Products - Sercomm Corporation

SerComm CorporationCompany ProfileNovember, 2009

IntroductionEstablished Year 1992Locations- Headquarters Taipei, Taiwan- Manufacturing Suzhou, ChinaHsinchu, Taiwan- US Office Fremont, CA- Europe Office Paris, France2008 Revenue NT$ 8.53 billion(US$ 260 million)Main Products- Wi-Fi Router - ADSL Gateway- Business Router - Print Server- Network Storage - IP Camera- VoIP Products - Cable Products

Management TeamName Title BackgroundPaul WangJames WangBen LinLeo ChenChairmanCEOCTOCFOCarnegie-Melon University, PhD in PhysicsChairman of Pacific Venture PartnersHarvard Business School, MBACarnegie-Melon University, MEPresident of Emerson SuzhouNational Ching-Hwa University, MSDirector of IBM subsidiaryUniversity of Illinois, MSADirector of Lite-On GroupJemmy Lee VP, Manufacturing VP of Proview Company ChinaCharles ChuHawk WuMichael LeeVP, SalesVP, SalesVP, SalesUniversity of Michigan, MEVP of Northern United M&E CompanyDirector of Quanta Computer Corp.Director of Xavi Technologies Corp.National Taiwan University, MSDirector of Hitron Technologies Inc.Benjamin Yeh Senior Director, SalesUC, Berkeley, MEHarvard Business School, MBA

Key Milestones• Proven Execution Track Record- First Company in Asia to Launch Print Server in Year 1993- First Company Worldwide to Launch WiFi Router in Year 2001- First Company Worldwide to Launch WiFi ADSL Gateway in Year 2004- First Company Worldwide to Launch Femtocell WiFi RG in Year 2008- First Company Worldwide to Launch DOCSIS 3.0 Cable RG in Year 2009• Leader in Home Networking Market- Largest Manufacturer of Print Server Worldwide- Leading Provider of Wireless Home Router / ADSL Gateway Worldwide• Awarded as- “100 Fast Growing Companies in Greater China Area”“30 Largest Companies in Telecom/Networking Sector in GreaterChina Area”, by Business Weekly Magazine in 2006- “Taiwan Best Performing 100 Listed Company”, by CommonWealthMagazine in 2003 and 2004

Product OfferingsData Centric Product LinesData/Voice/Video/ConvergenceWiFi RouterADSL GatewayPrint ServerTriple-Play / IAD(Data, Voice, Video)IP CameraBusiness RouterNetworkAttachedStorageFiber-to-the-HomeProductsIP Set-Top-BoxHome NetworkingAdapterVoIP Phone

Sales Revenue GrowthUnit: NT$ MillionCAGR = 36%9,13310,2558,5353,7995,0125,6701,886717 9282000 2001 2002 2003 2004 2005 2006 2007 2008

Revenue Breakdownby ProductJAN.-SEP. 2009Triple-Play28%Adapter5%HomeRouter19%Other6%BR12%Year 2008Triple-Play23%PS5%Adapter6%HR15%HG33%Other7%BusinessRouter12%Print Server3%HomeGateway26%

Revenue Breakdownby GeographyAsiaex-TW5%Year 2008TW Other2% 1%JAN.-SEP. 2009Europe54%NorthAmerica38%Asiaex-TW10%TaiwanOther3% 1%NorthAmerica37%Europe49%

Digital Home Networking• Broadband Access1. Wireless Router2. Power Line Adaptor• Networked Printing3. Wireless Print Server• Content Storage4. Network Attached Storage• Surveillance5. Network IP Camera(7)(2)(3)(5)• Music/Video Streaming6. Video Bridge7. IP Set-Top-Box• Communication(7)(6)(6)(1)(4)(2)8. VoIP Gateway9. VoIP Phone

China and Emerging Market Strategy• Leverage Supply of Quality Engineering Talents and CosteffectiveManufacturing in Greater China Area with Scalability• Catch New Business Opportunities from China with the Trendof Fixed-Mobile Convergence• Ally with China Partners to Explore Emerging MarketChina Prime Minister Mr.Wen visited SerComm (SuZhou) on July 5 th , 2008

Sernet Technology, Suzhou• State-of-the-Art Manufacturing Facility- Green Factory- Wireless Networking Specialized- One-Stop Manufacturing Service: Design, Testing,Quality Assurance, Regulatory Compliance• An Operation Hub in Greater ChinaArea- Procurement / Logistics Center- Quality Assurance- Advanced Manufacturing Engineering• Over 1.2 Million Units per MonthManufacturing Capacity

3Q09 Income StatementYoY ComparisonConsolidated20092008NT$ Million 3Q % 3Q % ChangeNet Sales 1,819 100.0% 1,951 100.0% -6.8%Cost of Goods Sold 1,503 82.6% 1,677 86.0% -10.4%Gross Profit 316 17.4% 274 14.0% 15.3%Operating Expenses 224 12.3% 227 11.6% -1.3%Operating Profit 92 5.1% 47 2.4% 95.7%Non-operating Income 8 0.4% 26 1.3% -69.2%Non-operating Expenses 6 0.3% 12 0.6% -50.0%Income Before Tax 94 5.2% 61 3.1% 54.1%Net Income 76 4.2% 46 2.4% 65.2%EPS (NT$1) 0.46 0.26Weighted Average SharesOutstanding (MN)166 175Note: Applied “Statements of Financial Accounting Standards No.10” (SFAS No.10)

Cumulative Income StatementConsolidated20092008NT$ Million JAN.-SEP. % JAN.-SEP. % ChangeNet Sales 4,928 100.0% 6,453 100.0% -23.6%Cost of Goods Sold 4,100 83.2% 5,474 84.8% -25.1%Gross Profit 828 16.8% 979 15.2% -15.4%Operating Expenses 665 13.5% 718 11.1% -7.4%Operating Profit 163 3.3% 261 4.0% -37.5%Non-operating Income 24 0.5% 81 1.3% -70.4%Non-operating Expenses 36 0.7% 34 0.5% 5.9%Income Before Tax 151 3.1% 308 4.8% -51.0%Net Income 122 2.5% 252 3.9% -51.6%EPS (NT$1) 0.74 1.44Weighted Average SharesOutstanding (MN)166 175Note: Applied “Statements of Financial Accounting Standards No.10” (SFAS No.10)

Balance SheetSeptember 30, 2009 June 30, 2009ConsolidatedNT$ Million Amount % Amount %Cash Equivalents 1,092 21% 1,154 24%A/R 1,061 21% 975 20%Inventory 1,026 20% 651 14%Fixed and Other Assets 1,890 37% 1,972 41%Long-term Investment 47 1% 47 1%Total Assets 5,116 100% 4,799 100%Loan 193 4% 164 3%A/P 1,737 34% 1,186 25%Leasehold Payable 383 7% 387 8%Other Payable 444 9% 759 16%Total Liabilities 2,757 54% 2,496 52%Stockholders' Equity 2,359 46% 2,303 48%A/R Turnover Days 66 67Inventory Turnover Days 67 50A/P Turnover Days 111 97

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