Corporate ProfileMarch, 2007

Agenda1. Introduction
2. Financial Results
3. Products
4. Growth Drivers
5. Q&A1

Introduction

AVerMedia Overview
Founded in 1990, Specializing in Designing, Manufacturingand Marketing of Multimedia Entertainment, Presentation andDigital Surveillance Products.

 Annual Turnover (2006): US$ 104.9 Million

 Consecutive profitable years: 16 years

 Consecutive profitable quarters: 63 quarters

 Employees (AVerMedia Group): 902

 Branding / ODM with premium value : 70% / 30%

Updated on Mar. 2007

42

Global Marketing & Service Network
Milton Keynes,London,UKParis,FranceRuesselsheim,Frankfurt,
Germany
Kun ShanShanghai
ChinaMadrid,
Spain

Taipei,TaiwanBangkok ,Thailand

Milpitas,
CAUSA

Subsidiaries and Global Network of Distributors, System
Integrators, VARs, and ODMs Over 75 Countries

5

2006 Taiwan Superior Brand• Based on the evaluation by the 2006 Taiwan Superior Brand
committee, the company is awarded for its outstanding
performance and innovation in research and development,
product quality, branding strategy, and branding achievement.

63

Award-Winner 2006
AwardAward-Winner

7

Financial Results

4Performance comparison 06/05/04
2006 ϩAmount : US$ k2005

2004

Net Sales

104,932

100 %

90,191100 %

87,452

100 %

COGS

(58,184)(55)%(49,806)(55)%(49,705)

(57)%

GP

46,74845 %

40,38545 %

37,74843 %Operating Expense(30,415)(29)%(26,769)(30)%(23,607)(27)%

Operating Income

16,33316 %

13,61615 %14,141

16 %

233

0%

430%

513

1%

16,566

16 %

13,65915 %

14,654

17 %

651

1%

1,137

1%

(205)

(0)%

17,21716 %

14,79616 %

14,44917 %Net Non-op Items
Income before Tax
Income Tax
Net Income
Fully Diluted EPS(NT$)

3.033.00

3.06 ϡ

Sales Grew

16 %

3%

18 %

EPS Grew

1%(2)%30 %ϩY2006's results are before CPA's audit

9ϡY2004 EPS are converted to “Fully Diluted”

Balance sheet highlights
2006

Amount : US$ k

2005

2004

Cash &Equivalent54,60141 %

61,35449 %

51,62348 %Accounts
Receivable

16,92013 %14,757

12 %

9,776

9%

Inventory

13,57310 %10,867

9%

8,601

8%

L-T Investment

3,430

3%

5,277

4%

5,408

5%

Fixed Assets

28,43421 %

20,69517 %

20,58619 %Total Assets

133,979 100 %124,705

100 %107,759

100 %Liabilities

34,78826 %

36,76529 %

43,82741 %Equities

99,19274 %

87,94071 %63,93259 %Full consolidated base105

Key Financial indicators
2006

2005

2004

ROE

17.24 %

16.82 %

22.60 %

ROA

12.93 %

11.86 %

14.65 %AR Turnover

57 days

60 days

42 daysInventory Turnover

86 days

79 days

74 days

Debt ratio

25.96 %

29.48 %

40.67 %

11Breakdown of ROE˅ˈˁ˃˃ ʸ˄ˋ˃ˁ˃˃ ʸ154.29 %˅˃ˁ˃˃ ʸ141.81 %141.67 %126.92 %133.35 %˄ˉ˃ˁ˃˃ ʸ˄ˇ˃ˁ˃˃ ʸ˄˅˃ˁ˃˃ ʸ˄ˈˁ˃˃ ʸ88.66 %

