Intel Investors - S3 Preannounces UPSIDE "Surprise".
S3 Expects to Exceed Analyst Expectations for Q2 1999 Financial Results; Series of Recent Developments Pushes Company Ahead of Plan
This may be good for the semi's tomorrow - and represents yet ANOTHER excellent investment for Intel.
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Thursday December 17, 8:00 am Eastern Time
Company Press Release
S3 Announces 10-Year Cross Licensing Agreement With Intel
Intel to Purchase Warrants for S3 Shares
S3 to be an Intel AGP 4X Validation Partner
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 17, 1998--S3 Inc. (Nasdaq:SIII - news) today announced a long-term agreement with Intel Corp. (Nasdaq:INTC - news) which includes a 10-year cross-license agreement for all S3 and Intel patents for development of certain semiconductor products, a bus license for current and future Intel general purpose processors, and the selection of S3 as an Intel AGP 4X validation partner.
S3 also announced that Intel is to purchase warrants to buy S3 shares under undisclosed terms.
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S3 was trading for $5+/- when Intel cut that deal - and is now trading for > $11.
Here's the S3 "warning".
Paul
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newsalert.com
July 01, 1999 07:16
S3 Expects to Exceed Analyst Expectations for Q2 1999 Financial Results; Series of Recent Developments Pushes Company Ahead of Plan
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 1, 1999---S3(R) Incorporated (Nasdaq:SIII) today announced that it expects to beat analyst expectations for the 2nd quarter 1999 by approximately $0.15 to $0.20 per share.
First Call estimates are calling for a loss of $0.20 per share. Based on preliminary results, the company anticipates reporting revenues in excess of $50 million when it releases complete second quarter results after the close of market on July 15, 1999.
"Our anticipated financial performance in Q2 puts us ahead of our plan to achieve profitability by the end of the year," said Ken Potashner, president and CEO of S3 Incorporated. "While profitability depends on the financial effects of the Diamond acquisition amongst other things, we look forward the challenges and opportunities ahead of us."
"Q2 was a successful quarter as evidenced by several major PC OEM design wins with Compaq, IBM, Packard Bell NEC and others, our announced patent license agreement with UMC, and plans to receive UMC stock worth approximately $500 million," said Potashner. "In addition, we also announced the pending acquisition of Diamond Multimedia, which should enable S3 to aggressively enter the Internet appliance, home networking and communications markets."
"We believe S3 is well positioned with the right technologies and financial resources necessary to accelerate our growth in graphics and emerging high-growth areas," added Potashner. "Based on Q2 developments and strategic plans being put place, we believe the Company has the potential to approach a billion dollars in revenues in the next fiscal year, assuming the completion of the Diamond acquisition and depending on our combined execution and financial performance."
Second Quarter Highlights
-- Acquisition of Diamond Multimedia -- S3 announced last week that
it had entered into a definitive agreement to acquire Diamond
Multimedia Systems. If completed, the acquisition of Diamond, one
of the industry's largest board makers with over $600 million in
sales in 1998, will give S3 a broad-based product diversity in
several high-value markets, as well as significant vertical
integration in time-to-market advanced technologies. Under the
terms of the agreement, S3 will acquire Diamond Multimedia
Systems in a purchase transaction in exchange for S3 common
stock. Diamond shareholders will receive 0.52 shares of S3 common
stock for each share of Diamond stock.
-- S3's USC Holdings Accorded Substantial Value -- S3 announced two
events related to the conversion into cash of S3's equity
interest in United Microelectronic Corporation, a Taiwanese
semiconductor foundry. Under the first event, S3 will be
receiving $42 million in cash, spread out over the next 5
quarters. This was followed by the announcement that S3 will
receive approximately 250 million shares of UMC stock, currently
worth approximately $500 million, related to a prior equity
investment. Both of these financial transactions, when completed,
will give S3 one of the strongest balance sheets in the industry.
-- Launch of Savage Mobile Products -- In June, S3 announced that it
was bringing true "desktop-equivalent" graphics capabilities to
notebook PCs for the first time with the launches of
Savage/MX(TM) and Savage/IX(TM) 3D mobile accelerators. With
industry-first 16MB integrated memory support, .18 micron design,
high-performance 3D speed and stunning S3TC image quality, S3's
mobile Savage defies the existing notion that PC users must
sacrifice graphics performance for mobility.
-- Savage4 Design Wins -- S3 has had success in securing major OEM
design wins for its Savage desktop accelerator. The company
recently announced volume wins with Compaq Presario, IBM Aptiva,
IBM PC 300PL commercial systems, NEC/Packard Bell Zuma line and
Micron Client Pro Systems.
-- S3 Forms Partnership with VIA to Develop Integrated Graphics and
Core Logic -- In a move to integrate the PC's graphics and core
logic subsystems, S3 formed a strategic partnership with VIA
Technologies, the world's leading PC core logic design house. S3
and VIA are working together to develop and market a family of
integrated products that support both Intel and AMD processors.
The two companies expect to introduce their first product, which
will be targeted at the mainstream and growing value PC market,
in the second half of 1999.
About S3 Incorporated
One of the largest suppliers of graphics and video accelerators in the world, S3 Incorporated has established itself as a market leader in technology excellence, core business strengths, strategic partnerships and worldwide reach. Building on these strengths, S3 is committed to delivering targeted products for the Personal Computer, Computing Integration and Consumer Appliance Markets.
S3 is not adopting as its own any analyst estimates or consensus estimates for any period subsequent to the second quarter of 1999. The current worth of S3's UMC shares is based on UMC's current stock price and current NT exchange rates. Any value that might be derived by S3 from its holdings of UMC shares are subject to numerous uncertainties, such as Taiwan regulatory and stock exchange approvals and restrictions, the trading price fluctuations of UMC shares, currency exchange rate fluctuations, and the ability of S3 to obtain liquidity for its shares. Except for historical information contained herein, the matters set forth in this press release, such as the anticipated revenues and income for the second quarter of 1999, anticipated profitability by year end, anticipated revenues as a result of the acquisition of Diamond and anticipated growth in new areas, and anticipated introductions of joint S3/VIA products, are forward-looking statements that are subject to risk and uncertainties, including the financial results and the adjustments to the company's accounts as a result of closing the company's books for the second quarter, the ability of S3 and Diamond to consummate their merger and to integrate their businesses in a timely and successful manner, strategies of competitors, reduced market demand, market acceptance of the company's and its customers' new products, S3 and VIA's ability to negotiate and document their venture and their ability to work together to design in a timely manner their proposed products, and other risks detailed from time to time in S3's SEC reports, including its Quarterly Report on Form 10-Q for the three months ended March 31, 1999. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo and Savage4 are trademarks of S3 Incorporated. Other marks referenced herein are the property of their respective owners.
CONTACT: S3
Kelly Morris, 408/588-8023 (Press)
Eugene Anton, 408/588-8086 (Investors)
s3.com
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