Orcadian Engy Regulatory News (ORCA)

2 Feb 2005 07:00

Emblaze Ltd02 February 2005 Orca Interactive Ltd Preliminary Results for the year ended 31 December 2004 Ra'anana, Israel, 2 February 2005 - Emblaze Ltd announces that its Groupcompany, Orca Interactive Ltd ("Orca"), a global leader in the IPTV middlewaremarket, publishes its maiden preliminary results following its successfuladmission to AIM in October 2004. Financial Highlights: • Revenue increased by 106% to $5.2 million (2003: $2.5 million) • Net loss reduced to $1.8 million (2003: $4.9 million) • Healthy balance sheet with net cash of $24.5 million • Positive outlook for the IPTV market in 2005 and beyond Operational Highlights: • Three new commercial deals signed during the year - Atlas Interactive andI-Spatial Communications in India and Magnet Networks in Ireland - and a markettrial commenced with a Western European telco • Release of RiGHTv 4.2TM in October 2004 - two customers already upgraded • 500,000 subscriber benchmark record set for Orca IPTV Solution inconjunction with HP • Taiwan's Chunghwa Telecom purchased additional licenses • Global partnership agreements signed with more leading IPTV players Announced today: • IBM announced as a new global marketing partner Eli Reifman, Chief Executive Officer of Emblaze said: "We are proud to announcethe maiden results of Orca Interactive. The deals in India and Ireland as wellas the subscriber benchmarking with HP are proof that Orca is now established asa leading middleware provider in IPTV market and has a tremendous future." Haggai Barel, Chief Executive Officer of Orca, said: "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. Our financial performance across all metrics was strong as we doubledrevenues and halved our operating loss. As at today's date, we are currently involved in over 25 trials/tenders for ourproduct worldwide and expect to announce further contract wins shortly. The significant opportunities becoming available in IPTV and current trends inthe company's performance give us confidence for 2005 and beyond." Enquiries: Emblaze LtdDoron Cohen/Emblaze +972 9 7699831/339 Corfin CommunicationsHarry Chathli +44 20 7645 2990 Shared ValueAlex Dee +44 20 7321 5013 About The Emblaze Group (Emblaze LTD) Emblaze Ltd. is a group of companies sharing a common mission to provide Telecomoperators with technologies, products and solutions for next generationservices: Emblaze Mobile, a new breed in handsets design and manufacturing;Adamind, a global leader in content adaptation (transcoding) for wirelessoperators; Emblaze Defense, a provider of wireless and IP video solutions formilitary and homeland security markets and Orca Interactive (LSE: ORCA),provider of Interactive Television IPTV middleware for Video On Demand (VOD) andbroadcast services, aimed at Telecom, cable and xDSL operators Emblaze Group is traded on the London Stock Exchange (LSE: BLZ) since 1996 andhas offices in the United States, United Kingdom, China, Korea and Israel.www.emblaze.com About Orca (LSE: ORCA)Orca Interactive (LSE: ORCA) is a leading provider of middleware solution toenable xDSL and FTTx operators to offer enhanced entertainment services such asbroadcast TV, video-on-demand and interactive services. Our applications delivercompelling and differentiated services to maximize the revenue stream of theoperators. Orca's user-friendly, end-to-end applications enable delivery andmanagement of VOD, TV channels, EPG, NVOD, Pay-Per-View and e-commerce forrelated merchandise. Orca Interactive has formed strategic partnerships withAmino, BitBand, GooMe, ECI, HP, IBM, Kasenna, Kreatel, Microsoft, nCUBE, NDS,Nokia, Nortel Networks, Optibase, Pace, Samsung, SeaChange and more).www.orcainteractive.com. Chief Executive's Review Overview 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. Our financial performance across all metrics was strong as we doubled revenuesand halved our operating loss. Three new customers were won during the year,including one for which Orca acted as the prime contractor. This emphasizes thestrong positioning of our product offering and provides further evidence of theexciting and rapid growth in our market place. Our partner programme has alsocontinued to develop and includes some of the most high profile names in theindustry. Financial performance Revenues of $5.2 million compared to $2.5 million in 2003, representing a 106%increase and reflect our success in winning new contracts in a growing market.Revenue as classified by customer location, was 