ATI Reports Q1 Adjusted Earnings of -US- $0.04 Per Share; Design Wins Drive Momentum; Margins Improve.Business Editors/High-Tech Writers MARKHAM Markham City (pop., 1991: 154,000), southeastern Ontario. It is situated on the Rouge River, northeast of Toronto. Settled in 1794, the town was named for William Markham, archbishop of York. It annexed the nearby township of Markham in 1971. , Ontario--(BUSINESS WIRE)--January 9, 2002 ATI Technologies “ATI” redirects here. For other uses, see Ati. ATI Technologies U.L.C. ATI is a major Canadian designer and supplier of graphics processing units, motherboard chipsets, and video display cards. Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :ATY ATY Air Textured Yarn (textile) ATY Watertown, SD, USA (Airport Code) ATY After-Tax Yield ) (Nasdaq:ATYT ATYT ATI Technologies, Inc (stock symbol) ), a world leader in the supply of graphics, video and multimedia solutions, today reported adjusted net income(1) of (US) $10.4 million or (US) $0.04 per share for the first quarter ended November November: see month. 30, 2001 of its 2002 fiscal year. Revenues increased 9.1 percent during the first quarter to (US) $250.0 million from (US) $229.1 million in the fourth quarter of fiscal 2001, and gross margin improved 2.4 percentage points to 32.0 percent. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of (US) $90.3 million increased 2.3 percent in the first quarter compared with the previous quarter. Operating expenses, excluding intangibles, were (US) $69.1 million, 3.0 percent higher than the previous quarter. The unadjusted net loss in the first quarter of fiscal 2002 was (US) $10.3 million or (US) $0.04 per share, compared to an unadjusted net loss of (US) $11.6 million, or (US) $0.05 per share, for the previous quarter. "Our revenue growth is being driven by our design win successes as we continue to deliver on the most aggressive schedule of new product and technology introductions in ATI's history," said David Orton Or·ton , Joe Full name John Kingsley Orton. 1933-1967. British playwright noted for his black comedies, including Entertaining Mr. Sloane (1964) and What the Butler Saw (1969). , President & Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , ATI Technologies Inc. "Our earnings reflect the positive momentum in our PC business across all fronts: our Original Equipment Manufacturer wins are now in volume shipment, our Add-In-Board partners are shipping our full range of products into all geographies, and our workstation business continues to strengthen. We also benefited from the very successful launch of the Nintendo GAMECUBE The Nintendo GameCube (GCN) is Nintendo's fourth home video game console, belonging to the sixth generation era. The system itself is the most compact and least expensive, next to the Dreamcast, of the sixth generation era consoles. (TM). Our recent announcement of the IMAGEON The Imageon (previously ATI Imageon) is a line of media processor line developed by ATI providing graphics acceleration and other multimedia features for handheld devices such as mobile phones and Personal Digital Assistants (PDA). (TM) 100 for the burgeoning PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). and "smartphone A cellular telephone with information access. It provides digital voice service as well as any combination of e-mail, text messaging, pager, Web access, voice recognition, still and/or video camera, MP3, TV or video player and organizer (see PDA). " market shows that ATI (ATI Technologies Inc., Markham Ontario, http://ati.amd.com) A leading manufacturer of graphics chips and display adapters. Founded in 1985 by K. Y. Ho, Benny Lau and Lee Lau, ATI chips and boards are widely used by OEMs. is not slowing its pace of product and technology introductions in 2002. Our goal is to follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan our GAMECUBE(TM) success with market leading initiatives in the consumer area." ATI's financial position continued to strengthen. Cash generated from operations during the first quarter was (US) $10.1 million. The Company's cash position increased slightly over the fourth quarter to (US) $221.5 million at November 30, 2001. Inventories declined a further (US) $7.4 million during the quarter to (US) $91.5 million at November 30, 2001. "ATI is building momentum through a continuing program of product and technology introductions. Our new generation of RADEON See ATI. (TM) products has been very well received and the steps we have taken to expand into new consumer markets are beginning to pay off," said K.Y. Ho, Chairman & Chief Executive Officer, ATI Technologies Inc. Outlook ATI expects continued performance improvements in the second quarter of fiscal 2002, primarily from growing customer acceptance of its products, including its RADEON(TM) 8500, RADEON(TM) 7500 and MOBILITY(TM) RADEON(TM) 7500 graphics processors. Revenues are expected to increase slightly in the second quarter as momentum grows from design wins with PC manufacturers. In addition, earnings should improve from ATI's business strategy to achieve marketshare gains in the worldwide system