DELTA NETWORKS, INC.

(incorporated in the Cayman Islands with limited liability)
(Stock code: 722)
ANNOUNCEMENT
OF UNAUDITED QUARTERLY RESULTS
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007
QUARTERLY RESULTS

The board of directors (the “Board”) of Delta Networks, Inc. (the “Company”) is
pleased to announce the unaudited results of the Company and its subsidiaries for the
nine months ended 30 September 2007 together with comparative figures for the
corresponding period of last year, as follows:
Unaudited condensed consolidated income statement
For the 9 months ended
30 September
For the 3 months ended
30 September
2007 2006 2007 2006

(Unaudited) (Unaudited) (Unaudited) (Unaudited)
US$’000 US$’000 US$’000 US$’000
Revenue 304,821 270,921 94,735 85,520
Cost of sales (252,354) (227,531) (78,127) (72,894)
Gross profit 52,467 43,390 16,608 12,626
Other (loss)/gain - net 2,110 1,158 (455) (1,523)
Other income 2,334 1,533 594 1,533
Other expense (980) (12) (817) (12)
General and
administration
expense (9,247) (6,513) (2,839) (1,717)
Selling expenses (10,958) (8,555) (3,212) (2,642)
Research and
development expense (20,547) (14,291) (5,310) (4,053)
Profit from operations 15,179 16,710 4,569 4,212
—1—

For the 9 months ended
30 September
For the 3 months ended
30 September
2007 2006 2007 2006

(Unaudited) (Unaudited) (Unaudited) (Unaudited)
US$’000 US$’000 US$’000 US$’000
Interest expense (8) (47) (1) (16)
Interest income 4,457 1,400 2,501 621
Net foreign exchange
transaction gain 902 314 384 314
Profit before income
tax 20,530 18,377 7,453 5,131
Income tax expense (940) (484) (329) (1,528)
Profit for the period 19,590 17,893 7,124 3,603
Attributable to:
Equity holders of the
Company 19,523 17,865 7,108 3,602
Minority interest 67 28 16 1
Earnings per share for
profit attributable to
the equity holders of
the Company during
the year
- Basic(Cents) 2.15 2.14 0.80 0.43
- Diluted(Cents) 2.03 2.10 0.76 0.42
— 2 —

Unaudited condensed consolidated balance sheet
As at
30 September
2007

As at
31 December
2006

(Unaudited) (audited)
US$’000 US$’000
ASSETS

Non-current assets
Property, plant and equipment 15,862 12,950
Deferred income tax assets 3,049 2,591
Available-for-sale financial assets — 774
Land use right 287 292
19,198 16,607

Current assets
Inventories 26,410 28,042
Trade and other receivables 74,181 59,421
Prepayments and other assets 4,906 2,443
Available-for-sale financial assets — 214
Derivative financial instruments 2,552 814
Cash and cash equivalents 238,494 82,707
346,543 173,641

Total assets 365,741 190,248
EQUITY

Capital and reserves attributable to equity holders of the
Company
Shares capital 59,840 41,880
Contributed reserves 26,635 17,274
Statutory reserves 5,092 3,907
Share-based payment reserves 8,587 5,174
Share issue reserves (7,464) —
Share premium 123,630 —
Retained earnings 55,091 36,754
271,411 104,989

Minority interests 257 190
Total equity 271,668 105,179
LIABILITIES

Non-current liabilities
Provisions and other liability 3,663 4,802
Retirement benefit obligation 3,979 3,795
7,642 8,597

— 3 —

As at
30 September
2007

As at
31 December
2006

(Unaudited) (audited)
US$’000 US$’000
Current liabilities
Provisions and other liability 4,551 1,982
Trade and other payables 79,616 66,593
Derivative financial instruments 1,173 1,069
Borrowings, unsecured — 6,000
Income tax payables 1,091 828
86,431 76,472

Total liabilities 94,073 85,069
Total equity and liabilities 365,741 190,248
— 4 —

Unaudited condensed consolidated statement of changes in equity
Attributable to equity holders of the Company US$’000
Share
Capital
Retained
Earnings
(Accumulated
deficit)
Contributed
Reserves
Share-
based
Payment
Reserves
Fair-value
Reserves
Share
Issuance
Cost Subtotal
Minority
Interest Total
Balance at 1 January 2006 41,880 15,187 11,231 — (60) — 68,238 95 68,333
Fair value loss, net of tax:
Available-for-sale investments ————60 — 60 — 60
Net profit for the period — 17,865 ————17,865 28 17,893
Total recognized income for the 9
months ended 30 September
2006 — 17,865 ——60 — 17,925 28 17,953
MSSS scheme reward ———278 ——278 — 278
EIS reward 6,042 3,046 9,088 — 9,088
Balance at 30 September 2006 41,880 33,052 17,273 3,324 ——95,529 123 95,652
Attributable to equity holders of the Company US$000
Share
Capital
Retained
Earnings
(Accumulated
Deficit)
Contributed
Reserves
Share-
based
Payment
Reserves
Fair- value
Reserves
Share
Premium
Share
Issuance
cost Subtotal
Minority
Interest Total
Balance at 1
January 2007 41,880 40,661 17,274 5,174 ———104,989 190 105,179
Increase in
authorized
share capital 11,760 — ———123,630 (7,464) 127,926 — 127,926
Employee bonus — (1) — — ———(1) — (1)
Net profit for
the period — 19,523 — — ———19,523 67 19,590
Total
recognized
income for
the 9 months
ended 30
September
2007 — 19,523 — — ———19,523 67 19,590
MSSS scheme
reward ———2,467 ———2,467 — 2,467
EIS reward 6,200 — 9,361 946 16,507 — 16,507
Balance at 30
September
2007 59,840 60,183 26,635 8,587 — 123,630 (7,464) 271,411 257 271,668
— 5 —

