Sonic Solutions

They are many type of investments, the mo mo type when you see name it's running and you hop on board. The deep discount falling knife scenario, the old favorite and sometimes you just have to go out on a limb and build a case for a good stock that the investment community hasn't latched onto... yet.

That stock is sonic Solutions. Anybody remember ROXIO? Well you've got it again here folks- part of SNIC. Why am I so HIGH on this stock? Well all this Blockbuster vs Netflix talk on ET has me digging for the technology that makes it all possible. That technology is from Sonic. Do you realize this company won BEST IN SHOW at macworld and no one even mentioned it?
- Roxio(R), a division of Sonic Solutions(R) , the leader in digital media software, today announced it has been awarded Best of Show at Macworld for Toast (R) 8 Titanium, the newest addition to its Mac consumer software line. The win for Toast 8, which offers a range of unique features and ground-breaking platform firsts, marks the third time in the past four years Roxio's products have taken home the coveted prize.

In what Macworld editors describe as one of the strongest shows for new and innovative products in recent years, Toast 8 was one of only 11 products recognized. "With many highly anticipated and desirable platform firsts, Toast 8 once again sets the standard for burning on the Mac," Jim Dalrymple, news director, MacCentral.com.

Toast 8 also garnered Best of Show from iLounge.com, the leading independent web site for iPod, iTunes, and iPhone information. iLounge awarded Best of Show to only 10 products this year, but recognized Toast 8 as an especially impressive software release. "Thanks to its TiVoToGo(TM) functionality and iPod friendly features," explained Jeremy Horwitz, editor-in-chief, iLounge. "Toast 8 isn't just a strong product for users of CD, DVD, and Blu-Ray burners; it's now a big deal for iPod owners, too."

Wow lets take that in... could this be the ONLY company with products for the IPhone not to get highlighted and pumped last week? Ok the TiviToGo bit is really interesting it allows you to transfer from tivo to your Mac and then burn discs! As Netflix has been touting their at home download-to-own services to be rolled out next year who sits in the middle of that as well- Sonic Solutions... let's take a look under the hood:

I estimate revenue will increased from 6% this year 07 to over 15% in 08! This is primarily on the adoption of High Def DVD nothing else! And you know that's coming like a sandstorm! Also we have a very important licensing agreement with Movielink which should prove to be significant in 08.

Gross margins will increase to 78% with a very favorable product mix. Operating EPS in 07' is 85 cents up about 8% from the year before but look at 08' S&P has them up at $1.04 for a gain of 22%!!
Shares are trading at a DISCOUNT to peers with a better growth profile. You don't run across this much stuff adding up for a stock very often. The only true negative that I can find is a substantially higher tax rate and a board with less than 6 directors.

My 1 year target price is $24-$27. I will be half boating it today due to market conditions.

 

Wow we started a mini revolution folks check out that ticker... could there be some Apple tie in with their earnings? ...

 

Well folks the big bad options scandle reared up and bit me on the ass yesterday. one minute Sonic was looking beautiful at $8.40 plus the next.....

Sonic Solutions announces voluntary review of stock option accounting
Briefing.com - February 01, 2007 6:02 PM ET



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SNIC Trade 18.03 0.00
Real time quote.


Co announced that it has commenced a voluntary review of its historical and current stock option grant practices and related accounting. The review was initiated by management and is being conducted by the audit committee of the board of directors, comprised solely of independent directors, with the assistance of independent legal counsel. The audit committee and Company management have been discussing this ongoing review with the Company's independent auditors and have voluntarily informed the Securities and Exchange Commission of the review. Based on the review to date, the audit committee and co management have preliminarily concluded that, under applicable accounting guidance, the co lacks sufficient documentation for certain historical option grants and that the measurement dates associated with these option grants may need to be adjusted. Based also on this review, the co believes that its current options granting practices are generally acceptable and meet relevant standards for properly documenting grant dates... Based on the preliminary conclusions of the review, the audit committee and management believe that the co will need to restate its previously issued financial statements in order to record additional non-cash charges for stock-based compensation expense... Accordingly, the audit committee, after consultation with management and the co's board of directors, determined that the co's annual and interim financial statements should no longer be relied upon. Given these circumstances, the co expects that it will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 in a timely manner.

