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No. of Recommendations: 0
Analysis of: ATI Technologies (TSE:ATY; NASDAQ:ATYT)

Financial AnalysiCompany Being Evaluated Competitor #1 Competitor #2 Competitor #3

ATI Technologies 3dfx Diamond Nvidia
Annual Annual Year-over-Year Annual Annual Annual
31-Oct-98 31-Oct-97 Growth 31-Dec-98 31-Dec-98 31-Jan-99
Income Statement . . .
Sales 1,157 603 91.9% 203 609 158
Cost of Goods S 729 409 78.1% 120 542 109
Net Income 168 48 253.0% 22 (40) 4
Shares Outstand 199 194 2.7%

Balance Sheet . . .
Cash & Equivale 69 72 -3.9% 96 36 50
Current Assets 497 233 113.1% 168 251 101
Short-term Debt 0 0 No Debt 0 46 1
Current Liabili 199 88 127.4% 58 159 47
Long-term Debt 0 0 No Debt 0 2 2
1 1 1Competitor
Margins & Ratios . . .
Gross Margins 37.0% 32.1% 4.9 41.0% 11.0% 31.0% 27.6%
Net Margins 14.6% 7.9% 6.6 10.7% -6.5% 2.5% 2.3%
Cash-to-Debt No Debt! No Debt! No Debt! 337.68 0.76 16.67 3.60
Net Cash 45.9 47.8 -3.9% 95.6 -11.2 47.0 43.8
Fool Flow Ratio 2.15 1.84 16.6% 1.26 1.90 1.11 1.42


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Ranking Rule Makers

1) Brand Points (0-1) 3) Financial Dire Points (0-3)
Familiarity 1 Sales Growth 3
Openness 1 Gross Margins 3
Optimism 1 Net Margins 3
Legitimacy 1 Shares Outstandin 2
Inevitability 1 Cash-to-Debt 3
Solitariness 0 Fool Flow Ratio 0
Humor 1 Expansion Potenti 2
Subtotal 6 Subtotal 16

2) Financial Loca Points (0-2) 4) Monopoly Statu Points (0-4)
Mass Market Habit 1 Gross Margins 4
Gross Margins 0 Net Margins 4
Net Margins 2 Net Cash 0
Cash-to-Debt 2 Fool Flow Ratio 0
Fool Flow Ratio 0 Convenience 2
Your Interest 2 Subtotal 10
Subtotal 7
5) Your Enjoymen 1

Total Score 40 Second Tier



Comments on subjective points:
ATI's Rage is about as familiar as 3dfx's products. ATI also makes open and optimistic products, as far as I can tell.
Legitimate and inevitable? Computers have to have graphics cards. I looked at 3 makers (okay, they were the big 3), and Compaq and Dell use ATI and Diamond, whereas Gateway uses 3DFX and nVidia in their performance computers, but is starting to use ATI components as well.
ATI isn't really solitary, with 3dfx being the strongest competitor.
Humor? Check out the Rage Conspiracy game/movie/Shockwave thingy on their homepage. Funny, cool, kick-ass.
As far as mass-market goes, I'd put computer peripherals on the 1 out of 2 scale. Expansion is possible on all levels of their product, and in the global marketplace.

In the end, ATI compates with Nvidia and 3dfx on chips and Diamond and others on boards. No one has a monopoly, and I don't think any one will get a monopoly anytime soon. 3DFX has perhaps greater support for the hard-core gamer, but ATI has perhaps a broader consumer base to work from, and also produces a wider range of products (such as the All-In-Wonder, which adds video/tv I/O functionality.)

Kevin :)
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