Diamond Multimedia Forecasts Lower Than Expected Revenue and Earnings for the Second Quarter Ending June 30, 1996.SAN JOSE, Calif.--(BUSINESS WIRE)--June 20, 1996--Diamond Multimedia Systems Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DIMD DIMD Dorland's Illustrated Medical Dictionary ) today announced that it anticipates that revenue for the second quarter ending June 30, 1996 will be approximately $120 million, and that gross margin will be lower than that reported for the first quarter ended March 31, 1996. This is expected to result in a loss. For the first quarter of 1996, Diamond reported net income of $11.2 million, or $0.32 per share, on revenue of $187.6 million. Gross margin for the first quarter was 21%. William J. Schroeder William J. Schroeder was one of the first recipients of an artificial heart. On November 25, 1984, Schroeder became the second human recipient of the Jarvik 7. After 18 days, he suffered the first of a series of strokes, eventually leaving him in a vegetative state. , president and chief executive officer, noted that: "We believe our revenue and gross margin for the quarter have been impacted by a number of factors, including price declines in the graphics and modem markets, lower demand levels in the PC market generally -- particularly in Europe, the effect on prices in our markets from continued price erosion of random access memory, and product sales mix sales mix See product mix. . "In addition, the strong early market acceptance of our newest 3D graphics product line has reduced our earlier expectations for market demand and price levels for our first-generation line of 3D multimedia accelerators. As a result, we expect gross margins to be reduced by a lower-of-cost-or-market inventory adjustment. "While we are disappointed with the performance of our business this quarter," said Schroeder, "we are encouraged by early market reaction to several of our new products. "The Stealth 3D graphics accelerator is showing strong early acceptance, the Supra A relational DBMS from Cincom Systems, Inc., Cincinnati, OH (www.cincom.com) that runs on IBM mainframes and VAXs. It includes a query language and a program that automates the database design process. NetCommander ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. has received positive early reviews, and the SupraExpress 336 and the SupraSonic 336V+ are among the first modems to ship at the new 33,600 bps data transfer rate and to support the V.80 video conferencing standard." This release contains forward looking statements with respect to financial results. Actual results for the quarter may differ materially as a result of a number of risks and uncertainties, including the closing and shipment of certain customer orders and potential product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. . These risks and uncertainties could result in lower revenues, additional accounting charges for excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. and further gross margin compression. Diamond Multimedia Systems Inc. Diamond designs, markets and supports high-performance PC and Macintosh multimedia solutions for the home, business and professional markets. Products include the Stealth, Diamond EDGE(R) 3D and Mirage series of multimedia accelerators, the Fire GL series of professional 3D and CAD accelerators, and the Supra series of fax/modems and NetCommander ISDN adapters. Diamond also markets sound cards and multimedia and Internet upgrade kits. Headquartered in San Jose, Diamond has sales, marketing and technical facilities in Vancouver (Wash.), Tokyo, Starnberg (Germany), Clichy (France), Winnersh (U.K.) and Singapore. Diamond's products are sold through regional, national and international distributors as well as to major computer retailers, mass merchants and OEMs worldwide. Diamond's common stock is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol DIMD. -0- Note to Editors: EDGE is a registered trademark of The EDGE Interactive Media Inc. in the United States, United Kingdom, France, and Germany and is a trademark elsewhere, used under license. All other trademarks referenced are the service mark, trademark or registered trademark of their respective manufacturers. CONTACT: Diamond Multimedia Systems Inc. Gary Filler, 408/325-7000 (investors) or FRB See Federal Reserve Board. San Francisco Ann Trunko, 415/986-1591 (general information) Bonnie McBride, 415/986-1591 (analyst contact) |
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