Advanced Media, Inc. · TSE:3773
Advanced Media — H1 FY2006 Earnings Presentation
44 slides from Advanced Media's earnings presentation, Nov 15, 2005
Slide 1: Interim Report for the First Half of the Fiscal Year Ending March 31, 2006
Interim Report for the First Half of the Fiscal Year Ending March 31, 2006 November 15, 2005 Advanced Media, Inc. 1
Slide 2: Agenda
Agenda z Summary of Business Results P. 3 z Business Conditions P. 15 z Corporate Data P. 35 z The Future of Speech Recognition Technology, and the Future of Our Business P. 42 2
Slide 3: Summary of Business Results
Summary of Business Results 3
Slide 4: Performance Summary
Performance Summary Million yen Performance Forecasts at Time of Listing Difference % Amount % Amount % Net Sales 914 (100.0%) 759 (100.0%) 155 (20.4%) Ordinary Income 48 (5.3%) 14 (1.8%) 34 (242.9%) Net Income 47 (5.1%) 13 (1.7%) 34 (261.5%) Adjusted forecasts as of October 31 are for net sales of
Slide 5: Comparison of 1st Half FY 2005 and 2006
Comparison of 1st Half FY 2005 and 2006 M illion yen 1st Half FY 2006 1st Half FY 2005 Difference Amount % Amout % Amount % Net Sales 914 (100.0%) 509 (100.0%) 405 (79.6%) Operating Income 48 (5.3%) -126 (-24.8%) 174 NA Ordinary Income 48 (5.3%) -125 (-24.6%) 173 NA Net Income 47 (5.1%) -124 (-24.4%
Slide 6: Net Sales by Business
Net Sales by Business Million yen 1st Half FY 2005 2nd Half FY 2005 1st Half FY 2006 Amount % Amount % Amount % Net Sales 509 (100.0%) 989 (100.0%) 914 (100.0%) Net Sales by Segment Solution Support 370 (72.7%) 349 (35.3%) 342 (37.4%) License 137 (26.9%) 638 (64.5%) 568 (62.1%) Service 1 (0.2%) 1 (0
Slide 7: Ordinary Income
Ordinary Income Million yen 1st Half FY 2005 2nd Half FY 2005 1st Half FY 2006 Amount % Amount % Amount % Ordinary Income -125 (-24.6%) 195 (19.7%) 48 (5.3%) For purposes of comparison: Full-year Business Results Million yen FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Amount Amount Amount Amount Amount
Slide 8: Balance Sheet Summary
Balance Sheet Summary Million yen st End of 1 Half End of FY 2005 Change Primary causes FY 2006 Current assets 4,401 2,834 1,567 Cash and deposits 3,553 1,073 2,480 New stock issue Notes and accounts receivable 760 774 -14 Inventory 56 36 20 Other current assets 19 34 -15 Allowance for doubtful rece
Slide 9: Other Figures
Other Figures zDepreciation Expenses Tangible assets: ¥7 million (Previous term: ¥3 million) Intangible assets: ¥90 million (Previous term: ¥55 million) zNumber of Employees (as of September 30, 2005) Non-consolidated: 73, plus an average of 22 part-time workers (Previous term: 51, plus an average o
Slide 10: Significant Events in the 1st Half
Significant Events in the 1st Half zThe Acquisition of MC2 • Expand sales volume of Advanced Media’s existing products, strengthen marketing capabilities • Conduct validation and demonstration of Advanced Media’s CTI products, support development and enhancement of strength of Advanced Media’s produ
Slide 11: About MC2
About MC2 z Company name: MC2, Ltd. z Representative (name, title): Tadashi Kawano, Representative Director z Address: Aioi Sonpo Shinjuku Building 2F, 3-25-3 Yoyogi, Shibuya-ku, Tokyo z Established: September 7, 2000 z Capital: ¥10 million z Number of employees: Approximately 200 (including part-ti
Slide 12: About MC2
About MC2 Business Category Activities Share Sales of communications z Telemarketing of access to the lines of major communications companies through outbound 80% lines (inbound) calls z Marketing of optical fiber connectivity through direct sales calls to condo and apartment owners Sales of office
Slide 13: About MC2: Advanced Media's Synergies
About MC2 zAdvanced Media’s Synergies • Strengthen active marketing capabilities, expand sales volume • Increase the competitiveness of Advanced Media's CTI products and its development capabilities • Contribute to the building and expansion of Advanced Media's Service Business base Copyright Advanc
Slide 14: Forecasts for the Fiscal Year Ending March 31, 2006
Forecasts for the Fiscal Year Ending March 31, 2006 Million yen Non-consolidated Consolidated Amount Amount Net Sales 2,400 3,000 Ordinary Income 499 300 Net Income 497 250 zConsolidated subsidiaries are MC2, Voice Domain Service, and Multi- Modal Technology of the U.S., an equity method subsidiary.