90.49 %

72.32 %

72.52 %

˄˃ˁ˃˃ ʸ12.71 %ˈˁ˃˃ ʸ17.91 %

13.81 %

22.60 %

13.97 %

79.37 %

˄˃˃ˁ˃˃ ʸˋ˃ˁ˃˃ ʸ16.82 %

16.52 %

17.24 %

16.40 %

16.29 %

ˉ˃ˁ˃˃ ʸˇ˃ˁ˃˃ ʸ˅˃ˁ˃˃ ʸ˃ˁ˃˃ ʸ˃ˁ˃˃ ʸ˅˃˃˅˅˃˃ˆ˅˃˃ˇ

˅˃˃ˈ

˅˃˃ˉ

ROE = Profit / Net Equity

Profit / Sales

Assets / Net Equity

Assets / Net Equity

2002

2003

2004

2005

2006

Profit / Sales

13.81 %

13.97 %

16.52 %

16.40 %

16.29 %

Sales / Assets

72.52 %

90.49 %

88.66 %

72.32 %

79.37 %

Assets / Net Equity

126.92 %141.67 %154.29 %141.81 %133.35 %ROE = Profit / Net Equity

12.71 %

17.91 %

22.60 %

16.82 %

17.24 %
126

Revenue evolution
120,000

104,932

CAGR : 21.73%

100,000

90,19187,45280,00074,20060,00047,78840,00020,000
0

2002

2003

Amount : US$ k

2004

2005

2006

Net Sales

Amount :US$ k

2002

2003

2004

2005

2006

Net Sales

47,78874,20087,452

90,191

104,932

Compound Annual Growth Rate : 21.73 %13R&D Expenditures
12,000CAGR : 21.89%

10,310 9,903

10,000

8,448

8,000

6,392

6,000

4,487

4,000
2,000
0
Amount :US$ k

2002

2003

2004

2005

2006

Amount : US$ k

2002

2003

2004

2005

2006

R&D Expenditures

4,487

6,392

8,448

10,3109,903

Compound Annual Growth Rate : 21.89%
147

Top 10 Customers / Top 10 Products
Amount : US$ kCustomers

Top 10 Customers

Products

Top 10 Products

NO. 1

7,066

6.73 %

Product #1

10,2019.72 %

NO. 2

5,974

5.69 %

Product #27,799

7.43 %

NO. 3

5,758

5.49 %

Product #3

5,313

5.06 %

NO. 4

4,254

4.05 %

Product #45,110

4.87 %

NO. 5

4,105

3.91 %

Product #54,236

4.04 %

NO. 6

3,773

3.60 %

Product #64,216

4.02 %

NO. 7

3,709

3.54 %

Product #73,986

3.80 %

NO. 82,915

2.78 %

Product #83,322

3.17 %

NO. 9

2,488

2.37 %

Product #93,288

3.13 %

NO. 102,470

2.35 %

Product #10

3,152

3.00 %

Others62,41959.49 %

Others54,30951.76 %

Total

104,932

100.00 %Total

104,932

100.00 %152006 2nd Half Financial Results, YoY
Amount : US$ k

2006 2nd-H

Net Sales

58,429100 %51,826

100 %

13 %

COGS

(32,068)(55)%(28,623)

(55)%

12 %

GP

26,36145 %

23,20345 %14 %Operating Expense(15,049)(26)%(14,240)

(27)%

6%

Operating Income

11,311

19 %

8,963

17 %

26 %1810%(28)(0)%

11,492

19 %

8,934

17 %

313

1%

931

2%

11,805

20 %

9,866

19 %

Net Non-op Items
Income before Tax
Income Tax
Net Income
Fully Diluted EPS(NT$)

1.91

2005 2nd-H

2.03

YoY %

29 %

20 %
(6)%
168

2005~06 Quarterly Revenue/Profit
8,000

35,00030,0006,000

25,00020,0004,000
15,00010,000

2,000

5,000
00ˈ
˅˃ ˃ˀˤ˄

˅˃˃ˈ ˀˤ˅ˆˈ ˀˤ˅˃ ˃ˇˈ ˀˤ˅˃ ˃

Amount : US$ k

Amount : US$k˅˃˃ˉ ˀˤ˅ˉ ˀˤ˅˃ ˃˄

Revenueˆˉ ˀˤ˅˃ ˃ˉ˅˃ ˃ˀ ˤˇ

Net Income2005-Q1

2005-Q2

2005-Q3

2005-Q4

2006-Q1

2006-Q2

2006-Q3

2006-Q4

Revenue

21,21917,14622,14029,686

22,844

23,66029,111

29,318Net Income

3,150

1,780

3,636

6,230

3,557

2,826

5,500

5,335
17

Dividends distribution
3.26

3.5

3.00
3
2.34

2.5
2
1.5

EPS
Cash
Stock

1.43
1.02

10.5
0˅˃˃˄˅˃˃˅

Year˅˃˃ˆ˅˃˃ˇCash˅˃˃ˈ

Stock

Total

2005

1.37

58 %

1.00

42 %

2.37

2004

1.57

55 %

1.26

45 %

2.83

2003

1.52

60 %

1.01

40 %

2.53

2002

0.79

44 %

0.99

56 %

1.78

2001

0.51

50 %

0.51

50 %

1.02189Products

Product Portfolio
Multimedia Product- Watch TV on NB solution- Analog TV Tuner- Hybrid TV Tuner- Digital TV Tuner- Digital Home Solution (ViiV(ViiV,, MCE & Vista)- External TV Tuner Box

