revenue of $87.0 million, a 218% increase year over year. -- All-time record unit shipment volume of approximately 144,000 units represented an increase of 327% year over year. -- Improved gross margins in the LCD segment to 20.92% from 18.55% in the prior quarter. -- Improved overall gross margins to 18.13% from 12.18% in the previous quarter. -- Achieved Adjusted EBITDA and GAAP profitability for the first time since the merger of Syntax and Brillian. -- Began nationwide television marketing campaign on ESPN. -- Added 8 new retailers and 7 new distributor/installers to the company's sales channels. Business Outlook Syntax-Brillian also provided the following business outlook for its second quarter of fiscal 2007, ending December 31, 2006, and for the full fiscal year ending June 30, 2007. For the quarter ending December 31, 2006, Syntax-Brillian anticipates revenue, excluding the operations of Vivitar, to be in the range of $160 million to $170 million, predominately from sales of LCD TVs, on shipment volumes of 290,000 to 310,000 units. The quarter ending December 31, 2006 will also include approximately two months of revenue from the acquired operations of Vivitar. Consolidated revenue, including the operations of Vivitar is anticipated to be in the range of $178 million to $190 million with consolidated gross margins in the range of 15% to 17%. For the full fiscal year ending June 30, 2007, Syntax-Brillian anticipates revenue, excluding the operations of Vivitar, to be in the range of $490 million to $520 million. Consolidated revenue, including Vivitar, is expected to be in the range of $565 million to $605 million with consolidated gross margins in the range of 16% to 18%. Syntax-Brillian will host a conference call today, November 2, to discuss its first fiscal quarter financial results and future outlook. The conference call may include forward-looking statements. The call will be Web cast and is scheduled to begin at 4:30 p.m. Eastern time (1:30 p.m. Pacific). The live audio broadcast and replay of the conference call can be accessed on Syntax-Brillian's Web site at www.syntaxbrillian.com under the Investor Relations section. Syntax-Brillian will maintain an audio replay of this conference call on its Web site through December 31, 2006. No other audio replay will be available. About Syntax-Brillian Corporation Syntax-Brillian (www.syntaxbrillian.com) is one of the world's leading manufacturers and marketers of LCD and LCoS(TM) HDTVs and digital entertainment products. The company's lead products include its Olevia (www.olevia.com) brand of widescreen HDTV-ready LCD TVs -- one of the fastest growing global TV brands -- and its next generation Gen II LCoS(TM) 720p and 1080p rear-projection HDTVs for the high-end video/audio market. Syntax-Brillian's global supply chain, Asian operations, and North American sales channels position the company as a market leader in consumer and high-end HDTV and digital entertainment products. Brillian, UltraContrast, and LCoS are trademarks or registered trademarks of Syntax-Brillian Corporation. All other trademarks are the property of their respective owners. Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and Syntax-Brillian intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include expectations regarding the future operating results of the company, including expectations regarding revenue and shipment volumes for the second quarter ending December 31, 2006 and the full fiscal year ending June 30, 2007. Syntax-Brillian cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein. Such factors include (i) changes in markets for the company's products; (ii) changes in the market for customer's products; (iii) the failure of the company's products to deliver commercially acceptable performance; (iv) the ability of the company's management, individually or collectively, to guide the company in a successful manner; and (v) other risks as detailed in Syntax-Brillian's annual report on Form 10-K for the year ended June 30, 2006. SYNTAX-BRILLIAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) Three Months Ended September 30, ------------------- 2006 2005 --------- -------- Total net sales $ 87,020 $ 27,357 Cost of Sales 71,244 21,739 --------- -------- Gross profit 15,776 5,618 Operating expenses: Selling, distribution, and marketing 3,131 937 General and administrative 4,206 5,126 Research and development 1,401 - --------- -------- Total