ATI Technologies Inc. Reports Record Second Quarter Results; Company Announces 4 for 1 Stock Split.TORONTO--(BUSINESS WIRE)--April 9, 1998--ATI Technologies 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 .) 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. a world leader in 3D graphics/video acceleration and multimedia solutions, today announced record results for the company's half year and second quarter. Sales for the six months ended February February: see month. 28, 1998 were $548.9 million, an increase of 74 percent from $315.5 million for the same period last year. Earnings for the six months rose 217 percent to $80.8 million or $1.52 per share compared with $25.5 million or 50 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the same period last year. All per share amounts are expressed 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. For the second quarter sales increased 89 percent to $285.5 million and earnings were 79 cents per share, compared with $151.5 million and 24 cents per share for the corresponding quarter of 1997. "ATI's second-quarter results clearly defines us as the market leader in Accelerated Graphics Port See AGP. (hardware, graphics) Accelerated Graphics Port - (AGP) A bus specification by Intel which gives low-cost 3D graphics cards faster access to main memory on personal computers than the usual PCI bus. (AGP (Accelerated Graphics Port) A high-speed 32-bit port from Intel for attaching a display adapter to a PC. It provides a direct connection between the card and memory, and only one AGP slot is on the motherboard. ) technologies and products," said K.Y. Ho, ATI's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , "As a company we are focused on continuing to lead new technology initiatives, extend the functionalities of the graphics industry and gain more market share." 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. to split stock Also today, the Board of Directors of ATI announced a four-for-one split of its common shares to be effected by way of a stock dividend. Shareholders of record on April 23, 1998 will be issued a certificate representing three additional common shares for each common share held on the record date. These certificates will be distributed commencing on or about April 24, 1998. Given the strong appreciation in the price of the corporation's common shares over the past year, the stock dividend enables ATI's common shares to be more accessible to a wider range of investors. The stock dividend will increase the number of outstanding ATI common shares from approximately 48.9 million to approximately 195.9 million. Financial Highlights Sales in the second quarter continued to be strong, reflecting the demand for ATI's RAGE PRO-based products and the company's penetration into the Top Ten OEMs. ATI experienced good growth in its component sales across all geographic regions and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. sales of both chips and boards exceeded all historical levels. Gross margins increased to 37.9 percent for the second quarter up from 30.5 percent in the same quarter last year. The overall gross margin increase results from lower material costs and changes in product sales mix sales mix See product mix. . Total dollar operating costs operating costs npl → gastos mpl operacionales increased as a result of larger sales volumes and our investments in R&D including the addition of the Tseng Labs (Tseng Labs, Inc., Newtown, PA) A company that manufactured chipsets and display adapters for PCs. Founded in 1983, it provided products that enhanced PC display standards, and its ET3000 and ET4000 chips have been used in millions of display adapters. development team. As a percentage of sales total operating costs for the second quarter were 17 percent or $48.6 million compared with 19 percent or $29.1 million in the same period last year. As a result of strong sales, high gross margins and operating costs in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with company budgets, net income rose to $42.3 million or 15 percent of sales versus $12.5 million or 8 percent of sales. To support strong sales demand, net working capital rose from $127.4 million at the end of the second quarter of fiscal 1997 to $219.1 million at the end of the second quarter of fiscal 1998. Inventory balances rose to $128.9 million specifically to support multiple product lines and company-owned material components. After capital expenditures and ATI's final installment for its investment in the UICC UICC Union International Contre le Cancer International Union against Cancer joint venture, net cash balances increased $38.3 million in the second quarter to $89.8 million. Operational Highlights During the quarter, ATI announced its Microsoft-certified TURBO Driver for its RAGE PRO chip, a breakthrough in driver technology that moves ATI's products to the head of the line in terms of 2D, 3D and video performance. The TURBO Driver increased by 40 percent the 3D performance of ATI's RAGE PRO accelerator accelerator: see particle accelerator. (1) A key