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January 26, 1998

CREATIVE TECHNOLOGY IS LATEST ASIAN ECONOMIC VICTIM

By CBR Staff Writer

The latest company to fall foul of the Asian economic crisis is Creative Technology Ltd, the Singapore maker of personal computer mulitmedia enhancers, which expects to see a 10% fall in revenue. The company that has just reported six month net income up 18.4% to $84.7m on revenue up 1.9% at $395m (CI No 3,333), expects sales to start showing the damage in the third quarter, and for a while after. The company cannot predict when a turnaround will occur, and pointed out that already it has seen Asian sales drop 28% in the second quarter. The company usually generates between 20% and 30% of its annual sales form the Asian market, but in light of the difficult times the continent is experiencing at the moment, will have to look else where if it wants to maintain steady figures. The company has been making waves on the acquisition front of late, late last year announcing the $77m purchase of Malvern, Pennsylvania PCI audio microchip operation Ensoniq Corp (CI No 3,309), and prior to that the $38m buy of Cambridge Soundworks Inc, a speaker manufacturer and retailer which concentrates on home theater, home stereo and car stereo systems (CI No 3,281). The company is banking on the Ensoniq purchase to help it gain share in the personal computer original equipment manufacturer space, and for the time being Ensoniq will be the last purchase for a while.

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