operating expenses 8,738 6,063 --------- -------- Operating income (loss) 7,038 (445) Interest and other, net (3,230) (292) --------- -------- Net income (loss) before income taxes 3,808 (737) Income tax benefit - 79 --------- -------- Net income (loss) $ 3,808 $ (658) ========= ======== Net loss per common share: Basic $ 0.08 $ (0.02) ========= ======== Diluted $ 0.07 $ (0.02) ========= ======== Weighted Average Number of Common Shares: Basic 49,172 30,462 ========= ======== Diluted 54,775 30,462 ========= ======== SYNTAX-BRILLIAN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, June 30, 2006 2006 ------------- -------- ASSETS (unaudited) - ----------------------------------------------- Current Assets: Cash and cash equivalents $ 8,266 $ 7,375 Accounts receivable and due from factor, net 76,862 50,829 Inventories 40,704 13,151 Deferred income taxes, current portion 2,666 2,666 Tooling deposit 15,294 - Other current assets 1,131 6,437 ------------- -------- Total current assets 144,923 80,458 Property, plant and equipment, net 16,173 16,703 Deferred income taxes, non-current portion - - Intangible assets, net 25,974 20,737 Goodwill 6,990 6,990 Other assets 1,134 1,461 Investments 1,020 1,307 ------------- -------- $ 196,214 $127,656 ============= ======== LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------- Current Liabilities: Amounts payable under credit facility $ 32,800 $ 30,800 Notes payable 650 650 Current portion of redeemable, convertible preferred stock 6,165 3,432 Accounts payable 60,137 3,924 Accrued rebates payable 1,186 4,043 Deferred warranty revenue 8,992 4,551 Income taxes payable 96 96 Accrued liabilities 6,803 5,540 ------------- -------- Total current liabilities 116,829 53,036 ------------- -------- Long-term debt, net of discount 3,974 3,758 Redeemable convertible preferred stock, net of discount 2,055 3,432 Deferred income taxes 2,628 2,628 Commitments and Contingencies Stockholders' Equity: Common stock 50 49 Additional paid-in capital 86,606 84,489 Accumulated deficit (15,928) (19,736) ------------- -------- Total stockholders' equity 70,728 64,802 ------------- -------- $ 196,214 $127,656 ============= ======== (a) Use of Non-GAAP Financial Measures In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Syntax-Brillian provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). Recent legislative and regulatory changes discourage the use of and emphasis on non-GAAP financial metrics and require companies to explain why non-GAAP financial metrics are relevant to management and investors. The company believes that the inclusion of these non-GAAP financial measures in this press release helps investors to gain a meaningful understanding of our future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts. The company uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring its core operating performance and comparing such performance to that of prior periods. This measure is also used by the company in its financial and operating decision-making. Syntax-Brillian defines "Adjusted EBITDA" as net income before interest, taxes, depreciation, amortization, and equity-related compensation. Syntax-Brillian considers Adjusted EBITDA to be an important indicator of the company's operational strength and performance of its business and a good measure of its historical operating trends. Adjusted EBITDA should be considered in addition to, not as a substitute for, the company's operating income and net income, as well as other measures of financial performance reported in accordance with GAAP. Reconciliation of Non-GAAP Financial Measures In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the company is presenting the most directly comparable GAAP financial measure and reconciling the non-GAAP financial measure to the comparable GAAP measure. SYNTAX-BRILLIAN CORPORATION RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (unaudited) (in thousands) Three Months Ended September 30, ------------------- 2006 2005 -------- --------- Net income (loss) $ 3,808 $ (658) Income tax expense (benefit) - (79) Interest, net 3,230 292 Depreciation and amortization 1,017 89 Equity-related compensation 481 2,228 -------- --------- Adjusted EBITDA $ 8,536 $ 1,872 ======== ========= CONTACT: Syntax-Brillian Corporation Wayne Pratt Executive Vice President, Chief Financial Officer 602-389-8797 wayne.pratt@syntaxbrillian.com -----END PRIVACY-ENHANCED MESSAGE-----