TVIA

[AussieTrader]

Designs, develops and markets display processors for the interactive-television market and HD and SD LCD TVs.

An image processing sleeper?
Commentary: Hot market monitors and TV set chips

By John C. Dvorak
BERKELEY, Calif. (MarketWatch) -- There are two companies involved in image processing that have caught my eye.

Both can benefit from a serious uptake in HDTV sets and LCD monitors for computers. Just go to Costco and tell me what is the first thing you see when you walk in the front door: giant expensive HDTV sets.

One name that is cropping up more and more is the up-and-down Genesis Microchip (GNSS) http://www.gnss.com. The company makes the chips for LCD and HDTV sets and exhibits great marketing and PR savvy. I'm always impressed by a company that utilizes solid PR, good advice and can throw unique parties that get a lot of insider attention. That's Genesis

The stock is promoted to death by Jim Cramer on his Mad Money show on CNBC and that should help boost its fortunes. Unless things mysteriously slow down. Genesis is a winner.

Some investment gurus will promote the notion that investors should buy the suppliers to the big companies -- the ones with the inventive circuit that saves everyone money since these companies usually have a monopoly on something that is selling like wild. That's Genesis.

While this seems like a good short term strategy it only works if you are familiar enough with the specific sub-sector to know how to spot another little company with another inventive circuit that will blow your company out of the water overnight. This is the theme for investing with component suppliers.

That said, Genesis is, like the rest of component suppliers, subject to a smaller company with a new invention appearing to steal business.

That's why it might be worthwhile to look at a microcap, TVIA, Inc (TVIA) www.tvia.com. TVIA rolled out its IPO just as the tech market was collapsing and never fully receovered with its stock now hovering under $2.

Its line of TrueView and CyberView video processing chips is expanding although the company is in the black. The company does not have the apparent marketing savvy of Genesis and that doesn't help.

TVIA you seldom hear about. The last real news from the company came in 2003 when it sold some software properties to MediaTek for around $10 million. There are only six mentions of the company in the EETimes database. Genesis has over 100. And it's hard to get too worked up about a company whose last report showed a yearly loss of $7.6 million on revenues of $.2 million. A yawner.

This looks like a dog, right? No marketing; unknown, poor sales, losses, big competitors. The good news is that's all the bad news there is.

Why do I like the idea of following this company? It's because of one man on the board who happens to be one of the greatest signal processing experts in the history of the video game: Yves Faroudja.

If you ever shot with a camcorder or used a VHS deck you've probably been around his circuits. He essentially invented line-doubling technology and something called super-NTSC, a technology that makes regular TV look so good it almost completely derailed HDTV. He invented Hiband 8mm and SVHS too.

Furthermore he's also connected to Genesis since his company, Faroudja, was bought by Sage which was bought by Genesis and now Faroudja is owned by Genesis. Normally board members are just window dressing, but this is never the case with a genius like Faroudja. And more importantly he's a legend and can draw quality engineers into the company just by his presence. The rest of the team including CEO of TVIA. Cal grad Eli Porat, are solid.

Is TVIA a rank speculation that only the foolhardy should even consider? It's definitely risky, but the HDTV, LCD, image processing world is becoming more and more important and there could be one of those disruptive home run chips in the pipeline of this company. Don't go crazy here but at least track it alongside Genesis. If Faroudja leaves the board, I'd bail.

[Tirebldr]

Great review Aussie! Thanks!!!
If this one pick pans out it will be reason enough to remain in 3SoF....

[AussieTrader]

LOL not many of my picks pan out Art

I have TVIA in the stock pick comp and am languishing somewhere near the bottom of the list in the red. That said the chart is still respecting an ascending triangle pattern on the weekly and I think earnings (and in particular guidance for the next qtr onwards) will set the stall for TVIA price.

[AussieTrader]

I am expecting breakout next week ahead of earnings and then depending on earnings...well who knows, but chart is telling me which way to trade right now.

[AussieTrader]

TVIA results were good (relative to expectation) and by all accounts the conference call was positive with production ramps being predicted for this current quarter onwards. Volume is ramping nicely and soon TVIA will break the $2.80 resistance zone. I am looking to hold TVIA for a while as the impact from new products hitting production is going to make a significant impact on valuation of the stock. I think it will steadily appreciate over the coming weeks/months in anticipation of this.
I understand Roth Capital Partners have upgraded to strong buy with $3.50 target (I don't have any confirmation of this though as I cannot find it anywhere).

SANTA CLARA, Calif., Feb 07, 2006 /PRNewswire-FirstCall via COMTEX/ -- Tvia, Inc. (TVIA), a leading provider of display processors for the digital and interactive TV market, announced today financial results for the third quarter of fiscal year 2006, ended December 31, 2005.



Revenue for the third quarter of fiscal 2006, ended December 31, 2005, was $2,710,000, compared to $1,090,000 for the quarter ended December 31, 2004. For the nine months ended December 31, 2005, revenues were $5,573,000, as compared to $2,235,000 in the comparable period ending December 31, 2004.

