SOURCE: Thomson

October 16, 2007 12:45 ET

Thomson Announces Exit From Remaining Audio-Video and Accessories Businesses

PARIS--(Marketwire - October 16, 2007) - Thomson (Euronext 18453 ; NYSE : TMS) today announced it has signed a definitive agreement to sell its consumer electronics Audio-Video (AV) activities outside Europe (AV US/ROW). In addition, Thomson will progress with closing its European Audio/Video and Accessories (AVA Europe) activities.

Sale of AV US/ROW

Thomson is selling the AV activities to Audiovox Corporation (NASDAQ: VOXX). Completion of the sale is expected to take place on December 31, 2007.

Currently, the AV business sells a range of AV products, including DVD and MP3 players, under various brands including RCA. As part of the transaction, Thomson will assign to Audiovox rights worldwide to the RCA brand within the field of use for AV products. Audiovox is a US listed company, well established in the consumer electronics field. It already has a presence in AV products and in January 2007 purchased Thomson's US/ROW Accessories business, including rights to the RCA brand for consumer electronics accessories.

AVA Europe

Following discussions with various parties on the alternatives for the future of its AVA Europe business, Thomson will progress with closing the business, except for the Skymaster activities in Germany, where discussions with potential purchasers continue. Thomson will implement the appropriate social measures in line with regulations and laws which apply in the different countries where the AVA Europe activities operate.

Financial effects

The cash proceeds of the AV US/ROW sale (net of related restructuring costs and including expected trademark payments and liquidation of working capital) are expected to be just over EUR 40 million. The cash costs of shutting the European activities and the expected costs of exiting the German operation, net of liquidation of working capital, are estimated to be just over EUR 30 million.

The US sale and European closure will give rise to one-off asset write-offs and charges of the order of EUR 90 million. In addition, operating losses and other costs from discontinued operations for the second half of 2007 are expected to be about EUR 45 million. All these costs will be taken in the second half of 2007 and will therefore impact the Group's net results after discontinued operations for 2007. From 2008 any remaining charges and net cash effects relating to these activities are expected to be immaterial.

Thomson reports its third quarter sales on Thursday 18th October.

Certain statements in this press release, including any discussion of management expectations for future periods, constitute "forward-looking statements" within the meaning of the "safe harbor" of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to changes in global economic and business conditions, consumer electronics markets, and regulatory factors. More detailed information on the potential factors that could affect the financial results of Thomson is contained in Thomson's filings with the U.S. Securities and Exchange Commission.

About Thomson — World leader in digital video technologies

Thomson (Euronext Paris: 18453; NYSE: TMS) provides technology, services, and systems to help its Media & Entertainment clients - content creators, content distributors and users of its technology - realize their business goals and optimize their performance in a rapidly changing technology environment. The Group is the preferred partner to the Media & Entertainment Industries through its Technicolor, Grass Valley, RCA, and Thomson brands. For more information: http://www.thomson.net.

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