combination such as Alt-G or Ctrl-Shift H that is used to activate a task. (2) An incubator that expects to develop the company considerably faster than normal. See incubator. chip, now called the RAGE PRO TURBO. As a result ATI's boards and chips become the fastest on the market among integrated 2D, 3D and video accelerators A hardware component on a display adapter that speeds up full-motion video. The primary video accelerator functions are color space conversion, which converts YUV to RGB, hardware scaling, which is used to enlarge the image to full screen and double buffering which moves the frames into with Microsoft-certified drivers. The company also announced a low-cost 2D, 3D and video chip, the RAGE IIC See infranet. AGP controller, ideal for cost-sensitive AGP corporate systems. The RAGE IIC AGP is pin compatible with ATI's market-leading RAGE PRO components and makes it possible for system makers to bring to market fully graphics-enabled computers under $1,000. In mid-December Noun 1. mid-December - the middle part of December period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Dec, December - the last (12th) month of the year , ATI also announced that approximately 40 members of the graphics development team of Tseng Labs, Inc. would join the company. In addition, ATI acquired all the graphics design assets of Tseng and leased its facilities in Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . The Tseng acquisition expedites ATI's strategy of moving to concurrent development teams worldwide. About ATI ATI Technologies Inc., one of only two major suppliers of 3D graphics and multimedia technology in the world, designs, manufactures and markets innovative and award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" multimedia solutions and graphics components for personal computers. An ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9002 company, ATI is one of the world's leading suppliers of video and 2D/3D graphics accelerators A display adapter that performs a specialized set of graphics functions to render an image on screen. Today, all display adapters provide basic rendering functions in hardware, but many have graphics processing units (GPUs) that are sophisticated computers. to OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and retail customers. Founded in 1985, ATI employs more than 1,200 people at headquarters in Thornhill, Ontario Thornhill (2006 population 106,394) is an upscale community in Ontario, Canada, directly north of Toronto. It is considered the most affluent of Toronto suburbs. It straddles two municipalities, the city of Vaughan having the portion west of Yonge Street and the town of Markham , and in offices in 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. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , France, the U.K., Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. , Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. , Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and Japan. ATI is a public company whose shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. . Visit our web site at http://www.atitech.com. Copyright (c) ATI Technologies Inc., 1998. All company and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. product names are trademarks and/or registered trademarks of their respective manufacturers. Features, availability and specifications are subject to change without notice. -0-
ATI TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Thousands of Canadian dollars, except per share amounts)
Three months ended
February 28
---------------------------------------------------------------
1998 1997
---------------------------------------------------------------
(unaudited)
Sales $285,528 100.0 percent $151,460 100.0 percent
Cost of goods sold 177,227 62.1 percent 105,267 69.5 percent
------- ------------- ------- -------------
108,301 37.9 percent 46,193 30.5 percent
Expenses
Selling and
marketing 25,822 9.0 percent 13,781 9.1 percent
Research and
development 16,040 5.6 percent 10,251 6.8 percent
Administrative 6,727 2.4 percent 5,035 3.3 percent
------- ------------- ------- -------------
48,589 17.0 percent 29,067 19.2 percent
------- ------------- ------- -------------
Income from
operations 59,712 20.9 percent 17,126 11.3 percent
Interest and
other income/(loss) 1,649 0.6 percent 1,953 1.2 percent
Interest expense (25) - (202) (0.1 percent)
------- ------------- ------- -------------
Income before
income taxes 61,336 21.5 percent 18,877 12.4 percent
Income taxes 19,014 6.7 percent 6,418 4.2 percent
------- ------------- ------- -------------
Net income $42,322 14.8 percent $12,459 8.2 percent
---------------------------------------------------------------
Retained earnings
Retained earnings -
beginning
of period $134,714 $61,612
Net income 42,322 12,459
------- -------
Retained earnings -
end of period $177,036 $74,071
---------------------------------------------------------------
Net income per share
Basic $0.87 $0.26
Fully diluted $0.79 $0.24
---------------------------------------------------------------
