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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: DRRISK who wrote (7194)	12/14/1997 2:05:00 PM
From: Douglas V. Fant	Read Replies (3) \| Respond to of 13925

DRRISK, Just for comparison purposes, here are Creative Technologies' Quarterly revenues for the last four quarters: 9/96- 284.6mm, 12-96 386mm, 3/97 282.8mm, 6/97 280mm, 9/97 287.8mm. Now the three acquisitions of Cambridge, (part of) Opti, and Ensoniq per the Merrill Lynch Report added cumulatively 120mm revenues annually,or dividing that by four (assuming that all quarters' revenues are the same) suggests a 30mm addition to quarterly revenue flows, or about a 10%/quarter boost to revenues. Factoring in the Asian revenues slowdown of about 25% (which is 25% of CREAF's) business or 7.5% total business, and a bit more slowdown in Brazil, says my estimated revenue growth rate of 10.2% is high and that Merrill Lynch Report's estimate of flat revenues in 1998 looks to correlate with current status. The wild cards here are of course two factors- potentially larger profit margins from manufacturing in devalued currency countries (note below- CREAF's profit margins have risen consistently over the last five quarters); and sales increases related to Voodoo2 Graphics Blasters starting 2d Quarter production, and increased PC-DVD sales currently... These could be positive surprises.... Sincerely, Doug F. P.S. Finally note that Net profit Margins have risen since the 9/96 Quarter: 6/30 [-13%]; 9/96 5.2%; 12/96 14.7%; 3/97 15.6%; 6/97 18.3%; and 9/97 24.3%. (I did not include the 6/96 Quarter since that was when CREAF wrote off its CD-Rom inventory and took a charge...).

To: DRRISK who wrote (7194)	12/14/1997 5:56:00 PM
From: Doug Fowler	Read Replies (2) \| Respond to of 13925

Hi DrRisk: Speaking of Merril Lynch: Someone posted on here a few nights ago that ML had upgraded Creative to a Strong Buy, but I never saw any proof of that. Did that actually occur, or was it just a rumor? Thanks, Doug

To: DRRISK who wrote (7194)	12/15/1997 2:40:00 AM
From: Howard	Respond to of 13925

I concur with your thoughts and coundn't have said it better myself. Those with forethought, guts, financial staying power, and some good luck stand to win big with this stock. Blood is certainly running in the street, based on the "Asian contagion" and negative high tech sentiment there is certainly a wall of worry to climb and I'm sure that margin calls are pouring in at this time, Mr. Sim does tend to downplay expectations for his company with the exception of his closing statement at the last quarterly conference call "You ain't seen nothing yet", and the fact that Creaf's balance sheet and forward looking prospects have never looked better. There may be some more work to do on the downside because of the panic selleng continuation and margin calls. However, when there is confirmation that we have hit bottom we will not be there for very long and most likely will see this stock screem back up to a more respectable level. I firmly believe that there is still a lot of good to be had from Creaf and those that hang on for the unknown time element will be handsomely rewarded. We should see the light at the end of the tunnel, hopefully very soon. Go Creaf and good luck to all those hardy Creaf believers that are hanging on. We will have our day and truly enjoy the ride back up!