Don't own but following it. Here is the press release 10 Q which I thought would be interesting to the board.
MHS
Wednesday November 19, 6:00 pm Eastern Time
Company Press Release
SOURCE: S3 Incorporated
S3 Incorporated Files Third Quarter, 1997 Form 10-Q
Includes Restated Financial Results for First Nine Months, 1996
SANTA CLARA, Calif., Nov. 19 /PRNewswire/ -- S3 Incorporated (Nasdaq: SIII - news) said today that it has filed its third quarter 1997, Form 10-Q with the Securities and Exchange Commission. The Form 10-Q for the period ended September 30, 1997 contains restated financial results for the third quarter and the first nine months of the 1996 fiscal year.
The company stated on November 3, 1997, that it expected to restate its revenues downward for prior quarters, following an internal review that uncovered errors in the timing of its recognition of sales to several international distributors. It expects to restate its financial results commencing with the first quarter of fiscal 1996.
For the three month period ended September 30, 1997, revenues were $119.6 million compared to the three months ended September 30, 1996 restated revenue of $110 million (versus $119.4 million as previously reported). Revenues increased approximately 9 percent in the third quarter of 1997 over the restated third quarter of 1996. Net income during the third quarter of 1997 was $4.4 million. Net income during the third quarter of fiscal year 1996 was restated to $8.9 million from $11.8 million.
For the nine month period ended September 30, 1997, revenues were $334.4 million compared to restated first nine months of 1996 revenue of $311.3 million (restated from $333.3 million). The nine month revenue for 1997 was a 7 percent increase from the restated revenue in the comparable nine months of 1996. Net income for the first nine months of 1997 was $17 million. In the comparable nine month period of 1996, net income was restated to $27 million from $32.9 million.
The company said the Audit Committee of its Board of Directors is continuing its review of the revenue recognition matters. Although its review has not been completed, the Company believes that it has quantified the revenue misstatements related to its distributors and has reported the effects as restatements in its Form 10-Q. The Company believes the cumulative downward effect of the restatement on revenues will be $58 million, or 23 cents per share. In its November 3, 1997 statement, the Company said that restatement for all the quarters would total between $40 million and $70 million and the resulting effect on net income for those quarters would be a cumulative decrease of 14 cents to 29 cents per share. The company anticipates filing restated 10-Q reports for 1996 and the first two quarters of 1997 and a restated Form 10-K for 1996 after further review.
About S3 Incorporated
S3 Incorporated, founded in 1989 with headquarters in Santa Clara, California, is the world's largest supplier of multimedia acceleration hardware and its associated software*. S3 is committed to applying its expertise in audio, video and graphics 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 -- integrating the best available consumer multimedia technologies into the mainstream PC platform.
NOTE: Except for historical information contained herein, the matters set forth in this press release, such as statements relating to status of the review, timing and extent of the restatement, are forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially, including the further review of revenue recognition matters by the Audit Committee of the Board of Directors and the company's auditors and the discovery of additional information with respect to those matters, uncertainties associated with the restatements of the Company's financial statements, pending stockholder class action litigation, the Company's ability to attract and retain qualified personnel, the impact of competitive products and pricing and of alternative technological advances, market acceptance of the Company's and its competitors new products, and other risks detailed from time to time in S3's SEC reports, including its Annual Report of Form 10-K for the year ended December 31, 1996 and in the Company's subsequent Quarterly Reports on Form 10-Q. These forward looking statements speak only as of the date hereof.
The S3 corporate logo is a trademark of S3 Incorporated.
* Source: Mercury Research (Scottsdale, AZ)
S3 INCORPORATED
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
September 30, December 31,
1997 1996
(Unaudited) (As Restated)
(Unaudited)
ASSETS
Current assets:
Cash and investments $112,091 $157,384
Accounts receivable, net 117,458 76,120
Inventories, net 50,727 53,466
Prepaid expenses and other 35,715 34,369
Total current assets 315,991 321,339
Property and equipment, net 48,593 34,047
Production capacity rights 14,400 14,400
Investment in joint venture 112,108 93,430
Other assets 44,542 17,246
Total $535,634 $480,462
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $66,039 $51,160
Notes payable 28,461 17,802
Accrued liabilities 14,896 12,063
Deferred revenue 21,760 12,113
Income taxes payable -- 2,651
Total current liabilities 131,156 95,789
Notes payable 4,800 14,400
Other liabilities 9,188 6,452
Total liabilities 145,144 116,641
Convertible subordinated debentures 103,500 103,500
Stockholders' equity 286,990 260,321
Total $535,634 $480,462
S3 INCORPORATED
STATEMENTS OF OPERATIONS
(In thousands, except per share data )
(Unaudited )
Three Months For the Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
(As Restated) (As Restated)
Net sales $119,604 $110,085 $334,448 $311,327
Cost of sales 78,791 68,079 207,039 191,391
Gross margin 40,813 42,006 127,409 119,936
Operating expenses:
Research and development 20,057 15,897 60,028 45,675
Selling, marketing and
administrative 13,763 12,858 39,895 35,359
Total operating expenses 33,820 28,755 99,923 81,034
Income from operations 6,993 13,251 27,486 38,902
Other income (expense), net (737) 277 (1,008) 1,986
Income before income taxes 6,256 13,528 26,478 40,888
Provision for Income taxes 1,872 4,600 9,478 13,869
Net income $4,384 $8,928 $17,000 $27,019
Net income per common and
equivalent share
Primary $0.08 $0.17 $0.33 $0.54
Fully Diluted $0.08 $0.17 $0.33 $0.53
Common and equivalent shares used in
computing net income per share
Primary 52,380 51,101 51,232 50,421
Fully Diluted 52,380 52,932 53,020 51,031
Restatement of Financial Statements for Previous Periods:
Three Months, Nine Months,
Ended Ended
September 30, September 30,
1996 1996
Net sales before restatement $119,440 $333,337
Net sales after restatement $110,085 $311,327
Cost of sales before restatement $72,824 $203,691
Cost of sales after restatement $68,079 $191,391
Net income before restatement $11,788 $32,888
Net income after restatement $8,928 $27,019
Net income per common and equivalent
share before restatement $0.23 $0.65
Net income per common and equivalent
share after restatement $0.17 $0.54
At December 31, 1996
Deferred revenue before restatement $624
Deferred revenue after restatement $12,113
Total liabilities before restatement $109,862
Total liabilities after restatement $116,641
Total stockholders' equity before restatement $267,100
Total stockholders' equity after restatement $260,321
SOURCE: S3 Incorporated |
