-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U2zkoUhswEqj1XmZZWX9wUvcxJ8f2I01E1Yyx5rgN9p7oVBWYcXe21oev419I+sD qI1r19R/IjJgaxJmT7X7gA== 0001194396-04-000097.txt : 20041007 0001194396-04-000097.hdr.sgml : 20041007 20041007150237 ACCESSION NUMBER: 0001194396-04-000097 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20041007 FILED AS OF DATE: 20041007 DATE AS OF CHANGE: 20041007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATI TECHNOLOGIES INC CENTRAL INDEX KEY: 0001065331 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER TERMINALS [3575] IRS NUMBER: 000000000 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29872 FILM NUMBER: 041070156 BUSINESS ADDRESS: STREET 1: 33 COMMERCE VALLEY DRIVE EAST STREET 2: THORNHILL CITY: ONTARIO CANADA STATE: E7 ZIP: L3T 7N6 BUSINESS PHONE: 9058822600 MAIL ADDRESS: STREET 1: 33 COMMERCE VALLEY DR EAST STREET 2: THORNHILL CITY: ONTARIO CANADA ZIP: L3T 7N6 6-K 1 ati6k87719.txt FORM 6-K 1 of 26 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of October, 2004 ------------- ATI TECHNOLOGIES INC. ------------------------------------- (Translation of Registrant's Name into English) 1 Commerce Valley Drive East, Markham, Ontario, Canada L3T 7X6 ------------------------------------- (Address of Principal Executive Offices) (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.) Form 20-F Form 40-F X ---------------- ----------------- (Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes No X -------------- --------------- Page 1 of 26 Pages Index is located on Page 2 2 of 26 INDEX
Document Page Number - -------- ----------- Press Release dated October 7, 2004 3 Signature Page 26
3 of 26 [ATI Technologies LOGO] For more information, please contact: Chris Evenden, Director, Public Relations 905-882-2600 xtn 8107 or cevenden@ati.com ---------------- ATI reports record revenues of US $572.2 million in Q4 2004 revenues up 44.1% to $2.0 billion MARKHAM, ON - October 7, 2004 - ATI Technologies Inc. (TSX: ATY, NASDAQ: ATYT) today announced its second consecutive record revenue quarter, driven by sales increases in both the personal computer and consumer product lines. ATI reported revenues/1/ of $572.2 million for the fourth quarter of fiscal 2004 (ended August 31, 2004), a 50.3% increase over the fourth quarter a year earlier. Gross margin declined 1.8 percentage points to 33.8% over the same period of the previous year as a result of costs associated with the ramp of a number of new desktop products. Net income/2/ per share was $0.24 for the quarter compared to $0.09 last year. ATI's cash position increased $40.9 million during the quarter to $548.9 million as of August 31, 2004. ATI's fiscal 2004 annual results also produced significant revenue and earnings growth over fiscal 2003. Revenues for the full 2004 fiscal year grew 44.1% to $2.0 billion. Net income for the year increased nearly six-fold to $0.80 per share from $0.14 per share in fiscal 2003. "Our corporate strategy continues to produce returns," said David Orton, ATI's Chief Executive Officer. "Our PCI Express desktop product line-up is the most competitive product family on the market, resulting in tremendous customer acceptance. In addition, the growth rate of our digital consumer business continues to outpace the market, based on ATI's innovative products for use in cell phones and digital televisions." - ----------------- 1 All dollar amounts are in U.S. dollars unless otherwise noted. All per share amounts are stated on a diluted basis unless otherwise noted. ATI Technologies Inc. reports under Canadian generally accepted accounting principles (GAAP). 2 Net income is reported according to Canadian GAAP. ATI is not reporting adjusted or proforma net income. 4 of 26 Outlook We expect our leadership in graphics and multimedia technologies for both digital consumer products and PCI Express-based PCs to continue driving growth for ATI in fiscal 2005. As a result, ATI currently expects revenue for the first quarter of fiscal 2005 to be in the range of $600 to $640 million. Gross margin, as a percentage of revenues, is expected to be between 33 and 34%. Operating expenses in the first quarter (excluding the expensing of stock options) are expected to grow between 5 and 10% relative to the fourth quarter of fiscal 2004. In accordance with Canadian generally accepted accounting principles, beginning with the first quarter of fiscal 2005, ATI will expense compensation costs associated with stock options granted to employees after September 1, 2002. The charge in the first quarter of fiscal 2005 will be approximately $7.0 million. ATI continues to be optimistic about its outlook for fiscal 2005, but anticipates some seasonality, where the first quarter is strong, followed by a slightly weaker revenue and profit profile for the second and third quarters. The fourth quarter is expected to build off of the third quarter. Management's Discussion and Analysis of Interim Financial Results In this Management's Discussion and Analysis (MD&A), ATI, we, us and our, mean ATI Technologies Inc. and its subsidiaries. About forward-looking statements: Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," "indicates," "targeting," "suggests" and similar expressions. This MD&A and other sections of this news release contain forward-looking statements about ATI's objectives, strategies, financial condition and results. These "forward-looking" statements are based on current expectations and entail various risks and uncertainties. Our actual results may materially differ from our expectations if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. Therefore we cannot provide any assurance that forward-looking statements will materialize. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Additional information concerning risks and uncertainties affecting our business and other factors that could cause our financial results to fluctuate is contained in our filings with Canadian and U.S. securities regulatory authorities, including our 2003 Annual Information Form and Annual Report. Any reference to "year-over-year" in this MD&A refers to a comparison of this year's fourth quarter results versus the fourth quarter of the prior year unless otherwise noted. 