3dfx Interactive® Inc. (Nasdaq: TDFX - news) today announced that L. Gregory Ballard, its president and chief executive officer, has resigned effective October 31, 1999. The Board of Directors announced that an immediate search would begin for his successor.
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``Greg has contributed greatly to the success of the Company, and we are sad to see him leave,'' said Gordon Campbell, founder and chairman of 3dfx Interactive, Inc., on behalf of the Board of Directors. ``The Board will take this opportunity to bring in an executive to continue the exceptional growth that 3dfx has enjoyed. I have pledged my time and efforts to seeing that the transition is smooth and causes no disruption to the conduct of our growing business.''
"Some of 3dfx Interactive's executives have stated publicly that our next generation product may be delayed until Q1 and may not ship in Q4 in time for Christmas. Because of a few minor setbacks (that have been corrected), the Q4 date is admittedly very aggressive. With a technology product like this, it is not uncommon for unforeseen circumstances to arise in the final stages of product development. As a result, we are steering the public to expect our next generation product in Q1, because we believe this is the most probable result. We are standing by our statements that our next generation product will be head and shoulders above competitor's products and will solidify the technology lead for 3dfx. Additionally, our internal roadmap will maintain that lead for 3dfx well into the future"
There is no press conference scheduled, nor is there a "formal" announcement being made. We have started today to inform investors that we have determined that Napalm will not ship in the 4th quarter or if it does, too late in the quarter to have a meaningful impact on revenues. We now expect it to ship in mid February with an outside chance of mid March. We expect that when it does ship, it will be the leading performance chip in the market.
The chip is now back on a more predictable schedule with all the previous problems having been resolved. There is always risk, of course, from this point on but we feel very good about the chip at this point. We spent many more months in the back end that we thought was going to be required and, literally, time ran out for a reasonable shot at 4th quarter volumes.
We are guiding people to expect losses in Q3 and Q4 as our revenues will stay roughly the same (maybe down 10% in Q4) but with gross margins declining significantly. Q1 and Q2, however, we believe will be very strong quarters with a return to profitability.
According to this email, it would seem 3dfx missed Q4 by only a few weeks (as I think
their fiscal Q4 ends in January). The stock's already been hammered recently, wonder what'll
happen tomorrow.
update by steve: KombatKing was kind enough to spot the actual
email, which I replaced in the news item now.
"We believe that there is still a chance that we can make the quarter, but each day we are getting closer to knowing the actual likelihood. We should know within a week or two whether it will make the quarter. But right now, it is substantially at risk."
"I think a number of the people on the boards interpreted this to mean that we have been out spreading that word for "months" behind the back of the average retail investor. In fact, we have been making this statement for less than a week only to investors that we have talked to when they call us."
"I do think they [the problems] are resolved, although we are still assessing this, but they took much, much longer to resolve than we thought. Now the question is whether we have left ourselves enough time."
"[The problems were] Completely unanticipated and due, in large part, to the enormous complexity of this chip."
"What we have been telling others in the financial community is that there is significant risk at this time that napalm will not hit the 4th quarter. We believe that there is still a chance that we can make the quarter, but each day we are getting closer to knowing the actual likelihood. We should know within a week or two whether it will make the quarter. But right now, it is substantially at risk."
We give nvidia a lot of credit for being first to market with a geometry accelerator, but we do disagree with their decision to emphasize geometry over fill-rate. The reality is that the announced fill-rate for GeForce is not going to allow it to remain competitive with our next generation products for games which run at high resolution and high color depth. While every new 3D product cycle gamers have been able to increase the resolution and pixel depth with which they enjoy their games, nvidia appears to have made no substantial improvements in being able to run games at high resolution and 32bpp color. In contrast, we have listened to our customers and have focused on delivering a compelling gaming experience at 1024x768 and beyond resolution in 32bpp color
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