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Brillian
Corporation is one of the few that has been able to master LCOS technology and participate
in the explosion that is going on with HDTV and home theatre
Technology
Semiconductors
(BRLC-NASDAQ)
Brillian Corporation
1600 North Desert Drive
Temp, AZ 85281
Phone: 602-389-8888
Vincent Sollitto, Jr.
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
April 7, 2005
BIO:
Vincent F. Sollitto, Jr.
President and Chief Executive Officer
Brillian Corporation's President and Chief Executive Officer brings 33 years of management
and engineering experience to his position and is responsible for driving the company's
strategic direction. Prior to joining Brillian, Sollitto was President and Chief Executive
Officer of Photon Dynamics, Inc., a manufacturer of flat-panel-display inspection, test,
and repair equipment. He helped lead the company through two follow-on public offerings,
raising more than $80 million and $100 million in 2000 and 2002 respectively; completed
the acquisition of five public and private companies; and was instrumental in growing the
company's revenues from $12 million to $94 million. He previously worked at Fujitsu
Microelectronics as General Manager of the Logic Products unit, after heading all
technical operations for an IBM-funded start-up, Supercomputer Systems, Inc. He also
worked at IBM for more than 21 years in a range of increasingly responsible positions,
with a final assignment as Director, Technology and Process, for the Enterprise Systems
headquarters.
Sollitto earned his bachelor of science degree in Electrical Engineering from Tufts University
in 1970. He also continued his education in management, business, and technology at Syracuse,
Cornell, and Carnegie Mellon Universities. A holder of four technical patents, Sollitto is
a Director of several companies, including Ultratech and Applied Films, which are
NASDAQ-listed firms, as well as RAVE LLC and Qubiclight Corp.
Company Profile:
Brillian Corporation designs and develops rear-projection HDTVs targeted at high-end
video/audio OEMs, high-end video/audio retailers, ProAV/CEDIA distributors, and their base
of dealers and custom installers looking for breakthrough performance and image quality.
The company is the first and only provider of Gen II LCoSTM technology used in
these products. In addition to its high-definition televisions, Brillian also offers a
broad line of LCoSTM microdisplay products and subsystems that OEMs integrate
into proprietary HDTV products, multimedia projectors, and near-to-eye products such as
monocular and binocular headsets. Brillian's LCoSTM microdisplay technologies
address the market demand for a high-performance display solution with high image
fidelity, high-resolution scalability, and high contrast ratios.
CEOCFOinterviews: Mr. Sollitto, will you tell us about your
background with Brillian?
Mr. Sollitto: “I joined Brillian in June of 2003. I had
retired earlier in the year from my last position of CEO at Photon Dynamics, Inc., a
position I held for seven years. I am an electrical engineer and I have managed high-tech
activities for more than thirty years. My interest in Brillian was the outstanding
technology and an interest in the display industry, which I have had for many years, and
the opportunity to participate in the explosion that is going on with HDTV and home
theatre.”
CEOCFOinterviews: How
has your vision played out so far?
Mr. Sollitto: “The technology is very exciting. Here at
Brillian we have the largest Liquid-Crystal-on-Silicon (LCoS™) microdisplay
manufacturing facility in North America with 25,000 square feet of clean room. The company
has been manufacturing microdisplays for about five years. The technology is one that has
been difficult for many to master and Brillian is one of the few that has been able to do
that. It was clear that the industry wanted to see more confidence in the supply chain for
LCOS as it competes against DLP (Digital Light Processing) and LCD (Liquid Crystal
Display) rear-projection televisions. We made a decision to manufacture a very high-end HDTV,
a 65-inch rear-projection television with a select group of partners. We demonstrated that
television in January 2004 at the Consumer Electronics Show in Las Vegas. We began
manufacturing and shipping televisions in July 2004. Unfortunately, we had a hiccup in the
supply chain: our light engine partner was unable to complete the manufacturing agreement,
so we had to stop shipment for a little while and regroup. We have taken on the light
engine manufacturing ourselves. We have licensed the technology and now make the light
engines and televisions in-house and have begun shipping again. We are in the process of
seeking out a strategic partner, who will serve as our manufacturing partner for light
engines, to lead us to high-volume shipments in the second half of this year.”
CEOCFOinterviews: Is
there a brand under which these go out?
Mr. Sollitto: “The television objective is to
demonstrate the technology, and to sell to OEM and very high-end dealers through our own
brand. We are selling to people who will be involved in ProAV/CEDIA distributions and home
theatre installations. This will include restaurants, hotels, convention centers, as well
as new home construction where home theatre installation goes into the house at the time
of construction. We will also sell to OEMs, who will put their names on the televisions
and customize them to their particular participation in the industry. We believe that this
allows us to achieve a modest share in the market but because we have a highly leveraged
business plan, we do not need to have a very high participation in order to hit our
targets. We think that at an annual volume of only 30,000 televisions per year, we can
achieve 13% operating profit. That is a tremendous opportunity for us.”