5 of 26 Financial Results Analysis Revenues - -------- Fourth quarter revenues of $572.2 million grew by 50.3% from $380.7 million in the same period a year ago. The gains in the fourth quarter were largely driven by revenue increases in all of our main business lines. Desktop discrete chip revenues grew about 40% as a result of PCI Express business with OEMs and expanded sales in the add-in-board (AIB) channel. Total notebook chip revenues (integrated and discrete) increased almost 20% resulting from market growth that was partially offset by market share declines in the notebook integrated market. Handset chip revenues more than doubled for a number of reasons -- increased demand from cell phone manufacturers, a growing number of design wins, a growing cell phone market overall, and the increasing proportion of the market claimed by camera phones. Our digital television revenues grew dramatically based on market growth and continued penetration of our products among top digital TV manufacturers. Gross Margin - ------------ Our gross margin for the fourth quarter of fiscal 2004 was 33.8% -- down 1.8 percentage points from 35.6% in the same period a year ago. The margin for our desktop discrete products declined relative to the fourth quarter of the previous year primarily due to early production costs associated with the introduction and ramp of our new PCI Express products. Gross margin for the fourth quarter of fiscal 2003 also benefited from higher margins in desktop discrete. The overall margin decline of our PC products was slightly offset by increases in our consumer products, which have margins that are typically higher than our corporate average. Our royalty income from Nintendo, and our non-recurring engineering revenues, are reported under "Other" in our segmented reporting. Please see Note 11 to our unaudited consolidated interim financial statements for further information on our segmented reporting. Operating Expenses - ------------------ Selling and marketing expenses increased by 10.6% year-over-year to $30.5 million. The increase in expenses related primarily to increased staff for sales and technical sales support, an increased investment in advertising designed to improve ATI's brand awareness and to create demand in the PC market, as well as increased marketing activities to support our brands, product launches, and participation in industry trade shows. 6 of 26 Administrative expenses were up 11.3% year-over-year to $11.7 million due to increased staffing levels to support a growing business, and incentive-based compensation. Research and development expenses increased 25.8% year-over-year to $77.1 million. This increase was largely a result of additional headcount to support broader programs in growing business areas, and increased prototyping costs - primarily in the desktop, integrated and notebook business units. These efforts have led to a number of design wins which we believe will result in continued growth in our business. Higher costs associated with licensing fees also added to the increase in R&D. Other Charges - ------------- We recorded other charges totaling $0.2 million in the fourth quarter. This compares favorably to other charges of $10.4 million for the fourth quarter last year. Last year's charges related largely to the settlement of patent litigation and restructuring charges related to the closure of our European R&D operations. Please see Note 8 to our unaudited consolidated interim financial statements for further information. Total Operating Expenses - ------------------------ Our total operating expenses reflect the operating expenses detailed earlier, as well as amortization of intangible assets. For further information on the treatment of the amortization of intangible assets, please see Note 4 to our unaudited consolidated interim financial statements. Interest and Other Income - ------------------------- Our interest and other income was $2.8 million in the fourth quarter of 2004, compared with $0.7 million for the comparable period in fiscal 2003. Interest and other income in 2004 was derived principally from interest on our higher cash balances. Net Income - ---------- Net income almost tripled to $61.2 million in the fourth quarter of 2004 from $22.3 million in the same quarter last year as a result of the significant increase in sales. 7 of 26 Liquidity and Financial Resources Fourth quarter inventory levels were steady relative to the third quarter of 2004 at $254.9 million. Inventory is up 44.4% since the end of the last fiscal year, August 31, 2003. The increase relative to August 31, 2003 is a direct result of our substantially increased sales. Accounts receivable were up 55.9% to $365.6 million from the year ended August 31, 2003. Accounts payable are up 43.7% to $274.8 million from the year ended August 31, 2003. Both accounts receivable and accounts payable are within our target range for current sales levels. Deferred revenue for the fourth quarter was $29.1 million, a decrease of $0.2 million from the third quarter and down $8.5 million from the end of fiscal 2003. Deferred revenue primarily relates to payments associated with development contracts where revenue is recognized on a percentage of completion basis, but payments are made according to contract terms. As of August 31, 2004 we had working capital of $694.7 million compared to $430.3 million at August 31, 2003. Cash flows from operations were $35.9 million in the fourth quarter. Our cash position was $548.9 million at the end of the fourth quarter, up from $350.7 million at the end of fiscal 2003. Our cash position increased mainly as a result of increased earnings throughout the fiscal year. Conference Call Information ATI Technologies Inc. will host a conference call today to discuss its financial results for the fourth quarter of its 2004 fiscal year ended August 31, 2004. To participate in the conference call, please dial 416-405-9310 ten minutes before the scheduled start of the call. No password is required. A live web cast of the conference call will be available at http://www.ati.com/companyinfo/ir/quarterlyresults.html under the Financial Information section, 2004 Conference Calls - Q4 2004. Replays of the conference call will be available through October 14, 2004 by calling 416-695-5800. The passcode is 3098802. A web cast replay will be available at the web site noted above. About ATI Technologies ATI Technologies Inc. is a world leader in the design and manufacture of innovative 3D graphics and digital media silicon solutions. An industry pioneer since 1985, ATI is the world's foremost visual processor unit (VPU) provider and is dedicated to deliver leading-edge performance solutions for the full range of PC and Mac desktop and notebook platforms, workstation, set-top and digital television, game console and handheld markets. With 2004 revenues of US $2 billion, ATI has more than 2,700 employees in the Americas, Europe and Asia. ATI common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange (ATY). 