Roundtop to Challenge NT$4 in EPS in 2006

Taipei, July 28, 2006 (CENS)--Thanks to the increased orders from the U.S. and Eastern European nations, Roundtop Machinery Industries Co., Ltd., one of Taiwan's listed manufacturers of machine tools, will likely challenge NT$4 (US$0.12 at US$1:NT$32.5) in earnings per share (EPS) this year.

Toundtop said it would post stronger performance in the second half of this year, compared to the first half. An institutional investor predicted Roundtop would register more than NT$2 (US$0.06) in EPS in the first half of this year.

Concentrating on the production of large-sized double-column machining centers and CNC (computer numerically controlled) lathes, Roundtop said its products are mainly used in the fields of 3C (computer, consumer electronics, and communication) products, electronics, and automobiles. At present, the company's orders mainly come from the U.S. and Europe.

Roundtop posted NT$133 million (US$4.09 million) in sales in June, representing an increase of 33.4% year-on-year and hitting a second-highest monthly record in history. The company had cumulative sales of NT$358 million (US$11.01 million) in the second quarter of this year, hitting a historic-high record.

Hsieh Hsun-min, president of Roundtop, said his company is enjoying a comeback in orders for large-sized double-column machining centers from the U.S. marketplace, which has seen a continued growth in spending for capital goods for four consecutive years.

Roundtop said it saw a 30% year-on-year growth in orders from the U.S. marketplace in the first half of this year. The U.S. spending for capital goods grew 24% annually in the first half of this year, compared to 15% posted in the corresponding period of last year.

In addition to the U.S. marketplace, Roundtop also saw increased orders from such emerging markets as Eastern Europe, Turkey, and Pakistan in the first half of this year.

In the first quarter of this year, Roundtop posted a profit margin of 27%, with a net profit ratio reaching 19%. The company said it would see a sequential growth in gross and net profit margins in the second quarter of this year because of its efforts to cut production costs and its development of high-margin CNC lathes.

With unfulfilled orders reaching NT$500 million (US$15.38 million), Roundtop said it would be able to keep production lines running at full capacity until the end of this year.