1999 Annual Report - Delta Electronics

3 1999 Annual Report
Message from the Chairman
Dear Shareholder:
The earthquake on Sep. 21, 1999, was a big shakeup for all the
Taiwanese, but Taiwan is walking out of the trauma and on the
road to recovery. With mixed feelings, we announce that 1999
was a good year for your Company. Revenues rose 52% to NT$
39.6 billion. Net earnings increased 61% to NT$ 3.6 billion.
Earnings per share grew 27% to NT$5.12. Operating margins
rose to 9%, up a full point from 8% in 1998.
Delta has one of the strongest balance sheets in the industry due to
years of successful operations and our prudent attitude toward
financial leverage. Our sustainable revenues increase can mainly
be attributed to strong growth in sales of new-generation principal
products and new products. On the other hand, we are always
proud of our commitment to product research and development.
Our research and development expenditures were a record NT$1.85 billion in 1999, a
46% increase over 1998, and represented 5% of net revenues.
We began the new millennium with a new president, James K.M. Ng, who is a highly
regarded international business manager and has been the president of Delta Thailand
for the last decade with outstanding track record. To strengthen our position in the
marketplace, we regrouped our activities for higher efficiency, improved
communication, and better performance. Our power related Business Units, i.e., Power
Supply, UPS and Telecom Power, and ODM, are now merged into Power System
Business Group. Our Components business was also upgraded to Components Business
Group.
The improved efficiency and added production capacity of the three new Dongguan
plants allow us to fill customer orders with more flexibility and customer satisfaction.
In addition, we recently decided to further invest in Wujiang (Jiangsu Province) for
setting up a new manufacturing base. On the other hand, we came through the Y2K
rollover with no significant problems. Our SAP ERP system will complete its
worldwide linkage this year. Our goal is to make Delta a "best-in-class" company.
As to our strategic investments, Cyntec Co., Ltd., a subsidiary that provides highprecision,
thin film passive components, reported significant growth in both sales
revenues and net profits in 1999. Delta Networks Inc, the networking product
subsidiary, for its first year of operation reported NT$4.3 billion net revenues. Delta
Optoelectronics, Inc. was established in last December for advanced display
development using polymer light emission display (PLED) and carbon nano-tube
electron emitter (CNT) technologies. Entering the e-Commerce era, Delta is also
exploring the Internet related business opportunities-such as ICP, broad band and ASP.
We move into 2000 with high expectations and great confidence that we have the right
initiatives, the right culture and the right leadership to seize the ample opportunities the
fast-changing world offers to us. We remain committed to our objectives of 30%
revenues growth, positive cash flow, and over 20% return on equity. All in all, we
believe that Delta is strategically well positioned to address the changing needs of the
new century.
Finally, I want to thank all our employees for their hard work. Without their dedication,
we would not be able to achieve last year's growth rate of 52%.
Above all, we are most grateful for your continued support to Delta. We are fully aware
it is your trust in us that drives the Company forward.
Sincerely yours,
Bruce C.H.Cheng
Chairman & CEO
1999 Annual Report
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