8 of 26 Copyright 2004 ATI Technologies Inc. All rights reserved. ATI and ATI product and product feature names are trademarks and/or registered trademarks of ATI Technologies Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice. For media or industry analyst support, visit our Web site at http://www.ati.com ------------------ Other ATI Contacts: Trevor Campbell, Director, Porter Novelli Canada, at (416) 422-7202 or trevor.campbell@porternovelli.com - --------------------------------- For investor relations support, please contact: Janet Craig, Director, Investor Relations, ATI Technologies Inc., at (905) 882-2631 or janet@ati.com ------------- - 30 - - FINANCIAL STATEMENTS ATTACHED - 9 of 26 ATI TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (Unaudited) (Thousands of US dollars, except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------ Three months ended Twelve months ended August 31 August 31 August 31 August 31 2004 2003 2004 2003 - ------------------------------------------------------------------------------------------------------------------------------ Revenues $ 572,218 100.0% $ 380,674 100.0% $ 1,996,717 100.0% $ 1,385,293 100.0% Cost of goods sold 378,792 66.2% 245,191 64.4% 1,299,597 65.1% 952,001 68.7% - ------------------------------------------------------------------------------------------------------------------------------ Gross margin 193,426 33.8 % 135,483 35.6% 697,120 34.9% 433,292 31.3% Expenses Selling and marketing 30,543 5.3% 27,628 7.3% 122,802 6.2% 96,925 7.0% Research and development 77,073 13.5% 61,285 16.1% 269,909 13.5% 212,976 15.4% Administrative 11,745 2.0% 10,557 2.8% 48,867 2.4% 39,413 2.8% Amortization of intangible assets 1,486 0.3% 1,271 0.3% 6,115 0.3% 10,767 0.8% Other charges (recoveries) (Note 8) 155 - 10,440 2.7% (304) - 28,724 2.1% - ------------------------------------------------------------------------------------------------------------------------------ 121,002 21.1% 111,181 29.2% 447,389 22.4% 388,805 28.1% - ------------------------------------------------------------------------------------------------------------------------------ Income from operations 72,424 12.7% 24,302 6.4% 249,731 12.5% 44,487 3.2% Interest and other income 2,815 0.5% 714 0.2% 4,257 0.2% 506 - Gain (loss) on investments - - 3,844 1.0% (1,307) - 3,876 0.3% Interest expense (499) (0.1%) (516) (0.1%) (2,058) (0.1%) (1,899) (0.1%) - ------------------------------------------------------------------------------------------------------------------------------ Income before income taxes 74,740 13.1% 28,344 7.5% 250,623 12.6% 46,970 3.4% Income taxes 13,584 2.4% 6,050 1.6% 45,824 2.3% 11,741 0.9% - ------------------------------------------------------------------------------------------------------------------------------ Net income $ 61,156 10.7% $ 22,294 5.9% $ 204,799 10.3% $ 35,229 2.5% Retained earnings, beginning of period 247,669 81,732 104,026 68,797 - ------------------------------------------------------------------------------------------------------------------------------ Retained earnings, end of period $ 308,825 $ 104,026 $ 308,825 $ 104,026 ============================================================================================================================== Net income per share (Note 9) Basic $ 0.25 $ 0.09 $ 0.84 $ 0.15 Diluted 0.24 0.09 0.80 0.14 ============================================================================================================================== Weighted average number of shares (000's) Basic 247,699 240,647 245,257 238,251 Diluted 256,849 249,525 255,092 244,353 Outstanding number of shares at the end of the quarter (000's) 249,287 241,742 249,287 241,742 ==============================================================================================================================
See accompanying notes to unaudited consolidated interim financial statements. These financial statements should be read in conjunction with the Company's most recent annual consolidated financial statements, as at and for year ended August 31, 2003. 10 of 26 ATI TECHNOLOGIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of US dollars)
------------------------------------------------------------- ------------------ ---------------- August 31 August 31 2004 2003 ------------------------------------------------------------- ------------------ ---------------- (Audited) Assets Current assets: Cash and cash equivalents $ 446,808 $ 300,905 Short-term investments 102,108 49,784 Accounts receivable 365,644 234,548 Inventories 254,867 176,494 Prepayments and sundry receivables 21,873 31,753 Future income tax assets 8,076 3,772 ------------------------------------------------------------- ------------------ ---------------- Total current assets 1,199,376 797,256 Capital assets 85,943 86,890 Intangible assets (Note 4) 5,558 8,811 Goodwill (Note 4) 190,095 190,095 Long-term investments 2,751 3,960 Tax credits recoverable 9,193 21,181 Future income tax assets 20,570 7,865 ------------------------------------------------------------- ------------------ ---------------- Total Assets $ 1,513,486 $ 1,116,058 ============================================================= ================== ================ Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 274,772 $ 191,196 Accrued liabilities 199,129 136,709 Deferred revenue 29,131 37,669 Current portion of long-term debt (Note 6) 1,571 1,394 Future income tax liabilities 54 - ------------------------------------------------------------- ------------------ ---------------- Total current liabilities 504,657 366,968 Long-term debt (Note 6) 28,053 28,073 Future income tax liabilities 36,088 21,408 ------------------------------------------------------------- ------------------ ---------------- Total liabilities 568,798 416,449 Shareholders' equity: Share capital 638,985 582,454 Treasury stock (Note 12) (22,100) - Contributed surplus 10,704 4,855 Retained earnings 308,825 104,026 Currency translation adjustments 8,274 8,274 ------------------------------------------------------------- ------------------ ---------------- Total shareholders' equity 944,688 699,609 ------------------------------------------------------------- ------------------ ---------------- Total Liabilities and Shareholders' Equity $ 1,513,486 $ 1,116,058 ============================================================== ================== ================
See accompanying notes to unaudited consolidated interim financial statements. These financial statements should be read in conjunction with the Company's most recent annual consolidated financial statements, as at and for year ended August 31, 2003. 11 of 26 ATI TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Thousands of US dollars)
- ------------------------------------------------------ ----------------------------- -------------------------- Three months ended Twelve months ended August 31 August 31 August 31 August 31 2004 2003 2004 2003 - ------------------------------------------------------ ------------- ------------- ------------- ------------- Cash provided by (used in): Operating activities: Net income $ 61,156 $ 22,294 $ 204,799 $ 35,229 Items which do not involve cash: Tax credits recoverable 6,435 (130) 11,988 (21,181) Future income taxes (5,604) 720 (2,275) (1,802) Stock-based compensation 1,670 - 5,849 - Depreciation and amortization 6,177 6,276 26,031 34,705 Other charges (Note 8) - - - 1,400 Loss (gain) on investments - (3,844) 1,307 (3,876) Gain on sale of long-lived assets (Note 8) - - (538) - Foreign exchange loss (gain) 826 (93) 961 3,637 Change in non-cash operating working capital: Accounts receivable (69,018) (29,568) (131,096) (93,422) Inventories (2,085) (40,064) (78,373) 15,627 Prepayments and sundry receivables 7,387 (6,129) 9,880 (8,678) Accounts payable 5,028 