ATI Technologies Reports Record Results For Fiscal 1997; Third Consecutive Year of More Than 70 Percent Earnings Growth.TORONTO--(BUSINESS WIRE)--Oct. 23, 1997--ATI Technologies Inc(TSE, ME ATY., OTC Bulletin Board ATITF. ) ATI Technologies Inc. (TSE - ATY) a world leader in 3D graphics/video acceleration and multimedia solutions, today announced record results reporting its third consecutive year of a greater than 70 percent earnings growth. Sales for the year ended August 31, 1997 increased 29 percent to $602.8 million, up from $466.6 million for the 1996 fiscal year. Earnings for the fiscal year rose 74 percent to $47.7 million or $1.00 per share, compared with $27.3 million or $0.58 per share for the 1996 fiscal year. (All per share amounts are expressed per basic share). For the fourth quarter, sales were $152.3 million and earnings were $0.25 per share compared with $116.2 million and $0.15 per share for the corresponding quarter of 1996. "We have achieved our fiscal 1997 goal of obtaining all ten of the Top Ten OEMS," said K.Y. Ho, ATI's president and CEO. "Our next level demands that we achieve deeper penetration into the Top Ten and continue to increase our market share in the graphics market. Based on the core technologies we have created, the broader based relationships we've developed and our timing in the market, I am confident that we will attain continued growth in 1998." Financial Highlights The company ended the fiscal year in a strong financial position. Net working capital rose to $152.4 million as at August 31, 1997 compared with $111.5 million at the end of fiscal 1996. Cash balances net of bank indebtedness increased by $8 million ending the fiscal year at $71.8 million and after payments of $18.1 million for a joint venture interest in the UICC UICC - UMTS Integrated Circuit Card UICC - Union Internationale Contre le Cancer (International Union Against Cancer) fabrication plant. For the fiscal year, gross margin reached 32.1 percent of sales compared with 26.3 percent realized in the prior year and 35.7 percent in the fourth quarter. Improved margins reflect a higher percentage of component products and the company's efforts to improve costs via its Customer Owned Tooling (COT) design and production process. Selling and marketing expenses rose to $58.9 million or 9.8 percent of sales (9.7 percent in 1996), principally due to heightened activities to enhance ATI's penetration in the marketplace and an increased number of OEMs. Research and development expenses rose to $44.5 million or 7.4 percent (5.9 percent in 1996) of sales as the company invested in creating future technologies and added the necessary headcounts to support multiple initiatives. Operational Highlights ATI is pleased to report the company captured the majority of the AGP-related design wins awarded this fall. (See schedule). New to the company's list of OEM customer was Compaq Computer Corporation and Dell Computer Corporation, in addition to other announced wins from continuing relationships with IBM, AST, Acer and Sony. ATI's superior technology continues to garner the major awards for product performance among the high tech world's most prestigious magazines. In the last quarter alone the ALL-IN-WONDER combination graphics accelerator and TV-tuner captured Editors' Choice Awards from PC Magazine, PC Gamer and 3D Design Magazine as well as the top "BootWorthy" Award from Boot Magazine. At the same time, 3D PRO TURBO PC2TV 2D, 3D and video accelerator captured PC World's Best Buy award. During the quarter ATI announced three new board-level graphics products based on our flagship RAGE PRO component: the NEXUS GA, the XPERT@Work and the XPERT@Play accelerator boards. The NEXUS GA is the company's add-in board for PCI compatible Macintosh systems and offers designers and content creators design caliber 2D performance and high quality 3D performance. The XPERT@Play and XPERT@Work graphics boards have been praised by the media for their high quality performance and multiple features that serve the distinct needs of the home, entertainment and corporate market. 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 multimedia solutions and graphics components for personal computers. An ISO 9002 company, ATI is one of the world's leading suppliers of video and 2D/3D graphics accelerators to OEM and retail customers. Founded in 1985, ATI employs more than 1,000 people at headquarters in Thornhill, Ontario, with offices in the United States, Germany, France, the United Kingdom, Ireland, Taiwan and Japan. ATI is a public company whose shares trade on the Toronto Stock Exchange. Copyright (c) ATI Technologies Inc., 1997. All company and/or product names are trademarks and/or registered trademarks of their respective manufacturers. Features, pricing, availability and specifications are subject to change without notice. -0-
Announced Design Wins: Fourth Quarter, 1997
OEM System Market Product
------------------------------------------------------------
AST Bravo MS 6266 Commercial RAGE PRO AGP
Bravo MS 6300
Compaq Presario 4840 Consumer RAGE PRO AGP
Presario 4850
Dell OptiPlex GXa Commercial RAGE PRO AGP
IBM
Corporation Aptiva L Series Consumer RAGE PRO AGP
Aptiva S Series
Sony
Electronics VAIO PCV-220 Consumer ALL-IN-WONDER
VAIO PCV-240 featuring
RAGE PRO AGP
ImpacTV2
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ATI TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Thousands of Canadian dollars, except per share amounts)
