Business Services Industry
Syntax Groups Corp. Reports First Quarter Results
Business Wire, Nov 14, 2005
CITY OF INDUSTRY, Calif. -- Syntax Groups Corp., one of the fastest-growing manufacturers of TFT-LCD TVs in North America and who has signed a definitive merger agreement to merge with publicly traded Brillian Corp. (Nasdaq: BRLC), today announced the financial results of its home and personal entertainment business for its first fiscal quarter ended Sept. 30, 2005.
For the quarter ended Sept. 30, 2005, Syntax reported revenue of $27.4 million, up 183% from the year-ago quarter. Net loss for the quarter was $658,000 compared with a net loss of $192,000 in the first quarter of fiscal 2005. Included in the net loss for the quarter ended Sept. 30, 2005, was non-cash compensation expense of $2.2 million related to stock options granted and vested during the quarter. The remaining amount of compensation expense to be recognized related to granted options is $340,000 which will be recognized over the next three quarters.
Syntax ended the quarter with cash and cash equivalents of $457,000, working capital of $11.6 million, shareholders' equity of $14.0 million, and available borrowings under its line of credit of approximately $5.0 million.
"This was a record first fiscal quarter in terms of revenue and shipments," said James Li, chief executive officer of Syntax. "We shipped more than 35,000 LCD TVs in the quarter, our largest volume in any non-holiday quarter ever. We also continued to build our distribution channels during the quarter by adding retail partners such as BJ's Wholesale Club, Office Depot, K-Mart and Circuit City. With the addition of these retail partners, we are gearing up to break more of our own records in the December quarter."
Syntax signed a definitive merger agreement on July 12, 2005, to merge with Brillian, a designer and developer of rear-projection, high-definition televisions based on its proprietary liquid crystal on silicon (LCoS(TM)) microdisplays. This planned merger is expected to close in the fourth calendar quarter of 2005.
About Syntax Groups Corp.
Founded in May 2003, Syntax Groups Corp. (www.syntaxgroups.com) manufactures the high-value, affordable Olevia family of widescreen HDTV-ready LCD TVs. Since the company commenced its initial shipments of Olevia LCD TVs in April 2004, Syntax has achieved unparalleled growth and is now recognized as one of the fastest-growing LCD TV brands in North America with ranking in the "Top 5" North American LCD TV brands and in the "Top 10" worldwide. Delivering on its mission to design and mass-produce digital convergence consumer electronics products with superior specifications and competitively affordable prices, and support consumers of its Olevia brand with a unique, customer-friendly after-sale warranty program, Syntax has rapidly established broad distribution in the North American retail sales channel and has expanded operations in Asia. Syntax maintains its own final assembly and quality control production facility at Syntax headquarters located at 20480 East Business Parkway, City of Industry, CA 91789.
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and Syntax intends that such forward-looking statements be subject to the safe harbor created thereby. Such forward-looking statements include expectations regarding the anticipated timing of the closing of the merger and future shipments and revenue. Syntax 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 the approval and timing of the closing of the proposed merger and other risks as detailed in the Registration Statement on Form S-4 filed by Brillian in conjunction with the proposed merger.
Additional Information Regarding the Merger
On Oct. 24, 2005, Brillian filed a definitive joint proxy statement/prospectus pursuant to Rule 424(b)(3) regarding the merger with the Securities and Exchange Commission ("SEC"). Because the joint proxy statement/prospectus and any other relevant materials filed by Brillian with the SEC contain important information about Brillian, Syntax, and the merger, investors and security holders of Brillian and Syntax are urged to read them. These documents are available for free (along with any other documents and reports filed by Brillian with the SEC) at the SEC's Web site, www.sec.gov. In addition, free copies of the documents filed with the SEC may be obtained from Brillian by contacting Investor Relations, 1600 North Desert Drive, Tempe, AZ 85281, 602-389-8888.
The Home and Personal Entertainment Business of
SYNTAX GROUPS CORP.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands)
Three months Ended
Sept. 30,
----------------------------
2005 2004
----------- -----------
Total net sales $ 27,357 $ 9,658
Cost of sales 21,761 8,475
----------- -----------
5,596 1,183
Operating expenses
Selling, distribution and marketing 915 313
General and administrative 2,809 1,000
Non-cash stock option expense 2,228 -
Depreciation and amortization 89 28
----------- -----------
6,041 1,341
----------- -----------
Loss from operations (445) (158)
Other Income (Expense):
Interest, net (292) (33)
----------- -----------
Loss before income taxes (737) (191)
Income benefit (expense) 79 (1)
----------- -----------
Net loss $ (658) $ (192)
=========== ===========
The Home and Personal Entertainment Business of
SYNTAX GROUPS CORP.
CONDENSED BALANCE SHEETS
(unaudited)
(in thousands)
Sept. 30, June 30,
2005 2005
---------- ----------
ASSETS
------
Current Assets:
Cash and cash equivalents $ 457 $ 1,804
Accounts receivable and due from factor,
net 14,588 15,616
Inventories 38,429 15,139
Other current assets 5,152 3,789
---------- ----------
Total current assets 58,626 36,348
Property, plant and equipment, net 879 816
Other assets
1,046 46
Other investments 555 424
---------- ----------
$ 61,106 $ 37,634
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Amounts payable under credit facility $ 14,987 $ 12,049
Notes payable 483 461
Accounts payable 20,904 9,287
Deferred warranty revenue 3,125 1,995
Accrued liabilities and other current
liabilities 3,850 4,049
Income taxes payable 3,695 1,510
---------- ----------
Total current liabilities 47,044 29,351
---------- ----------
Deferred income taxes 58 49
Commitments and Contingencies
Owner's net investment 14,004 8,234
---------- ----------
$ 61,106 $ 37,634
========== ==========
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