integrator See systems integrator. channel and from royalties from Nintendo's new GAMECUBE(TM) game console See video game console. . Excluding amortization, operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. and gross margin percents to revenue should be about the same, or slightly better than, the first quarter. Momentum in revenue and earnings is expected to continue for the balance of the fiscal year. Operational Highlights During the first quarter, ATI secured a number of important new desktop and notebook design wins, continuing the momentum that it began to build in fiscal 2001. Desktop design wins for IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Net Vista, Dell Optiplex Dell, Inc. targets its OptiPlex™ line of desktop computers for sale into the corporate, government and education markets. These systems typically contain Intel CPUs, beginning with the Pentium and currently with the Core 2 although Dell sells some models with AMD CPUs as well. and Dimension, and Hewlett Hewlett may refer to: People with the surname Hewlett:
ATI's flagship desktop product the RADEON(TM) 8500 scored its first two design wins in the quarter. RADEON(TM) 8500 technology is being used in both the Gateway 700 series of desktop computers, as well as Evans Ev·ans , Herbert McLean 1882-1971. American anatomist who isolated four pituitary hormones and discovered vitamin E (1922). & Sutherland's high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. PC-IG visualization Using the computer to convert data into picture form. The most basic visualization is that of turning transaction data and summary information into charts and graphs. Visualization is used in computer-aided design (CAD) to render screen images into 3D models that can be viewed from all products. In the notebook market, ATI secured five MOBILITY(TM) RADEON(TM) wins during the quarter in addition to the 10 wins already announced. In the three months to November 30, 2001 MOBILITY(TM) RADEON(TM) was selected for the Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. LifeBook LIFEBOOK is a range of laptop computers made by Fujitsu and/or its subsidiaries. The distributors and LIFEBOOK models vary depending on the region. Fujitsu Siemens Computers, Fujitsu PC Asia Pacific, Fujitsu Computer Systems are Fujitsu subsidiaries that manage LIFEBOOK products in E Series; Compaq Presario Presario is a series of desktop computers and notebooks from Compaq. The Presario family of computers was launched for the consumer marketplace in September 1993. Although HP has since acquired Compaq, the Presario name was not discontinued due to its marketability. 2700; IBM Thinkpad A family of notebook computers from Lenovo. Originally made by IBM and introduced in 1992, Lenovo acquired the ThinkPad brand along with IBM's personal computer division in 2004. ThinkPads have been widely praised for their excellent keyboard quality and innovations. X22; IBM Thinkpad A series; and the Apple Titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. PowerBook A family of laptop computers from Apple that was introduced in 1991. PowerBook was the first Apple brand name for a series of portable computers, which lasted until 2006, when they were superseded by the MacBook Pro. G4. ATI also had a win for its top-of-the-line MOBILITY(TM) RADEON(TM) 7500 with the Dell Inspiron 8100. ATI continued its rapid pace of product development during the quarter with the introduction of two new desktop workstation products, the RADEON(TM) 8500LE, a speed reduced version of the RADEON(TM) 8500, and the Xilleon The ATI Xilleon video processor is a 32-bit system-on-a-chip MIPS processor, for use in set-top boxes and digital TVs, providing MPEG2 decoding and other functions for major worldwide broadcast networks (including PAL, NTSC, SECAM and ATSC). (TM) 220, ATI's system-on-chip See SoC. for the digital set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. and digital TV markets. The workstation products -- the Fire GL(TM) 8700 for desktop and the Fire GL(TM) 7800 for the mobility market -- are offerings ideally suited to the digital content creator See content provider. , 3D animation and MCAD MCAD Microsoft Certified Application Developer MCAD Mechanical Computer Aided Design MCAD Medium-Chain Acyl-CoA Dehydrogenase (inherited metabolic disease) MCAD Minneapolis College of Art and Design workstation customer. ATI products were recognized with a number of important awards during the quarter including the Maximum PC "Kick Ass" Award for the RADEON(TM) 8500, which scored a perfect 10 out of 10 in the magazine's evaluation. The critically-acclaimed RADEON(TM) 8500 also received the coveted cov·et v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. Peak Performer(TM) Award in the Best New Hardware category at the most recent System Builder  This article's grammar usage needs improvement. Please edit this article in accordance with Wikipedia's . Summit(TM) in San
Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation).San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. . The RADEON 8500 graphics board was selected by individual system builders from more than 90 hardware vendors' products world-wide. Nintendo's introduction of GAMECUBE(TM) in Japan on September September: see month. 14 and in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. on November 18 was a tremendous success, with total North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales for GAMECUBE(TM) reaching 1.1 million units within four weeks of launch. Industry analyst Cahners In-Stat expected that almost 2.5 million GAMECUBEs would be shipped worldwide by the end of 2001. Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Interim Financial Results Revenue ATI revenues for the first quarter increased 9.1 percent to (US) $250.0 million from (US) $229.1 million in the fourth quarter of fiscal 2001, but were 26.9 percent lower than the first quarter a year earlier. First quarter 2002 revenues increased over the fourth quarter of fiscal 2001 due to stronger sales into the PC market and royalty revenue from sales of Nintendo's GAMECUBE(TM) game console, which features graphics technology powered by ATI. The decline compared to the first quarter of fiscal 2001 was primarily the result of a worldwide slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in PC sales, the shift to integrated graphics Refers to having the video display circuitry of a computer contained directly on the motherboard rather than on a separate plug-in card (the display adapter). Integrated graphics typically share memory with the CPU (see shared video memory) and provide a more economical alternative to the solutions as well as the affect of ATI's system integrator strategy. As part of this strategy, the Company is delivering chips rather than boards into the system integrator channel, which reduces top-line revenue but improves gross margins. Gross Margin Gross margin for the first quarter improved to 32.0 percent of revenues compared to 29.6 percent of revenues in the fourth quarter and 24.3 percent in the first quarter a year earlier. The improvement is a result of better margins across the desktop product line due to shipment of new products. During the first quarter of fiscal 2002, ATI also benefited from royalties on sales of Nintendo's new GAMECUBE(TM) game console, which has received strong consumer acceptance. Operating Expense Total operating expenses, excluding amortization of intangibles, were (US) $69.1 million or 3.0 percent higher than the fourth quarter, and 1.9 percent higher than the same quarter a year earlier. The increase in the first quarter was primarily higher advertising expense associated with the launch of the new products that began shipping in September, volume related sales expense, and engineering support costs. Year over year, there have been additional operating expenses resulting from the acquisition of FIRE GL. Total operating expenses rose 2.3 percent to (US) $90.3 million in the first quarter, but declined 11.4 percent from the same period a year earlier. The amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. remained steady between the first and fourth quarters but declined by 37.9 percent from the first quarter of fiscal 2001 as the Company completed its amortization of purchased in process R&D resulting from the acquisition of ArtX ARTX Ada Real-Time Executive . Net Income In the first quarter of fiscal 2002, ATI's unadjusted net loss was (US) $10.3 million or (US) $0.04 per share compared to an unadjusted net loss of (US) $11.6 million or (US) $0.05 per share in the fourth quarter and an unadjusted net loss of (US) $16.2 million or (US) $0.07 per share for the first quarter a year ago. The year over year improvement in unadjusted earnings is primarily the result of declines in amortization of intangible assets and increases in gross margins. Adjusted net income for the first quarter was (US) $10.4 million or (US) $0.04 per share on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, compared to adjusted net income of (US) $2.2 million or (US) $0.01 per share for the fourth quarter, and adjusted net income of (US) $11.8 million, or (US) $0.05 in the first quarter of fiscal 2001. Income from royalties on sales of Nintendo's GAMECUBE(TM) game console, increased sales to the PC markets, and higher gross margins account for the increase in adjusted net earnings in the first quarter compared to the fourth quarter of fiscal 2001. Compared to the first quarter of fiscal 2001, adjusted net earnings were affected primarily by the lower revenue offset by higher gross margins. Liquidity and Financial Resources ATI's cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was (US) $10.1 million in the first quarter compared to (US) $70.3 million in the fourth quarter, and cash flow of (US) $7.7 million in the first quarter a year ago. Fourth quarter 2001 cash flow benefited from a (US) $41.1 million reduction in inventories. In the first quarter of fiscal 2002 inventories continued to decline, by (US) $7.4 million to (US) $91.5 million at November 30, 2001, compared to (US) $99.0 million at fiscal 2001 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. and (US) $257.3 million at November 30, 