33,013 83,576 19,103 Accrued liabilities 24,117 46,511 61,380 87,288 Deferred revenue (215) 19,067 (8,538) 37,419 - ------------------------------------------------------ ------------- ------------- ------------- ------------- 35,874 48,053 184,951 105,449 - ------------------------------------------------------ ------------- ------------- ------------- ------------- Financing activities: Decrease in bank indebtedness - - - (12,015) Addition to long-term debt - - - 10,709 Principal payment on long-term debt (367) (335) (1,442) (1,064) Settlement of swap contract - - - (1,365) Issuance of common shares 11,843 14,373 56,531 20,977 Repurchase of common shares (Note 12) - - (22,100) - Repayment of share purchase loans - - - 225 - ------------------------------------------------------ ------------- ------------- ------------- ------------- 11,476 14,038 32,989 17,467 - ------------------------------------------------------ ------------- ------------- ------------- ------------- Investing activities: Purchase of short-term investments (102,108) - (142,015) (49,784) Maturity of short-term investments - - 89,691 49,649 Additions to capital assets (6,738) (3,667) (20,671) (16,390) Purchase of long-term investments - (2,460) (98) (2,460) Proceeds from sale of investments - 9,749 - 10,029 Proceeds from sale of long-lived assets (Note 8) - - 2,489 - Acquisitions, net of cash acquired (Note 3) - - (2,071) - - ------------------------------------------------------ ------------- ------------- ------------- ------------- (108,846) 3,622 (72,675) (8,956) - ------------------------------------------------------ ------------- ------------- ------------- ------------- Foreign exchange gain (loss) on cash held in foreign currency 280 (266) 638 (181) - ------------------------------------------------------ ------------- ------------- ------------- ------------- Increase (decrease) in cash and cash equivalents (61,216) 65,447 145,903 113,779 Cash and cash equivalents - beginning of period 508,024 235,458 300,905 187,126 - ------------------------------------------------------ ------------- ------------- ------------- ------------- Cash and cash equivalents - end of period 446,808 300,905 $ 446,808 300,905 Short-term investments 102,108 49,784 102,108 49,784 - ------------------------------------------------------ ------------- ------------- ------------- ------------- Cash position - end of period $ 548,916 $ 350,689 $ 548,916 $ 350,689 ====================================================== ============= ============= ============= =============
12 of 26 ATI TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Cash position is defined as cash and cash equivalents and short-term investments. See accompanying notes to unaudited consolidated interim financial statements. These financial statements should be read in conjunction with the Company's most recent annual consolidated financial statements, as at and for year ended August 31, 2003. 13 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) The principal business activities of ATI Technologies Inc. (the "Company") are the design, manufacture and sale of innovative 3D graphics and digital media silicon solutions. The Company markets its products to original equipment manufacturers, system builders, distributors and retailers primarily in North America, Europe and the Asia-Pacific region. 1. SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited financial statements are prepared in accordance with Canadian generally accepted accounting principles for interim financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed to include only the notes related to elements which have significantly changed in the interim period. As a result, these interim consolidated financial statements do not contain all disclosures required to be included in the annual financial statements and should be read in conjunction with the most recent audited annual consolidated financial statements and notes thereto for the year ended August 31, 2003. These consolidated condensed financial statements are prepared following accounting policies consistent with the Company's audited annual consolidated financial statements and notes thereto for the year ended August 31, 2003, except for the following accounting policy adopted during the fiscal quarter ended May 31, 2004: (a) The Company adopted CICA Accounting Guideline No. 13, "Hedging Relationships", for its derivative instruments. Commencing in the third quarter of fiscal 2004, the Company engaged in activities to purchase certain derivative financial instruments, principally forward foreign exchange contracts ("Forwards"), to manage its foreign currency exposures. The Company's policy is not to utilize derivative financial instruments for trading or speculative purposes. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or anticipated transactions. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The Company purchases Forwards to hedge anticipated Canadian dollar expenses pertaining to its operations in Canada. These instruments are not recognized in the consolidated financial statements at inception. Foreign exchange gains and losses on these contracts are deferred off-balance sheet and recognized as an adjustment to the operating expenses when the operating expenses are incurred. Realized and unrealized gains or losses associated with derivative instruments, which have been terminated or cease to be effective prior to maturity, are deferred under other current, or non-current, assets or liabilities on the balance sheet and recognized in income in the period in which the underlying hedged transaction is recognized. In the event a designated hedged item is sold, extinguished or matures prior to the termination of the related derivative instrument, any realized or unrealized gain or loss on such derivative instrument is recognized in income. The financial information included herein reflects all adjustments (consisting only of normal recurring adjustments), which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. 14 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 2. FINANCIAL INSTRUMENTS The Company enters into Forwards to hedge its foreign currency exposure on expenses incurred for its Canadian operations. The Forwards obligate the Company to sell US dollars for Canadian dollars in the future at predetermined exchange rates and are matched with anticipated future operating expenses in Canada. The Forwards do not subject the Company to risk from exchange rate movements because gains and losses on such contracts offset losses and gains on exposures being hedged. The counterparties to the Forwards are multinational commercial banks and, therefore, the credit risk of counterparty non-performance is low. During the fourth quarter fiscal 2004, the Company purchased Forwards to buy $35.0 million Canadian dollars in the next three months at an average exchange rate of 1.3793. All of the Forwards have become favourable to the Company since their inception and have a fair value of $1.3 million at August 31, 2004. 3. ACQUISITIONS On September 2, 2003, the Company acquired certain assets located in Taiwan and China from AMI Technologies Corp., its exclusive sales organization for Taiwan and China since 1992, for consideration of $3.1 million. The purchase price was allocated to the net assets acquired, including intangible assets of $2.9 million, based on their relative fair values at the date of acquisition. The useful life of the intangible assets acquired is approximately one year. 4. GOODWILL AND INTANGIBLE ASSETS The net book values of goodwill and intangible assets at August 31, 2004 and August 31, 2003 are as follows :