Ahhhhhh. Investing. It's great isn't it?

 

Folks far be it for me to pick up a dead stock but you have to be dead not to notice the drumbeat of good news out of Sonic lately. Their dream of burning movies on to DVD's left and right is now about a year away. Their product is ready for Dell to insert into new machines Dell has been a little slow. A Whole slew of companies will be using their burning tech to have kiosks everywhere. this is all awful news for the environment I hope they do away with the cases! These are small players though...This is really a next year story but some huge agreement could be announced with someone any day I imagine. Always dreaming! -- bringing Sonic Solutions back to your attention today... When to buy?

I've been really struggling with this over the past few days. On the surface it's a double. my warning antennas have been holding me back though, after all, very few of these will be sold before this christmas,,, although we can count on the company to be proactive with the press releases. >Have to make a decision on this after the hoopla with the ratings board finally agreeing to their product I have been awaiting the sell the news and it just has not happened. Clinging to $10 here.

>>Sonic Solutions (SNIC) is hoping to spark a home entertainment revolution today with the release of its DVD On Demand software and Qflix recordable Content Scramble System (CSS) program. If successful, this means you’ll be able to burn movies you download at home to a DVD, or purchase custom-made DVDs online or at a retail kiosk, and have these discs work in any DVD player.

The move comes thanks to, in part, the DVD Copy Control Association (DVD CCA), which recently approved a change in the rules dealing with the home burning of CSS-protected DVDs. Up until now, “The CSS license explicitly disallow[ed] players from playing CSS content on recordable media,” said Jim Taylor, senior vice-president and general manager of the advanced technology division at Sonic. “It was created because of concerns that writable media would be used in piracy.” Translation: if studios couldn't’t protect it, you couldn't’t burn it.

But wiser heads prevailed. “People saw the opportunities, and answering market demand is really what this is about,” said a spokesperson for the DVD CCA.

“When we first went to studios three years ago, their initial reaction was ‘No way we’re going to take CSS systems and open it up for recordable media,’” said Taylor. “But we made it clear we’re designing a system that still protects their content.”

As solutions to the legal challenges made their way through committee, Sonic was facing technical hurdles. Roughly 90 percent of homes in the U.S. have a DVD player, so it was crucial that custom-burned DVDs not only included copy protection, but could also play on these existing devices, since, as Taylor pointed out, “People know what to do with them.” The result is a new type of disc and burner that meet both of these criteria.

And Sonic’s Qflix is the nuts and bolts of that process, handling the DVD formatting and CSS duties. Sonic has announced partnerships with drive companies such as DataPlay, Pioneer, PLDS (Philips & Lite-On Digital Solutions Corp.), Plextor, TSST (Toshiba Samsung Storage Technology Corp.). And the special blank discs being released by Mitsubishi Kagaku Media (MKM)/Verbatim, and RITEK.

The first phase of this on-demand DVD creation will be purchasing customized discs via online and retail kiosks. “We are working with various retailers and have plans for potential pilot launches for sure in the first half of next year,” said Taylor.

Sonic wants its technology to free up vast libraries of content for you to purchase epitomizing the classic “long tail” scenario. Where it would be too costly to produce, bring to market and house certain niche content, the on-demand creation allows retailers and manufacturers to burn individual discs, or maintain an infinite number of titles on virtual shelf space. Enabling this is Sonic’s DVD On Demand software, which can power retail kiosks, or be licensed by an online retailer.

The ability to burn at home won’t come until consumers can get their hands on new burners that can write to the new DVDs. Sonic is partnering with Dell (DELL) and other PC manufacturers to have Qflix drives installed, and hopes they start appearing next year.