Three months ended August 31
----------------------------------------
1997 1996
----------------------------------------
(unaudited)
(Percent) (Percent)
Sales 152,261 100.0 116,244 100.0
Cost of
goods sold 97,858 64.3 83,707 72.0
----------------------------------------
54,403 35.7 32,537 28.0
----------------------------------------
Expenses
Selling and 18,003 11.8 13,849 11.9
Marketing
Research and 13,734 9.0 6,768 5.8
development
Administrative 6,625 4.4 3,972 3.4
---------------------------------------
38,362 25.2 24,589 21.1
---------------------------------------
Income from
Operations 16,041 10.5 7,948 6.9
Interest and
other income 839 0.6 875 0.7
Interest expense (4) (0.0) (49) (0.0)
--------------------------------------
Income before
income taxes 16,876 11.1 8,774 7.6
Income taxes 5,232 3.4 2,032 1.8
--------------------------------------
Net income $ 11,644 7.7 $ 6,742 5.8
Net income per
share - basic $ 0.25 $ 0.15
- fully $ 0.23 $ 0.14
diluted
Retained earnings
Retained earnings-
beginning of
period $ 84,605 $ 41,818
Net income for
the period 11,644 6,742
----------------------------------------
Retained earnings
end of period $96,249 $ 48,560
Twelve months ended August 31
----------------------------------------
1997 1996
----------------------------------------
(audited)
(Percent) (Percent)
Sales 602,839 100.0 466,598 100.0
Cost of
goods sold 409,153 67.9 343,699 73.7
----------------------------------------
193,686 32.1 122,899 26.3
----------------------------------------
Expenses
Selling and 58,936 9.8 45,174 9.7
marketing
Research and 44,459 7.4 27,507 5.9
development
Administrative 21,848 3.6 14,933 3.2
---------------------------------------
125,243 20.8 87,614 18.8
---------------------------------------
Income from
operations 68,443 11.3 35,285 7.5
Interest and
other income 3,733 0.6 3,683 0.8
Interest expense (382) (0.0) (179) (0.0)
--------------------------------------
Income before
income taxes 71,794 11.9 38,789 8.3
Income taxes 24,105 4.0 11,442 2.4
--------------------------------------
Net income $ 47,689 7.9 $ 27,347 5.9
Net income per
share - basic $ 1.00 $ 0.58
- fully $ 0.94 $ 0.56
diluted
Retained earnings-
Retained earnings
beginning of
period $ 48,560 $ 21,213
Net income for
the period 47,689 27,347
---------------------------------------
Retained earnings
end of period $96,249 $ 48,560
Certain 1996 figures have been reclassified to conform with 1997
presentation.
-0-
ATI TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(Thousands of Canadian dollars)
At August 31 At August 31
---------------------------
1997 1996
---------------------------
(audited) (audited)
Assets
Current Assets
Cash and cash equivalents $71,763 $73,855
Accounts receivable 113,744 65,398
Inventories 41,591 23,681
Prepayments and sundry receivables 6,072 5,071
-------- -------
Total current assets 233,170 168,005
Long-term portion of investment
tax credits - 5,770
Capital assets 31,085 25,321
Investment in joint venture 27,480 9,388
-------- -------
Total assets $291,735 $208,484
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness - $10,270
Accounts payable and accrued
liabilities 73,224 45,615
Income taxes payable 7,511 650
-------- --------
Total current liabilities 80,735 56,535
-------- --------
Deferred income taxes 5,000 3,800
----- -----
Shareholders' equity
Share capital 109,751 99,589
Retained earnings 96,249 48,560
--------- --------
Total shareholders' equity 206,000 148,149
--------- --------
Total liabilities and
shareholders' equity $291,735 $208,484
-0-
ATI TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Thousands of Canadian dollars)
Three months Twelve months
ended ended
August 31 August 31
------------------- ------------------
1997 1996 1997 1996
------------------- ------------------
(audited) (audited)
Cash provided by (used in)
Operating activities
Net income $11,644 $6,742 $47,689 $27,347
Add items not affecting
working capital:
Deferred income taxes 300 150 1,200 600
Depreciation 1,818 1,374 6,662 5,143
Long-term portion of
investment tax credits - (160) 5,770 2,063
Net changes in non-cash
working capital balances
relating to operations:
Accounts Receivable (31,328) (213) (48,346) (7,223)
Inventories 5,742 4,875 (17,910) 31,286
Prepayments and sundry
receivables 492 848 (1,001) (299)
Accounts payable and
accrued liabilities 25,006 5,120 27,609 2,136
Income taxes payable 1,210 (278) 6,861 450
--------------------------------------
14,884 18,458 28,534 61,503
--------------------------------------
Financing activities
Issue of common shares 5,442 93 10,162 1,501
---------------------------------------
Investing activities
Additions to capital
assets (5,184) (2,023) (12,426) (8,451)
Investment in joint
venture (162) - (18,092) (9,388)
---------------------------------------
(5,346) (2,023) (30,518) (17,839)
---------------------------------------
Increase in cash
position 14,980 16,528 8,178 45,165
Cash position, beginning
of period 56,783 47,057 63,585 18,420
--------------------------------------
Cash position, end of
period $71,763 $63,585 $71,763 $63,585
Cash is defined as cash and cash equivalents, less bank indebtedness.
For the fiscal 1997 year: weighted average number of shares
outstanding - 47,893,332
As at August 31, 1997: shares outstanding - 48,499,537
-0- CONTACT: ATI Technologies Inc. Jo-Anne Chang, 905/ 882-2600 Extension 8306 bwilcox@atitech.ca (e-mail) |
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