(Thousands of US dollars) ----------------------------- ------------ ----------------- -------------- ----------------- Cost Accumulated Net book Net book value amortization value August 31, 2004 August 31, 2003 ----------------------------- ------------ ----------------- -------------- ----------------- Purchased in-process R & D $ 56,250 $ 56,250 $ - $ - Core technology 23,670 18,112 5,558 8,811 Other 2,862 2,862 - - ----------------------------- ------------ ----------------- -------------- ----------------- Total intangible assets $ 82,782 $ 77,224 $ 5,558 $ 8,811 ============================= ============ ================= ============== ================= Goodwill $ 376,788 $ 186,693 $ 190,095 $ 190,095 ============================= ============ ================= ============== =================
Amortization expense related to intangible assets amounted to $1.5 million and $6.1 million for the three months and twelve months ended August 31, 2004 respectively (2003 - $1.3 million and $10.8 million). During the fourth quarter of fiscal 2004, the Company performed its annual goodwill impairment test in accordance with the CICA Handbook Section 3062 "Goodwill and Other Intangible Assets" and determined that there was no goodwill impairment in fiscal 2004. 15 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 5. CREDIT FACILITIES The Company maintains committed operating credit facilities aggregating $43.0 million with a single financial institution. There are no borrowings outstanding under these facilities. 6. LONG-TERM DEBT
(Thousands of US dollars) ------------------------------------- ------------ ------------- ------------ Interest August 31 August 31 rate 2004 2003 ------------------------------------- ------------ ------------- ------------ Obligation under capital lease (i) 6.31% $ 18,049 $ 17,785 Mortgage payable (ii) 6.96% 11,575 11,682 ------------------------------------- ------------ ------------- ------------ 29,624 29,467 Less : Current portion 1,571 1,394 ------------------------------------- ------------ ------------- ------------ Long-term portion $ 28,053 $ 28,073 ===================================== ============ ============= ============
(i) Obligation under capital lease : The Company's obligation under capital lease represents the lease on the building facility occupied by the Company in Markham, Ontario ("Building Facility"). The capital lease is denominated in Canadian dollars. As at August 31, 2004, the remaining amount outstanding on the capital lease was $18.0 million (Cdn. $23.7 million). (ii) Mortgage payable : On September 10, 2002, Commerce Valley Realty Holding Inc. ("CVRH"), a joint venture in which the Company has a 50 per cent ownership interest, entered into a mortgage agreement with a lender to finance the Building Facility. The Company's proportionate share of the mortgage as at August 31, 2004 amounted to $11.6 million (Cdn. $15.2 million). The mortgage has a repayment term of 12 years and is denominated in Canadian dollars. 7. GUARANTEE The Company and other owners of CVRH have jointly and severally provided a guarantee for the mortgage payment of the Building Facility. In the event that CVRH is unable to meet the underlying mortgage payment to the lender, the Company and other owners of CVRH will be jointly and severally responsible under this guarantee. In addition, the Company posted a letter of credit in the amount of $2.3 million (Cdn. $3.0 million) in favour of CVRH. CVRH has assigned this letter of credit to the exclusive benefit of the lender as additional security of the mortgage. The letter of credit has a term of 5 years and will expire on November 5, 2007. In the event of a lease default by the Company, the proceeds of the letter of credit will be paid to the lender. 16 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 8. OTHER CHARGES (RECOVERIES) Other charges (recoveries) include the following items:
(Thousands of US dollars) -------------------------------------------------------------- ------------------------ ---------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 -------------------------------------------------------------- ---------- ----------- ----------- ------------ Settlement of class action lawsuits (i) $ - $ (3,330) $ - $ 4,670 Regulatory matters (ii) 342 728 1,885 5,828 Restructuring charge (recovery) - European operations (iii) (187) 3,777 (725) 6,542 Lease exit charge (recovery) (iv) - 265 (1,464) 2,684 Settlement of patent litigation with Cirrus Logic, Inc. (v) - 9,000 - 9,000 -------------------------------------------------------------- ---------- ----------- ----------- ------------ Total $ 155 $ 10,440 $ (304) $ 28,724 ============================================================== ========== =========== =========== ============
(i) Settlement of class action lawsuits: On February 7, 2003, the Company announced that it had reached an agreement for the full and complete settlement of all remaining claims alleged in the shareholder class action lawsuits filed in May 2001 in the United States District Court for the Eastern District of Pennsylvania for a cash payment of $8.0 million. This litigation relates to alleged misrepresentations and omissions made by the Company and certain directors and officers during a period preceding its May 2000 earnings warning. The terms of the Stipulation and Agreement of Settlement received final court approval on April 28, 2003 and included no admission of liability or wrongdoing by the Company or other defendants. No party timely appealed from the Court's order. During the fourth quarter of fiscal 2003, the Company received $3.3 million from its insurer as its contribution towards the settlement. (ii) Regulatory matters: In January 2003, the Company announced that Staff of the Ontario Securities Commission ("OSC") had filed a Notice of Hearing and Statement of Allegations ("Notice") in relation to the Company and others. The Notice alleged that the Company failed to disclose information concerning the shortfall in revenues and earnings that occurred in the third quarter of fiscal 2000, as required by the listing rules of the Toronto Stock Exchange. The Notice also alleged that the Company made a misleading statement to Staff of the OSC in August 2000 regarding the events leading up to the disclosure on May 24, 2000 of the shortfall. Seven individuals were also named in the Notice. The Notice alleged that six of these individuals, including K.Y. Ho, the then Chairman and Chief Executive Officer of the Company, engaged in insider trading contrary to the Securities Act. The hearing originally set for February - March 2004 has been rescheduled to October - November 2004. 17 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 8. OTHER CHARGES (RECOVERIES) (CONTINUED) (iii) Restructuring charge (recovery) - European operations: The following table details the activity through the restructuring liabilities accrual :
