March 7th, 1996 - Creative Technology Ltd., (NASDAQ: CREAF) the leading provider of multimedia products for personal computers, announced financial results for the second quarter of fiscal 1996, ended December 31, 1995.

Net income for the second fiscal quarter of 1996 was US$27.0 million, compared to US$21.6 million for the same quarter last year. Earnings per share were US$0.31 compared to US$0.24 for the same quarter last year. Sales for the second quarter of fiscal 1996 were US$435.0 million, compared to US$400.9 for the same quarter last year.

Included in the cost of sales for the quarter was US$10.4 million for a lower of cost or market inventory adjustment for DRAM memory components and 4x CD-ROM drives. Prices from suppliers for these components have decreased considerably since December. Without this inventory adjustment, gross margin for the quarter would have been 23.2 percent and earnings per share, US$0.41.

"I am pleased with the solid results that we achieved this quarter as it underscores our on-going success in controlling costs while driving up profitability," said Sim Wong Hoo, chairman and chief executive officer of Creative Technology, Ltd. "Although we had a set-back due to the inventory adjustment -- as a result of the lower costs of DRAMs and CD-ROM drives -- this overall lowering of costs represents significant potential for expanding the multimedia market in which Creative is the leading provider."

Net income for the first six months of fiscal 1996 was US$33.6 million compared to US$39.3 million for the corresponding period of the prior year. Earnings per share for the six months ended December 31, 1995 were US$0.38 compared to US$0.44 for the corresponding period last year. Sales for the six months ended December 31, 1995 were US$733.7 million compared to US$651.2 million for the comparable period last year.

Next Generation Sound Blaster Continues
Creative continued its transition to next generation audio in the Sound Blaster line of audio cards and multimedia upgrade kits. The company began shipping its new Sound Blaster 32 PnP audio card and announced the Sound Blaster Performance 6x, the company's premier multimedia upgrade kit. This kit includes Creative's own 6x speed CD-ROM drive, the Sound Blaster 32 PnP, high- performance stereo speakers and a bundle of nearly a dozen education and entertainment software titles.

Creative's next generation Sound Blaster products include the company's 3D Stereo Enhancement for richer, more spacious sound, and E-mu's 3D Positional Audio that allows sounds to be placed and travel along a positional pattern in a 3D space for a more immersive experience. Additionally, Creative has successfully completed pilot production of its own in-house developed 8x speed CD-ROM drive, due to be offered this Spring.

Drive into 3D Graphics
During the quarter, Creative continued an aggressive drive into the market with a 3D graphics solution. In November, the company began shipping its 3D Blaster for 486 VL-Bus personal computers - the first in the industry to do so. Additionally, the company announced a new PCI-Bus version of its 3D Blaster game board, expected to ship in the fiscal fourth quarter, that brings all the excitement and visual realism of today's most advanced 3D arcade games to Pentium-based personal computers. Together with its Sound Blaster AWE32 wave table synthesis that supports 3D positional audio, 3D Blaster provides consumers with a complete 3D entertainment solution under Creative's Blaster brand name.

Complementing its growing family of 3D Blaster graphics solutions, Creative also introduced in November, the Blaster GamePad, a new digital PC game controller that has been optimised for faster response time, enhanced control and extensive compatibility with current and next-generation PC games with Creative 3D Blaster solutions.

Communications Family Expands
Along with significantly expanding its broad line of communications products in the second quarter, Creative made major strides in advancing industry standards for business and home communications. Creative announced that its ShareVision desktop video conferencing products will support the forthcoming H.324 video conferencing standard for analogue telephone lines, as well as the new T.120 standard for data sharing in whiteboards and application sharing. Additionally, the company introduced several new additions to its Modem Blaster family of modems including the new Plug and Play Modem Blaster 28.8 PnP, which provides an easy, convenient solution for Windows 95 users who need fast access to on-line services, or wish to share information or game playing with others.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
The future product availability dates, future financial guidance and other non- historical information contained herein and/or in the accompanying conference call are subject to the attached cautionary statements which are provided pursuant to The Private Securities Litigation Reform Act of 1995.

About Creative ...
Creative Technology Ltd. develops, manufactures and markets a family of sound, video, software, telephony and multimedia products for PCs under the Blaster family name, and the ShareVision line of desktop video conferencing products for PCs. The company's Sound Blaster sound platform enables PCs to produce high-quality audio for entertainment, educational, music and productivity applications, and has been accepted as the industry standard sound platform for PC-based software.

Creative Technology was founded in 1981 and is based in Singapore. The companys subsidiaries include Creative Labs in China, Europe, Japan, Taiwan and the US. The European head office is based at Ruscombe, near Twyford. In January 1994, Creative opened its technical support group in Dublin, which provides telephone support to French, German and English-speaking customers across Europe. Creatives stock is traded on the NASDAQ exchange, with sales in FY 1995 of $1202.3 million - a 83% increase on 1994.