Looking for who said what in the sound world? Well there is no better place to find every audio related press release than 3DsoundSurge.!

Fourth Quarter EPS Up 153% Year-Over-Year; Annual EPS Rise by 67%

Creative posted its third consecutive quarter of record year-over-year revenues, achieving sales for the fourth quarter of $307.7 million. This represents a 12% increase over the same quarter the previous year when sales were $275.1 million. The company reported fiscal year revenues of $1.343 billion, up from $1.296 billion for the previous fiscal year.

• Net income for the fourth quarter was $37.4 million, a 153% increase from $14.7 million for the same quarter in the previous year.
• Earnings per share also increased by 153% to $0.43, versus $0.17 for the same quarter in the previous year.
• Net income for the fiscal year was an all-time record $181.0 million, a 57% increase from $115.0 million for the previous fiscal year.
• Earnings per share increased to a record $2.09, an increase of 67% from $1.25 for the previous fiscal year.

Note: The results for the fourth quarter of fiscal 2000 include a gain of $19.2 million from investment gains, versus investment gains of $12.6 million for the same quarter in fiscal 1999. Results for fiscal year 2000 include investment gains of $103.4 million, versus investment gains of $15 million in fiscal 1999.

``In addition to achieving our third consecutive quarter of record revenues, we improved gross margin to the highest level in nine quarters
-- driven not only by a 32% increase in audio systems sales over the same
quarter last year, but also by strong margin contributions from other PDE
products such as our Video Blaster WebCam family," said Craig McHugh,
President of Creative Labs, Inc.

``At this time last year, we shared our plan to improve operating results. The success of these efforts is reflected in the eight-fold increase in income from operations over the same quarter last year, and we have delivered three straight quarters of strong financial results and a record year. We are particularly proud of this, as we achieved it in a time when component shortages are increasingly disrupting the technology hardware industry. We have implemented a deliberate strategy to increase inventory levels of key components in our effort to lessen the impact of the supply situation on our audio and PDE products in the upcoming quarters.''

``I am very pleased with how Creative has delivered on the sweeping transformation we outlined a year ago,'' said Sim Wong Hoo, Chairman and CEO. ``We have improved profitability, made significant progress on our PDE and Internet initiatives, and increased our strategic investment fund from $50 to $200 million, with investments to date in over 40 companies. These investments have contributed to both our profitability and our balance sheet, while helping us build technology partnerships for our future. More importantly, we increased shareholders' equity by 42% to $799 million, even after spending $102 million of our cash on share buybacks and $21 million on our dividend.

``The market for our products has extended well beyond traditional gaming, driven by the excitement and phenomenal growth of MP3 and downloadable digital music. Companies like Napster and others have brought awareness of digital music on the PC platform to tens of millions of people in less than a year. Creative is ideally positioned to benefit from this revolution because users are demanding the high-quality sound and full functionality offered by Environmental Audio in our Sound Blaster Live! and Cambridge SoundWorks audio systems, which enable the PC platform to provide a listening experience which rivals or exceeds that of home stereo. We are now developing this market opportunity even further, with PDE appliances which expand digital entertainment beyond the confines of the PC box, such as the soon-to-be shipped NOMAD Jukebox.''

During the quarter, Creative continued its share buy-back program, repurchasing approximately 2.2 million shares at a cost of $54 million. During the fiscal year, Creative repurchased approximately 5.9 million shares at a cost of $102 million. Subject to market price and conditions and securities law restrictions, the company plans to continue its buyback program during fiscal year 2001.

Also during the fourth quarter, Creative's broadband communications subsidiary, Digicom, was spun-off by closing a $22.5 million first round of private equity financing for approximately 11% of the company, with Creative retaining 89% ownership.

Strategic Investment Fund -- Investee Companies

During the fourth quarter, Creative made new investments in a number of companies, including DataPlay, DiMagic, and e-Micro, and announced its investment in Halo Data Devices and SigmaTel.