69.7% Far East (2003: 79.4%),28.6% Europe (2003 : 6.3%) and 1.7% RoW (2003: 14.3%). Gross profit for thefiscal year was $3.9 million (2003: $2.1 million). Total operating expenses for the year decreased 14.6% to $6.0 million (2003:$7.0 million). Despite a year on year reduction, research and development costsof $2.0 million (2003: $2.9 million) were higher than originally budgeted. Thiswas due to an acceleration in the development of a new application (previouslyexpected to be launched in the second half of 2005, now the first half). Inaddition, following the successful development and sales of Orca's RiGHTvproduct, an amount may now need to be returned to the Office of the ChiefScientist in Israel as a royalty and thus is not shown as a deduction from R&Dexpense. Financial income increased to $0.2 million for the year (2003: $0.01million). The net loss for the year 2004 was $1.8 million or $0.11 per share, as comparedwith a net loss of $4.9 million or $0.41 per share in 2003, a decrease of 63%.The directors do not intend to declare a dividend. Orca closed the year with a strong net cash position of $24.5m following thefundraising on AIM in October. Operating cash outflow during the year was $0.4million (2003: $6.2 million). Product development In October 2004 we announced the release of RiGHTv 4.2TM, the newest version ofour IPTV software, incorporating new features such as RiGHTv XPVR (PersonalVideo Recorder), SUI SDK, Subscriber User Interface Software Development Kit forTV services customizations, and new capabilities to host 3rd party IPTVapplications. Two existing customers, iVISJON and FiberCity have alreadypurchased upgrade licenses. In December 2004 we announced, with our partner HP, the results of arecord-breaking benchmark demonstrating the very high scalability of the Orcaproposition. The benchmark simulated an active subscriber base of 500,000 peopleaccessing our RiGHTv 4.2 solution. This is the first time an IPTV solution hasbeen shown to reach this threshold in a commercial simulation; previouslypublished benchmarks in 2003 demonstrated approximately 100,000 users. Even atthe much higher subscriber load, average response times remained relativelyconstant, demonstrating the fundamental scalability of the Orca solution. Customers and Partners During the year, Orca signed three new commercial partners to its offering;Atlas Interactive and I-Spatial Communications in India and Magnet Networks inIreland. In addition Taiwan's Chunghwa Telecom continued to expand and purchaseadditional licenses from Orca. Following successful lab trials, Orca has also entered into an agreement with aWestern European telecoms operator to provide its RiGHTv technology for amarketing trial. Orca has signed additional global partnership agreements with more of theworld's leading IPTV players, for example, SeaChange International, NortelNetworks, Lucent, Zhongxing Telecom Co. (ZTE), Redback Networks and WidevineTechnologies. Orca has also announced today that it has signed a global co-marketing agreementwith IBM, to promote its products in telco tenders worldwide. AIM Listing In October, Orca successfully completed its initial public offering on theAlternative Investment Market of the London Stock Exchange. 14,141,414 new Orcaordinary shares were allocated to institutional and other investors at a priceof 99 pence per share, raising approximately £14 million for the Company. TheIPO, public profile and funds raised have increased our credibility in themarket, provided us with an appropriate platform from which to accelerate theadoption of our products and given us the financial strength and flexibility togrow effectively within our markets, both organically and through selectiveacquisitions. Outlook The IPTV market is evolving rapidly. Middleware sits at the heart of the IPTVvalue chain and, with an established position as one of the leading middlewareproviders to this market, we are ideally positioned to benefit from itsanticipated growth. As at today's date, we are currently involved in over 25 trials/tenders for ourproduct worldwide and expect to announce further contract wins shortly. The significant opportunities becoming available in IPTV and current trends inthe company's performance give us confidence for 2005 and beyond. Haggai BarelChief Executive Officer 2 February 2005 BALANCE SHEETSU.S. dollars 31 December 2003 2004ASSETS CURRENT ASSETS:Cash and cash equivalents $ 103,124 $ 23,579,427Trade receivables and unbilled accounts, net 1,504,597 1,335,173Other accounts receivables