(Thousands of US dollars) -------------------------------- ---------------------- ------------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 -------------------------------- --------- ------------- ------------ ------------- Balance, beginning of period $ 778 $ 1,127 $ 4,246 $ - Provision (recovery) (187) 3,777 (187) 5,142 Cash payments (573) (658) (4,041) (896) -------------------------------- --------- ------------- ------------ ------------- Balance, end of period $ 18 $ 4,246 $ 18 $ 4,246 ================================ ========= ============= ============ =============
(a) During the second quarter of fiscal 2003, the Company announced the closure of ATI Technologies (Europe) Limited ("ATEL"), its subsidiary in Dublin, Ireland and recorded a pre-tax charge of $2.8 million. The charge included a $1.4 million write-down of the building facility, to estimated fair value less cost to sell. The Company completed the major components of the exit plan for ATEL in July 2003. During the first quarter of fiscal 2004, the Company was able to sell the building facility at a higher price than originally estimated resulting in a recovery of $0.5 million from the restructuring charge. The Company also paid out the remaining cash portion of the restructuring charge of $0.5 million during the same quarter. (b) During the fourth quarter of fiscal 2003, the Company decided to discontinue the operations of ATI Research GmbH, its FireGL product division located in Starnberg, Germany, in order to consolidate its research and development activities. As a result, the Company recorded a pre-tax charge of $3.8 million for the quarter pertaining to the closure of ATI Research GmbH. During the fourth quarter of fiscal 2004, the Company recovered $0.2 million relating to the restructuring charge of ATI Research GmbH. During the three months and twelve months ended August 31, 2004, the Company made cash payments of $0.6 million and $3.5 million respectively relating to the pre-tax charge setup in the fourth quarter of fiscal 2003. The Company completed the major components of its exit plan for ATI Research GmbH in December 2003. The remaining balance relates to unpaid facility costs and legal fees. 18 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 8. OTHER CHARGES (CONTINUED) (iv) Lease exit charge (recovery): During the second quarter of fiscal 2003, the Company determined that it would exit the two leased properties located in Markham, Ontario. As a result, the Company recognized the fair value of the future net costs related to the leases in the amount of $2.4 million as a charge for the second quarter. During the fourth quarter of fiscal 2003, the Company recorded an additional charge of $0.3 million related to the exit costs of the above-mentioned lease properties due to a change in estimate of the fair value of the future net costs. During the second quarter of fiscal 2004, the Company determined that it would re-occupy one of the two leased properties due to an expansion of business. This resulted in a reduction of the previously accrued exit charge liability in the amount of $0.6 million for the quarter. During the third quarter of fiscal 2004, the Company determined that it would re-occupy the remaining leased property resulting in a reduction of the previously accrued exit charge liability of $0.9 million. (v) Settlement of patent litigation with Cirrus Logic, Inc.: Subsequent to the year end of fiscal 2003, the Company and Cirrus announced that they had entered into a cross-license agreement and had settled all outstanding litigation between the Companies related to certain patent infringement lawsuits. Under the settlement agreement, all outstanding claims and counterclaims in the lawsuits between the Company and Cirrus were dismissed. In connection with the settlement, Cirrus would transfer to the Company a portion of its patent portfolio relating to the former graphics products group of its PC products division, a business that Cirrus exited several years ago, for a cash payment of $9.0 million from the Company. 19 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 9. NET INCOME PER SHARE The following table presents a reconciliation of the numerators and denominators used in the calculations of the basic and diluted net income per share:
(Thousands of US dollars, except per share amounts) ---------------------------------------------- ----------------------- ----------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 ---------------------------------------------- ---------- ------------ ------------ ----------- Net income $ 61,156 $ 22,294 $ 204,799 $ 35,229 ============================================== ========== ============ ============ =========== Weighted average number of common shares outstanding (000's): Basic 247,699 240,647 245,257 238,251 Effect of dilutive securities 9,150 8,878 9,835 6,102 ---------------------------------------------- ---------- ------------ ------------ ------------ Diluted 256,849 249,525 255,092 244,353 ============================================== ========== ============ ============ =========== Net income per share Basic $ 0.25 $ 0.09 $ 0.84 $ 0.15 Diluted $ 0.24 $ 0.09 $ 0.80 $ 0.14 ============================================== ========== ============ ============ ===========
Certain options that are anti-dilutive were excluded from the calculation. 10. SUPPLEMENTAL CASH FLOW INFORMATION
(Thousands of US dollars) --------------------------- ---------------------------- ---------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 --------------------------- ------------------------- ------------------------- Cash paid for: Interest $ 472 $ 485 $ 1,946 $ 1,739 Income taxes 187 296 1,653 2,127 Interest received $ 1,409 $ 610 $ 4,358 $ 2,902 --------------------------- ------------ ------------ ------------ ------------
20 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 11. SEGMENTED INFORMATION The Company operates in one primary operating segment, that being the design, manufacture and sale of innovative 3D graphics and digital media silicon solutions. The following tables provide revenues by geographic area and by product, as well as capital assets, intangible assets and goodwill by geographic area. The breakdown in revenues by geographic area in the following table is based on customer and royalty payer location, whereas the breakdown in capital assets, intangible assets and goodwill is based on physical location.
