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THIRD QUARTER REPORT
FOR THE THREE MONTHS
ENDED DECEMBER 31, 1997
[PEAK LOGO APPEARS HERE]
PEAK INTERNATIONAL LIMITED
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TO OUR STOCKHOLDERS:
For the third quarter of fiscal 1998, the Company reported that net income
increased 52% to $5,630,000 from $3,699,000 for the third quarter of fiscal
1997. Earnings per share increased 17% to $0.41 from $0.35 reported for the
corresponding quarter in the previous fiscal year. The weighted average number
of shares outstanding increased 31% as a result of the Company's initial public
offering in June 1997. Net sales for the third fiscal quarter of 1998 grew 25%
to $19,506,000 from $15,561,000 a year ago.
For the nine-month period ended December 31, 1997, net income increased 60% to
$14,739,000 from $9,226,000 reported for the corresponding period last year.
Earnings per share for the period grew 32% to $1.16 from $0.88 reported for the
corresponding period last year. The weighted average number of shares
outstanding increased 22% between these periods. Net sales for the nine-month
period grew 30% to $53,539,000 from $41,175,000 reported for the period last
year.
We were quite gratified to see that the fall quarter remained stronger than
expected. This strength was spread fairly evenly throughout all of our global
markets. The telecommunications and consumer electronics segments remained
strong while the computer industry continued to drive the most significant
portion of Peak's growth during the quarter. Various sources estimate 1997 US
computer unit volume growth rates upwards of 20% and 15% world wide, far
exceeding expectations established earlier in the year. Since we benefit from
the semiconductor unit volumes shipped, this will likely translate into
naturally strong growth in demand for our mainstay products. We hope to achieve
additional growth beyond this from the markets increasing adoption of our new
products as well as from market share increases in our established product
lines.
We continue to accelerate the design and construction of our additional
manufacturing facilities located in the PRC. Our new dormitory, which will
house up to 3500 staff, is close to 95% completed. Design drawings for the
factory
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adjacent to the new dormitory have been approved and the construction tendering
process has begun. Upon its completion, this new facility will provide an
additional 80,000 square meters of manufacturing and warehouse space.
As a result of what we see in the market place and Peak's unique position, we
remain upbeat about the coming quarters and the prospects for our continued
growth. We hope to see continued strength in semiconductor unit volumes and
have positioned Peak to benefit from this anticipated growth.
/s/ Richard Brook
- --------------------------
RICHARD BROOK
PRESIDENT AND
CHIEF OPERATING OFFICER
JANUARY 29, 1997
RESULTS AT A GLANCE...
THIRD QUARTER ENDED DECEMBER 31,
1997 1996
- --------------------------------------------------------------------
Net sales $19,506,000 $15,561,000
Net income 5,630,000 3,699,000
Per share - Basic $ 0.42 $ 0.35
- Diluted $ 0.41 $ 0.35
# Shares - Diluted 13,717,000 10,462,000
NINE MONTHS ENDED DECEMBER 31,
1997 1996
- --------------------------------------------------------------------
Net sales $53,539,000 $41,175,000
Net income 14,739,000 9,226,000
Per share - Basic $ 1.17 $ 0.88
- Diluted $ 1.16 $ 0.88
# Shares - Diluted 12,736,000 10,462,000
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CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31
(Unaudited)
1997 1996
- -------------------------------------------------------------------
(in thousands, except per share data)
Net Sales $ 19,506 $ 15,561
Cost of Goods Sold 10,520 8,890
-------- --------
Gross Profit 8,986 6,671
General & Administrative, and
Research & Development 1,653 1,217
Selling & Marketing 1,543 1,183
-------- --------
Operating Income 5,790 4,271
Other Income - net 55 18
Interest Income/(expense)- net 341 (262)
-------- --------
Profit Before Tax 6,186 4,027
Taxation 556 328
-------- --------
NET INCOME $ 5,630 $ 3,699
======== ========
EARNINGS PER SHARE
- - Basic $ 0.42 $ 0.35
- - Diluted $ 0.41 $ 0.35
Weighted Avg #Shares-Diluted 13,717 10,462
Nine Months Ended December 31
(Unaudited)
1997 1996
- -------------------------------------------------------------------
(in thousands, except per share data)
Net Sales $ 53,539 $ 41,175
Cost of Goods Sold 29,496 23,605
-------- --------
Gross Profit 24,043 17,570
General & Administrative, and
Research & Development 4,464 3,720
Selling & Marketing 4,181 3,015
-------- --------
Operating Income 15,398 10,835
Other Income - net 470 18
Interest Income/(expense)- net 204 (725)
-------- --------
Profit Before Tax 16,072 10,128
Taxation 1333 902
-------- --------
NET INCOME $ 14,739 $ 9,226
======== ========
EARNINGS PER SHARE
- - Basic $ 1.17 $ 0.88
- - Diluted $ 1.16 $ 0.88
Weighted Avg #Shares-Diluted 12,736 10,462
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CONSOLIDATED BALANCE SHEETS
December 31, March 31,
1997 1997
(unaudited)
- ---------------------------------------------------------------------
(in thousands)
ASSETS
Current assets:
Cash & cash equivalents $ 17,682 $ 1,914
Marketable securities - 1,129
Accounts receivable-net 10,271 10,251
Inventory-net 26,175 22,053
Other current assets 4,975 2,704
-------- --------
Total Current Assets 59,103 38,051
-------- --------
Property, plant and
equipment-net 24,912 15,744
-------- --------
TOTALS $ 84,015 $ 53,795
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Bank borrowings 582 21,170
Accounts payable 7,514 3,502
Taxation 3,766 2,477
Total Current Liabilities 11,862 27,149
-------- --------
Deferred income taxes 437 374
-------- --------
Total Liabilities 12,299 27,523
-------- --------
Stockholders' Equity:
Share capital 135 105
Additional paid-in capital 34,034 2,564
Retained earnings 38,261 23,523
Cumulative translation
adjustment (714) 21
Unrealized gain on marketable
securities - 59
-------- --------
Total stockholders' equity 71,716 26,272
-------- --------
TOTALS $ 84,015 $ 53,795
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[PEAK LOGO APPEARS HERE]
Peak International Limited, 2111 Kramer Lane, Austin, TX 78758 (512) 339-4684
