Creative Technology Announces First Quarter Fiscal 1999 Earnings
PR Newswire - October 27, 1998 16:20
SINGAPORE, Oct. 27 /PRNewswire/ -- Creative Technology Ltd. (Nasdaq: CREAF), the world's leading provider of multimedia products for personal
computers, today announced financial results for the first quarter of fiscal 1999, ended September 30, 1998.
Sales for the first quarter of fiscal 1999 were US$279.0 million, compared to US$287.8 million for the same quarter last year.
Results for the first quarter were:
* Net income for the quarter of US$21.5 million, compared to US$51.6 million for the same quarter last year.
* Earnings per share for the quarter of US$0.23, compared to US$0.55 per share for the same quarter last year.
The comparative results for the first quarter of last year exclude a gain of US$18.5 million, or US$0.19 per share, from the sale of quoted investments.
"I am very pleased that so many areas of the company were able to deliver strong results, overcoming difficult economic conditions in several of our
markets and allowing us to meet expectations in the quarter," said Sim Wong Hoo, chairman and chief executive officer of Creative Technology Ltd.
"During the quarter, we launched an unprecedented number of new products that are truly exciting and highly competitive."
Business Developments
Creative made a number of announcements in the past several months including:
* The intent to repurchase up to 9.3 million of its own shares from the market -- the maximum number of shares (10 percent of issued capital)
permitted to be repurchased each year under relevant legislation pending in Singapore to allow share repurchases by Singapore companies.
* The launch of Sound Blaster(R) Live! Value(TM) at an extremely attractive value price of US$99. This sound card utilizes Creative's Environmental
Audio(TM) technology industry standard and provides unmatched, incredibly real audio that is forever changing the way mainstream PC users
experience music, entertainment and games.
* The announcement of Creative's Live!Ware(TM) program designed to provide the newest enhancements and applications for both Sound Blaster Live!
and Sound Blaster Live! Value. Live!Ware underscores Creative's on-going commitment to offer to its current and future customers the latest
developments in Sound Blaster Live! audio technology.
* The announcement that over 50 game titles supporting Creative's Environmental Audio Platform are currently slated to ship this holiday software
shopping season. This includes hot new titles such as Activision's Heavy Gear II, Bungie's Myth II, Electronic Arts' Sim City 3000 and Madden 99,
Dreamworks' Trespasser and many more.
* The introduction of Creative's 3D Blaster(TM) Banshee, an extraordinary new 16MB 2D/3D graphics card combining exceptional 3D game play with
outstanding 2D performance at a breakthrough price of US$99.99, after a manufacturer's mail-in rebate of US$30 for U.S. and Canada only.
* The introduction of Creative's newest addition to its Graphics Blaster family -- Graphics Blaster(TM) RIVA TNT -- a high-end graphics accelerator
card that delivers stunning, high-quality graphics at breakneck speeds. Based on NVIDIA Corporation's RIVA TNT chipset, Graphics Blaster RIVA
TNT boasts 16MB of high speed SDRAM and features full support for AGP 2X for optimized texture handling performance.
* The shipment of the computer industry's first complete desktop theater system for the PC -- Creative's new PC-DVD Encore 5x(TM) with Cambridge
SoundWorks'(R) DeskTop Theater(TM) 5.1 speaker system. This system combines the industry-leading PC-DVD and Dolby(R) Digital 5.1 surround
sound technology to deliver a PC entertainment experience that, until now, has only been available on very expensive traditional home entertainment
systems.
Awards and Recommendations
In the last quarter, Creative garnered top-rate reviews and numerous recommendations from a variety of computer trade publications and organizations.
These include the following:
* Sound Blaster Live!
-- Received the "Editor's Choice" Award from PC Gamer
-- Made the "A" List in PC Computing
-- Earned the "Kick Ass" Award and "10 Out of 10" from Maximum PC
-- Earned the "Drool Award" from Gamers Depot
-- Received "10 Out of 10 Stars" from All Games Network
* PC-DVD Encore Dxr2(TM)
-- Made the prestigious "WinList" from Windows Magazine
-- Earned a "World Class Award" from PC World
* Cambridge SoundWorks Speaker Series
-- Garnered the "WinList" Award from Windows Magazine
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995
Except for the historical information contained herein or in the
accompanying conference call, the statements herein and in the call (including
information on future products, future marketing efforts, and future revenues,
margins, expenses and earnings) are forward-looking statements that are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those set forth in the forward looking statements.
Such statements are subject to the attached cautionary statements which are
provided pursuant to The Private Securities Litigation Reform Act of 1995.
