Now I know that 3dfx's quarter was pretty back-end loaded, but A/R is a little high and their cash balances did go down by almost $16 million from December to now. A/R went down quarter over quarter and inventory went down quarter over quarter (generates cash). They used up almost $3 million in cash from their loss for the period and current liabilities went down a bunch as well which used cash up (about $11.5M). They also increase fixed assets and other assets during the quarter (used almost $9 million of cash but I bet that most of the $3 million other assets are capitalized merger costs).
Overall, especially considering the launch costs for Voodoo3, their cash burn rate appears to be ok.
Without a breakdown between inter-co A/R (STB) and Trade A/R (all their other customers) it is difficult to see how much is left to colect so how much risk of non-payment there is.
Earnings-wise, they came right on the -9 cents for the combined companies which is right at expectations.
They used a great deal of waffle-words when discussing OEM wins. Lots of talk about "still in qualification and subject to change". The good news is that they seemed to be about to announce high-volume wins. If they're the basic card for the meat of some OEM's line-up, then we'll get pretty good volume at lower margins than retail sales. TNT2 will be on the store shelves in a week or so (Creative Labs is shipping and their press release says 1-3 weeks from now it will show up), so V3 will have all of May without a serious competitor on the shelves.
I looked again at the nvidia OEM announcements. Micron and Gateway appears to be the standard card. The TNT2 is only on the Pentium II 550's for Gateway. Dell is only an option. The Diamond card that is going to Dell appears to be very stripped down (anyone else notice the AGPx2 tag in the Diamond press release?).
Overall, I'm not happy with everything, but 3dfx still appears to be positioned well. Nvidia is also doing very well. I'm going to try and do some side-by-side P&L comparisons and see where each company is spending their money, but the basic fact is that nvidia sold about $30 million more than 3dfx did in Q1 (3dfx may have sold at a cheaper price to STB - there was a pretty vauge answer to a question like that in the conference call).
Q2 will have all the merger expenses hitting it and it'll be the slowest sales quarter (from the CC).
Michael |
