Cirmaker Technology Reports Third Quarter 2004 Financial Results
25 November 2004 - 8:20AM
PR Newswire (US)
Cirmaker Technology Reports Third Quarter 2004 Financial Results
Company Makes Significant Strides in the Digital Set Top Box Market
in Mainland China and Taiwan NEW YORK, Nov. 24
/PRNewswire-FirstCall/ -- Cirmaker Technology Corp. (OTC:CRKT.OB)
(BULLETIN BOARD: CRKT.OB) , which manufactures set top boxes
(STB's) for digital TV signal reception, LCD flat screens for
televisions and PC's, CPU coolers for computers and electronic
components, today announced its financial results for the third
quarter ended September 30, 2004. Revenues for the nine month
period ended September 30, 2004 increased to $3,464,922 from
$3,063,091 during the comparable period of the prior year. The
results for first, second and third quarters of 2003 have been
restated to reflect the Company's 25% minority interest in Cirmaker
Taiwan, its manufacturing operation located in Taiwan. Gross profit
was $401,491 for the third quarter of 2004, versus $801,394 in the
third quarter of 2003. The Company attributed the gross profit
decline to increased operating expenses of Cirmaker USA and the
Company's factory in Guangdong, China. The net loss for the three
months ended September 30, 2004 was $438,119, or $(0.02) per share,
before foreign currency translation adjustment and $488,638 after
foreign currency translation adjustment. This compares to a net
loss in the same period in 2003 of $34,608, or $(0.02) per share,
before currency adjustment and a net loss of $140,760 after the
currency adjustment. Net losses increased largely by expenses
incurred with the Company's new facility expansion initiative in
Guangdong, China. The Guangdong factory commenced manufacturing in
July 2004. Operational expenses associated with the factory in
China were approximately $350,000 during the nine month period
ended September 30, 2004. Revenue for the first nine months of 2004
rose 12.2% to $12.8 million from $11.4 million in the first nine
months of the prior year. The gross profit for the current nine
month period was $1,050,504 versus a gross profit of $1,957,727
million in the prior period. As of September 30, 2004, the Company
had $135,448 in cash and cash equivalents, down 37% from $216,628
in cash holdings a year ago. The decrease in cash reflects an
increase in Cirmaker's restricted cash account required to be held
to meet the Company's debt covenants. The Company also had
significant business developments during the third quarter of 2004:
* On September 9, 2004, Shaanxi New Century Electronic Co., Ltd.
("New Century"), a subsidiary of the Company, entered into a
Satellite Receiver Sales Agreement with Xian Huaxing Electronic
Technology Co. Ltd. ("Xian Huaxing"), pursuant to which Xian
Huaxing agreed to purchase from New Century all of Xian Huaxing's
requirements for satellite set top box receivers that convert
digital television broadcast signals into analog formats. The basic
unit price for satellite receivers sold under the agreement is RMB
230 (approximately US$27.79). This price, however, may be increased
under the agreement if estimated volume levels are not met. * On
September 13, 2004, Xian Huaxing made, and New Century accepted, a
purchase order from Mainland China under the aforementioned
agreement for 240,000 Satellite Receivers at a unit price of RMB
230 (approximately US$27.79) for an aggregate price of RMB
55,200,000 (approximately US$6,669,600). * Cirmaker began
production on the 240,000 STB order from Mainland China, and is
expected to complete the order by the end of the year. Bill Liao,
President of Cirmaker Technology, commented, "During the third
quarter of 2004, we have announced significant developments within
the Set Top Box market. We have successfully entered the China
Mainland and Taiwan STB marketplace and are in the process of
fulfilling our existing order with Mainland China. We are also
ramping up our manufacturing facility to prepare from anticipated
orders from the Taiwan marketplace." He continued, "We continue to
focus on our three main businesses: digital set top boxes,
electrical cooling systems for laptop and personal computers, and
terminals and electrical connectors. To date, Cirmaker has been
able to respond quickly to our customers' demands and requirements,
and adapt to their needs in our products. Commenting on the
reduction in gross profit for the third quarter, Mr. Liao said, "A
substantial portion of our loss in this and the previous quarter
was due to increases in operating expenses of Cirmaker USA and in
our factory in China." "We recently announced an order from
Mainland China for two hundred and forty thousand digital set top
boxes worth $6,669,600 million. The Company is in the process of
preparing the first shipment of the STB order. In addition, we
recently announced the Company's entry into Taiwan's digital set
top box market, and are looking forward to receiving orders from
the marketplace. We have already conducted several tests with a few
thousand of our STB's within the Taiwan market for two of our new
STB product offerings, Direct T and Direct S, and we are encouraged
by the positive feedback and results we have received from
consumers," Mr. Liao concluded. About Cirmaker Technology Corp.
