Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today
announced its financial results for the quarter ended September 30,
2013 (the Company’s second quarter of fiscal 2014). Additionally,
the Company announced the closure of its EMS business.
Net sales for the second quarter of fiscal 2014 were $12.6
million, compared to $26 million for the corresponding quarter in
fiscal 2013. This decrease in net sales is primarily attributable
to sharp declines in sales in our EMS business which, as previously
disclosed, continues to be adversely affected by a slowing Chinese
domestic market, high turnover and rapidly decreasing margins. Net
loss for the second quarter of fiscal 2014 was $5.2 million, or
$1.70 per share, compared to a net income of $0.2 million, or $0.07
per share, for the second quarter of fiscal 2013. Net losses for
the second quarter of fiscal 2014 included non-cash impairment
charges of $0.9 million, provision for doubtful debts of $0.2
million and severance expenses of $0.9 million incurred in
connection with reductions in workforce within our EMS segment. Of
the total charges/expenses listed above, $0.6 million was reflected
in cost of goods and $1.4 million in SG&A.
Net sales for the six months ended September 30, 2013 were $27.4
million, compared to $46.5 million in the corresponding six-month
period in fiscal 2013. Net loss for the first six months of fiscal
2014 was $6.7 million, or $2.21 per share, compared to a net income
of $0.3 million, or $0.08 per share, for the first half of fiscal
2013.
As previously disclosed, the results of the Company’s EMS
business have been adversely affected by rising labor costs, high
turnover and downward pricing demands from major customers. Given
the weakening Chinese domestic market, management felt that these
issues were likely to continue, if not worsen, and that the
decision to close the EMS business was necessary to avoid incurring
further losses. John C.K. Sham, the Company's President and Chief
Executive Officer, said: “After careful review and consideration of
this quarter’s results, it became clear that this business was no
longer economically viable for us in our current location.”
Mr. Sham continued, “Our electronic components customers,
particularly our largest CCM customer, recently rebalanced their
inventory which not only impacted our volume, but also the mix of
our camera modules. Production from our new COB (chip-on-board)
production lines increased, but many shipments were delayed until
the next fiscal quarter."
Mr. Sham concluded, “We are continuing to evaluate strategic
alternatives, which include the potential leasing of our EMS
facilities, which we believe could generate more positive results
than would be possible from continuing current operations. Despite
disappointing results from our EMS business, we remain committed to
our goal of enhancing shareholder value and are diligently
evaluating other opportunities. We expect improvement in the
operating results of our electronic components business in the
upcoming quarter.”
Global-Tech Advanced Innovations Inc. is a holding company,
owning subsidiaries that manufacture and market a diversified
portfolio of products, such as complementary metal oxide
semiconductor (CMOS) and camera modules (CCMs). The primary focus
of its subsidiaries is to develop and market high-quality products
for the communications industry in China and export such products
to markets in other countries throughout the world.
Except for historical information, certain statements contained
herein are forward-looking statements that are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," “should,” "estimates," or variations
of such words and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are
subject to risks and uncertainties, including but not limited to,
the impact of competitive products and pricing, demand for new and
existing products in our core business, the financial condition of
the Company’s customers, product demand and market acceptance
especially of our new products, the success of new product
development especially in the area of cellular phone components and
solutions, compact camera modules and other pending projects,
reliance on material customers, suppliers and key strategic
alliances, the terms and conditions of customer contracts and
purchase orders, availability and cost of raw materials, the timely
and proper execution of certain business plans, including the plan
to diversify and transform a portion of manufacturing capacity to
higher-value, technology-oriented products, currency fluctuations,
including the revaluation of the Chinese Renminbi, the imposition
by China’s trading partners of economic sanctions and/or protective
tariffs on Chinese manufactured goods, uncertainties associated
with investments, the regulatory environment, fluctuations in
operating results, the impact of changing global, political and
economic conditions and other risks detailed from time to time in
the Company's filings with the U.S. Securities and Exchange
Commission including its most recent Report on Form 20-F. The
Company does not undertake to update its forward-looking
information, or any other information contained or referenced in
this press release to reflect future events or circumstances.
