| Faroudja, Inc. | |||
| Ticker: | FDJA | 750 Palomar Avenue | |
| Exchange: | NASDAQ-National Market | Sunnyvale, CA 94086 | |
| Industry: | Manufacturing (SIC Code 3651) | (408) 735-1492 | |
| # of Employees: | 67 | ||
| Type of Shares: | Common Shares | Filing Date: | 7/30/97 | |
| U.S. Shares: | 3,000,000 | Offer Date: | 10/29/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $8.00 - $10.00 | |
| Primary Shares: | 3,000,000 | Offer Price: | $6.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.42 | |
| Offering Amount: | $27,000,000 | Selling: | $0.24 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Robertson, Stephens & Company | Lead Manager | (415) 989-8500 |
| Volpe Brown Whelan & Company | Co-manager | (415) 274-4463 |
| Issuer's Law Firm: | Buchalter, Nemer, Fields & Younger |
| Bank's Law Firm: | Wilson, Sonsini, Goodrich & Rosati |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | U. S. Stock Transfer Corporation |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $13.13 | $7.86 | $5.59 | Assets: | $15.23 |
| Net Income: | $1.51 | $0.53 | $0.81 | Curr Assets: | $13.49 |
| EPS: | $0.05 | Liabilities: | $2.30 | ||
| Prior EPS: | $0.08 | $1.34 | Curr Liabilities: | $2.30 | |
| Cash Flow/Oper: | $1.29 | $4.96 | Equity: | $12.92 | |
| Cash Flow/Fin: | -$0.03 | $1.27 | -$0.70 | Cash: | $7.52 |
| Cash Flow/Inv: | -$1.57 | $1.27 | Working Cap: | $11.18 | |
| Business Description |
| The company is a leader in the video image enhancement field. The company designs, develops and markets a range of video image enhancement products that significantly improve displayed images to achieve cinema-like quality. Through more than 25 years of product development and technological advances, the Company has established a reputation for excellence in video signal processing and video image enhancement in the high-end home theater, industrial and broadcast markets. The Company believes that its technology, experience and reputation in these markets will enable it to address opportunities in the emerging digital television ("DTV") and digital high definition television ("HDTV") broadcast environment and to facilitate the convergence of the personal computer ("PC") and the television ("TV").The Company's products for the TV market substantially reduce the imperfections inherent in analog NTSC signals and dramatically improve displayed images, giving the observer a far richer viewing experience. The Company's technology improves picture quality by removing artifacts and noise, detecting and compensating for motion, enhancing resolution and multiplying the number of lines displayed on the TV screen. |
| Competition |
| The markets in which the Company competes are intensely competitive and are characterized by rapid technological change, rapid product obsolescence and price competition. The Company expects competition to increase in the future from existing competitors and from other companies that may enter the Company's existing or future markets with products or technologies which may be less costly or provide higher performance or more desirable features than the Company's products. The Company's existing and potential competitorsinclude several large domestic and international companies that have substantially greater financial, manufacturing, technical, marketing, distribution and other resources than the Company. In the market for TV video processors, the Company's principal competitors are DWIN, Extron, NEC, Snell & Wilcox, Sony and YEM. In the market for broadcast products, the Company's principal competitors are Extron, Leitch, Matsushita, Snell & Wilcox, Sony Broadcast and Vistek. As the Company's products penetrate broader markets and as these markets become commercial markets, the Company expects to face competition from diversified electronic and semiconductor companies. Certain of the Company's principal competitors maintain their own manufacturing facilities, including semiconductor foundries, and may therefore benefit from certain capacity, cost and technical advantages. Since the Company does not operate its own semiconductor manufacturing, assembly or testing facilities, it may not be able to reduce its costs as rapidly as companies that operate their own facilities. The failure of the Company to introduce lower cost versions of its products in a timely manner or to successfully manage its manufacturing, assembly and testing relationships would have a material adverse effect on its business, operating results and financial condition. The Company believes that its ability to compete successfully in the rapidly evolving markets for high performance video image enhancement technology depends on a number of factors, including protection of its proprietary technology and information, the price, quality and performance of the Company's and its competitors' products, the timing and success of new product introductions by the Company, its customers and its competitors, the emergence of new industry standards, the Company's ability to obtain adequate foundry capacity, the number and nature of the Company's competitors in a given market and general market and economic conditions. There can be no assurance that the Company will compete successfully in the future with respect to these or any other competitive factors. |
| Business Plan |
| The company's objective is to maintain and expand its position as the industry standard of excellence for video image quality. Key elements of the company's strategy to achieve this objective include: (I) Maintain and Extend Technology Leadership, (ii) Penetrate Broader Market Segments, (iii) Increase Brand Name Awareness, (iv) Build and Leverage Strategic Relationships and (v) Expand International Presence. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for research and development and general corporate purposes including working capital. |
| Name of Shareholder | % Owned Before | % Owned After |
| Roger K. Baumberger | 42.17% | |
| Faroudja Images Investors, LLC | 42.17% | |
| Yves C. Faroudja | 23.64% | |
| Kevin B. Kimberlin | 17.67% | |
| Merv L. Adelson | 16.39% | |
| Adelson Investors, LLC | 16.39% | |
| Image Partners, L.P. | 11.86% | |
| S3 Incorporated | 6.03% |
| Officer Name | Title | Age |
| William J. Turner | Chairman of the Board of Directors | 53 |
| Yves C. Faroudja | Chief Technical Officer, Chairman of the Executive Committee, Secretary and Director | 63 |
| Michael J. Moone | President, Chief Executive Officer and Director | 51 |
| Kenneth S. Boschwitz | Vice President--Business Development and General Counsel | 43 |
| Donald S. Butler | Vice President--Engineering | 51 |
| Michael C. Hoberg | Vice President--Finance and Chief Financial Officer | 45 |
| Thomas A. Harvey | Vice President--Sales and Marketing | 48 |