ESS Technology Receives Tax Exemption from Taiwan Government for MediaTek Royalties and Fees
Wednesday October 15, 8:35 am ET
Estimates Increase in Q3 EPS at $0.12 Per Diluted Share
FREMONT, Calif., Oct. 15 /PRNewswire-FirstCall/ -- ESS Technology (Nasdaq: ESST - News), a leading supplier of silicon solutions for digital audio, video and imaging consumer electronics, today announced that license and royalty fees from MediaTek have received favorable tax treatment from the Taiwanese government.
On June 12, 2003 ESS announced that MediaTek Corporation of Taiwan signed a non-exclusive worldwide license of ESS's proprietary DVD user interface and other DVD software for a one-time license fee of $45 million, plus ongoing quarterly royalties with a lifetime cap of an additional $45 million. The Taiwan government has now granted a tax exemption for this license and royalty income. This favorable ruling reduces the withholding tax rate on the $45 million in license income, which had been recognized in the second quarter of 2003, increasing third quarter earnings by an estimated $0.12 per diluted share.
Robert Blair, president and CEO of ESS Technology commented, "I am very pleased that the Taiwan tax authorities have granted this tax exemption. This decision improves our third quarter and our overall 2003 results and will also benefit future quarters as royalty payments from MediaTek are expected for at least two more years."
Mr. Blair continued, "Our digital video playback products continue to grow and gain market share worldwide. Our new recordable video chips are ramping in volume and are also gaining market share in this exciting new market. With the recent acquisition of Pictos Technologies, ESS is now shipping high- performance digital imaging chips targeted for the fast-growing digital camera and camera phone markets. Additionally, we have successfully expanded our sales outside China with many new designs in Japan, Korea and Europe. Overall, we believe ESS is very well positioned to grow in the fourth quarter and in the future. Please join us for our third quarter conference call on October 29th for more details."
ESS Technology will report its third quarter 2003 results on Wednesday, October 29 after the close of market.
About ESS Technology
ESS Technology, Inc., is a leading supplier of high-performance feature-rich chips, for the rapidly expanding digital video, digital imaging and digital entertainment markets. ESS also provides advanced products that enable the emergence of digital home systems that deliver and manage entertainment and information in the home.
ESS, headquartered in Fremont, California, has R&D, sales, and technical support offices worldwide. ESS Technology's common stock is traded on the Nasdaq National Market under the symbol "ESST." ESS Technology's web site address is: esstech.com .
The matters discussed in this news release include certain forward-looking statements that involve risks and uncertainties, including, but not limited to, the timely availability and acceptance of ESS's new products, the possible reduction of consumer spending occasioned by general economic conditions, the dependence on continued growth in demand for consumer multimedia products, the possible reduction of consumer spending occasioned by terrorist activity and armed conflict, difficulties inherent in integrating acquired businesses with ESS, the impact of competitive products and pricing, and the other risks detailed from time to time in the SEC reports of ESS, including the reports on Form 10-K, Form 10-Q and Form 8-K (if any) which we incorporate by reference. Actual results could differ materially from those projected in the forward- looking statements. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events, or otherwise.
Source: ESS Technology, Inc. |