Presentation Product- Document Camera

Network Video Product- Digital Video Surveillance2010Watch TV on NB solution
z Watch TV on Notebook

USB 2.0 Hybrid TV solution
Analog TV

USB 2.0 DTV solution

DVB-T

CardBus solution

Express Card

MiniPCI Solution

Hybrid Mini card

VCD\DVD Player21

External marketing trend• Multimedia Products– Strong demand in Notebook PCs: annual demand of75 million sets ( less than 5% of attachment rate ofTV Tuner in Notebook PCs )22112002

2003

2004

2005

2006

23

ሽ՗ൣ໴‫ݾ‬๬㶷ᄐ࠰㢸ΰJEITAαNotebook demands
Business ()Home ()24

12

ODM solution

Hybrid Mini cardHybrid Mini PCI

Hybrid DVB-T

Analog Worldwide

DVB-T Mini cardHybrid ATSC

Analog Worldwide

Hybrid DVB-T

DVB-H SDIO

DVB-H Mini card

Analog Worldwide Hybrid DVB-T

ATSC

DVB-T USB

Hybrid PCIe

DVB-T

25

MiniPCI TV Tuner card for NB

26

13

Top 10 NB Market Share27

ODM main customers

28

14Sony Notebook TV inside

29

Sony Notebook TV inside3015

Sony Desktop TV inside

RB Series - HomeLS1 Series - Home31

http://event.asus.com/2006/nb/fullline/mobiletv/eng/
3216

acer Aspire TV Inside

Aspire 9800/9810

Aspire 9520

Aspire 5650/5670

Aspire 9120

33

DELL Desktop

3417

DELL Desktop

35

Analog TV Tuner / PVRz Watch, Record & Enjoy TV / Video on PC

z Desktop PC Solution

AVerTV PVR PCI
H/W MPEG II,TV Tuner Cardz Notebook PC Solution

AVerTV Studio

AVerTV CardBus

AVerTV USB2.0

High-Quality TV Tuner Card

Notebook TV Tuner

USB2.0 TV Tuner
3618

PCI TV tuner card for desktop

3719Deadline of the digital TV broadcasting
Emerging digital TV broadcasting in the forthcoming years.
Area

Digital TV Broadcasting Standard
Terrestrial Cable

Satellite

Deadline ofAnalog TV
Terminated

USA

ATSC

Open Cable DSS, DVB-S 2008

Europe

DVB-T

DVB-C

DVB-S

2010-2015

Japan
TaiwanISDB-T
DVB-T

DVB-C
DVB-C

DVB-S
DVB-S

2010
2006

39

Digital TV Tunerz Watch Digital Terrestrial TV on PC

or

DVB-T & ATSC
Digital Terrestrial TV Tuner Cardz Watch Digital Satellite TV on PC

AVerTV DVB-S
Digital Satellite TV Tuner Card

4020

Hybrid TV Tuner Cardz Watch Digital Terrestrial and Analog TV on PC

MiniPCI Solution
Analog TV

EXPress Card Solution

DVB-T

CardBus Solution
VCD\DVD Player42

PCI Solution

21

AVerMedia TV card won TIA Award

http://www.intel.com/ca/pressroom/2005/0825b.htm

4422

Microsoft Windows Vista• Microsoft will launch Windows Vista at the beginning of 2007.
• Most significantly, Windows Vista includes all of the Windows
Media Center capabilities for turning your PC into an all-in-one
home entertainment center. Windows Media Center inWindows Vista provides new ways for you to enjoy your music,
photos, DVD movies. and record and watch your favorite TV
shows (even HDTV).