GLOBAL-TECH APPLIANCES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts expressed in thousands of United
States dollars, except per share data)
Three Months EndedSeptember
30,
Six Months EndedSeptember
30,
2013 2012 2013
2012 (unaudited) (unaudited)
(unaudited) (unaudited) Net sales $ 12,614 $
26,040 $ 27,413 $ 46,532 Cost of goods sold (13,314 )
(22,066 ) (27,216 ) (39,516 ) Gross profit (loss)
(700 ) 3,974 197 7,016 Selling, general and administrative expenses
(5,079 ) (4,000 ) (8,562 ) (7,452 ) Other operating income
(expense) - - - -
Operating (loss) (5,779 ) (26 ) (8,365 ) (436 ) Interest
income, net 170 210 302 345 Other income (expense), net 461
96 1,313 394
Income (loss) from continuing operations
before incometaxes
(5,148 ) 280 (6,750 ) 303 Income tax expenses (66 )
(102 ) (30 ) (102 ) Net income (loss) (5,214 ) 178
(6,780 ) 201 Net income (loss) attributable to non-controlling
interests 47 25 73
51 Net income (loss) attributable to shareholders $ (5,167 )
$ 203 $ (6,707 ) $ 252 Basic earnings (loss)
per common share $ (1.70 ) $ 0.07 $ (2.21 ) $ 0.08
Diluted earnings (loss) per common share $ (1.70 ) $ 0.07
$ (2.21 ) $ 0.08 Basic weighted average number
of shares outstanding 3,040 3,039
3,040 3,039 Diluted weighted
average number of shares outstanding 3,040
3,039 3,040 3,039
GLOBAL-TECH ADVANCED INNOVATIONS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United
States dollars)
September 30, 2013 (unaudited)
(audited) ASSETS Current assets: Cash and cash
equivalents $ 15,975 $ 32,385 Time deposits 19,601 - Restricted
cash 4,079 14,592 Available-for-sale investments - 17 Accounts and
bills receivable 13,655 19,714 Inventories 9,114 5,392 Prepaid
expenses 198 181 Deposits and other assets 1,523 5,044 Amount due
from a related party 13 19 Total
current assets 64,158 77,344 Interests in jointly-controlled
entities - - Property, plant and equipment, net 29,424 26,529 Land
use rights, net 3,022 3,027 Deposits paid for purchase of property,
plant and equipment 178 280 Available for sales investments
1,048 1,045 Total assets $ 97,830 $
108,225
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Short-term bank loans 2,616 4,826 Accounts
payable 10,083 7,135 Customer deposits 1,169 1,331 Accrued
salaries, allowances and other employee benefits 3,575 4,368 Other
accrued liabilities 5,574 9,644 Income tax payable 4,522
4,659 Total current liabilities 27,539 31,963
Deferred tax liabilities 5 5 Total
liabilities 27,544 31,968
Shareholders' equity:
Common stock, par value $0.04 per share;
12,500,000 shares authorized; 3,230,814 shares issuedas of
September 30 and March 31, 2013
129
129
Additional paid-in capital 85,062 85,053 Statutory reserves 1,238
1,238 Accumulated deficit (22,640 ) (15,933 ) Accumulated other
comprehensive income 11,510 10,710 Less: Treasury stock, at cost,
189,587 shares as of September 30 and March 31, 2013 (4,663
) (4,663 ) Total Global-Tech Advanced Innovations Inc.
shareholders’ equity 70,636 76,534 Non-controlling interests
(350 ) (277 ) Total equity 70,286
76,257 Total liabilities and shareholders’ equity $ 97,830
$ 108,225
Global-Tech Advanced Innovations Inc.Cecilia Au-Yeung,
852-2814-0601 (Hong
Kong)investorrelations@global-webpage.comhttp://global-webpage.newshq.businesswire.com
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