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Sales for the fourth quarter of fiscal 1999 were US$275.1 million as compared to US$253.0 million for the same quarter last year. Sales for fiscal 1999 were US$1.297 billion as compared to US$1.234 billion for 1998.
The quarterly and yearly results were:
Please note that the results for the fourth quarter of fiscal 1999 include a gain of US$12.6 million from the sale of quoted investments. Comparative results for fiscal 1998 include: a gain of US$18.5 million from the sale of quoted investments in the first quarter of fiscal 1998; one-time write-offs totaling US$60.3 million for in-process technology related to acquisitions in the second quarter of fiscal 1998; and a one-time write-off of US$8.3 million relating to the cessation of certain activities in the fourth quarter of fiscal 1998.
"Although we reported earnings per share in line with expectations, end-of-life graphics products hurt our performance, and our operating income this quarter was a disappointment," said Craig McHugh, President of Creative Labs, Inc. "Consolidation in the graphics market and drastic price reductions on certain graphics products impacted our margins and, in addition, cost us eleven cents per share in charges related to these products during the quarter. We are taking strong steps to improve our results, including moving low-margin products to a direct e-commerce model - reducing expenses and inventory exposure. This will allow us to turn what have been bad businesses into good businesses."
"While we had a very challenging quarter, we made tremendous progress on our Internet and PDE initiatives," said Sim Wong Hoo, Chairman and Chief Executive Officer of Creative Technology Ltd. "Among the steps we've already taken are eight completed investments in Internet/broadband companies, a number of soon-to-be-closed similar investments, the development of two very exciting products in our PDE area, and plans for an aggressive transformation of our business model to accelerate these opportunities. I am pleased to announce today that, to assist in this transformation, I have promoted Hock Leow, a Silicon Valley veteran, to Chief Technology Officer, leading our 600-strong worldwide R&D effort. Hock will continue to be based in California."
The Year in Review - Business Developments & Success Highlights
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. develops, manufactures and markets a wide array of advanced multimedia 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 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.
Sound Blaster and Blaster are registered trademarks and 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 projections on future market valuations and 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; 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 at the chip and operating
system levels; Creative's reliance on sole sources for many of
its chips and other key components and possible limitations on
future availability of graphics chips, memory chips, and passive
components used in Creative products; the timely 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.