Headquartered in Taiwan with offices in New York City, Beijing, and
Guangdong province, Cirmaker Technology manufactures 3G MHP (3rd
generation multimedia home platform) digital set top boxes for
television sets, LCD flat screens for televisions and PC's, cooling
systems for laptop and personal computers, electrical and
electronic components. Cirmaker has developed set top boxes that
convert digital television broadcast signals into analog formats so
that analog TV sets can receive digital programming. The system
also receives, processes, stores and broadcasts analog, digital and
streaming media signals, and supports pay-per-view and
video-on-demand functions. Cirmaker believes it is the only 3G MHP
STB manufacturer operating in China able to produce in volume a
device that meets all the required standards of Chinese
broadcasting authorities. It also complies with all international
HDTV standards for high definition television. The Company's
subsidiary, Shaanxi New Century Electronic Co., produces a new
generation satellite set top box that converts digital television
broadcast signals into analog formats so that analog TV sets can
receive digital programming. This device meets all the required
standards of Chinese broadcasting authorities. Because the Chinese
government plans to change all TV broadcast signals from analog to
digital, there is a significant demand in Mainland China for this
product. For further information on Cirmaker Technology Corp.,
please visit http://www.cirmaker.com.tw/ Forward-Looking Statements
The matters discussed in this news release contain forward-looking
statements, including statements regarding the demand for set top
box satellite receivers in China, future sales made by Cirmaker in
China, and the potential success of the strategic alliance between
Shaanxi Ruyi Electric Co. and Cirmaker. These statements are
subject to various risks, uncertainties and other factors that
could cause actual results to vary materially from the results
anticipated in such forward-looking statements. Such risks,
uncertainties and other factors include Cirmaker's potential
inability to raise additional capital, the potential breach by the
counterparty to the sales agreement of its obligations to buy
satellite receivers thereunder, Cirmaker's potential inability to
compete with other companies that may be more experienced and
better capitalized than Cirmaker, changes in domestic and foreign
laws, regulations and taxes, changes in economic conditions,
uncertainties related to the legal systems in Cirmaker's target
markets, including, China's legal system and economic, political
and social events in China and other target markets, foreign
relations between Taiwan, China and Cirmaker's other potential
target markets, a general economic downturn, a downturn in the
securities markets, Securities and Exchange Commission regulations
which affect trading in the securities of "penny stocks," and other
risks and uncertainties detailed from time to time in Cirmaker's
filings with the Securities and Exchange Commission. These
forward-looking statements represent management's judgment as of
the date of this release. Cirmaker disclaims any intent or
obligation to update these forward-looking statements. For more
information, please contact: Company Contact: Cirmaker Technology
Corporation Charles R. Skeele General Manager Telephone:
917-639-4098 Email: Investor Relations Contact: ROI Group
Associates, Inc. Charles A. Nelson / Sarah Shepard Vice President /
Vice President Telephone: 212-495-0200, ext. 15 / 17 Email: /
http://www.roiny.com/ You may register to receive Cirmaker's future
press releases and to be added to the company's distribution list
by visiting: http://www.roiny.com/form.php. DATASOURCE: Cirmaker
Technology Corp. CONTACT: Charles R. Skeele, General Manager of
Cirmaker Technology Corporation, +1-917-639-4098, ; or Investor
Relations Contact: Charles A. Nelson, Vice President,
+1-212-495-0200, ext. 15, , or Sarah Shepard, Vice President,
+1-212-495-0200, ext. 17, , both of ROI Group Associates, Inc., for
Cirmaker Technology Corp. Web site: http://www.cirmaker.com.tw/
http://www.roiny.com/form.php
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