Creative In Red Again With US$20 Million Loss In Q4 FY09 ~ Creative Labs Zen MP3 Players Sound Blaster Card
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Friday, August 7, 2009

Creative In Red Again With US$20 Million Loss In Q4 FY09

Creative reported another loss making quarter in Q4 FY09. Hopefully with the introduction of the Zii platform Plaszma and Zii Egg, Creative can really turnaround and make profit in the next quarter and beyond.

SINGAPORE – Aug. 6, 2009– Creative Technology Ltd. today announced US GAAP financial results for the fourth quarter of its 2009 fiscal year and for the Company’s full 2009 fiscal year, ended June 30, 2009.

The Company has previously prepared financial statements in accordance with US GAAP. Following the Company’s termination of registration of its shares and reporting obligations in May 2009 under the United States Securities Exchange Act of 1934, the Company is now required to prepare financial statements under Singapore Financial Reporting Standards (“FRS”), in accordance with the requirements of the Singapore Exchange Securities Trading Limited (“SGX-ST”). The financial results under Singapore FRS are set out in a separate announcement made in accordance with requirements from SGX-ST.

The financial results in this announcement have been prepared under US GAAP and are for information purposes only, to provide a basis for comparison to the financial results for the previous quarters of the fiscal year. Going forward, the Company will no longer provide US GAAP financial results.

Revenues for the fourth quarter were US$86.1 million, compared to revenues of US$83.1 million for the third quarter and revenues of US$150.3 million for the same quarter last year.

Net loss for the fourth quarter was US$19.3 million, with a loss per share of US$0.28, including a provision of US$12.8 million for loans due from a former subsidiary that Creative divested in 2007. Excluding the provision of US$12.8 million, net loss for the quarter was US$6.5 million with a loss per share of US$0.10. This compares to a net loss for the previous quarter of US$41.8 million, with loss per share of US 0.60, including restructuring charges of US$11.2 million, and a net loss of US$31.7 million with a loss per share of US$0.40 including restructuring charges of US$11.7 million for the same period last year.

Revenues for the 2009 fiscal year were US$466.1 million, compared to revenues of US$736.8 million for the previous fiscal year. Net loss for the 2009 fiscal year was US$125.8 million, with a loss per share of US$1.74. This compares to a net loss of US$19.7 million, with a loss per share of US$0.24 for the previous fiscal year.

“During fiscal year 2009, we have focused on a complete restructuring of our world wide sales and marketing operations. The other major development is our just- announced Zii Platform. Our restructuring efforts have resulted in a significant reduction of fourth quarter operating expenses compared to the same quarter last year. The reductions were primarily in our SG&A expenses as we sharply reduced our international head count and infrastructure costs,” said Craig McHugh, president and COO of Creative. “As we begin fiscal year 2010 our major restructuring efforts are substantially complete. We made smaller reductions in our research and development efforts as we have continued to invest heavily in our Zii Platform, cutting back development spending only in product areas that were not strategic going forward.”

“The Zii Platform includes the Plaszma OS, Plaszma SDK and the Zii EGG for developers, which runs the Plaszma or Android OS. We also introduced our ZMS-05 system Module, a compact, media-rich module that can be used by developers in combination with Plaszma software to significantly reduce design and manufacturing complexity in creating next-generation devices and applications. In the same announcement we unveiled our ‘Shanzhai’ OEM Marketing Program to outreach and build demand in this burgeoning OEM market in China,” continued McHugh.

“Looking forward we will intensify our focus on marketing our Zii Platform. As a result of these marketing efforts our operating expenses will increase. The overall market for our current products remains difficult and unpredictable but we are targeting to further reduce our losses in the current quarter,” continued McHugh.

Share Buyback Program
During the fourth quarter, Creative did not purchase any shares under its share buyback program.


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