SAN JOSE, Calif., June 29, 2005 - Genesis® Microchip Inc. (Nasdaq: GNSS), a world leader in the development of image processing technologies for flat-panel monitors, TVs and other consumer display products, and Meridian Audio Limited, the United Kingdom-based manufacturer of high-end audio, video and home theater systems and components, today announced that the two companies have entered into a strategic licensing agreement that gives Meridian the right to promote Genesis' Faroudja technologies, products and brand on a worldwide basis. The agreement authorizes Meridian to integrate, manufacture and distribute home theater solutions under the Faroudja brand as part of Meridian's audio/video product portfolio, using Genesis Microchip's most advanced Faroudja video technologies. These products will be available effective immediately through Meridian and its global distribution network. Genesis Microchip will cease the manufacture and distribution of Faroudja home theater solutions, but will continue to develop advanced video processing algorithms in cooperation with Meridian for its Faroudja-based products.
"Faroudja is at the forefront of video technology. Combining their video processing algorithms with Meridian's own award-winning audio technologies presents an ideal strategy of offering extremely high-quality home theater solutions to the worldwide market," said Robert Stuart, Meridian chairman, co-founder and technical director. "We are pleased to bring our audio/video expertise, manufacturing and marketing capabilities to bear on developing this renowned brand internationally. In addition to promoting the existing Faroudja product line, we will create new products in collaboration with Genesis that will complement our already advanced optical disc player technology."
"This agreement enables Genesis Microchip to sharpen its focus on our core competency of developing advanced video processing algorithms for our IC customers," said Anders Frisk, executive vice president of Genesis Microchip. "At the same time, it expands Faroudja's global branding presence in the high-end consumer electronics market via Meridian's worldwide distribution network. Consumers looking for best-of-class audio and video quality in their home theater installations will appreciate this technological match."
Genesis recorded Faroudja-related revenue of $4.9 million for the year ended March 31, 2005, which represented approximately 2% of the total revenue recorded for the year. Genesis expects to record a charge of less than $500,000 related to severance payments to employees and other transaction-related costs in the quarter ended June 30, 2005. The future impact of this transaction on quarterly GAAP earnings per share is expected to be immaterial.
Legal Notice Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the federal securities laws, including, without limitation, statements by Anders Frisk regarding the expansion of Faroudja's market presence, statements regarding the expected financial impact of the transaction in the quarter ended June 30, 2005, and statements regarding the future impact of the transaction on earnings per share. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks related to transitioning the manufacture, promotion and sale of the Faroudja-branded products to Meridian and the two companies' ability to successfully develop new video processing technology. Genesis Microchip assumes no obligation to update the forward-looking statements included in this release.
Meridian Audio Limited is based in Huntingdon, near Cambridge, UK, and was founded in 1977 by Allen Boothroyd and Robert Stuart. With a 25-year history of innovation and development of the highest quality consumer audio systems, the award-winning company is widely recognized as a world leader in digital and analogue audio reproduction. Meridian developed the world's first audiophile CD player, the world's first consumer digital surround controller, developed the MLP lossless packing systems mandated for use in DVD-Audio, and is the only UK audio manufacturer to be a member of the DVD Forum. The company's optical disc players, DSP-based loudspeakers and Digital Theatre systems are unique in the industry, maintaining a super-quality digital audio signal throughout the path from the source to the amplifier, and using digital signal processing to generate advanced crossover characteristics that would be impossible with conventional passive analogue systems. For more information, please visit http://www.meridian-audio.com/welcome.htm.
About Genesis Microchip
Genesis Microchip Inc. (Nasdaq: GNSS) is a leading provider of image processing systems enabling superior picture quality in flat-panel TVs and a variety of consumer and PC-display products. Featuring Genesis Display Perfection® technologies and Emmy award-winning Faroudja® video technologies, Genesis system-on-a-chip solutions are used worldwide by display manufacturers to produce visibly better images across a broad array of devices including flat-panel displays, digital TVs, projectors and DVD players/recorders. The Genesis technology portfolio features analog and mixed signal system-on-a-chip design, DCDi® by Faroudja deinterlacing, TrueLife? video enhancement, IntelliComb? video decoding and includes over 185 patents. Founded in 1987, Genesis supports its leading brand-name customers with offices in the U.S., Canada, India, Taiwan, South Korea, China and Japan. For more information about Genesis Microchip Inc. or Genesis Display Perfection technologies, please visit www.gnss.com.