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EXHIBIT 99.1
Press Contacts: Investor Relations Contacts:
Scott Taylor Diane Sha
3dfx Interactive, Inc. 3dfx Interactive, Inc.
(408) 719-5920 (408) 935-4075
[email protected]
[email protected]
Nikki Tanis
Tanis Communications Inc.
(408) 371-9394
(408) 431-1757
[email protected]
FOR IMMEDIATE RELEASE
3DFX INTERACTIVE ANNOUNCES RESULTS FOR ITS FISCAL THIRD
QUARTER ENDED OCTOBER 31, 2000
SAN JOSE, Calif., December 15, 2000 - 3dfx Interactive, Inc. (Nasdaq: TDFX -
news) today announced financial results for its third fiscal quarter of the
fiscal year 2001, ended October 31, 2000.
Revenues for the nine months ended October 31, 2000, were down 14
percent over the same period last fiscal year to $214.8 million compared to
revenues of $251.1 million for the nine months ended October 31, 1999. Revenues
for the third fiscal quarter were down 63 percent over the same period last
fiscal year to $39.2 million compared to $105.9 million for the third quarter of
fiscal 2000, ended October 31, 1999.
"Our financial results illustrate the dramatic shift we've seen in
the retail market over the past quarter," said Alex Leupp, president and CEO,
3dfx Interactive Inc. "We have experienced a significant slowdown in demand for
our products, especially the Voodoo 3 and Voodoo 5 boards. This slowdown is
consistent with the overall softness
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experienced by the PC market, especially in Western Europe. In addition, we've
experienced pricing pressures in the channel. Finally, our inability to secure a
bank line of credit has impacted our ability to build inventory to meet even the
existing demand."
Gross profit (loss) for the third quarter fiscal 2001 decreased to ($21.7
million) from $17.2 million in the three months ended October 31, 1999. Gross
profit (loss) as a percentage of revenues was (55.5)% in the three months ended
October 31, 2000 compared to a gross profit of 16.3% in the comparable period of
the previous year.
The company reported an operating loss before charges for amortization
and impairment of goodwill and intangibles for the third quarter of fiscal 2001
of $55.9 million. Operating losses before in process research and development
and charges for amortization and impairment of goodwill and intangibles for the
first nine months of the fiscal year 2001 were $90.7 million, compared to $30.3
million for the first nine months of fiscal year 2000. The third quarter fiscal
2001 net loss includes a $117.1 million charge for impairment of goodwill and
other intangible assets and $9.7 million for amortization expenses.
The company reported a net loss of $178.6 million for the quarter, or
$4.53 per share, using 39,442,000 shares in the per share calculation. For the
nine months ending October 31, 2000, the company reported a net loss of $291.5
million, or $9.69 per share.
In a separate announcement dated December 15, 2000, 3dfx Interactive
announced its intention to substantially reduce costs in order to best conserve
its resources. These cost-cutting measures include a significant reduction in
the company's work force as well as other measures. In addition, the company's
Board of Directors and advisors are recommending to its shareholders that they
approve a plan to sell most of
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3dfx's assets to NVIDIA Corporation (Nasdaq: NVDA-news) and that shareholders
also approve a plan to dissolve the company following completion of the asset
sale.
3dfx will hold a conference call to discuss its financial results
and current business developments today at 2 p.m., Pacific Standard Time (3 p.m.
Mountain, 4 p.m. Central, 5 p.m. Eastern). To participate in the conference
call, please dial 800-521-5428 approximately five minutes before the scheduled
starting time. No password is required. A live webcast (listen-only mode) of
this call will also be available at www.3dfx.com/earnings and
www.streetevents.com. Analysts and institutional investors who wish to
participate in the question and answer should call 408-935-4075 in advance of
the conference call.
Replay starts immediately after the call and runs for 72 hours, 24 hours per
day.
