Business Update - Sercomm Corporation

SerComm Corporation
2Q’07 Investor Conference
August 16th, 2007

Agenda
- Welcome and Introduction
- 2Q’07 & 1H’07 Financial Results
- Business Update
- Q & A

Safe Harbor Notice
The following presentation may contain forward-looking
statements regarding, among other things, our financial
condition, future expansion plans and business strategies
based on our current expectations and projections about
future events. Although we believe that these expectations
and projections are reasonable, such forward-looking
statements are inherently subject to risks, uncertainties and
assumptions.
The company undertakes no obligation to publicly update or
revise any forward-looking statements whether as a result of
new information, future events or otherwise. The actual
results could differ materially from those contained in these
forward-looking statements.

2Q07 Income Statement
Consolidated
2007
2006
NT$ Million Q2 % Q2 % Change
Net Sales 2,742 100.0% 2,295 100.0% 19.5%
Gross Profit 424 15.5% 307 13.4% 38.1%
Operating Expenses 216 7.9% 183 8.0% 18.0%
Operating Profit 208 7.6% 124 5.4% 67.7%
Non-operating Income 19 0.7% 9 0.4% 111.1%
Non-operating Expenses 49 1.8% 21 0.9% 133.3%
Income Before Tax 178 6.5% 112 4.9% 58.9%
Net Income 153 5.6% 100 4.4% 53.0%
EPS (NT$1) 1.19 0.77
Weighted Average Shares
Outstanding (MN)
130 130

2Q07 Income Statement
Consolidated
2007
2007
NT$ Million Q2 % Q1 % Change
Net Sales 2,742 100.0% 2,438 100.0% 12.5%
Gross Profit 424 15.5% 342 14.0% 24.0%
Operating Expenses 216 7.9% 193 7.9% 11.9%
Operating Profit 208 7.6% 149 6.1% 39.6%
Non-operating Income 19 0.7% 7 0.3% 171.4%
Non-operating Expenses 49 1.8% 26 1.1% 88.5%
Income Before Tax 178 6.5% 130 5.3% 36.9%
Net Income 153 5.6% 111 4.6% 37.8%
EPS (NT$1) 1.19 0.85
Weighted Average Shares
Outstanding (MN)
130 130

1H07 Income Statement
Consolidated
2007 2006
(In NT$MN) 1H % 1H % Change
Net Revenue 5,180 100.0% 3,647 100.0% 42.0%
Cost of Goods Sold 4,414 85.2% 3,182 87.2% 38.7%
Gross Profit 766 14.8% 465 12.8% 64.7%
Operating expenses 409 7.9% 325 8.9% 25.8%
Operating Profit 357 6.9% 140 3.8% 155.0%
Non-operating Income 26 0.5% 12 0.3% 116.7%
Non-operating Expenses 75 1.4% 24 0.7% 212.5%
Income before Tax 308 5.9% 129 3.5% 138.8%
Net Income 264 5.1% 117 3.2% 125.6%
EPS(NTD$1) 2.04 0.88
Weighted Average Shares
Outstanding (MN) 130 130

Historic Quarterly Sales
Unit:NT$ Billion
2.44
2.29
2.74
2.69 2.8
1.51 1.55
1.35
1.32
1.26
1.27
1.23 1.31
1.19
1.24
1.05
0.81
0.71
‘03 ’04 ’05 ’06 ’07
‘03 ’04 ’05 ’06 ’07
‘03 ’04 ’05 ’06
‘03 ’04 ’05 ’06
Q1 Q2 Q3 Q4

Revenue Breakdown
by Product
Other
4%
Business
Router
10%
Triple-Play
18%
1H 2007
Adapter
8%
Print
Server
6% Home
Gateway
38%
BR
7%
PS
7%
Other
5%
Home
Router
16%
Year 2006
Adapter
10%
HR
28%
HG
43%

Revenue Breakdown by
Geography
1H 2007
North
America
46%
Year 2006
Asia ex-
Taiwan
4%
Taiwan
2%
North
America
37%
Asia ex-
Taiwan
3%
Taiwan
4%
Europe
48%
Europe
56%

Balance Sheet
Consolidated
June 30, 2007 December 31, 2006
NT$ Million Amount % Amount %
Cash Equivalents 949 20% 887 18%
A/R 1,283 27% 1,379 28%
Inventory 959 20% 1,204 24%
Fixed Assets 1,480 31% 1,137 23%
Longterm Investment 48 1% 55 1%
Total Assets 4,719 100% 5,008 100%
Loan 0 0% 277 6%
A/P 2,029 43% 2,292 46%
Leasehold Payable 257 5% 259 5%
Other Payable 444 9% 328 7%
Stockholders' Equity 1,989 42% 1,852 37%
A/R Turnover Days 47 46
Inventory Turnover Days 41 44
A/P Turnover Days 88 83

Consolidated Cash Flow
NT$Million June 30, 2007 June 30, 2006
-Net profit 265 177
-Depreciation & Amortization 84 72
-Other Op Sources/(Uses) 55 (81)
From Operation 404 108
-L-T Investment 0 0
-Fixed Assets (37) (104)
-Other Investing Sources/(Uses) (24) (20)
From Investment (61) (124)
-Cash Dividends- Common Stock 0 0
-L-T Liabilities (5) (4)
-Treasury Stock 0 (75)
-Other Financing Sources/(Uses) (276) 118
From Financing (281) 39
Net Cash Position Change 62 23
Cash Equivalents at end the year 949 519

Business Update
• Better product mix has contributed to gross margin
improvement in 1H’07
• Increasing sales of business router with market
share gain in SMB market
• Growing demand of integrated products from
European service provider market
- Triple-play products (data, voice and video) with rich application
software start to ramp up
- Increasing new broadband services (VoIP, MOD,…etc) offered by
service providers
• Market share leader in WiFi ADSL gateway market
- Over 2.2MN units shipment in 1H’07
- More migration to 11n in 2 nd half of the year

Business Update
• Print Server
- Solid market leading position with design wins from all major printer
makers
- Over 400k units shipped in 1H’07
• IP Surveillance
- Design wins from global leading networking companies
- H.264 IP Camera to be launched in 2H’07
• Manufacturing capacity remains tight and will seek to
expand capacity in 2H’07
• Transferred to be listed in TSEC with tentative filing
schedule by end of August

Q & A
www.sercomm.com