Net loss for the quarter ended December 31, 2005 totaled $1,733,000, or $0.07 per share. Adjusted net loss for the third quarter was $1,364,000 or $0.06 per share, excluding non-cash share-based compensation charges. This compared to the net loss for the comparable quarter ending December 31, 2004 of $1,580,000 or $0.07 per share. Net loss for the nine months ended December 31, 2005 was $6,195,000, or $0.26 per share. The adjusted net loss for the nine months was $5,156,000 or $0.22 per share, excluding non-cash share-based compensation charges. This compared to the net loss for the comparable period ending December 31, 2004 of $4,703,000, or $0.21 per share. In the first quarter of fiscal year 2006, the Company elected early adoption of FAS 123R, the new accounting rules on stock-based compensation. In accordance with SAB 107, issued March 2005, we present stock-based compensation within the same operating expense line items as cash compensation. The total stock compensation expense recorded in the quarter ended December 31, 2005 is $369,000. The total stock compensation expense recorded in the nine months ended December 31, 2005 is $1,039,000. There is no comparable stock compensation expense recorded in the quarter and nine months ended December 31, 2004. Additional expenses which account for the increase in the adjusted net loss relate to the establishment of sales and customer support centers in Beijing and Shenzhen, China. As well as an increase in legal, audit fees and outside services associated with a public company and Sarbanes Oxley compliance.

The operating loss for the quarter ended December 31, 2005 was $1,847,000. The adjusted operating loss (excluding stock-based compensation) was $1,478,000 as compared to an operating loss of $1,684,000 for the quarter ended December 31, 2004. The operating loss for the nine months ended December 31, 2005 was $6,520,000. The adjusted operating loss (excluding stock-based compensation) was $5,481,000 compared to an operating loss of $5,006,000, in the comparable period ending December 31, 2004.

In the third quarter of fiscal 2006, Tvia continued to focus on customers' design activity and corporate infrastructure.

We continue to make great progress with customers in the US, Europe and Asia Pacific. Our Turnkey LCD-TV reference design released to customers in June 2005, in conjunction with the support of our TV design center in Shenzhen, is making it easier for our customers to rapidly move products to mass production. Our LCD TV reference design for European and US standards enables customers to move to production within 2 to 3 months. Customers are using our ShenZhen TV Design Center services and our LCD-TV reference design in growing numbers and the backlog to our design services has stretched to a few months.

In the third quarter we have introduced our newest chip the TrueView 5725 which is rapidly gaining momentum within the market. The TrueView 5725 chip embedded in the TV5725 turnkey LCD TV design kit allows manufacturers to quickly enter the low cost LCD-TVs market with significantly higher picture quality. Our TV design center has produced a complete LCD-TV system design with a BOM of around $30 for an EU version and around $25 for a US version, allowing TV manufacturers to get a low cost, high quality 17"-27" TV to market quickly at the lowest bill of material while producing significantly better picture quality in the very lucrative low cost LCD-TV market.

As a result of the increased customer demand, we have expanded our customer support group for system design, application and software support. We have multiple teams available to provide these services to customers for European & US standards and enable those customers to quickly move into volume production.

We continue to focus on our financial and operations infrastructure to ensure compliance with the requirements of the Sarbanes Oxley Act, as well as meet the anticipated demand for our products.

Cash conservation remains a priority to ensure that we have sufficient resources available to accomplish our vision to become a DTV leader, increase revenue, achieve profitability and acquire technology needed in our pursuit of the DTV market.

[boatguy]

Hey Aussie nice pick-I'm going to watch this one!

I used to work for Turner Broadcasting and have used some of the equipment that was made by Faroudja before it was sold.  Faroudja made a piece of equipment that we considered indispensible, it was called a line doubler, when  processing video it takes the signal and doubles the number of lines in the image(doubling the number of pixels). It was a very high priced and specialized piece of equipment.

The analyst is right when he mentions Mr.Faroudja, he is well known in the broadcast world and is well respected. I wonder if they use some sort of variation of this technology for their displays?

I'm going to dig deeper on this one, they may have something good up their sleeves!

[la-onda]

TVIA: Roth Capital Ups to Strong Buy from Buy; Ups Tgt to $3.5 vs $3; Analyst Notes
Wednesday, February 08, 2006 08:58 ET

Issuer: TVIA Incorporated (NasdaqSC: TVIA)

Analyst Firm:  Roth Capital Partners Inc.

Ratings Action: UPGRADE

Current Rating: Strong Buy (from Buy)

Target Price Action: INCREASE
Target Price: $3.50 (+16.67% from $3.00)

Analyst Comments: The firm believes TVIA has reached an inflection point in its revenues given that sequential growth is expected in every FY07 quarter.

[boatguy]

OK,  I'm in for half a position at 2.65.