Genlyte Thomas Group LLC has acquired the manufacturing assets, intellectual property and sales division of Vari-Lite Incorporated, a wholly owned subsidiary of Dallas based Vari-Lite International, Incorporated, a designer and manufacturer of highly advanced automated lighting equipment for the entertainment industry. In 2003, Vari-Lite International will be renamed VLPS Lighting Services International, Inc.
Larry Powers, president and chief executive officer of Genlyte Thomas commented, "We are excited about the potential that this acquisition has to enhance our entertainment lighting products and controls package. Vari-Lite products are the most technically advanced in the lighting industry, utilizing computer control technologies to automate various lighting effects seamlessly. Many of these features are protected by more than 50 patents, which we acquired with this purchase."
"This transaction will not have any material effect on our earnings in 2002 but we expect the Vari-Lite acquisition to positively impact earnings during 2003. Annual sales volume of Vari-Lite products will be in the range of $25 to $30 million during 2003 with the potential to increase to $50 million during the subsequent three to five years. In addition, we ultimately will integrate these advanced lighting technologies into our existing products aimed at our commercial markets."
"Vari-Lite will benefit in several ways from the melding of GTG's manufacturing strengths with its leading-edge technologies," says Rusty Brutsche, chairman and CEO of Vari-Lite International, Inc. "Operating as a manufacturer and a rental company was confusing to the industry, and it limited the growth prospects of VLPS Lighting Services, our rental division. This transaction allows VLPS Lighting Services to operate independently and to focus on its core competency, lighting rental and production services."
"The acquisition of Vari-Lite strengthens our growing position in the Entertainment Lighting market," said Steven Carson, vice president and general manager of the Genlyte Controls Division. "It is also consistent with our strategy to market the most sophisticated technologies in the lighting industry, providing lighting professionals with advanced, innovative products. In addition, the synergies resulting from this transaction will give us the critical mass necessary to become one of the most efficient manufacturers in the industry."
Tickets.com Posts Profitable 3Q
During the third quarter, Tickets.com expanded its client roster with new ticketing services agreements including establishing a greater presence in Houston with the H'Towns Arena, in Oklahoma with the Mabee Center, and in the Mid-Atlantic area with the Roanoke Civic Center, along with renewing its agreement with The Wolf Trap Foundation for the Performing Arts. Tickets.com also secured Second City as a client, entered into a software licensing agreement with the University of New Mexico, and signed a retail distribution agreement with Sports Authority. Also in the third quarter Tickets.com announced a partnership with Blackbaud's Raiser's Edge product, the global leader in fundraising software, to integrate the critical fundraising and ticketing functions of nonprofit organizations with their Tickets.com back-office ticketing systems.
Total revenues for the third quarter of 2002 were $16.4 million, a 15 percent increase versus the same period in 2001. On a year-to-date basis, total revenues of $51.4 million represent a 13 percent increase over the first three quarters of 2001.
Total gross profit for the third quarter of 2002 improved to $8.8 million, an increase of 26 percent over the same period last year. From a margin standpoint, the third quarter result of 53.6 percent represents a 4.7 percentage point increase over the third quarter last year and a 2.7 percentage point improvement versus the immediately preceding quarter. On a year-to-date basis, 2002 gross margin of 50.5 percent reflects a 7.5 percentage point improvement as compared to the prior year period, translating into an incremental $6.4 million of gross profit.
Tickets.com's total operating expenses decreased 22 percent, from $16.1 million in Q3 2001 to $12.6 million in Q3 2002. On a year-to-date basis, the 2002 figure of $49.1 million represents a 26 percent improvement over the prior year figure of $66 million. Excluding non-recurring charges related to restructuring and impairment of goodwill and other intangibles of $9.5 million and $15.3 million for 2002 and 2001, respectively, the Q3 2002 year-to-date result of $39.5 million is 22 percent better than in the same period last year. The reductions represent the execution against continued opportunities for staff rationalization, facility consolidation and efficiency improvements.