2000. ATI's financial position continued to strengthen in the first quarter. At November 30, 2001, ATI had working capital of (US) $332.6 million, compared to (US) $323.6 million at year-end, fiscal 2001. The Company's cash position was (US) $221.5 million as of November 30, 2001, compared to (US) $216.5 million at year-end 2001. The increases were largely due to cash flows resulting from continued inventory reductions and positive earnings. Intangible assets declined to (US) $266.7 million at November 30, 2001, from (US) $367.1 million a year earlier due to the large amounts amortized during the year. Forward-looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements in this press release, including Management's Discussion and Analysis of Interim Financial Results, constitute "forward-looking statements." When used in this press release, words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on current expectations and entail entail, in law, restriction of inheritance to a limited class of descendants for at least several generations. The object of entail is to preserve large estates in land from the disintegration that is caused by equal inheritance by all the heirs and by the ordinary various risks and uncertainties that are outlined in this press release and in the Company's 2001 annual report. For example, the markets for the Company's products are characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by rapidly changing technology, evolving industry standards, frequent new product introductions, emerging competitors and significant price competition. In the event that the Company is unsuccessful in identifying, developing, manufacturing or marketing new products or enhancing its existing products or maintaining is historical prices or margins, its operating results will be adversely affected. These risks and uncertainties could cause or contribute to actual results that are materially different from those projected. Additional information concerning factors that could cause actual results to materially differ from those in such forward-looking statements is contained in the Company's filings with securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . ATI disclaims any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Conference Call Information ATI will host a conference call today to discuss the first quarter results at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . To participate in the call, please dial (416) 405-9328 ten minutes before the scheduled start of the call. A live webcast of the conference call will be available at: http://www.ati.com/na/pages/corporate/investor_relations/investor _index.html The default name for a home page in a Web server. The page is appropriately named, because the home page is an index to the entire Web site. When you type in a URL such as www.computerglossary.com, it is the same as entering www.computerglossary.com/index.html. INDEX. under the Financial Information section or at http://www.enewsservices.com/en/webcast/index.html. Annual Meeting Information ATI is hosting its annual meeting of shareholders tomorrow, January January: see month. 10, 2002. At the meeting, senior management will discuss its accomplishments and financial results of its fiscal year 2001, as well as discuss its growth opportunities in fiscal 2002 and beyond. Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. Hotel 145 Richmond Street West Toronto This article is about the defunct federal riding of West Toronto (1867-1903). For the historical village, town, and city of West Toronto (1884-1908), see The Junction. West Toronto , Ontario (the corner of Richmond & University) Thursday January 10, 2002 2:00 p.m. Company Background Founded in 1985, ATI Technologies Inc. is a world leader in the supply of graphics, video and multimedia solutions for the personal computer and Mac platforms. The pioneer, innovator and market leader in the graphics industry, ATI provides cutting-edge technologies for the PC, workstation, set-top box, game console and other consumer appliances markets. The Company has more than 1,900 full-time employees supporting customers from its headquarters in Markham, Ontario Markham (2006 Population 261,573[0]) is located in York Region, directly north of Toronto, and is part of Toronto's CMA. It is larger than many Canadian cities. Despite its qualifications regarding population, it has not had the title of city conferred upon it by the , Canada, as well as from offices in Barbados, France, Germany, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Ireland, Japan, Malaysia, the United Kingdom and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . ATI common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (ATY).
(1) Adjusted net income excludes amortization of intangible assets
related to the Company's acquisitions, and the deferred tax
recovery of future tax liability pertaining to intangible assets
acquired. Please see Note 2 to the financial statements. ATI's
financial results are reported under Canadian GAAP. A
reconciliation to U.S. GAAP may be found in Note 4 to the
financials statements.
