Revenues grew $39 million or nearly 8% to $530 million relative to the third quarter of fiscal 2004. Gross margin percentage was 29.1%. For the third quarter, net loss was $0.4 million ($0.00 per share), as compared with net income of $49 million ($0.19 per share) in the third quarter last year. Stock-based compensation costs2 in the third quarter of fiscal 2005 totaled $10.4 million. Net income and net income per share excluding these costs and related taxes would have been $8.5 million and $0.03, respectively, as compared with $50.5 million or $0.20 in the third quarter of fiscal 2004. These results are consistent with the preliminary results announced on June 6, 2005.
|Three months ended May 31, 2005|
|Excluding Stock-Based Compensation Costs||Including Stock-Based Compensation Costs (GAAP)|
|Net income (loss)||$8.5 million||$(0.4 million)|
|Net income per share||$0.03||$0.00|
“It was a challenging quarter for ATI, particularly within our PC business where we came in well below our expectations for both revenue and gross margin,” said David Orton, ATI’s Chief Executive Officer. “Yet, during the quarter, we also achieved important milestones in our core GPU business. In addition, we have a renewed focus on improving our operational consistency in ramping new technologies. Looking forward, we expect continued growth in our core markets as well as the new markets of chipsets and consumer.”
For the fourth quarter, we anticipate revenues in the range of $550-580 million. This range has been adjusted down from the preliminary guidance announced on June 6, 2005, due to a more conservative expectation on the ramp of new products in the fourth quarter. Gross margin percentage is expected to be in the range of 29-30%, but is largely dependent on the final product mix for the quarter. Operating expenses, excluding stock-based compensation costs, are expected to remain flat to up 3% from the third quarter.
 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 In accordance with Canadian GAAP, beginning with the first quarter of fiscal 2005, ATI began expensing compensation costs associated with stock options granted to employees after September 1, 2002. Total stock-based compensation includes the costs associated with stock options, restricted share units and deferred share units.