45

Windows OS vs PC Shipment

Santa Rosa4623

Microsoft Windows Vista• AVerMedia once again keeps ahead of competitors toobtain the approval of its TV Tuner Cards byMicrosoft for Windows Vista Premium.
• AVerMedia has developed many items for working on
Windows Vista to provide PC users the best
performance and solution for watching TV on PC.
VersionPriceTV Function

Windows Vista Business$ 299 (199)

X

Windows Vista Enterprisenot available for retail

X

Windows Vista Home Premium$ 239 (159)

V

Windows Vista Home Basic$ 199 ( 99)X

Windows Vista Ultimate$ 399 (259)V
47

Mobile TV Market•

Forecast by : Informa Telecoms and Media

48

24

Watch DVB-H TV Solution

South of Taiwan is start tobroadcast trial stage
AVerMedia DVB-H solution is49

25

External TV Tuner BOX
z Watch Digital Terrestrial TV on PC Monitor/TVor

AVerTV DVB-T STB5
Digital Terrestrial TV Set-top-Box

z Watch Analog TV / Video on PC Monitor

51

Portable Document Cameraz Display 3D Objects or Documents on Projector /Monitor / TV

AVerVision530
Digital Platform DocCam
w/Optical Zoom, Smart Focus

AVerVision110

AVerVision300i

AVerVision330

Gooseneck DocCam

Digital Portable DocCam

Digital Portable DocCamw/Optical Zoom, Smart Focus

52

26

DocCam Application

53

Portable Document Cameraz Advanced Features
DVI Output (AVerVision530/330/300i only)~ Connect to a high-end projector for higher bandwidth andclearer images.
USB & Card R/W Function (AVerVision530/330/330i only)~ Easily upload and download image files to and from your computer.

Supports Color/Mono/Negative~ Display various presentation effects.

Optical Zoom, Digital Zoom & Pan (AVerVision 330/530 only)
Smart Auto Focus System (AVerVision 330/530 only)
5427

DocCam Potential market size
• Market of Projectors: 30% of projectors will go toinstitutions every year, considering the sales data ofprojectors from 2004 to 2006, it will be around 1M to1.3M units a year as its potential market size.
• Number of schools: the maximum market size can bederived from number of schools. Take USA as an
example, there are 90,792 K-12 schools in the US with
about 48 millions students.
• If we assume each school has 20 classrooms and eachclassroom shall install one DocCam, the potential market
is 1.8 M units in total.
55

Top 10 wish list as selected byAmericans in education field

56

28

An Article about DocCam used in Seattle schools

57

Central Monitoring System Software

The AVerDiGi Central Monitoring System Software (CM3000)enables users toaccess and monitor multiple DVRs simultaneously for a wide range of applications.
Features include: instant notification on DVR latest status or events, supports remote
PTZ and I/O control for alarm events, up to quad monitor outputs, full remote DVR
control, etc.

5829

Network Video Surveillancez Advanced Features

E-Map~ Visualize the locations of each cameras,
sensors and relays through E-map.

Privacy Protection~ Exclude the private area from being recordedor monitored.

Intelligent Search~ Save searching time by using quick tracking
between different conditions in the marked zone.

Web/Server Based~ Get connected through an IP or domain nameanywhere.

Handy View
~ Instantly view the image on PDA.
59

Network Video Surveillance

NV Series

MP Series

Eyes Pro Series

Windows PVRs

EB 1304 Series

Standalone PVRs
60

30

Growth Drivers

Internal organization capability
Multimedia
Product•Culture•Technology•BrandPresentation
ProductNetwork Video
Product
6231

Culture• Core Value– Down-to-Earth•Culture– Value Creation•Technology– Self- Devotion•Brand– Service to Society• Humanity- Self Awareness / Transcendence / Honesty& Integrity

63ΓTechnology– Video conversion between analog and digital– Leading technology for TV tuners in the field ofNotebook PCs– Patents : 77 of patents being granted, 234 of patents
application in the process•Culture– Product awards•Technology•Brand6432Brand•MultiMedia products: Brand premium in certain
geographical areas, like Spain, Russia and East
Europe etc.
•DoCam: Distinguished as one of the firstmovers with strong presence in K12.

•Culture•Technology•Brand•Education market in the U.S. with brandrecognition inherited from the glamour of previous
product lines.

65Presentation Products Potential market size

• No statistic data investigating the market size ofDocCam.
– Market of Projectors: 30% of projectors will go to institutions
every year, considering the sales data of projectors from 2004 to2006, it will be around 1M to 1.3M units a year as its potential
market size.
– Number of schools: the maximum market size can be derived
from number of schools. Take USA as an example, there are
90,792 K-12 schools in the US with about 48 millions
students. If we assume each school has 20 classrooms and eachclassroom shall install one DocCam, the potential market is 1.8
M units in total.
6633

Quality & Environment Management
 ISO 14001 Environment Manage System- Lead – Free Process (by the end of 2006)
 ISO9001: 2000 Version Quality System
 OHSAS:18001
 Passed the Quality System Audit by first tier companies.

67

Q&A34