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SINGAPORE - August 6, 2003
- Creative Technology Ltd. (Nasdaq: CREAF), the worldwide leader in digital entertainment products for PC users, today announced financial results for the fourth quarter and fiscal year 2003, ended June 30, 2003. All financial results are stated in U.S. dollars.Sales for the fourth quarter were $149.6 million, in line with the Company's guidance. This compares to sales of $182.6 million for the same quarter of last year. Creative achieved net income for the fourth quarter of $4.6 million, and earnings per share met the Company's expectations, coming in at $0.06. This compares to last year's fourth quarter net loss of $48.4 million and loss per share of $0.65. Comparative results for the fourth quarter of fiscal year 2002 include a one-time charge related to the acquisition of 3Dlabs, Inc. of $26 million for in-process technology, and also include an investment loss of $29.8 million.
Sales for the full fiscal year 2003 were $701.8 million, compared to $805.9 million for the same period last year. Net income for fiscal year 2003 was $23.4 million or $0.29 per share, compared to a net loss of $19.7 million or a loss of $0.27 per share for the previous fiscal year. Net income for fiscal year 2003 includes net investment losses of $6.0 million or $0.07 per share. Net income for fiscal year 2002 includes a one-time charge related to the acquisition of 3Dlabs, Inc. of $26 million for in-process technology, and also includes net investment losses of $45.4 million.
"This has been an operationally solid and profitable year for Creative," said Craig McHugh, president of Creative Labs, Inc. "In the fourth quarter, we again achieved our expectations for revenue, gross margin, operating expenses and earnings per share, as we did each quarter during fiscal year 2003. During the quarter, we continued to dedicate significant development resources toward increasing the breadth of our product lines and moving more of our product offerings outside the PC box where we can offer great visual ID and appeal to an even broader base of potential customers."
"Between now and the end of the year, we plan to launch over 90 products, the most in our history," said Sim Wong Hoo, chairman and CEO of Creative Technology Ltd. "The introductions will come across all of our product categories and will extend our leadership position in Personal Digital Entertainment. We have just announced the first of these in our NOMAD MP3 player line: the NOMAD Jukebox Zen NX and the NOMAD MuVo NX. The Nomad Jukebox Zen NX is the slimmest, lightest NOMAD Jukebox ever - at a price 40% less than the highest-capacity Apple iPod. And with the Nomad MuVo NX, we have taken our award-winning, revolutionary MP3 player and USB storage device all-in-one, added an LCD display and a microphone, and expanded the capacity to offer a 256 MB model. We have also just launched two beautiful Creative I-Trigue speaker systems with killer looks and exceptional performance. These are truly incredible speakers, featuring Lateral Firing Transducers for a wider soundstage and richer listening experience. They also feature our patent pending M-Port® technology, which provides direct connection from compatible NOMAD MuVo players to the I-Trigue volume control."
First Quarter Outlook
For the first fiscal quarter of fiscal year 2004, ending September 30, 2003, Creative announced that it is targeting revenues in the range of $140 to $160 million, with gross margins to remain around 35%, and operating expenses between $48 and $50 million. Earnings per share for the first quarter are expected to be around $0.05.
Share Buyback Program
During the quarter, Creative did not repurchase any shares under its share buyback program.
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About Creative
Creative (Nasdaq: CREAF) is a worldwide leader in digital entertainment products for PC users. Famous for its Sound Blaster audio cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed NOMAD Jukebox. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.
This announcement refers to products and pricing sold in the United States of America. Pricing and product availability are subject to change without notice. Sound Blaster, I-Trigue, Creative TravelSound, MegaWorks, Creative Inspire, Audigy, MuVo and Creative CardCam are trademarks or registered trademarks of Creative Technology Ltd. in the United States and/or other countries. 3Dlabs and Wildcat are registered trademarks of 3Dlabs, Inc. Ltd. NOMAD is a registered trademark of Aonix and is used by Creative Technology Ltd. and/or its affiliates under license. Apple and iPod are trademarks of Apple Computer, Inc., registered in the U.S. and other countries. All other brand and product names are trademarks of their respective holder and are hereby recognized as such.
Safe Harbor for Forward-Looking Statements:
This press release contains forward-looking statements. These forward-looking statements represent Creative's expectations or beliefs concerning future events and include statements, among others, regarding Creative's expected revenue, gross margin, operating expenses, and earnings per share for the quarter ending September 30, 2003. These forward-looking statements involve risks and uncertainties that could cause Creative's actual results to differ materially. Such risks and uncertainties include: Creative's ability to timely develop new products that gain market acceptance and to manage frequent product transitions; competitive pressures in the marketplace; Creative's ability to successfully integrate acquisitions; potential fluctuations in quarterly results due to the seasonality of Creative's business and the difficulty of projecting such fluctuations; possible disruption in commercial activities caused by factors outside of Creative's control, such as terrorism, armed conflict and labor disputes; a reduction in demand for computer systems, peripherals and related consumer products as a result of poor economic conditions, social and political turmoil and major health concerns, such as the spread of Severe Acute Respiratory Syndrome, or SARS; the proliferation of sound functionality in new products from competitors at the application software, chip and operating system levels; the failure of cost-cutting measures to achieve anticipated cost reduction benefits; the deterioration of global equity markets; exposure to excess and obsolete inventory; Creative's reliance on sole sources for many of its chips and other key components; component shortages which may impact Creative's ability to meet customer demand; Creative's ability to protect its proprietary rights; a reduction or cancellation of sales orders for Creative products; accelerated declines in the average selling prices of Creative's products; the vulnerability of certain markets to current and future currency fluctuations; the effects of restricted fuel availability and rising costs of fuel; fluctuations in the value and liquidity of Creative's investee companies; and the potential decrease in the trading volume and value of Creative's Ordinary Shares as a result of Creative's intended delisting from NASDAQ and elimination of its U.S. public reporting obligations. For further information regarding the risks and uncertainties associated with Creative's business, please refer to its filings with the SEC, including its Form 20-F for fiscal 2002 filed with the SEC. Creative undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in Creative's expectations.