Patrick Verderico, CFO       Susan Breshears
Creative Labs, Inc.          Copithorne & Bellows

Sales for the fourth quarter of fiscal 1995 were US$270.7 million compared with US$180.5 million for the same quarter last year (+50%). Sales for the year ended June 30, 1995, were US$1202.3 million compared to US$657.9 million for the previous fiscal year (+83%).

Net loss for the fourth quarter was US$24.0 million compared to a net income of USD$15.7 million for the same quarter last year. Net income for the year was US$26.5 million compared to US$97.9 million for the prior year.

Loss per share was US$0.27 compared to earnings of US$0.18 per share for the fourth quarter last year. Earnings per share for the year were US$0.30 compared to US$1.11 per share for fiscal 1994.

Results for the fourth quarter included one-time non-cash charges of $19.2 million for the write-off of impaired assets. The Company has written-off $6.3 million of investments in Creative Insights, an associated company, due to the cessation of their operations. In accordance with the Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," the Company has taken write-offs of $5 million for its investments in Datastream Corporation and $3.4 million in Voice Processing Corporation and taken a write-down of $4.5 million in its investment in Digicom Systems, Inc. These charges were the results of changes in future sales estimates and the resulting cash flows and other factors. Excluding these one-time charges, net loss and loss per share would have been US$4.8 million or US$0.06 per share, respectively.

Results for the year ended June 30, 1995, included a one time charge of $7 million for the write-off of in-process technology due to the acquisition of Digicom Systems, Inc. in the second fiscal quarter and $19.2 million for the write-off of impaired assets in the fourth fiscal quarter. Excluding these one-time charges, net income and earnings per share would have been US$52.7 million or US$0.59 per share, respectively.

Gross margin for the fourth quarter was 17.6% compared to 22.8% for the third quarter. Included in the cost of sales for the fourth quarter was a significant charge for a lower of cost or market adjustment for double speed CD-ROM drives. The market acceptance and conversion to quad speed CD-ROM drives has been faster than anticipated by the Company and sales of double speed CD-ROM drives has been lower than forecasted resulting in higher than planned inventory levels. The unsold drives were acquired during the fourth quarter. Without this inventory adjustment, gross margin for the fourth quarter would have been higher than the third quarter.

"Our manufacturing operations in Singapore achieved several significant milestones in the past year," said Sim Wong Hoo, Chairman and CEO. "We earned the coveted ISO 9002 certification of which we are very proud. We increased our CD-ROM drive production up to a level of currently supplying approximately 30% of our needs. We have successfully completed pilot production of our own in-house developed 6x speed CD-ROM drive and will bring it to the market by this September. Competitive manufacturing in both cost and technology is a vital part of our strategy and future success."

In a separate announcement today, Creative also announced its new music synthesis solution, Creative Quadratic Modulation ("CQM").

CQM is fully compatible with low end FM music synthesis as is found on the full range of Creative's Sound Blaster products and the Sound Blaster, Sound Blaster 16 and Sound Blaster 32 standards, the de facto sound standards in the industry. Developed by Creative subsidiary, E-Mu Systems, Inc. of Scott's Valley, California, CQM technology has patent applications pending and will be integrated into the full-range of Creative's chip and board based Sound Blaster products. It will start shipping in volume in Fall, 1995. CQM offers Creative both cost and quality advantages. It will permit Creative to enjoy substantial cost savings across its entire audio product line -- while at the same time providing sound quality that is demonstrably richer and fuller than that derived from any pervious music synthesis device for the PC.

Creative Technology Ltd. develops, manufactures and markets a family of sound, video, software and telephony multimedia products for PCs under the Blaster™ family name, and the ShareVision line of desktop video conferencing products for Macintoshes and 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 Ltd. was incorporated in 1983 and is based in Singapore. Creative Technology's U.S. subsidiaries include Creative Labs, Inc., E-mu Systems®, Inc., Digicom Systems, Inc. and ShareVision® Technology, Inc. Creative also has other subsidiaries in Australia, China, Europe, Japan, Malaysia, Singapore, South Korea and Taiwan. The company's stock is traded on Nasdaq under the symbol CREAF and on the Stock Exchange of Singapore.

Sound Blaster is a registered trademark and Blaster and CQM are trademarks of Creative Technology Ltd. E-mu is a registered trademark of E-mu Systems, Inc. and ShareVision is a registered trademark of ShareVision Technology, Inc. All other products mentioned herein are trademarks of their respective owners and are hereby recognized as such.