and prepaid expenses 118,719 120,410 Total current assets 1,726,440 25,035,010 LONG-TERM MARKETABLE SECURITIES - 1,000,000 SEVERANCE PAY FUNDS 436,585 444,871 PROPERTY AND EQUIPMENT, NET 828,748 493,869 $ 2,991,773 $ 26,973,750LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) CURRENT LIABILITIES:Trade payables $ 137,566 $ 343,060Deferred revenues 69,793 14,875Other accounts payables and accrued expenses 1,171,675 2,476,960Parent company - 875,088 Total current liabilities 1,379,034 3,709,983 ACCRUED SEVERANCE PAY 667,706 686,945 CONVERTIBLE LOANS FROM PARENT COMPANY 18,909,984 - SHAREHOLDERS' EQUITY (DEFICIENCY):Share capital:Class A Preferred shares of NIS 0.01 par value: 29,196 -Authorized: 17,000,000 and 0 shares at 31 December2003 and 2004, respectively; Issued andoutstanding: 12,098,327 and 0 shares at 31December 2003 and 2004, respectivelyOrdinary shares of NIS 0.01 par value: Authorized: 51 81,3053,000,000 and 55,000,000 shares at 31 December2003 and 2004, respectively; Issued andoutstanding: 23,900 shares and 35,323,799 at 31December 2003 and 2004, respectivelyAdditional paid-in capital 3,002,698 45,338,723Accumulated deficit (20,996,896) (22,843,206) Total shareholders' equity (deficiency) (17,964,951) 22,576,822 $ 2,991,773 $ 26,973,750 STATEMENTS OF OPERATIONSU.S. dollars Year ended 31 December 2002 2003 2004 Revenues $ 757,367 $ 2,524,738 $ 5,201,970Cost of revenues 236,543 470,634 1,261,675 Gross profit 520,824 2,054,104 3,940,295 Operating expenses:Research and development, net 3,670,664 2,904,840 2,016,330Sales and marketing, net 2,836,515 3,279,745 3,174,952General and administrative 970,171 825,366 795,198 Total operating expenses 7,477,350 7,009,951 5,986,480 Operating loss 6,956,526 4,955,847 2,046,185Financial income, net 16,615 9,768 199,875 Net loss $ 6,939,911 $ 4,946,079 $ 1,846,310 Basic and diluted net loss per share $ 0.58 $ 0.41 $ 0.11 Weighted average number of shares used 12,021,435 12,079,771 17,145,648in computing basic and diluted net loss per share STATEMENTS OF CASH FLOWSU.S. dollars Year ended 31 December 2002 2003 2004Cash flows from operating activities: Net loss $(6,939,911) $(4,946,079) $(1,846,310) Adjustments to reconcile net loss to netcash used in operating activities:Depreciation 513,700 490,927 382,579Decrease (increase) in trade receivables 104,184 (1,425,593) 167,733and unbilled accounts, other accountsreceivables and prepaid expensesDecrease (increase) in inventories (1,658) 59,512 -Increase (decrease) in trade payables and 128,891 (128,326) 946,779other accounts payable and accruedexpensesIncrease (decrease) in deferred 289,948 (249,177) (54,918)revenuesIncrease in accrued severance pay, net 33,108 44,629 10,953Other - (1,895) - Net cash used in operating activities (5,871,738) (6,156,002) (393,184) Cash flows from investing activities: Investment in long-term marketable - - (1,000,000)securitiesPurchase of property and equipment, net (613,918) (425,857) (47,700)Proceeds from sale of property and - 4,342 -equipmentProceeds from short-term bank deposits 142,880 - - Net cash used in investing activities (471,038) (421,515) (1,047,700) STATEMENTS OF CASH FLOWS continuedU.S. dollars Year ended 31 December 2002 2003 2004 Cash flows from financing activities: Parent company - - 875,088Collection of receivables on account of 6,542 - -sharesIssuance of Class A Preferred shares to - 227,273 -Parent Company, netIssuance of shares upon exercise of 4,813 1,760 25,167employees' share options, netIssuance of shares upon Initial Public - - 25,181,535OfferingIssuance expenses - - (2,561,020)Convertible loans from Parent Company 6,353,509 6,352,942 1,396,417 Net cash provided by financing activities 6,364,864 6,581,975 24,917,187 Increase in cash and cash equivalents 22,088 4,458 23,476,303Cash and cash equivalents at the beginning 76,578 98,666 103,124of the period Cash and cash equivalents at the end of the $ 98,666 $ 103,124 $ 23,579,427 Supplemental disclosure of cash flowsactivities: Non-cash activities:Conversion of convertible loans from parent $ - $ - $ 20,306,401company into shares Issuance accrued expenses $ - $ - $ 564,000 Note A copy of the Annual Report and Financial Statements for the year ended 31December 2004 will be posted to the shareholders in due course. Copies of thisannouncement can be obtained from Financial Dynamics, Holborn Gate, 26 Southampton Buildings London WC2A 1PB or from the Company's website -www.orca.tv This information is provided by RNS The company news service from the London Stock Exchange