The EBITDA (earnings before interest, taxes, depreciation and amortization) loss for the third quarter was $2.7 million as compared to a loss of $4.4 million in the same period in the prior year, or a 38 percent improvement. Pro forma EBITDA (which excludes the impact of certain non-cash expenses relating to marketing and advertising relationships, as well as asset impairment charges) loss was $2.3 million in the third quarter of 2002 as compared to $1.4 million in the third quarter of 2001. On a year-to-date basis, the EBITDA loss was $40.4 million in 2002 versus $31.0 million in the prior year. Year-to-date 2002 pro forma EBITDA loss of $5.2 million represents a 56 percent improvement versus 2001. Pro forma EBITDA is presented in addition to results provided in accordance with generally accepted accounting principles (GAAP). Management measures the progress of the business using this pro-forma information as an indicator of operating cash usage.
The company reported a net loss of ($3.7) million or ($0.62) per share on a fully diluted basis for the third quarter of 2002. This compares with a net loss of ($8.9) million or ($1.24) per diluted share for the same period of 2001. On a 2002 year-to-date basis, the company has recorded a net loss of ($47.2) million versus a 2001 year-to-date net loss of ($46.1) million.
Liquid Audio, Alliance Entertainment Call Off Merger
Liquid Audio, Inc. and Alliance Entertainment Corp. have mutually agreed to terminate their agreement to merge dated June 12, 2002 and amended and restated as of July 14, 2002.
Both companies entered into the merger agreement in the hope that combining their operations would provide strategic advantages for the digital and physical distribution of entertainment media and that the transaction could create stockholder value.
While the management of both companies still supports the strategic aspects of the merger, a significant percentage of Liquid Audio stockholders have publicly expressed opposition to the proposed merger and the companies believe that the termination is in the best interests of both parties.
Roxio To Acquire Napster
Digital media company Roxio, Inc., billed as the provider of the "best selling digital media software in the world," has entered into a definitive agreement to acquire substantially all of the assets of Napster. Roxio has offered $5 million in cash and 100,000 warrants to purchase Roxio common stock. As part of the transaction, Roxio will receive all of Napster's intellectual property including its technology patent portfolio. Roxio is not assuming any of Napster's liabilities, including pending litigation. Roxio's purchase of Napster's assets is subject to approval of the bankruptcy court, expected November 27.
"Roxio's acquisition of Napster will expand our role in the digital media landscape and enhance our offerings to consumers," said Roxio President/CEO Chris Gorog . "We look forward to continuing to work with our partners in the entertainment industry and will be announcing further plans in the coming months."
Satellite Radio Cos. Report Losses
NEW YORK (AP) — The two pioneers of the satellite radio business, XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc., Thursday reported large third-quarter losses and difficulties in finding financing.
Both companies broadcast radio from satellites to receivers usually mounted in subscriber's cars.
XM, said its third-quarter loss was $109.6 million, or $1.26 a share. Analysts expected a loss of $1.25 a share, according to Thomson First Call. Revenue was $5.5 million.
XM's service launched in September last year. In that quarter, it lost of $65 million, or $1.14 a share, on revenue of $1,000.
The Washington-based company said it has cut 80 jobs. It did not provide the current number of employees. At the end of last year, it had about 450 employees.
XM also said is in talks with General Motors Corp. to defer up to $200 million in payments.
XM said it hopes to see break-even cash flow by mid- to late 2004. It now expects to break even with much fewer subscribers than it had previously forecast.
The company ended the quarter with 201,544 subscribers, up from 504 subscribers a year earlier and a 47 percent increase over the second quarter.
Shares of XM closed Thursday at $2.32, down 73 cents or 24 percent, on the Nasdaq Stock Market.
New York-based Sirius, which launched its service in July, lost $108 million, or $1.56 a share, on revenue of $17,000, compared with a loss of $47 million, or $1.06 a share on no revenue last year.
Analysts were expecting a third-quarter loss of $1.48 a share, according to Thomson First Call.
Sirius expects its operating expenses to increase as it continues to expand and build its subscriber base. It also expects to incur more expenses until it finishes restructuring its debt and equity.
If Sirius doesn't complete its restructuring plan, it will need an additional $600 million of funding until its operations become self-sustaining. That requires signing up about 3 million subscribers, which the company doesn't see for at least several years.
Sirius reported its results after the close of regular trading on the Nasdaq Stock Market, which saw its shares at 82 cents, down 7 cents. In 6 p.m. EST after-hours trading, the shares were down a further 16 cents.