Copyright 2002 ATI Technologies Inc. All rights reserved. ATI and ATI product and product feature names are trademarks and/or registered trademarks of ATI Technologies Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice. For media or industry analyst support, please visit our Web site at http://www.ati.com or contact: Brian Chadderton, Acting Director, Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most , ATI Technologies Inc., at (905) 882-2600, Ext. 8350 or bchadder@ati.com Anne Ferguson, Manager, Consumer Technology Practise prac·tise v. & n. Chiefly British Variant of practice. prac  tis·er n. , BenchMark
Porter Novelli Porter Novelli International is a leading, global PR and lobbying firm. It is part of the Omnicom Group of advertising and marketing companies, the world's largest advertising conglomerate. The following article on Porter Novelli was obtained from "Sourcewatch. , at (416) 422-7154 or aferguson@bmporternovelli.comFor investor relations Investor relations The process by which the corporation communicates with its investors. support, please contact: Janet Janet: see Clouet, Jean. JANET - Joint Academic NETwork Craig, Director, Investor Relations, ATI Technologies Inc., at (905) 882-2600, Ext. 2631 or jcraig@ati.com
ATI TECHNOLOGIES INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of US dollars, except per share amounts)
Three months ended
November 30 November 30
2001 2000
----------------------------------------------------------------
(unaudited)
Revenues $250,038 100.0% $342,187 100.0%
Cost of goods sold 169,960 68.0% 258,999 75.7%
----------------------------------------------------------------
80,078 32.0% 83,188 24.3%
Expenses
Selling and marketing 20,289 8.1% 21,908 6.4%
Research and development 40,070 16.0% 37,277 10.9%
Administrative 8,781 3.5% 8,643 2.5%
Amortization of intangible
assets 21,190 8.5% 34,132 10.0%
----------------------------------------------------------------
90,330 36.1% 101,960 29.8%
----------------------------------------------------------------
Loss from operations (10,252) (4.1%) (18,772) (5.5%)
Interest and other income 1,729 0.7% (408) (0.1%)
Interest expense (2) - (610) (0.2%)
----------------------------------------------------------------
Loss before income taxes (8,525) (3.4%) (19,790) (5.8%)
Income taxes 1,794 0.7% (3,618) (1.1%)
----------------------------------------------------------------
Net loss $(10,319) (4.1%) $(16,172) (4.7%)
================================================================
Net loss per share (note 1)
Basic $(0.04) $(0.07)
Fully diluted $(0.04) $(0.07)
================================================================
Weighted average number of
shares (000's)
Basic 232,496 229,748
Fully diluted - net loss 232,496 229,748
Fully diluted - adjusted
net income 244,916 240,223
Outstanding number of shares
at the end of the quarter
(000's) 232,787 230,110
================================================================
See accompanying notes to interim consolidated financial statements
ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER SHARE
(Thousands of US dollars, except per share amounts)
Adjusted net income (note 2) $10,385 $11,760
Adjusted net income per share
(note 1 & 2)
Basic $0.04 $0.05
Fully diluted $0.04 $0.05
================================================================
ATI TECHNOLOGIES INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(Thousands of US dollars)
November 30 August 31
2001 2001
--------------------------------------------------------
(unaudited)
Assets
Current Assets
Cash and cash equivalents $196,921 $171,455
Short-term investments 24,601 45,000
Accounts receivable 178,317 134,852
Inventories 91,547 98,970
Prepayments and sundry receivables 20,503 20,704
Future income tax assets 4,800 4,658
--------------------------------------------------------
Total current assets $516,689 $475,639
Capital assets 70,928 71,487
Intangible assets 266,746 285,869
Long-term investments 11,008 11,008
Future income tax assets - long term 4,877 4,887
--------------------------------------------------------
Total Assets $870,248 $848,890
========================================================
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $9,245 $8,749
Accounts payable 106,581 79,719
Accrued liabilities 54,362 48,965
Deferred revenue 229 354
Income taxes payable 8,477 9,573
Future income tax liabilities 5,244 4,719
--------------------------------------------------------
Total current liabilities 184,138 152,079
Future income tax liabilities -
long term 13,488 15,176
Shareholders' Equity
Share capital 550,753 551,217
Contributed surplus 3,803 2,033
Retained earnings 109,792 120,111
Currency translation adjustment 8,274 8,274