(Thousands of US dollars) --------------------------------------------------- -------------------------- ----------------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 --------------------------------------------------- ------------- ------------- -------------- -------------- Revenues: Canada $ 4,990 $ 5,076 $ 22,439 $ 20,065 United States 82,212 55,615 257,542 258,545 Europe 17,332 21,800 95,287 113,193 Asia-Pacific 467,684 298,183 1,621,449 993,490 --------------------------------------------------- ------------- ------------- -------------- -------------- Consolidated revenues $ 572,218 $ 380,674 $ 1,996,717 $ 1,385,293 =================================================== ============= ============= ============== ============== Product revenues: Components $ 449,391 $ 299,428 $ 1,581,413 $ 962,735 Boards 111,905 77,682 364,335 397,533 Others 10,922 3,564 50,969 25,025 --------------------------------------------------- ------------- ------------- -------------- -------------- Consolidated revenues $ 572,218 $ 380,674 $ 1,996,717 $ 1,385,293 =================================================== ============= ============= ============== ============== Capital assets, intangible assets and goodwill: Canada $ 73,863 $ 74,332 United States 206,147 208,764 Europe 165 2,277 Asia-Pacific 1,421 423 --------------------------------------------------- -------------- -------------- Consolidated capital assets, intangible assets and goodwill $ 281,596 $ 285,796 =================================================== ============== ==============
21 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 12. STOCK-BASED COMPENSATION (i) Stock options For stock options granted to employees after September 1, 2002, had the Company determined compensation costs based on the "fair value" of the stock options at grant dates consistent with the method prescribed under CICA Handbook Section 3870, the Company's net income per share would have been reported as the pro forma amounts indicated below:
(Thousands of US dollars, except per share amount) ---------------------------------------- ----------------------------- -------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 ---------------------------------------- ----------- ----------- ------------- ------------ Net income for the period, as reported $ 61,156 $ 22,294 $ 204,799 $ 35,229 Pro forma adjustment for stock-based compensation (6,100) (205) (13,318) (525) ---------------------------------------- ----------- ----------- ------------- ------------ Pro forma net income $ 55,056 $ 22,089 $ 191,481 $ 34,704 ======================================== =========== ============ ============ ============ Pro forma net income per share: Basic $ 0.22 $ 0.09 $ 0.78 $ 0.15 Diluted $ 0.21 $ 0.09 $ 0.75 $ 0.14 ======================================== =========== ============ ============ ============
The weighted average estimated fair values at the date of grant for the stock options granted for the three months and twelve months ended August 31, 2004 were $9.20 and $8.96 per share respectively. No options were issued during the three months ended August 31, 2003 and the weighted average estimated fair value of the stock options granted for the twelve months ended August 31, 2003 was $2.65 per share. The "fair value" of each option granted was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:
----------------------------------------------- -------------------------- -------------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 ----------------------------------------------- ------------- ------------ ------------- ------------- Risk-free interest rate 3.4% - 3.7% 3.1% Dividend yield 0.0% - 0.0% 0.0% Volatility factor of the expected market price of the Company's common shares 67.8% - 69.2% 71.1% Weighted average expected life of the options 4.1 years - 4.2 years 4.2 years ----------------------------------------------- ------------- ------------ ------------- -------------
22 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 12. STOCK-BASED COMPENSATION (CONTINUED) (i) Stock options (continued) For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense on a straight line basis over the options' vesting period. (ii) Restricted share units During the first quarter of fiscal 2004, the Company adopted a plan to grant restricted share units ("RSUs") as part of its overall stock-based compensation plan. Under this plan, certain employees will receive an award in the form of an RSU. Each RSU entitles the holder to receive one common share on the vesting date of the RSUs. The RSUs vest on each anniversary of the grant in equal one-third instalments over a vesting period of three years. Stock-based compensation, representing the underlying value of $14.17 per common share of the Company at the date of grant of the RSUs, is being recognized evenly over the three-year vesting period. On the vesting dates, the RSUs are settled by the delivery of common shares of the Company to the participants except for the participants residing outside of North America who will receive cash equivalent market value of the shares. Grants of RSUs to participants residing outside of North America are accounted for using variable plan accounting whereby the value of the RSUs and its related amortization are adjusted based on the underlying value of the Company's common shares at the end of each fiscal quarter. As at August 31, 2004, there were 1,514,450 RSUs awarded and outstanding of which none were vested. The issuance of RSUs replaced the annual grant of options for the 2003 calendar year. In addition, a one-time cash payment of $7.8 million was also awarded to the non-executive employees who were eligible for the RSU plan during the first quarter of fiscal 2004. The full amount of the cash payment was expensed in the first quarter. The total expenses by functional areas incurred for the three months and twelve months ended August 31, 2004 pertaining to the cash payment and amortization of RSUs are as follows:
