***3Dlabs Reports First Quarter 1998 Results
(April 22)
3Dlabs Inc. Ltd. announced financial results for the first
quarter ended March 31,1998.
Total revenues in the first quarter were $24.5 million, up 56%
from the $15.8 million reported in the first quarter of 1997,
and up 10% from the $22.3 million reported in the fourth quarter
of 1997. Product revenues in the first quarter were $24.4
million, up 32% from the $18.5 million reported in the fourth
quarter of 1997. Net income for the first quarter was $2.3
million, or $0.15 per share on a diluted basis.
Gross profit related to product sales was $8.0 million, up 81%
compared to $4.4 million reported in the fourth quarter of 1997.
Product gross-margins in the quarter increased sequentially to
33% compared to 24% in the fourth quarter of 1997. Revenues
reported in the fourth quarter of 1997 included $3.7 million
related to licensing and royalties.
"Our product momentum with PERMEDIA 2 continued in the quarter
as we increased unit volumes by approximately 38% and more than
doubled the related contribution to gross profit", said Osman
Kent, president and CEO of 3Dlabs. "We also achieved a fast
ramp-up with SGS-Thomson, who provided approximately 30% of our
PERMEDIA 2 volume in the quarter. Looking forward, the combined
PERMEDIA 2 unit volumes from Texas Instruments (TI) and 3Dlabs
are expected to continue to show strong growth during the second
quarter of 1998. As a result of our recently amended licensing
arrangement with TI, the absolute gross margin contribution from
our PERMEDIA 2 sales is expected to increase despite a modest
anticipated decrease in our PERMEDIA 2 revenues during the
second quarter."
"We are pleased with the overall benchmark and application
performance we are achieving with our latest GLINT Gamma-based
products," Kent continued. "Our GLINT revenues in the quarter
were up approximately 23% sequentially over the fourth quarter
of 1997, all from GLINT Gamma-based products which are now in
full production. However, with the realization late in the
quarter that our customers are going to take longer than
anticipated to bring their GLINT Gamma-based products to market,
we now expect a slower build up of momentum for our GLINT
business over the remainder of 1998. We strongly believe in the
strategic direction we have taken with our GLINT Gamma-based
products, and will continue to pursue near-term and longer-term
opportunities with this product while continuing to invest in
geometry acceleration technology over the long-term."
"Coupled with the general slowdown in the PC industry
anticipated for the second quarter, we expect the above factors
to cause our second quarter revenues to be sequentially down by
approximately 10%. However, we expect our product gross margin
percentage to continue to improve in the second quarter as the
cost of products is reduced. We are also continuing to invest in
future products which we expect to formally announce during the
course of the year."
www.3dlabs.com
Wave Issue 9811 4/24/98 Article 1-01