ESST is losing the price war.
ESS Technology Reports First Quarter Results
PR Newswire - April 22, 1998 16:19
FREMONT, Calif., April 22 /PRNewswire/ -- ESS Technology Inc.
(Nasdaq: ESST) today reported a net loss of ($12.4) million, or ($0.30) per
share, on net revenues of $52.9 million for the quarter ended March 31, 1998
primarily due to inventory reserves for video products. The Company reported
a net profit for the first quarter of 1997 of $17.8 million, or $0.43 per
share on revenues of $81.5 million.
"We are disappointed with our current video business in the China market.
We are experiencing intense price competition and slow seasonal demand. After
a recent review of the China market, we decided to initiate a more aggressive
marketing program for our video products which resulted in substantial
inventory reserves for video products. Other factors contributing to our loss
for the first quarter were higher costs associated with production shipments
of our new modem products and a legal expense reserve associated with the
patent lawsuit recently filed against the Company," said Fred Chan, Chairman
and CEO. "In contrast to the video business, we are pleased with the
performance of the audio business, the design wins for our new PCI audio
products, and the acceptance we are receiving in our modem products. Looking
forward, we expect the second quarter to continue to have slow seasonal demand
with improved performance in the second half of the year." |
