Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (31532)	3/27/1998 9:38:00 PM
From: John Rieman	Respond to of 50808

Sales and return allowance down. They used it in the first Q, '97............................................. Net revenues increased 5% to $337.0 million in 1997 compared to $319.8 million in 1996. Revenue from the Company's family of encoder products increased primarily due to sales of encoder systems developed by DiviCom, which was acquired in the third quarter of 1996. See "Acquisition." The Company also began volume shipments of its MPEG-2 DVD decoder chips used primarily in DVD-ROMs on PCs. Revenue from MPEG-1 decoder chips used in VideoCD players which are sold primarily in China, decreased from the prior year due to price reductions made in response to competition. The decreased prices for these products were partially offset by unit volumes which roughly doubled. 1996 revenues increased 157% to $319.8 million compared to $124.6 million in 1995. Revenue from the VideoCD market increased significantly due to an increase in volume shipments of MPEG-1 VideoCD system decoders, led by the CL484VCD MPEG-1 Decoder, which was introduced and began significant volume shipments in the first quarter of 1996. Revenue from the Company's family of encoder products increased primarily due to the acquisition of DiviCom and shipments of its MediaView MV20 program encoder as well as increased volume shipments of C-Cube's MPEG-2 encoder chips. Revenue from the digital video broadcast market increased due to increased volume shipments of the CL9100 MPEG-2 video decoder product and the CL9110 MPEG-2 transport demultiplexer product. The increase in product revenues noted above was partially offset by a decline in the CL450 MPEG-1 video decoder product shipments and an increased provision for sales returnsallowance. 24<PAGE> The sales returns allowance at December 31, 1997 was $6.7 million, down from $11.5 million at December 31, 1996. During 1997, provisions to the sales returns allowance were $3.3 million and deductions were $8.1 million. The deductions to the allowance were primarily due to price protection credits given to distributors in the first quarter of 1997 as the Company significantly reduced the selling prices of its MPEG-1 decoder chips in response to competitive pressures. The sales returns allowance increased to $11.5 million at the end of 1996 as compared to $1.8 million at the end of 1995. The increase was due to the $12.2 million provision to the allowance during 1996, partially offset by $2.5 million in deductions. The $11.5 million allowance at the end of 1996 was established to cover price protection credits to distributors, as selling price reductions on MPEG-1 decoder chips were anticipated in the first quarter of 1997, and to cover potential returns for new products shipped in the fourth quarter of 1996.