|Accton Announces 2005 First Half-Year Report|
Hsinchu, Taiwan-Accton Technology Corporation (Accton hereinafter), a leading outsource partner of advanced communication products, today announces its 2005 first half-year report for the period ended June 30, 2005. Net sales for the first half-year of 2005 were NT$6,781million. Gross margin and operating income were NT$1,052 million and NT$98 million, respectively. Non-operation loss was NT$421 million and net loss before tax was NT$323 million.
Although Accton seems to be in low gear temporarily, yet as the adjustment and rearrangement on product portfolio, the rise of shipment volumes in Enterprise managed switches, and the transfer of manufacturing low-margin products to EMS and strategic partners, its gross margin has risen from 12.6% for the same period last year to15.5% this year; it has risen by 1.2% in Q2 higher than in Q1.
Through the 18-month adjustment, Accton will perform better by end of this year. By the adjustment of operation strategies, improved outcomes have been delivered step-by-step. Accton’s Own-Brand business—SMC has ameliorated the business situation in the key North America market by reducing the shipment volumes in price-haggling low-end retail products and lifting shipment volumes in SMB and SI; the gross margin has risen from 12% in Q1 to 20% in Q2.
Even though the growth of Enterprise market is moderate; Accton’s new products will be on the market in second half year or the beginning of 2006, including carrier-class Ethernet equipments, high-end Enterprise wireless equipments, videophones, and multimedia mobile phones. Furthermore, Arcadyan—a joint venture of Accton Technology Corporation and Royal Philips Electronics, will continue to outshine the telecom equipment market in Europe.
As to the cost control, Accton will continue to apply resources to high-tech development, including the bilateral cooperation relationship with Compal Electronics, Inc. Good results have been gradually emerged; the total inventory value declined from NT$ 1.68 billion to NT$1.46 billion and the account receivable turnover day also declined from 80 days to 62 days, mainly due to the company's proactive improvement on operation processes and efficiency as well as stronger control on inventory and AR.
Accton pointed out that for the past two years, since the ODM business mode was revolutionized and profit/loss imbalance of Brand management still continued, Accton is still in deficit situation for the moment. Investors can rest assured that Accton will not only accelerate the exploration of new markets and exploitation of new technology but also reduce operating and manufacturing costs within the shortest time.
Accton’s 2005 first half-year sales revenue breakdown by product: 61% of revenue was contributed by Ethernet switches, 1% by hubs and adapter cards, 16% by wireless products, 14% by gateway and broadband and 8% for other products. Revenue on a regional basis was 43% from North America, 33% from Asia Pacific and Taiwan, and 24% from Europe.
About Accton Technology Corporation
Accton Technology Corporation (TAIEX: 2345) is a global premier provider of networking and communications solutions for top tier networking, computer, and telecommunications vendors.Leveraging its advanced software applications and state-of-the-art ASIC, Accton collaborates with its strategic partners to design, develop and manufacture innovative, leading-edge technologies.The company’s constantly-evolving core technology, highly-qualified employees and aggressive cost engineering make it possible for Accton to deliver superior products that are as affordable as they are robust.For more information about Accton and its subsidiaries, visit www.accton.com.
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