--------------------------------------------------------
Total shareholders' equity 672,622 681,635
Total Liabilities and
Shareholders' Equity $870,248 $848,890
========================================================
See accompanying notes to interim consolidated financial statements
ATI TECHNOLOGIES INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of US dollars)
Three months ended
November 30 November 30
2001 2000
--------------------------------------------------------
(unaudited)
Cash provided by (used in):
Operating activities:
Net loss $(10,319) $(16,172)
Add items not affecting
working capital:
Future income taxes (1,295) (7,100)
Depreciation 5,297 5,252
Amortization of intangible assets 21,190 36,354
Foreign exchange loss 24 331
Net changes in non-cash working
capital balances relating to
operations:
Accounts receivable (43,465) (18,237)
Inventories 7,423 (18,098)
Prepayments and sundry receivables 201 4,208
Accounts payable 26,862 14,387
Accrued liabilities 5,397 (145)
Deferred revenue (125) (1,363)
Income taxes payable (1,096) 8,281
--------------------------------------------------------
10,094 7,698
--------------------------------------------------------
Financing activities:
Increase in bank indebtedness 496 -
Issuance (cancellation) of common
shares 1,306 (789)
--------------------------------------------------------
1,802 (789)
--------------------------------------------------------
Investing activities:
Purchase of short-term investments (4,601) -
Maturity of short-term investments 25,000 4,403
Net additions to capital assets (4,738) (9,465)
Acquisitions, net of cash acquired (2,067) -
--------------------------------------------------------
13,594 (5,062)
Foreign exchange loss on cash
held in foreign currency (24) (331)
========================================================
Increase in cash 25,466 1,516
Cash and cash equivalents -
beginning of period 171,455 74,835
--------------------------------------------------------
Cash and cash equivalents -
end of period $196,921 $76,351
Short-term investments 24,601 -
--------------------------------------------------------
Cash position - end of period $221,522 $76,351
========================================================
Cash position is defined as cash and cash equivalents and
short-term investments. See accompanying notes to interim consolidated
financial statements.
ATI TECHNOLOGIES INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2001
The principal business activities of ATI Technologies Inc. (the
"Company") are the design, manufacture and sale of graphics and
multimedia products for personal computers and consumer electronics
devices. The Company markets its products to original equipment
manufacturers, system builders, distributors and retailers primarily
in North America, Europe and Asia-Pacific.
1. SIGNIFICANT ACCOUNTING POLICIES:
The accompanying unaudited financial statements are prepared in
accordance with Canadian generally accepted accounting principles for
interim financial statements and do not include all the information
required for complete financial statements. These interim financial
statements and notes related thereto should be read in conjunction
with the Company's most recent annual consolidated financial
statements, as at and for the year ended August 31, 2001.
These interim consolidated financial statements follow the same
accounting policies and methods of their application as the most
recent annual consolidated financial statements with the exception of
the Company's adoption of the new accounting standard for earnings per
share with effect from September 1, 2001, as required by the revised
Handbook Section 3500 of the Canadian Institute of Chartered
Accountants.
Under this new standard, basic earnings per share is computed by
dividing the net income or loss before discontinued operations and
extraordinary items by the weighted average number of shares
outstanding during the reporting periods. Diluted earnings per share
is computed similar to basic earnings per share except that the
weighted average shares outstanding are increased to include
additional shares from the assumed exercise of stock options, if
dilutive. The number of additional shares is calculated by the
treasury stock method, assuming that the outstanding stock options are
exercised and the proceeds from such exercises were used to acquire
shares of common stock at the average market price during the
reporting periods.
The basic and diluted earnings per share for the comparable
interim period of the immediately preceding fiscal year have been
adjusted accordingly to reflect the adoption of this new standard for
earnings per share.