Replay: 800-625-5288
Passcode: 880445
Webcast replay will be available at the web sites noted above.
INSERT BALANCE SHEET.
ABOUT 3DFX INTERACTIVE
3dfx Interactive is enabling the emerging age of visual communications, and the
3D multimedia revolution in personal computers and consumer products. With its
patented and award-winning graphics accelerator chips, boards and software, 3dfx
provides the technology to create high-impact visual experiences. The company is
recognized worldwide for its ability to bring the world's finest games,
educational content, interactive entertainment and media-rich business
applications to life. 3dfx products are available in retail stores worldwide,
and through leading PC makers including Compaq, Dell, Falcon Northwest and
Micron. 3dfx has headquarters in San Jose, Calif., with engineering and
manufacturing facilities in Richardson, Texas, Austin, Texas, and Juarez,
Mexico. The company also operates www.3dfxgamers.com, the premier online
community for Voodoo owners and gaming enthusiasts.
3dfx Interactive is available on the Web at http://www.3dfx.com.
This notice does not constitute an offer of any securities for sale. In
connection with the proposed asset sale by and between 3dfx Interactive, Inc.
("3dfx"), NVIDIA corporation
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("NVIDIA") and NVIDIA Subsidiary (the "Asset Sale"), 3dfx and NVIDIA plan to
file with the SEC the Proxy Statement/Prospectus of 3dfx and NVIDIA relating to
the Asset Sale, as well as documents incorporated by reference therein. You are
urged to read the Proxy Statement/Prospectus when it is filed and any other
relevant documents filed with the SEC because they contain important
information. You may obtain the documents free of charge at the SEC's web site,
http://www.sec.gov. In addition, documents filed by 3dfx with the SEC can be
obtained by contacting 3dfx at the following address and telephone number:
Shareholder Relations, 4435 Fortran Drive, San Jose, California 95134,
telephone: (408) 935-4400. When it becomes available, please read the Proxy
Statement/Prospectus carefully before making a decision concerning the Asset
Sale. 3dfx, its officers, directors, employees and agents may be soliciting
proxies from 3dfx shareholders in connection with the Asset Sale. Information
concerning the participants in the solicitation will be set forth in the Proxy
Statement/Prospectus.
This press release contains forward-looking statements based on current
expectations that are inherently subject to risks and uncertainties. The words
"estimate," "project," "intend," "expect," "believe," "plan," and similar
expressions are intended to identify forward-looking statements. The Company's
actual results could differ materially from those currently anticipated due to a
number of factors, including, but not limited to, risks associated with the
Company's need for additional financing and its inability to satisfy debt
obligations in the face of a potential forced bankruptcy, claims of fraudulent
conveyance by the Company's creditors in the event proceeds from the Asset Sale
are insufficient to satisfy creditors, costs incurred if the Asset Sale is
terminated due to a superior proposal or the failure of the Company to obtain
shareholder approval for the Asset Sale, the failure of the Asset Sale to be
consummated, the failure of estimates of net proceeds from the Asset Sale to be
realized by the Company shareholders, amendment, delay in implementation or
termination of a planned Plan of Dissolution by the Company's shareholders, the
liability of Company shareholders for Company liabilities in the event
contingent reserves are insufficient to satisfy such liabilities, unexpected
revenue shortfalls and quarterly variations in operating results, the recent
downturn in the retail chip market and its adverse affect on the Company's
business, cost-cutting measures prompted by the need to conserve cash reserves,
the need to adequately support the retail/distributor channel, the Company's
limited operating history and the inability to assess future operating results,
volatility in the Company's stock price and its effect on the ability of
shareholders to sell their shares at attractive prices, the development of new
products and technologies and the effect on financial results, management of
product transitions, significant customer concentration and the potential
adverse effect on the Company's financial performance of a loss of significant
customers, the absence of long-term contracts or any assurances that historical
sales volumes will continue in the future, limited product diversity, the need
for developers and publishers to write software compatible with the Company's
products, dependence on single-source manufacturers and the Company's own
manufacturing facility, exposure to global economic factors, foreign business
practices, tax law and currency fluctuations, the inability to protect the
Company's proprietary rights, reliance on third-party licenses, potential loss
of market share, litigation expenses, the existence of a shareholder rights plan
that could discourage a third party from acquiring control of the Company, the
Company's recently completed merger with GigaPixel, as well as other factors set
forth in the Company's current report on Form 10-Q for the most recently ended
fiscal quarter and other reports and documents filed by Company with the
Securities and Exchange Commission from time to time.
