Falcon ties up with Compositron of the U.S.

Taipei, May 14, 2004 (CENS)--Falcon Machine Tools Co., Ltd., Taiwan's largest manufacturer of computerized numerically controlled (CNC) grinding machines, has started volume production for CNC grinding machines through molecular decomposition process (MDP), in cooperation with Compositron Corp. of the U.S.

Falcon also announced it has obtained exclusive sales agent right for the distribution of the new machines in the Asian market. The company plans to introduce the brand-new product sometime in June.

Founded in 1987, Falcon has been involved in the development and production of milling machines, lathes, and machining centers, in addition to grinding machines. Currently the company uses 'Chevalier' brand to distribute machines to more than 70 nations worldwide.

Hsu Chao-kuei, vice president of Falcon, said the new products are mainly sold in the U.S. medical supply market and there will be huge business opportunities in the mainland Chinese market.

Hsu noted common-type grinding machines are priced based on market competitiveness while the MDPs are priced according to customers' production value. Sales of consumables will follow in the wake of the sales of MDPs.

With 40 American customers, Falcon anticipated it would see sales of consumables for MDPs reach between US$600,000 and US$800,000 per year.

Falcon began making profits last year, reversing from big operating loss in the previous year. The company boasted it earned NT$17 million (US$507,460) on sales of NT$1.075 billion (US$32.08 million) last year. Thanks to the continued introduction of new products, the company will see substantial growth in earnings this year.

The company projects sales of NT$1.3 billion (US$38.8 million) for this year. An institutional investor estimated Falcon will obtain over NT$2 (US$0.06) in earnings per share this year.

Falcon said it raked in total revenue of NT$285 million (US$8.5 million) in the first quarter of this year, up 35% from the corresponding period of last year. The company boasted it has received NT$500 million (US$14.92 million) worth of orders, which will its keep production lines busy through the end of July.

The company said it completed a second-phase expansion in its mainland production facility in the beginning of this year. The mainland facility will see sales reach RMB120 million (US$3.58 million) this year, up 65% from last year's RMB72 million (US$2.14 million).