CEOCFOinterviews: Are
you at the beginning of a market explosion?
Mr. Sollitto: “We really are! This is a second start for
us since we entered the market last year, but we have regrouped and started again this
year.”
CEOCFOinterviews: You
mentioned some competing technologies; why is LCoS™ superior?
Mr. Sollitto: “DLP is a very expensive technology and,
as a result, DLP televisions are manufactured with a single imager and a light engine that
uses a color wheel to sequentially send the colors to your eye. This occurs very quickly
so that your eye integrates the actual information. With LCoS™ technology, we use
three imagers, one for each of the three primary colors. Therefore, the picture is painted
on the screen in such a way, that it looks like how you would see it in real life. As a
result, we handle color, grey scale, and motion much better and the picture quality is
better than DLP. Because of the low cost of LCOS, it is possible to make a three-imager
solution economically viable for consumers. That’s the real advantage of it. One of
the interesting things that has happened recently is that Sony Corporation (NYSE: SNE)
announced earlier this year at CES that they would enter the rear-projection television
market with an LCOS television. The people that have seen that Sony $13,000 television
believe it compares favorably with our picture quality. There is an opportunity with a lot
of different technologies and players. Our niche is the high-end where the consumer wants
the best television picture they can get. We think that the market is large enough to
support our objectives.”
CEOCFOinterviews: What
other qualities differentiate your television from the other high-end models?
Mr. Sollitto: “The first thing that you have to start
with is a very good picture. We have high contrast ratios, excellent grey scale. One of
the things that differentiates us is outstanding uniformity. All the pixels across all
three devices are mastered electronically to support a terrific picture. We then wrap our
technology in the best supporting technologies that are available. We have the best
anti-reflective screens and the best viewing angle in the industry. We have the best
features. For example, most televisions have three inputs; we have thirteen. Most do
picture-in-picture, but no other company does picture-in-picture with both pictures in
high definition. We also have the best audio system with a 30-watt per-channel sound
system.”
CEOCFOinterviews: How
are you marketing your product?
Mr. Sollitto: “At CES in Las Vegas, we showcased our HDTV
in a suite and provided one-on-one demonstrations with key prospects. For the
International Home Theatre’s Association and other shows, we implement the same
process. Once potential customers have seen our HDTVs and expressed an interest, we
discuss options, including designing a unique product for them. At that point, it becomes
their product. We do not market directly to the consumer; our customer and/or their
dealers handle consumer marketing.”
CEOCFOinterviews: Once
this group recognizes the benefits of the technology, will word-of-mouth take you quite a
distance?
Mr. Sollitto: “These people are installing $50,000 or
$150,000 home theatres, and what they want is the best technology they can get because
they intend to put excellent speaker systems with it and a variety of input sources. They
are going to be recommending to their customers what they should be putting into their
home theatres. What they like about our LCoS™ HDTVs are all the added features for
ProAV, CEDIA and home theatre applications. Last summer, we started a pilot program right
here in Phoenix with a handful of these kinds of dealers. They gave us suggestions on
features they would like to see. We were able to add those features, and now as we
re-launch it into the space, all of the professionals who see it believe it is the best
television they have ever seen.”
CEOCFOinterviews: Will
you tell us about the financial picture of the company?
Mr. Sollitto: “Well that is the biggest issue that I am
working presently. We had a serious technology issue last year and we needed to
demonstrate the ability to put together a road map to high-volume manufacturing for the
light engine. We have done that and now we are implementing that plan and demonstrating
what we will need to be successful. Right now, Brillian has enough cash to make it for the
early part of this year, but in order to finance the actual explosion of growth for the
company, we will be looking for additional financing for 2005.”
CEOCFOinterviews: In
closing, why should investors be interested and what should they know that doesn’t
jump out when they look on the surface?”
Mr. Sollitto: “There are two things: Clearly the company’s
current valuation is based on the risk that we will be unsuccessful in our business plan.
I was in a similar situation at Photon Dynamics back in 1998 when the company’s stock
dropped to $2.00 and our market cap was $16 million. Investors were very concerned about
the company’s ability to compete in a market with very large competitors. We proved
that we could do it. We turned the company around and the stock eventually went to $94 and
the market cap is today in the $300 to $400 million range. There is an opportunity here to
participate in the very exciting HDTV market. There is also an opportunity for excellent
return. Of course, it is high-risk opportunity because this is high-tech. Our investors
need to be willing to make those kinds of investments and if they are willing, I think
they are going to get a chance to enjoy very significant returns.”
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