Six months ended
February 28
---------------------------------------------------------------
1998 1997
---------------------------------------------------------------
(unaudited)
Sales $548,881 100.0 percent $315,528 100.0 percent
Cost of goods sold 344,641 62.8 percent 221,694 70.3 percent
------- ------------- ------- -------------
204,240 37.2 percent 93,834 29.7 percent
Expenses
Selling and
marketing 46,385 8.4 percent 26,984 8.6 percent
Research and
development 29,990 5.5 percent 19,687 6.2 percent
Administrative 13,281 2.4 percent 9,866 3.1 percent
------- ------------- ------- -------------
89,656 16.3 percent 56,537 17.9 percent
------- ------------- ------- -------------
Income from
operations 114,584 20.9 percent 37,297 11.8 percent
Interest and
other income/(loss) 2,540 0.4 percent 1,880 0.6 percent
Interest expense (41) - (220) (0.1 percent)
------- ------------- ------- -------------
Income before
income taxes 117,083 21.3 percent 38,957 12.3 percent
Income taxes 36,296 6.6 percent 13,446 4.2 percent
------- ------------- ------- -------------
Net income $80,787 14.7 percent $25,511 8.1 percent
---------------------------------------------------------------
Retained earnings
Retained earnings -
beginning
of period $96,249 $48,560
Net income 80,787 25,511
------- -------
Retained earnings -
end of period $177,036 $74,071
---------------------------------------------------------------
Net income per share
Basic $1.66 $0.53
Fully diluted $1.52 $0.50
---------------------------------------------------------------
(Weighted average number of common shares: Q2 1998 - 48,883,281;
Q2 1997 - 47,763,439)
(Number of shares outstanding: Q2 1998 - 48,998,331; Q2 1997 -
47,874,061)
ATI TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(Thousands of Canadian dollars)
At February 28 At August 31
----------------------------------------------------------------
1998 1997 1997
----------------------------------------------------------------
(unaudited) (audited)
Assets
Current Assets
Cash and cash equivalents $104,022 $73,049 $71,763
Accounts receivable 169,953 88,005 113,744
Inventories 128,869 62,141 41,591
Prepayments and
sundry receivables 9,764 7,515 6,072
------- ------- -------
Total current assets 412,608 230,710 233,170
Capital assets 41,756 26,870 31,085
Investment in joint venture 35,316 27,318 27,480
------- ------- -------
Total assets $489,680 $284,898 $291,735
----------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $14,265 $42,329 -
Accounts payable
and accrued liabilities 149,237 55,928 73,224
Income taxes payable 30,029 5,050 7,511
------- ------- -------
Total current liabilities 193,531 103,307 80,735
Deferred income taxes 3,500 4,500 5,000
Shareholders' equity
Share capital 115,613 103,020 109,751
Retained earnings 177,036 74,071 96,249
------- ------- -------
Total shareholders' equity 292,649 177,091 206,000
------- ------- -------
Total liabilities
and shareholders' equity $489,680 $284,898 $291,735
----------------------------------------------------------------
ATI TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Thousands of Canadian dollars)
Three months ended Six months ended
February 28 February 28
---------------------------------------------------------------
1998 1997 1998 1997
---------------------------------------------------------------
(unaudited) (unaudited)
Cash provided by (used in):
Operating activities:
Net income $42,322 $12,459 $80,787 $25,511
Add items not
affecting working
capital:
Deferred
income taxes (950) 500 (1,500) 700
Depreciation and
amortization 2,414 1,674 4,369 3,185
Long-term portion
of investment
tax credits - 2,188 - 5,770
Net changes in
non-cash working capital
balances relating
to operations:
Accounts
receivable 11,566 15,662 (56,209) (22,607)
Inventories (60,396) (21,317) (87,278) (38,460)
Prepayments
and sundry
receivables (3,483) 135 (3,692) (2,444)
Accounts payable
and accrued
liabilities 47,989 (23,050) 76,013 10,313
Income
taxes payable 14,313 2,211 22,518 4,400
------ ------ ------ ------
53,775 (9,538) 35,008 (13,632)
------ ------ ------ ------
Financing activities:
Issuance of
common shares 3,207 2,728 5,862 3,431
------ ------ ------ ------
Investment activities:
Additions to
capital assets (10,805) (3,493) (15,040) (4,734)
Investment in
Joint Venture (7,836) (17,930) (7,836) (17,930)
------ ------ ------ ------
(18,641) (21,423) (22,876) (22,664)
------ ------ ------ ------
Increase/(Decrease)
in cash 38,341 (28,233) 17,994 (32,865)
Cash position,
beginning of period 51,416 58,953 71,763 63,585
------ ------ ------ ------
Cash position,
end of period $89,757 $30,720 $89,757 $30,720
---------------------------------------------------------------
Cash is defined as cash and cash equivalents, less bank
indebtedness.
CONTACT: ATI Technologies Inc. Jo-Anne Chang Chang (chăng) or Yangtze (yăng`sē`, yäng`dzŭ`), Mandarin Chang Jiang, longest river of China and of Asia, c.3,880 mi (6,245 km) long, rising in the Tibetan highlands, SW Qinghai prov. , 905/882-2600 Extension 8306 e-mail: Jchang@atitech.ca |
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