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3DFX INTERACTIVE, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
OCTOBER 31, JANUARY 31,
2000 2000
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ..................................... $ 33,606 $ 41,818
Short-term investments ........................................ -- 24,012
Accounts receivable, net of allowance for doubtful accounts
of $5,202 and $6,681 ....................................... 30,177 66,160
Inventories, net .............................................. 45,794 45,065
Other current assets .......................................... 5,075 28,407
--------- ---------
Total current assets .................................... 114,652 205,462
Property and equipment, net ................................... 36,961 40,269
Goodwill and intangibles ...................................... 27,220 45,651
Other assets .................................................. 10,433 4,729
--------- ---------
Total assets ........................................ $ 189,266 $ 296,111
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt ............................................... $ 30,983 $ 25,000
Accounts payable .............................................. 62,679 60,879
Accrued liabilities ........................................... 17,499 20,385
Current portion long-term liabilities ......................... 1,324 732
Deferred revenue .............................................. 6,075 --
--------- ---------
Total current liabilities ............................. 118,559 106,996
--------- ---------
Other long term liabilities .................................... 701 1,881
--------- ---------
Shareholders' equity:
Common stock .................................................. 440,816 251,883
Warrants ...................................................... 242 242
Deferred compensation ......................................... (11,000) (172)
Unrealized gain on equity securities .......................... (1,983) 1,844
Accumulated deficit ........................................... (358,069) (66,563)
--------- ---------
Total shareholders' equity ............................... 70,006 187,234
--------- ---------
Total liabilities and shareholders' equity ........... $ 189,266 $ 296,111
========= =========
</TABLE>
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3DFX INTERACTIVE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------- -------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales ...................................... $ 39,189 $ 105,856 $ 214,757 $ 251,135
Cost of sales .................................. 60,935 88,624 199,903 191,122
--------- --------- --------- ---------
Gross profit (loss) .................. (21,746) 17,232 14,854 60,013
Operating expenses:
Research and development .................... 18,767 18,040 54,830 46,373
Sales, general and administrative ........... 15,399 18,329 50,750 43,954
Restructuring expense ....................... -- 1,830 -- 1,830
In-process research and development ......... -- -- 66,250 4,302
Goodwill and intangibles amortization ........ 9,667 3,627 17,993 6,601
Impairment of goodwill and intangibles assets 117,065 -- 117,065 --
--------- ---------
Total operating expenses ....................... 160,898 41,826 306,888 103,060
--------- --------- --------- ---------
Loss from operations ........................... (182,644) (24,594) (292,034) (43,047)
Interest and other income (expense), net ....... 696 393 215 1,988
--------- --------- --------- ---------
Loss before income taxes ....................... (181,948) (24,201) (291,819) (41,059)
Provision (benefit) for income taxes ........... (3,375) (6,583) (313) (9,658)
--------- --------- --------- ---------
Net loss ....................................... $ 178,573 $ 17,618 $ 291,506 $ 31,401
========= ========= ========= =========
Net loss per share:
Basic and diluted ......................... $ 4.53 $ .73 $ 9.69 $ 1.48
========= ========= ========= =========
Shares used in net loss per share
calculations:
Basic and diluted .............................. 39,442 24,131 30,077 21,163
========= ========= ========= =========
</TABLE>