Investee companies in which Creative holds a position of over 5% include: Adroit Innovations, Behavioral Technology Computer, Catcha.com, ChainCast, DiMagic, Embedded Solutions, e-Micro, Eureka Technologies, InnoMedia, Lafe Technology, MediaRing.com, Mindmaker, Pixaround.com, PlanetWeb, SigmaTel, Silicon Illusions, 3DFX (through its acquisition of GigaPixel), and 3Dlabs.

Investee companies in which Creative holds a position of under 5% include: Bex.com, Centillium Technology, Coresma, DataPlay, EMusic.com, GRIC Communications, Halo Data Devices, HearMe (through its acquisition of AudioTalk), MyTeam.com, NVIDIA, Sina.com, and TeraLogic.

In addition to the companies listed above, there are several other companies in which Creative has invested that are not disclosed at this time due to competitive, strategic, or other reasons.

Recent Highlights

• Creative's NOMAD II MG for the MAC and the PC began shipping to selected retail and e-tail outlets in the United States.
• Creative announced support for Microsoft's Windows Media Format for high quality downloads and playback of digital music.
• Creative introduced the PlayWorks PS2000 (P2Dipole) and PlayWorks DTT2500 Digital speaker systems that offer Dolby-Digital 5.1 audio for the Playstation2 in Japan.

Awards & Accolades

• NOMAD Jukebox was introduced to the Asian press on July 28th in Singapore.
• Nomad II garnered the PC World ``World Class'' award and ``Editor's Pick'' and was listed on the ``A-List'' from Smart Computing. Representative accolades include a ``Best Buy'' from Computer Shopper, an ``Editor's Choice'' from PC Magazine (Australia), ``5 out of 5 star'' ratings from MP3.com and Stuff Magazine and an ``Editor's Choice'' from c/net.
• Sound Blaster Live! audio card family won a host of awards including the PC World ``World Class'' award. The Sound Blaster Live! Platinum won a ``Best Sound Card'' from the Toronto Star, a ``Best Buy'' from Computer Shopper and a ``Meuiller Produit 2000'' from PC Achat (France). Sound Blaster Live! MP3+ was honored on the ``WinList'' from Winmag.com and received a ``9 out of 10'' from Maximum PC. PC Gamer bestowed an ``Editor's Choice'' award on both the Sound Blaster Live! MP3+ and the Sound Blaster Live! X-Gamer.
• 3D Blaster Annihilator Pro received an ``Editor's Choice'' award from PC Gamer, a ``5 out of 5'' star review from Incite PC and a ``Seal of Approval'' award from Canada Computes.
• Video Blaster WebCam Go won a ``5-star'' review from the Straits Times, a ``Recommended'' listing from Personal Computer World and a ``4 out of 5'' star review from PC Magazine.

Safe Harbor for Forward-Looking Statements Under The Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein and in the accompanying conference call, the matters set forth herein and in the call (including any references to future financial performance, products and marketing efforts) are forward-looking statements within the meaning of the ``safe harbor'' provisions of The Private Securities Litigation Reform Act of 1995. Readers of this press release and listeners to the conference call are cautioned not to place undue emphasis or reliance on these forward-looking statements which reflect management's analysis, judgement, belief or expectation only as of the date hereof. These forward-looking statements are subject to certain assumptions, risks and uncertainties that could cause actual results to differ materially from those set forth or implied in the forward looking statements. Such assumptions, risks and uncertainties include, among others: potential fluctuations in the value and liquidity of Creative's investee companies; the timing or completion of a subsidiary IPO and/or the valuation that would apply in the event of a consummation of a subsidiary IPO; potential fluctuations in quarterly results due to the seasonality of Creative's business and the difficulty of projecting such fluctuations; the vulnerability of certain markets to currency fluctuations and credit shortages; reductions in the market value of products sold by Creative, including increases in inventory or declines in demand or prices for optical storage devices, board and chip-level products, software, and other products; the short product cycles that characterize most of Creative's products; the increasing proliferation of sound functionality in new products from new and existing competitors and at the application software, chip and operating system levels; Creative's reliance on sole sources for many of its chips and other key components; component shortages which may impact Creative's ability to meet customer demand; the timely development, ramp, delivery and market acceptance of new products, including Creative's next generation audio, graphics accelerator, CD-ROM and DVD drives, communications and personal digital entertainment products, including the NOMAD Jukebox; the volatility of share prices for companies in Creative's industry and the effect of those prices or other events beyond Creative's control; and other risk factors described in Creative's filings with the Securities and Exchange Commission over the past twelve months. Creative undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Creative

