D-Link 2011 Q1 Operation Review

2011-04-29

For the first quarter of 2011, D-Link posted net revenue of NT$7.802bln, down by 14.7% over 4Q10, primarily owing to seasonal slowness worldwide and slightly weak end demands in Europe, and down by 1.3% compared to 1Q10’s figure mainly due to currency fluctuation, if translating into US$, 1Q11’s sales remained up by 6.8% YoY. Due to better product mix shifting towards more switch and digital home contribution, gross margin excluding inventory related gain/loss ascended to 33.0% in 1Q11 from 30.8% in 4Q10, but down by 1.7% compared to 34.7% of the year-ago quarter. In compliance with Taiwan’s GAAP, gross margin including inventory provisional gain/loss was 32.7% in 1Q11, increasing by 3.1% from 29.6% in 4Q10, thank to effective inventory control over seasonality, but down by 1.2% compared to 33.9% of the comparable 2010 quarter. Operating expenses of 30.5% of net revenue was up by 4.4% from 26.1% in the previous quarter mainly owing to relatively smaller sales base for 1Q11, and slightly up by 0.4% compared to the number in the year-ago quarter. In absolute dollar value, 1Q11’s operating expenses amounted to NT$2.381bln down by 0.3% QoQ or down by 0.1% YoY. Operating profit margin declined to 2.2% from 3.5% in 4Q10 or down by 1.6% as compared to 3.8% in 1Q10.