Zen has recently acquired Silicon Value, a developer of advanced ASIC solutions generating substantial cost, performance and power enhancements.
Zen further announces that Mr. Davidi Gilo, Co-Founder and Chairman of the Board, has in addition been appointed as Chief Executive Officer to manage the day-to-day operations of the enlarged Zen Group. Mr. Emil Jachmann, the former Chief Executive, has been appointed Executive Vice President to continue the development of Zen’s optical drive technologies and will remain as a Director.
Mr. Gilo stated, I would like to take this opportunity to thank Emil Jachmann for his years of vision and leadership as Zen’s Chief Executive Officer since its inception. We look forward to his continued contribution and assistance.
First Quarter Highlights
Afreey, located in Taiwan, began prototyping a Zen-enabled DVD-ROM drive
A global consumer electronic company commenced development of components for their first Zen-enabled consumer product
A licensing agreement was signed and chip development commenced with a DVD video player company
A further patent was awarded to Zen for Multibeam, bringing Zen’s patent portfolio to a total of 24
Current period
Completed acquisition of Silicon Value, a developer of advanced technologies for ASIC enhancement, which is expected to accelerate cost reduction of future Zen-enabled chips
Infineon Multibeam DVD-ROM chip taped out for production
Davidi Gilo, Chairman and Chief Executive, Zen Research plc, said:
The delays in realization of a commercial product, which are now largely behind us, lead us to conclude that we will not have significant volume sales of Zen-enabled DVD-ROM drives in 2001. In addition, the slowing PC market worldwide, combined with the current PC and component pricing pressures, as well as the oversupply of components and final products has reduced our visibility into 2002.
We have taken steps to adapt to the changing economic conditions of the marketplace. Silicon Value was a timely acquisition and will create significant cost savings to Zen-enabled ASICs in an increasingly price driven market. We are also working with our other component licensees to adjust to these changing conditions.
Silicon Value is well-positioned to benefit from similar pricing trends in the broader chip market by offering solutions to silicon providers who are under pressure to produce cheaper and smaller chips.
I am aware of the many challenges that we face. I will be working with the rest of Zen management team, employees, and partners and will use my 15 years of experience managing high-tech companies which produced low-cost, high volume consumer and communications products, primarily for the Japanese markets, to successfully meet Zen’s objectives.
Turnover
Turnover for the three months ended 31 March 2001 increased to US$182,000 compared to US$87,000 for the comparable period ended 31 March 2000. This represents engineering fees earned during the period, whereas, turnover for the three month period ended 31 March 2000 represents royalties.
Research and development
Research and development expenses increased to US$3.1 million for the three month period ended 31 March 2001 compared to the corresponding period amount of US$1.6 million. This increase reflects the increase in headcount and related expenses, expenditures on outside engineering services to develop and enhance Zen’s intellectual property and increased facilities expenses.
Other operating expenses
Other operating expenses for the three month period ended 31 March 2001 increased to US$1.9 million, compared to US$888,000 for the corresponding prior year three month period. This increase was mainly due to increased headcount and related expenses, professional fees, insurance, marketing programs and other costs arising from Zen’s growth and status as a listed company.
Consolidated Balance Sheet
Cash on hand and short-term investments increased at 31 March 2001 to US$92.6 million compared to US$2.1 million at 31 March 2000. This increase was mainly due to the successful public offering on the London Stock Exchange. Proceeds from this issue were partially used to reduce the outstanding amount due to creditors falling due within one year.