Raises Quarterly Revenue Growth Guidance to 45% Year-Over-Year
SINGAPORE, Jan. 11 /PRNewswire-FirstCall/ -- Creative Technology Ltd.
(Nasdaq: CREAF), a worldwide leader in digital entertainment products, today
announced that strong sales of its MuVo family of MP3/WMA players and
phenomenal demand for its Zen Micro resulted in sales of more than two million
of its MP3/WMA players in Q2 FY2005, which ended December 31, 2004.
Based on the strong sales of its MP3 players, Creative today raised its
guidance for revenue growth in the quarter to a 45 percent increase on a
year-over-year basis. Creative is now expecting to achieve sales of over
$360 million, a sharp increase over sales of $250 million for the same fiscal
period last year. Creative had already expected strong growth in the period
to $325 million. With the sharp increase in revenue coming from the dramatic
increase in sales of its MP3 players, Creative has adjusted its gross margin
guidance to about 27 to 28 percent for the period.
"Today's announcement of our two million MP3 players sold in the quarter
will come as a surprise to many who underestimated our marketing capability
and didn't believe that we could be such a strong contender to the Apple
iPod," said Sim Wong Hoo, chairman and CEO of Creative. "We just began
shipping the Zen Micro in late November and it is taking the market by storm.
We just won the 'Best of CES' for our Zen Micro Photo, which we just previewed
at the Consumer Electronics Show in Las Vegas."
"The great reviews and broad consumer adoption that Creative is receiving
for their Zen Micro underscore the importance of their focus on rapid
innovation and design," said Amir Majidimehr, vice president of Microsoft's
Windows Digital Media Division. "We are very excited with Creative's strong
support for the PlaysForSure(TM) logo program and their upcoming release of
full subscription support of Windows Media DRM 10 to support all major music
subscription services across their line of Zen players."
Creative Also Announced Today Substantial Investment Gains in the Quarter
During its second fiscal quarter Creative sold 2 million shares of its
SigmaTel holdings, generating cash proceeds of about $61 million dollars, with
net investment gains in the period of approximately $51 million. After this
sale, Creative still holds 3.7 million shares of SigmaTel stock.
About Creative
Creative is a worldwide leader in digital entertainment products for PC
users. Famous for its Sound Blaster(R) sound cards and for launching the
multimedia revolution, Creative is now driving digital entertainment on the PC
platform with products like its highly acclaimed MuVo(R) and Zen portable
audio players. Creative's innovative hardware, proprietary technology,
applications and services leverage the Internet, enabling consumers to
experience high-quality digital entertainment -- anytime, anywhere.
This announcement relates to products launched in the United States. The
product names, prices and availability are subject to change without notice
and may differ elsewhere in the world according to local factors and
requirements. MuVo and Sound Blaster are registered trademarks of Creative
Technology Ltd. in the United States and other countries. All other brand
names are trademarks of their respective owners.
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 including those related to Creative's estimated revenue and
gross margin for the quarter ended December 31, 2004. 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; major health
concerns; the proliferation of sound functionality in new products from
competitors at the application software, chip and operating system levels; 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; Creative's
ability to successfully manage its expanding operations; 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 trading volume and value of Creative's Ordinary Shares as a result
of Creative's previous plan and any future plans to delist from NASDAQ and to
eliminate its U.S. 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 2004 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.
SOURCE Creative Technology Ltd.
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Related links:
http://www.creative.com
CONTACT:
Phil O'Shaughnessy of Creative Labs, Inc.,
+1-408-546-6773, or poshaughnessy@creative.com
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