Slide 15: Business Conditions in the First Half
Business Conditions in the First Half 15
Slide 16: Introduction to Business Areas
Introduction to Business Areas zGames/Entertainment/Education PS2, Robots, zMedical Educational games X-ray/medical image reports, AmiVoice CALL electronic medical records (large hospitals, clinics, dental clinics), drug dispensing AmiVoice EX z Government and Public Sector zBusiness Solutions • Ass
Slide 17: Significant Events in the First Half
Significant Events in the First Half 1. Released AmiVoice® Ex Clinic Three-license Value Pack. (May) 2. AmiVoice® Reporter for Smart Phone, Phone the world’s first high-accuracy distributed speech recognition systems for mobile telephones, planned and developed. (May) 3. With Argobrain Co., Ltd., re
Slide 18: Performance by Business Area: Medical
Performance by Business Area in the First Half zMedical •Full-scale installation at pharmacies. (Installed in 589 pharmacies as of September 30) •Sales of speech recognition software for electronic medical records to clinics and hospitals. (Installed in 539 locations as of September 30) •At of the b
Slide 19: Performance by Business Area: Games/Entertainment/Education
Performance by Business Area in the First Half • Healthy sales of English Pronunciation Evaluation zGames/Entertainment/Education System. (Uchida Yoko Co., Ltd.) • Development and promotion of English Education Software for the second half proceeded smoothly. AmiVoice CALL -pronunciation- Speak and
Slide 20: Performance by Business Area: Games/Entertainment/Education
Performance by Business Area in the First Half zGames/Entertainment/Education •After Expo 2005 in Aichi, Japan, robots were rented out to various facilities. They are scheduled to go on sale in April. (Development and customizing of voice interfaces for the Actroid) Reception and Information Robots
Slide 21: Performance by Business Area: CTI
Performance by Business Area in the First Half zComputer Telephony Integration (CTI) • Providing software for pharmaceuticals wholesaling, finance, and securities related businesses. • Providing consultation and systems integration related to the use of CTI. • Joint operations with MC2. (to enhance
Slide 22: Performance by Business Area: Government/Public Sector
Performance by Business Area in the First Half zGovernment/Public Sector (Conference Proceedings Business) Conference proceedings creation support system Conference proceedings creation support system for regional governments for private enterprises National Institutions Conference proceedings creat
Slide 23: Performance by Business Area: Business Solutions
Performance by Business Area in the First Half zBusiness Solutions •Steadily gaining new enterprise users AmiReception A speech-operated automatic reception device that increases the efficiency of reception operations. 62 units sold in first half. AmiVoice Dialer Automated internal/external line con
Slide 24: Performance by Business Area: Mobile Services
Performance by Business Area in the First Half zMobile Services • Developing and promoting software for the Front Service Business − Planned and developed AmiVoice® Reporter for Smart Phone, Phone the world’s first high- accuracy distributed speech recognition system for mobile telephones. − Launche
Slide 25: Voice Domain Service Business: Service Content
Voice Domain Service Business zService Content • The Base of the VDS Business The voice domain registration and operation business Voice domain: − A new advertising model for mobile telephones − When the user speaks a given word, he or she is taken to the firm’s advertising site. − The word registra
Slide 26: Voice Domain Service Business: Comparison With Earlier Input Tools
Voice Domain Service Business zComparison With Earlier Input Tools • Comparison with keyboard input Number of keystrokes required is radically reduced. Actual words with meanings are easy to remember. • Comparison with two-dimensional bar codes No camera is needed. No constraints on display location
Slide 27: Voice Domain Service Business: Using the System
Voice Domain Service Business zUsing the System This service allows URL input by speaking into a mobile telephone. When the user speaks into a mobile telephone, the word is converted to text on the server, and identical or similar URLs are displayed on the terminal. The user can then navigate to a U
Slide 28: Voice Domain Service Business: Structure of the System
Voice Domain Service Business zStructure of the System • Thin Client The mobile telephone incorporates a tiny software program or a chip. The server holds the recognition decoder, dictionary, grammar rules, link table, and other elements. VDS Server Internet Mobile Phone Mobile Virtual Network Adver
Slide 29: Voice Domain Service Business: Domain Registration Service