(Thousands of US dollars) -------------------------------- ------------------- --------------------- Three months ended Twelve months ended August 31, 2004 August 31, 2004 -------------------------------- ------------------ ---------------------- Selling and marketing $ 256 $ 2,064 Research and development 1,207 10,454 Administrative 200 1,685 -------------------------------- ------------------ ------------------- $ 1,663 $ 14,203 -------------------------------- ------------------ -------------------
During 2004, the Company advanced $22.1 million to the trustee of the RSU plan to enable the trustee to purchase the Company's common shares in the open market. At August 31, 2004 1,467,304 shares are being held by the trustee in order to deliver such shares to the participants on the vesting of the RSUs. The cost of the purchase of these shares is classified as treasury stock and presented as a reduction of shareholders' equity in the Company's consolidated balance sheet. 23 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 12. STOCK-BASED COMPENSATION (CONTINUED) (iii) Deferred share units During the second quarter of fiscal 2004, the Company established a plan to grant deferred share units ("DSUs") to its non-management directors. Under this plan, the directors will receive DSUs, in addition to cash payments, as part of their annual compensation package. A DSU is a unit equivalent in value to one common share of the Company based on the five-day average trading price of the Company's common shares on the Nasdaq Stock Market (the "Weighted Average Price") immediately prior to the date on which the value of the DSU is determined. DSUs may be redeemed following termination of Board service, and prior to the end of the year following departure from the Board based on the Weighted Average Price at the time of redemption. Alternatively, a director may elect to receive RSUs in lieu of DSUs provided the market value of his holdings in the Company's common stock equity is greater than $350,000. As at August 31, 2004, there were 92,082 DSUs outstanding of which 75,155 were vested. As of the date of the grant, the fair value of the DSUs outstanding, being the fair market value of the Company's common shares at that date, will be recorded as a liability on the Company's balance sheet and will be amortized over the one year vesting period of the DSU. The value of the DSU liability will be adjusted to reflect changes in the market value of the Company's common shares. The expenses for this quarter and the twelve months ended August 31, 2004 relating to DSUs granted to the directors for services rendered were $0.03 million and $1.2 million respectively. 24 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 13. U.S. GAAP The following table reconciles the net income as reported on the consolidated statements of operations and retained earnings prepared in accordance with Canadian GAAP to the consolidated net income (loss) that would have been reported had the financial statements been prepared in accordance with U.S. GAAP:
(Thousands of US dollars, except per share amounts) ---------------------------------------------------- ----------------------------- ----------------------- Three months ended Twelve months ended August 31 August 31 2004 2003 2004 2003 ---------------------------------------------------- ------------- ------------ ------------- ------------ Net income in accordance with Canadian GAAP $ 61,156 $ 22,294 $ 204,799 $ 35,229 Tax effect of stock options exercised (2,253) (1,704) (7,291) (2,083) Loss on hedging transactions 28 28 112 94 Amortization of purchased in-process research and development - 442 - 4,417 Stock compensation expenses (i), (ii) (925) (21,879) (9,579) (25,486) Restructuring charges not yet incurred - (270) - - ---------------------------------------------------- ------------- ------------ ------------- ------------ Net income (loss) in accordance with U.S. GAAP $ 58,006 $ (1,089) $ 188,041 $ 12,171 ==================================================== ============= ============ ============= ============ Net income (loss) per share: Basic $ 0.23 $ (0.00) $ 0.77 $ 0.05 Diluted $ 0.23 $ (0.00) $ 0.74 $ 0.05 ===================================================== ============= ============ ============= ============ Weighted average number of shares (000's): Basic 247,699 240,647 245,257 238,251 Diluted 256,849 240,647 255,092 244,353 ===================================================== ============= ============ ============= ============
25 of 26 ATI TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2004 (Unaudited) 13. U.S. GAAP (CONTINUED) (i) Under U.S. GAAP, options granted after January 18, 2001 with an exercise price denominated in a currency other than the currency of the primary economic environment of either the employer or the employee, should be accounted for under the variable accounting method. Under Canadian GAAP, there is no equivalent requirement. There were no such options granted after February 28, 2002. (ii) Under U.S. GAAP, the intrinsic value of the stock options issued under an incentive plan entered into in July 2002 is calculated as the increase in the Company's stock price between the grant date and the date on which all the conditions of the specified business arrangement were determined to have been met. The compensation expense is recognized over the vesting period of the options. Under Canadian GAAP, there is no equivalent requirement. 14. SUBSEQUENT EVENT (i) On September 1, 2004, the Company acquired certain assets of RT&C International, its sales organization for South Korea, for cash consideration of $2.6 million, plus acquisition related costs. (ii) In September 2004, ATI signed an agreement to purchase the shares of a company for cash consideration of up to $3.6 million, plus acquisition related costs. The company, a high technology embedded solutions provider, is located in India. The acquisition is subject to regulatory approval and is expected to close by October 31, 2004. 26 of 26 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ATI TECHNOLOGIES INC. Date: October 7, 2004 By: //Terry Nickerson// ------------------------------------------- Name: Terry Nickerson Title: Senior Vice President, Finance and Chief Financial Officer
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