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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: David R. Parker who wrote (7136)	9/14/1998 5:31:00 PM
From: Gravitar	Read Replies (1) \| Respond to of 16960

3Dfx Announces Third Quarter Retail Sales Less Than Anticipated Due to Greater Than Expected Seasonal Slowdown Voodoo Banshee OEM Acceptance Strong September 14, 1998 05:20 PM SAN JOSE, Calif., Sept. 14 /PRNewswire/ -- 3Dfx Interactive(R), Inc. TDFX announced today that sales of its products in the third quarter of the calendar year have been lower than anticipated due to a greater than expected seasonal slowdown in the retail channel. "There appears to be more inventory on hand at the retailers for Voodoo2(TM) than originally forecast by our leading add-in board distributors. Although our Voodoo2 product continues to be the market leader, recent weeks have been slower than anticipated in the retail channel," said Greg Ballard, president and chief executive officer of 3Dfx Interactive. The company continues to sample sell-through data on the retail shelves where Voodoo2 continues to occupy the leading sales position, according to published figures from PC Data, Inc. 3Dfx Interactive anticipates this inventory will move more quickly during the upcoming holiday retail buying season. The anticipated increase in sell through will not be a factor in the third quarter, but is expected to contribute to the fourth quarter financial results. Given this quarter's environment to date and assuming no unforecasted increase in demand during September, 3Dfx Interactive anticipates losing several million dollars at the pre-tax operating level. However, due to the recent Sega litigation settlement, 3Dfx still anticipates that its third quarter will be profitable. "While we are disappointed with the third quarter financial results to date, we believe that it is a seasonal setback that will be overshadowed by our ongoing acceptance by PC OEMs and an expected seasonal increase in retail sales during the next quarter," said Greg Ballard. The company's newest product, Voodoo Banshee(TM), began production shipments in mid-August and has received a positive response in the market. The performance advantages and the 3Dfx brand and content position, have resulted in unannounced design wins with top Tier 1 and Tier 2 PC OEMs for Voodoo Banshee. Volume OEM shipments will commence in the fourth quarter of calendar 1998. The company will be releasing its third quarter earnings results on October 15, 1998 after the close of market. 3Dfx Interactive, develops high performance, cost-effective 3D media processors, software and related technology that are designed to enable a highly immersive, interactive and realistic 3D experience across interactive electronic entertainment systems -- personal computers, coin-operated arcade game machines and location-based entertainment installations, such as racing car simulators. Current 3Dfx Interactive products include the Voodoo(TM) family of accelerator chipsets, Voodoo2, Voodoo Graphics(R) and Voodoo Banshee. Visit the company on the web at 3dfx.com. Certain of the statements in this press release, including the statements in the third paragraph relating to the Company's expectations for inventory movement during the upcoming holiday retail buying season and the effect of such increased sell through on the third and fourth quarter financial results, the statements in the fourth paragraph regarding the Company's expectation of losses at the pre-tax income level and expectation that the third quarter will be profitable, the statements in the fourth paragraph regarding increased retail sales in the next quarter and the acceptance of the Company's products by PC OEMs and the statement in the fifth paragraph regarding the commencement of volume shipment of Voodoo Banshee, are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expected. Such risks and uncertainties include, but are not limited to, general industry trends, including cyclical trends in the PC and semiconductor industries, the Company's dependence on the PC industry, the impact of competitive products and pricing alternatives, market acceptance of the Company's new products, the Company's dependence on the retail distribution channel and retail sales of the Company's products, and manufacturing and other delays relating to new products. Investors are advised to read the Company's reports on Forms 10-Q and 10-K filed with the Securities and Exchange Commission, particularly those sections entitled "Factors Affecting Operating Results," for a fuller discussion of such risks and uncertainties. NOTE: 3Dfx Interactive and Voodoo Graphics are registered trademarks and Voodoo, Voodoo2 and Voodoo Banshee are trademarks of 3Dfx Interactive. All other names trademarks of their respective holders. SOURCE 3Dfx Interactive, Inc.