Voice Domain Service Business zDomain Registration Service • Voice domain registration and maintenance fees for the first year are ¥40,000, and ¥20,000 for the second and subsequent years (excluding taxes). The first year’s fees consist of a ¥20,000 initial registration fee and a ¥20,000 maintenance
Slide 30: Voice Domain Service Business: Schedule
Voice Domain Service Business zSchedule • β Service will commence on November 28, 2005. • Applications for registration will be accepted from January 15, 2006. Firms (advertisers) will register their company, product, and service names. • Full service will begin in March 2006. Copyright Advanced Med
Slide 31: Voice Domain Service Business: Numerical Targets
Voice Domain Service Business zNumerical Targets for This Service • Voice Domain Registrations March 2006: 4,000 keywords March 2007: 13,000 keywords • Net sales targets FY Ending March 31, 2006: ¥50 million FY Ending March 31, 2007: ¥234 million • VDS service-compatible terminals (estimated) FY End
Slide 32: Voice Domain Service Business: Equity Policy
Voice Domain Service Business zEquity Policy • At the time of establishment (July 27, 2005) A wholly owned subsidiary of Advanced Media, Inc. Shares issued and outstanding: 10,000 Paid-in capital: ¥30,000,000 • After capital increase through third-party allocation (October 18, 2005) Paid-in capital:
Slide 33: Important Measures in the Second Half
Important Measures in the Second Half zStrengthening our development and solution offering system • Upgrade systems integration capabilities to bolster systems engineering services. • Establish ties with systems integration firms to increase the value of our speech recognition solution products. zRe
Slide 34: Reference Materials: Overview of Advanced Media's Operations
Reference Materials: Overview of Advanced Media’s Operations 34
Slide 35: Corporate Profile
Corporate Profile z Company name: Advanced Media, Inc. z Established: December 1997 z Paid-in capital: ¥3,218,470,000 z Address: 48F Sunshine 60 Building, 3-1-1 Higashi Ikebukuro,Toshima-ku, Tokyo 170-6048 z Tel: 03-5958-1031 z Business ally: Multimodal Technologies, Inc. (of the U. S.) z Subsidiari
Slide 36: Business Objectives
Business Objectives Propose and provide speech recognition solutions that create new value Specialize in making speech visible any time, any where, to anyone Offer a framework AmiVoice Speech for convenience and Recognition Engine value Operate a variety of services that are of practical use in bu
Slide 37: Business Model
Business Model Customer (User) End user End user Enterprise user Private consumers (Primarily private consumers) (Companies and clients) Provide products Service and services Service Non-end user Content providers, carriers, Products and (Firms that serve end users) and other partners services Licen
Slide 38: Points of Differentiation
Points of Differentiation Expanding into the Mass Market Earlier speech recognition software Quicker acceptance by consumers: General - Prior training required games and entertainment, mobile fields - General-use language-model phones - Specialized sound model Usable Advanced Media Convenient Low ac
Slide 39: Structure of the AmiVoice Engine
Structure of the AmiVoice Engine Analog sound AmiVoice Engine Output Feature data Acoustical Recognition Speech analysis decoder Text (FE) (DC) Sound Language model model (AM) (LM or RG) Application Dictionary (DT) Copyright Advanced Media, Inc. 39
Slide 40: AmiVoice DSR: Higher quality speech data through DSR
AmiVoice DSR Higher quality speech data through DSR The Distributed Speech Recognition (DSR) solution is a speech recognition system that is distributed between the device and the server. Before importing the speech, it is converted into feature data at the client device and then sent in packet form
Slide 41: Changes in Speech Recognition Technology
Changes in Speech Recognition Technology Copyright Advanced Media, Inc. 41
Slide 42: Speech Recognition Technology Roadmap
Speech Recognition Technology Roadmap Regarding generations: 3G: Capable of working with unspecified 1G: Single-word recognition (1960~) speaker, speed changes, different intonations and accents 4G: Recognition at a distance of 2-3 meters 2G: LVCSR (1991~) 5G: Spontaneous speech, intelligent inferen
Slide 43: Long-Term Goals
Long-Term Goals Change in focus of business activities: volume Æ quality Æ volume Æ quality… – Phase I (1998~) Sales of SR engine (volume) – Phase II (2004~) High-value-added business (volume to quality) – Phase III (2006~) Service business (quality) – Phase IV Platform integration/globalization (qu
Slide 44: Thank you for your interest in Advanced Media, Inc.
Thank you for your interest in Advanced Media, Inc. Copyright Advanced Media, Inc. 44