Asia sales increase as ARC sees multimedia future -

Asia sales increase as ARC sees multimedia future

LONDON — ARC International has raised revenue by 32 perecent to $18.3 million in the six months ended June 30, 2008 compared to first half of 2007 with licensing revenue up 33% to $8.4 million and royalty revenue up 53 percent to $8.3 million. Net loss was £2.0 million (about $4million) compared to £1.5 million (about $3million) in the same period of last year.

In the six month period 16 licensing contracts were finalized and ARC’s (St Albans, England) worldwide customer base now stands at 148 companies.

Sales in Asia have taken a leap to 33 percent from 15 percent of total sales while sales in Europe were steady at 16 percent (14 pecent last year) with North America 51 percent down from 71 percent.

The company had 209 employees at the end of June 2008 compared with 149 in June 2007 and this growth in headcount was due to the two acquisitions – Sonic Focus Inc, a developer of audio enhancement software, for a total consideration of £2.8 million (about $5.6million) in February 2008 and Alarity Corp. in September 2007 for £2 million (about $4million) in cash.

Most of the increased loss can be attributed to the Sonic Focus acquisition which contributed £38,000 (about $72,000) to revenue, £371,000 (about $700,000) to the operating expenses (excluding amortization), £138,000 (about $270,000) of amortization of intangible assets, and £471,000 (about $940,000) to net loss.

Revenue from ARC’s multimedia subsystems continues to grow; in the first half of 2008 average selling prices were approximately twice that of ARC’s processor products and Carl Schlachte, ARC's president and chief executive officer, said, the company's management will look for ways to enhance its strategic focus on the multimedia market while accelerating profitability.

Hewlett-Packard was the first customer to ship higher value royalty-bearing products – its TouchSmart all-in-one personal computers – with Sonic Focus post-processing technologies and ARC expects additional Sonic Focus customer agreements to be completed in the next six months.

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