Hsinchu, Taiwan – Accton Technology Corporation (Accton hereinafter), a leading outsource partner of advanced communication products, today announced its 2005 first quarter report for the period ended March 31, 2005. Net sales for the first quarter of 2005 were NT$3,502million. Gross margin and operating income were NT$523 million and NT$51 million, respectively. Non-operation loss was NT$209 million and net loss before tax was NT$158 million.
Looking into the detail financial statement, the first quarter presents a slight loss, with a margin increase from 13.6% to 14.9%, resulted from the adjustment and rearrangement on the product portfolio. Moreover, the total inventory value declined from NT$ 1.68 billion to NT$1.49 billion and the account receivable turnover day also declined from 80 days to 76 days, mainly due to the company’s proactive improvement on operation processes and efficiency as well as stronger control of inventory and AR. All these essential indexes proves Accton’s dedication on improving financial structure.
Current ratio 193%
Debts ratio 44%
Inventory turnover (times) 7.51
A/R turnover(times) 4.78
Moreover, Accton also implemented actions on the management of its subsidiaries in the past two years. Arcaydan, the joint venture of Accton & Royal Philips, became profitable in H2 of 2004 with a net profit of NT$34 million. The company has successfully developed series of integrated products combining multimedia and wireless technology and is shipping to various worldwide leading players.In the near future, Arcaydan will co-promote and co-sell with ISP and content provider in selected territories. Since “Digital Home” is becoming the mainstream in the worldwide market and benefits from increasing market demand on integrated DSL equipment in Western Europe, the continued growth outlook for Arcadyan remains positive.
The SMC’s business loss was reduced gradually, mainly due to improved control in operational expenses. Along with the fast growing broadband market, continuous improvement on operation models, strengthened product and channel strategy, SMC’s investment on new product development and marketing activities will provide a strong returns with an objective to break even in the second half-year of 2005. Accton continue to invest on branded business will be an essential part of corporate strategy. Aggressively expanded business scales and services for brand business include Edge-Core Integrated Services and SMC will be the focus over the coming quarters.
Accton’s 2005 first quarter sales revenue breakdown by product: 60% of revenue was contributed by Ethernet switches, 1% by hubs and adapter cards, 17% by wireless products, 16% by gateway and broadband and 6% for other products. Revenue on a regional basis was 41% from North America, 36% from Asia Pacific and Taiwan, and 23% from Europe.