Creative Technology Ltd., a global leader in PC entertainment products, expands the power of the personal computer with Personal Digital Entertainment (PDE) Solutions, comprising desktop products, Internet appliances and Internet applications and services. Leveraging in-house technology, partnerships and value-added investments, Creative markets its solutions to consumers and system integrators, with worldwide distribution through traditional marketing channels, OEMs and the Internet. Creative's mission is to expand upon its leadership role in PDE, utilizing innovative technology, broadband and leading-edge designs for technically progressive consumers and entertainment enthusiasts. Explore PDE at www.creative.com.

NOTE: Sound Blaster and Blaster are registered trademarks and Environmental Audio, PC-DVD Encore, DeskTop Theater, 3D Blaster and Graphics Blaster are trademarks of Creative Technology Ltd. Cambridge SoundWorks is a registered trademark of Cambridge SoundWorks, Inc. All other products mentioned herein are trademarks of their respective owners and are hereby recognized as such. Nomad is a registered trademark of Aonix and is used by Creative Technology Ltd. and/or its affiliates under license.

                             CREATIVE TECHNOLOGY LTD.
                           CONSOLIDATED BALANCE SHEETS
                                  (In US$' 000)

                                              (Unaudited)
                                               June 30,       June 30,
                                                 2000           1999
    ASSETS

    Current Assets:
      Cash and cash equivalents                $285,757       $318,990
      Marketable securities                      21,156             --
      Accounts receivable, net                   98,923        130,144
      Inventory                                 230,616        148,028
      Other assets and prepaids                  34,942         12,709
        Total current assets                    671,394        609,871

    Property and equipment, net                  96,751         97,961
    Investments                                 395,888         70,305
    Other non-current assets                     12,426         27,552

                                             $1,176,459       $805,689

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities:
      Accounts payable                         $183,299       $101,666
      Accrued liabilities                        83,756         55,684
      Income taxes payable                       48,350         47,031
      Other current liabilities                   4,575          4,492
        Total current liabilities               319,980        208,873

    Long term obligations                        27,051         28,642

    Minority interest in subsidiaries            30,790          7,913

    Total shareholders' equity                  798,638        560,261

                                             $1,176,459       $805,689

                             CREATIVE TECHNOLOGY LTD.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In US$' 000, except per share data)
                                   (Unaudited)

                            Three months ended       Twelve months ended
                                 June 30,                 June 30,
                             2000        1999        2000         1999

    Sales, net             $307,715    $275,134   $1,343,604  $1,296,537

    Cost of goods
     sold                   212,739     213,071      947,157     944,499

    Gross profit             94,976      62,063      396,447     352,038

    Operating expenses:

      Selling, general
       and administrative    59,724      47,966      253,733     209,668

      Research and
       development           16,460      12,873       60,428      46,725

    Total operating
     expenses                76,184      60,839      314,161     256,393

    Operating income         18,792       1,224       82,286      95,645

    Gain from investments,
     net                     19,211      12,562      103,443      15,048

    Interest income
     and other, net           1,055       2,488        5,287      14,621

    Income before
     income taxes
     and minority
     interest                39,058      16,274      191,016     125,314

    Provision for
     income taxes            (2,004)     (1,303)      (9,472)     (9,920)

    Minority interest
     in income                  349        (235)        (532)       (312)

    Net income              $37,403     $14,736     $181,012    $115,082

    Basic earnings
     per share:               $0.46       $0.17        $2.21       $1.28

    Average ordinary
     shares
     outstanding ('000)      81,367      85,457       82,028      89,818

    Diluted earnings
     per share:               $0.43       $0.17        $2.09       $1.25

    Average ordinary
     shares and
     equivalents
     outstanding ('000)      87,605      88,026       86,612      92,241

SOURCE: Creative Technology Ltd.