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The following table presents a reconciliation of the numerators
and denominators of the basic and diluted earnings per share
calculations:
Three months ended
November 30
(Thousands of US dollars,
except per share amounts) 2001 2000
===============================================================
(unaudited)
Net loss $ (10,319) $ (16,172)
Adjusted net income (note 2) $ 10,385 $ 11,760
---------------------------------------------------------------
Average number of common shares outstanding:
Basic 232,496 229,748
Effect of stock options - -
---------------------------------------------------------------
Fully diluted - net loss 232,496 229,748
Effect of stock options 12,420 10,475
---------------------------------------------------------------
Fully diluted - adjusted net income 244,916 240,223
Earnings per share:
Basic $ (0.04) $ (0.07)
Fully diluted - net loss $ (0.04) $ (0.07)
Fully diluted - adjusted net income $ 0.04 $ 0.05
===============================================================
Share options to purchase 4,580,560 common shares at the prices
ranging from CAD $14.00 to CAD $23.37 per share were outstanding in
the first quarter of the fiscal year (2000 - 6,203,660 common shares
at CAD $13.37 to CAD $23.37 per share) but were not included in the
computation of diluted earnings per share because the exercise prices
of the stock options were greater than the average market price of the
common shares for the reporting period.
2. ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER SHARE
The table below presents adjusted net income and adjusted net
income per share, which excludes amortization of intangible assets
related to the Company's acquisitions, and the deferred tax recovery
of future tax liability pertaining to intangible assets acquired,
related to the Company's acquisitions.
Three months ended
November 30
(Thousands of US dollars,
except per share amounts) 2001 2000
===============================================================
(unaudited)
Net loss $ (10,319) $ (16,172)
Amortization of intangible assets 21,190 34,132
Deferred tax recovery of future tax (486) (6,200)
liability on intangible assets
---------------------------------------------------------------
Adjusted net income $ 10,385 $ 11,760
===============================================================
Adjusted net income per share
Basic $ 0.04 $ 0.05
Fully diluted $ 0.04 $ 0.05
===============================================================
Weighted average number of shares (000's):
Basic 232,496 229,748
Fully diluted - adjusted net income
(note 1) 244,916 240,223
===============================================================
3. SEGMENTED INFORMATION
The Company operates in one operating segment, that being the
design, manufacture and sale of graphics and multimedia products for
personal computers and consumer electronics devices.
The following tables provide revenues by geographic area and by
product, as well as capital and intangible assets by geographic area:
Three months ended
November 30
(Thousands of US dollars) 2001 2000
===============================================================
(unaudited)
Revenues:
Canada $ 4,695 $ 9,150
United States 74,119 110,462
Europe 41,192 89,581
Asia-Pacific 130,032 132,994
---------------------------------------------------------------
Consolidated revenues $ 250,038 $ 342,187
===============================================================
Product revenues:
Components $ 123,312 $ 137,180
Boards 119,593 201,517
Other 7,133 3,490
---------------------------------------------------------------
Consolidated revenues $ 250,038 $ 342,187
---------------------------------------------------------------
Capital and intangible assets:
Canada $ 53,967 $ 46,581
United States 277,986 379,923
Europe 4,950 5,286
Asia-Pacific 771 841
---------------------------------------------------------------
Consolidated capital and intangible $ 337,674 $ 432,631
assets
===============================================================
4. U.S. GAAP
The following table reconciles the net income as reported on the
consolidated statements of operations prepared in accordance with
Canadian GAAP to the consolidated net income that would have been
reported had the financial statements been prepared in accordance with
U.S. GAAP:
Three months ended
November 30
(Thousands of US dollars,
except per share amounts) 2001 2000
===============================================================
(unaudited)
Net loss in accordance with $ (10,319) $ (16,172)
Canadian GAAP
Tax effect of stock options exercised (73) -
Amortization of purchased - 12,703
in-process research and development
Amortization difference between 602 1,881
Canadian and U.S. GAAP
---------------------------------------------------------------
Net loss in accordance with U.S. GAAP $ (9,790) $ (1,588)
===============================================================
Net loss per share
Basic $ (0.04) $ (0.01)
Diluted $ (0.04) $ (0.01)
===============================================================
Weighted average number of shares (000's):
Basic 232,496 229,748
Diluted 232,496 229,748
===============================================================
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