Creative Technology Ltd. is the leading provider of advanced multimedia
solutions for personal computers. It develops, manufactures and markets a
wide array of solutions for the PC, entertainment, education, music and
productivity tools markets. Creative's products are marketed through the OEM,
systems integrator and retail channels under a variety of trademarks,
including the "Blaster" family name. With the new Sound Blaster(R) PCI
standard, Creative has produced a solution that utilizes a combination of
hardware and software for near-perfect compatibility with existing DOS and
Windows titles. Creative's corporate headquarters and primary manufacturing
are based in Singapore, with sales, distribution and research and development
being carried out through an extensive, global network of subsidiaries located
in North America, Europe, Asia and Africa.
NOTE: Sound Blaster and Blaster are registered trademarks and
Environmental Audio, PC-DVD Encore, DeskTop Theater, 3D Blaster and Graphics
Blaster are trademarks of Creative Technology Ltd. Cambridge SoundWorks is a
registered trademark of Cambridge SoundWorks, Inc. All other products
mentioned herein are trademarks of their respective owners and are hereby
recognized as such.
Safe Harbor for Forward-Looking Statements:
Except for the historical information contained herein and in the accompanying conference call on today's date, the matters set forth herein and in the
accompanying conference call (including our guidance on future revenues, margins, expenses and earnings) are forward-looking statements that are
subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. Such
risks and uncertainties include, among others: potential fluctuations in quarterly results due to the seasonality of Creative's business and the difficulty of
projecting such fluctuations; the vulnerability of certain markets to currency fluctuations and credit shortages; reductions in the market value of
products sold by Creative, including increases in supply or declines in demand or prices for CD-ROM or DVD drives, board and chip-level products,
and software products; the short product cycles that characterize most of Creative's products; the increasing proliferation of sound functionality in new
products from new and existing competitors and at the application software, chip and operating system levels; Creative's reliance on sole sources for
many of its chips and other key components; the timely development, ramp, delivery and market acceptance of new products, including Creative's next
generation audio, graphics accelerator, CD-ROM and DVD drives and communications products; the volatility of share prices for companies in
Creative's industry and the effect of those prices or other events beyond Creative's control; and other risk factors described in Creative's filings with the
Securities and Exchange Commission over the past twelve months. The company undertakes no obligation to publicly release the results of any revisions
to such forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
CREATIVE TECHNOLOGY LTD.
CONSOLIDATED BALANCE SHEETS
(In US$' 000, except per share data)
(Unaudited)
September 30, June 30,
1998 1998
ASSETS
Current Assets:
Cash and cash equivalents $433,228 $417,262
Accounts receivable, less allowances
of $13,096 and $14,074 146,507 115,930
Inventory 120,228 144,320
Other assets and prepaids 12,943 10,180
Total current assets 712,906 687,692
Property and equipment, net 98,704 100,767
Investments and other non-current assets 83,031 76,654
$894,641 $865,113
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $98,318 $90,544
Other accrued liabilities 66,263 61,381
Income taxes payable 46,947 45,002
Current portion of long term obligations 5,740 5,973
Total current liabilities 217,268 202,900
Long term obligations 31,673 32,277
Minority interest in subsidiaries 7,453 7,622
Shareholders' equity:
Ordinary shares ('000); S$0.25 par value;
Authorized: 200,000 shares
Outstanding: 93,087 and 92,914 shares 9,703 9,678
Additional paid-in capital 159,465 158,532
Unrealised holding gains on quoted
investments 7,182 13,719
Retained earnings 461,897 440,385
Total shareholders' equity 638,247 622,314
$894,641 $865,113
CREATIVE TECHNOLOGY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In US$' 000, except per share data)
(Unaudited)
Three months ended
September 30,
1998 1997
Sales, net $278,989 $287,766
Cost of goods sold 199,156 193,038
Gross profit 79,833 94,728
Operating expenses:
Selling, general and administrative 51,723 34,466
Research and development 10,346 8,981
Other charges -- --
Total operating expenses 62,069 43,447
Operating income 17,764 51,281
Net gain from investments -- 18,469
Interest income and other, net 5,617 5,005
Income before income taxes and
minority interest 23,381 74,755
Provision for income taxes (2,104) (5,628)
Minority interest in loss 236 941
Net income $21,513 $70,068
Basic earnings per share: $0.23 $0.79
Average ordinary shares outstanding ('000) 92,989 89,061
Diluted earnings per share: $0.23 $0.74
Average ordinary shares and equivalents
outstanding ('000) 94,968 94,430
SOURCE Creative Technology Ltd.
/CONTACT: analysts, Lisa Laymon, Manager, Investor Relations,
408-546-6106, or llaymon@creaf.com, or media, Rick Myllenbeck, Director,
Public Relations, 408-546-6490, or rickm@soundblaster.com/
/Web site: soundblaster.com
(CREAF) |
