GOOD NEWS:
SANTA CLARA, Calif., Jan. 20 /PRNewswire/ -- S3(R) Incorporated
(Nasdaq: SIII) today reported that net revenues for the fourth quarter of
1996 increased 28% to $132.0 million compared to $103.5 million for the fourth
quarter of 1995. Net income for the quarter increased 35% to $15.5 million, or
$0.29 per share, compared to net income for the same quarter last year of
$11.5 million, or $0.23 per share.
S3's net revenues for the fourth quarter of 1996 increased by 11% over the
third quarter 1996 revenue of $119.4 million. Fourth quarter 1996 earnings per
share increased by 26% compared to the third quarter 1996 earnings of
$0.23 per share. Common and equivalent shares for the fourth quarter
increased to 57.8 million from 52.9 million from the previous quarter. The
increase in shares reflects the full as converted impact of the convertible
note offering completed in September, 1996.
The 1996 fiscal year end results marks the sixth consecutive year of top
line growth for the company as reported net revenues for 1996 increased 47% to
$465.4 million, compared to $316.3 million for 1995. Net income for 1996 was
$48.4 million, or $0.94 per share, compared to net income of $35.4 million, or
$0.75 per share for 1995.
"This has been an exceptional year of growth and leadership for S3," said
Gary Johnson, S3's president and CEO. "In the coming year our customers will
be offered a breadth of products that will bring differentiation to their
expanding product lines. S3's graphic, video and audio acceleration offerings
together with Intel's MMX technology, can bring the optimum multimedia
experience to the PC consumer. In addition, we once again intend to pioneer
new technologies to heighten the computing experience through the combination
of consumer electronics and the PC platform."
In separate announcements today, S3 introduced their initiatives for 1997.
S3 plans to bring technology differentiation to the PC platform by integrating
the best of consumer electronics proprietary technologies, including
compression, communications, high quality video and audio, and video quality
3D graphics. These technologies, as well as a new tagline and logo, bring S3
into 1997 with opportunities to further drive the S3 brand and ensure the
richest possible computing experience.
"During the year S3 significantly strengthened its balance sheet by
raising $103.5 million in a private placement of convertible debt and reducing
days sales outstanding from 73 days in the fourth quarter 1995 to 52 days at
the end of the fourth quarter 1996. We also exited 1996 with what we believe
is a balanced and appropriate inventory level," stated George Hervey, Senior
VP of Finance and CFO. "This strong balance sheet places S3 in an excellent
position to continue investing in manufacturing and new technologies."
The company today also announced the establishment of a $20 million
investment program designed to seed innovative software companies in the 2D/3D
graphics, video, audio and Internet areas.
Fourth Quarter Highlights
Next Generation ViRGE DX/GX brings higher performance to the market
In October, S3 announced the arrival of ViRGE DX/GX bringing a higher
performance member to the successful family of ViRGE 3D graphic accelerators.
Targeted at the advanced gaming and emerging desktop market, DRAM-based ViRGE
DX and SDRAM/SGRAM-based ViRGE GX are designed to deliver performance and
image quality at a mainstream price point.
SonicVibes Revolutionizes the PC Architecture by Moving Audio from the ISA
to the PCI Bus
In November, S3 introduced the SonicVibes audio processor, which features
a revolutionary new design that bridges the gap between the PC and consumer
electronics. SonicVibes represents a milestone in PC audio capabilities by
being the first sound chip to move audio acceleration from the ISA bus to the
PCI bus, enabling higher performance and lower overall system cost, and
decreasing bus bandwidth. SonicVibes also scores an industry first by being a
fully-integrated audio processor that brings Wavetable music synthesis to the
PC motherboard. Through its support of the Microsoft DirectMusic API, it is
the first audio accelerator that provides an unlimited sound palette.
Plato/PX Integrated Platform Accelerator Enables the Next Level of System
Integration
Redefining the PC architecture to enable the next level of integration, S3
announced Plato/PX Integrated Platform Accelerator. Based on Shared Memory
Architecture (SMA), Plato/PX integrates a PC's system controller and
multimedia accelerator onto a single chip. Targeted at today's entry-level
business and SOHO market, this product affords manufacturers the opportunity
to move into the sub-$500 system for emerging markets such as network
computing and Internet devices.
S3 Incorporated, founded in 1989 with headquarters in Santa Clara,
California, is the world's largest supplier of multimedia acceleration
hardware(1) and its associated software. S3 is committed to applying its
expertise in audio, video, graphics and platform acceleration to create
innovative and affordable products for the home, desktop and mobile markets.
The company's vision for the future is to also bring a rich, consumer
electronics-type experience to PC users by integrating the best available
consumer multimedia technologies into the mainstream PC platform.
Except for historical information contained herein, the matters set forth
in this press release, such as statements relating to the company's ability to
drive technological developments, the company's introduction of new products,
and the company's ability to invest in manufacturing and new technologies, are
forward looking statements that are subject to risks and uncertainties,
including the impact of competitive products and pricing and alternative
technological advances, the timely and successful development and market
acceptance of new products and upgrades to existing products, and other risks
detailed from time to time in S3's SEC reports.
NOTE: S3 is a registered trademark of S3 Incorporated. The S3 corporate
logo, ViRGE, ViRGE GX/DX, SonicVibes, Plato/PX are trademarks of S3
Incorporated. All other tradenames, trademarks and registered trademarks are
property of their respective firms.
(1) Based on graphics controllers unit shipments for Q3, 1996. Source:
Mercury Research (Scottsdale, AZ)
S3 Incorporated
Consolidated Balance Sheets
(dollars in thousands)
December 31, December 31,
1996 1995
ASSETS
Current assets:
Cash and investments $157,384 $ 93,919
Accounts receivable, net 76,120 84,210
Inventories, net 53,466 43,293
Prepaid expenses and other 34,369 14,216
Total current assets 321,339 235,638
Property and equipment, net 34,047 20,678
Production capacity rights 14,400 24,000
Investment in joint venture 93,430 36,425
Other assets 17,246 4,902
Total $480,462 $321,643
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 51,160 $ 62,081
Notes payable 17,802 9,200
Accrued liabilities 12,687 13,461
Income taxes payable 7,361 6,276
Total current liabilities 89,010 91,018
Notes payable 14,400 24,000
Other liabilities 6,452 761
Total liabilities 109,862 115,779
Convertible subordinated debentures 103,500 --
Stockholders' equity 267,100 205,864
Total $480,462 $321,643
23,814 17,639 74,412 55,441
Income taxes 8,335 6,180 26,045 20,067
Net income $ 15,479 $ 11,459 $ 48,367 $ 35,374
Net Income per common and
equivalent share:
Primary $ 0.30 $ 0.23 $ 0.95 $ 0.75
Assuming full dilution $ 0.29 $ 0.23 $ 0.94 $ 0.75
Shares used in computing net
income per common and equivalent
share:
Primary 52,455 50,329 50,929 47,013
Assuming full dilution 57,840 50,329 52,733 47,013
SOURCE S3 Inc.
CONTACT: George Hervey, Sr. Vice President, CFO, 408-588-8000, or
s3.com, or Sandy O'Halloran, Investor Relations, 408-588-8000, ext.
3994, or email: SandyOH@S3.com, both of S3 Incorporated |
