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Lextar Electronics Corp. (“Lextar” or the “Company) (TAIEX: 3698) announced its results for the third quarter of 2013. The Company reported consolidated revenues of NT$ 3,696 million, slightly down 3.9% from the previous quarter and up 27.7% over year. Consolidated net profits were NT$ 176 million, EPS NT$ 0.35. The consolidated revenues of the first three quarters in 2013 totaled NT$ 10,429 million, consolidated gross margin was 14%, consolidated net profits were NT$ 915 million, EPS NT$ 1.82.

3Q2013 Result Highlights：

• 	Revenues were NT$ 3,696 million, down 3.9 % QoQ

• 	Net profits were NT$ 176 million

• 	Gross margin was 15 %, slightly down 2 % QoQ
  	Basic EPS were NT$ 0.35

According to Lextar’s CFO B.Y. Chang, 3Q revenues dipped 3.9%, suggesting the company entered an off season earlier than expected. Sales were dragged by, first, Chinese backlight clients’ inventory adjustments, leaving weaker demands in 3Q thus causing customers’ higher stocking level. Second, tablet substitution for notebook devices was on the rise at a faster pace. And third, the pricing decline continued to cause pressure to the company. However, by implementing adequate adjustments for cost minimization throughout its vertically-integrated business model, including LED epi, chip, packaging, modules and fixtures, the company presented gross margin that was in line with guidance, and kept its days of inventory steady at 64 days, indicating a well performance on resource optimization.

Lextar gained business momentum in 3Q as it captured orders from Japanese top-tier mobile brands, with its LED package with high efficiency and low power consumption. 3Q sales were also driven by its growing business of direct-lit backlight for TVs, which accounted for half of total revenues in the TV sector in 3Q, with further uptrend in Q4. Lextar will therefore present an advanced LED solution for even slimmer direct-lit TVs, that is incorporated with minimized light mixing area (by 1.5cm, OD 15) in the backlight module, utilizing Lextar’s unique optical design capability. On the other hand, Lextar has just received recognitions both from worldwide customers visiting Hong Kong International Lighting Fair (Autumn Edition) for its latest high efficiency omni-directional LED light tube, and from Japan Good Design 2013 for its dual emitting LED pendant lamp. The eye-catching light tube featuring ultra high efficiency of 200 lumens per watt, distributing 360 degree of lighting area, demonstrated Lextar’s determination on advanced technology and product development. For customers looking for LED modules, the COB “Nimbus” series is on top of the most common inquires, while 3030 and 5050 are the new alternatives for high-voltage packaging products.

Lextar has seen results generated by the onward integration of facilities and production in Taiwan, after the transaction with Wellypower earlier this year in Q1. The company also sees emerging synergy benefits from current integration in Suzhou, China with strengthened business and supply chain management capability in China.