Unaudited condensed consolidated cash flow statement
For the 9 months ended
30 September
2007 2006

(Unaudited) (Unaudited)
US$000 US$000
Net cash generated from operating activities 32,230 35,423
Net cash used in investing activities (2,356) (3,304)
Net cash generated from / (used in) financing
activities 125,261 (2,000)
Net increase in cash and cash equivalents 155,135 30,119
Cash and cash equivalents at the beginning of the
period 82,707 31,507
Foreign exchange adjustment 652 611
Cash and cash equivalents at the end of the period 238,494 62,237
Segment information-by product
For the
9 months ended
30 September
2007

For the
9 months ended
30 September
2006

(Unaudited) (Unaudited)
US$000 % US$000 %
Broadband Wireless 45,918 15% 45,673 17%
LAN-Carrier 47,231 15% 37,561 14%
LAN-Enterprise 123,513 41% 100,460 37%
LAN-SOHO 72,772 24% 64,787 24%
LAN-Others 6,692 2% 11,612 4%
Others 8,695 3% 10,828 4%
Total Revenue 304,821 100% 270,921 100%
— 6 —

FINANCIAL REVIEW
For the three months ended 30 September 2007, revenue increased by approximately
US$9.22 million, representing a 10.78% growth, to approximately US$94.74 million
from US$85.52 million of the same period last year. For the nine months ended 30
September 2007, total revenue amounted to approximately US$304.82 million,
representing a 12.51% growth from US$270.92 million of the same period last year.
The double-digit percentage growth in revenue is mainly due to the increased
shipments our to existing customers and shipments to our new customers.
Gross margin for the nine months ended 30 September 2007 improved significantly
to 17.21% from 16.02% of the same period last year. Gross margin improved from
14.76% for the three months ended 30 September 2006 to 17.53% for the same period
in 2007, representing a 18.77% increase. The improvement in gross margin is mainly
due to the manufacture and sale of higher margin products including LAN products
and the continuous cost cutting efforts in material procurement.
Net profit for the nine months ended 30 September 2007 was approximately
US$19.59 million, compared to the net profit for the period in 2006 of US$17.89
million, representing a growth of 9.50% on a year on year basis. There is a significant
growth in the net profit for the three months ended 30 September 2007 from US$3.60
million for the three months ended 30 September 2006 to approximately US$7.12
million for the same period this year, representing a growth of 97.78%. The
satisfactory improvement in net profit is mainly due to the sale of higher margin
products and better cost control as mentioned above and the increase in other income.
— 7 —

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Financial impact of share-based compensation
As shown in the following table, without taking into account the share-based
compensations, the gross profit margin and percentage of profit from operations to
revenue would improve from 15% and 5.7% for the three months ended 30 September
2006 to 18% and 10.8% for the three months ended 30 September 2007, respectively.
For the 3 months ended
30 September
2007 2006

With
share-based
compensation
Without
share-based
compensation
With
share-based
compensation
Without
share-based
compensation
Gross Profit 17.5% 18.0% 14.8% 15%
Operation expenses 12% 9.2% 9.8% 8.5%
Profit from
operations 7.5% 10.8% 4.2% 5.7%
As shown in the following table, without taking into account the share-based
compensations, the gross profit margin and percentage of profit from operations to
revenue would improve from 16.6% and 10.1% for the nine months ended 30
September 2006 to 18.3% and 12.7% for the nine months ended 30 September 2007,
respectively.
For the 9 months ended
30 September
2007 2006

With
share-based
compensation
Without
share-based
compensation
With
share-based
compensation
Without
share-based
compensation
Gross Profit 17.2% 18.3% 16.0% 16.6%
Operation expenses 13.4% 8.2% 10.8% 7.9%
Profit from
operations 6.4% 12.7% 6.6% 10.1%
Details of our share-based compensations are set out in the “Financial Information”
section of our prospectus dated 22 June 2007.
— 8 —

BUSINESS OUTLOOK
Ethernet has become more and more widely used in the global communications
backbone and in Metro Area Networks, and is available to a much wider class of users
over fiber, copper, cable, passive optical networks (PON) and wireless networks.
According to a study conducted by Infonetics Research in 2007, spending on Metro
and carrier Ethernet equipment, including Ethernet access devices (EAD), enterprise-
class Ethernet Switches and routers, carrier Ethernet switches and routers, Ethernet-
based passive optical networks (EPON), and Ethernet over fiber, copper and cable,
is expected to increase from US$9.2 billion in 2006 to over US$16 billion in 2010.
In addition to pursuing organic growth, we will continue to explore external
opportunities with a view to expanding our business at a faster pace. We are also
currently identifying suitable targets for strategic mergers, acquisitions and joint
venture cooperation.
GENERAL

This announcement is made pursuant to Rule 13.09 of the Rules Governing the
Listing of Securities on
By the Order of the Board
Liang Ker Uon, Sam
Chairman
Taipei, Taiwan
27 October 2007
As at the date of this announcement, the executive directors of the Company are Mr. Liang Ker Uon,
Sam and Mr. Cheng An, Victor; the non-executive directors are Mr. Cheng Chung Hua, Bruce and Mr.
Hai Ing-Jiunn, Yancey; the independent non-executive directors are Mr. Zue Wai To, Victor, Mr. Liu
Chung Laung and Mr. Shen Bing.

— 9 —