Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today
announced its financial results for the fiscal quarter ended
December 31, 2013 (the Company’s third quarter of fiscal 2014).
Net sales for the third quarter of fiscal 2014 were $20.5
million, up approximately 31% when compared to $15.6 million for
the corresponding quarter in fiscal 2013. Net sales for the third
quarter of fiscal 2013 excluded $5.0 million in revenues from our
EMS business segment that is now reflected in discontinued
operations. Net loss for the third quarter of fiscal 2014 was $0.7
million, or $0.22 per share, compared to a net income of $0.1
million, or $0.02 per share, for the third quarter of fiscal 2013.
Despite the increase in net sales, our gross profit margin
decreased significantly due to unit pricing declining faster than
we could reduce our material costs and labor productivity lagging
compensation costs. Additionally, in the third quarter of fiscal
2014, our general and administrative expenses increased $0.5
million, primarily due to our investment in the chip-on-board
operation for producing computer tablet camera modules.
Net sales for the nine months ended December 31, 2013 were $45.0
million, compared to $56.1 million in the corresponding nine-month
period in fiscal 2013. Net sales for the nine-month period in
fiscal 2013 excluded $11.0 million in EMS revenues now reflected in
discontinued operations. Net loss for the first nine months of
fiscal 2014 was $7.4 million, or $2.43 per share, compared to a net
income of $0.3 million, or $0.10 per share, for the first nine
months of fiscal 2013. Included in the net loss for the first nine
months of fiscal 2014 was $4.6 million of losses from discontinued
operations.
John C.K. Sham, the Company's President and Chief Executive
Officer, said: “As previously disclosed, increasing expenses,
including rising labor costs, downward pricing demands and a
weakening Chinese domestic market required the closure of our EMS
business. In connection with our exit from the EMS business, we
incurred $0.9 million in impairment charges, $0.9 million in
severance costs, and $0.2 million in provision for doubtful debts
for the nine-month period ended December 31, 2013. The closure of
our EMS business, while disappointing, allows us to concentrate
additional resources towards the further development of our
electronic components business as well as the pursuit of other
potential opportunities.”
Mr. Sham continued, “As part of our plans to improve our
profitability, we intend to lease the space and equipment that were
formerly used in the operation of our EMS business, together with
other excess manufacturing space, until we can achieve a more
productive utilization of this space."
Mr. Sham concluded, “We are continuing to explore and evaluate
potential opportunities to further expand our electronic components
business beyond camera modules for mobile phones and computer
tablets, but for any such expansion to be viable, low labor input
would need to be maintained which could prove difficult given the
issues with both the cost and availability of labor in the southern
part of China.”
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 Ended
December 31,
Nine Months Ended
December 31,
2013 2012 2013
2012 (unaudited) (unaudited)
(unaudited) (unaudited) Net sales $ 20,511 $
15,637 $ 44,973 $ 56,129 Cost of goods sold (18,579)
(13,639) (41,189) (48,043) Gross profit 1,932 1,998
3,784 8,086 Selling, general and administrative expenses (3,325)
(2,850) (9,097) (8,401) Other operating income (expense) -
- - - Operating income (loss) (1,393) (852)
(5,313) (315) Interest income, net 159 163 461 508 Other income
(expense), net 863 141 2,141 527 Income
(loss) from continuing operations before income taxes (371) (548)
(2,711) 720 Income tax expenses (133) 384
(163) 282 Income (loss) from continuing operations (504)
(164) (2,874) 1,002 Income (loss) from discontinued operations, net
of tax (185) 197 (4,595) (768) Net
income (loss) (689) 33 (7,469) 234 Net income (loss) attributable
to non-controlling interests 18 27 91
78 Net income (loss) attributable to shareholders $ (671) $ 60 $
(7,378) $ 312 Basic earnings (loss) per common share $
(0.22) $ 0.02 $ (2.43) $ 0.10 Diluted earnings (loss) per
common share $ (0.22) $ 0.02 $ (2.43) $ 0.10 Basic weighted
average number of shares outstanding 3,043 3,040
3,041 3,039 Diluted weighted average number of
shares outstanding 3,043 3,040 3,041
3,039
GLOBAL-TECH ADVANCED INNOVATIONS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United
States dollars)
December 31,2013
March 31,2013
(unaudited) (audited) ASSETS Current assets:
Cash and cash equivalents $ 15,701 $ 32,385 Time deposits 13,293 -
Restricted cash 7,754 14,592 Available-for-sale investments 1,049
17 Accounts and bills receivable 23,085 19,714 Inventories 7,531
5,392 Prepaid expenses 206 181 Deposits and other assets 2,519
5,044 Amount due from a related party 13 19 Total
current assets 71,151 77,344 Interests in jointly-controlled
entities - - Property, plant and equipment, net 28,889 26,529 Land
use rights, net 3,036 3,027 Deposits paid for purchase of property,
plant and equipment 268 280 Available for sales investments
- 1,045 Total assets $ 103,344 $ 108,225
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Short-term bank loans 4,212 4,826 Accounts payable 13,968 7,135
Customer deposits 1,284 1,331 Accrued salaries, allowances and
other employee benefits 3,932 4,368 Other accrued liabilities 5,158
9,644 Income tax payable 4,652 4,659 Total current
liabilities 33,206 31,963 Deferred tax liabilities 5
5 Total liabilities 33,211 31,968
Shareholders' equity:
Common stock, par value $0.04 per share;
12,500,000 shares authorized; 3,233,814 and 3,230,814shares issued
as of December 31 and March 31, 2013
129
129
Additional paid-in capital 85,076 85,053 Statutory reserves 1,238
1,238 Accumulated deficit (23,311) (15,933) Accumulated other
comprehensive income 12,031 10,710 Less: Treasury stock, at cost,
189,587 shares as of December 31 and March 31, 2013 (4,663)
(4,663) Total Global-Tech Advanced Innovations Inc.
shareholders’ equity 70,500 76,534 Non-controlling interests
(367) (277) Total equity 70,133 76,257 Total
liabilities and shareholders’ equity $ 103,344 $ 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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