Global-Tech Advanced Innovations Announces Continued Profitability for Third Quarter of Fiscal 2012

Global-Tech Advanced Innovations Inc. (NASDAQ:GAI - News) today announced its financial results for the fiscal quarter ended December 31, 2011 (the Company’s third quarter of fiscal 2012).

Net sales for the third quarter of fiscal 2012 were $44.2 million, an increase of approximately 81% when compared to $24.4 million for the corresponding quarter in fiscal 2011. Net sales of electronic components and revenues from electronic manufacturing services (EMS) increased approximately 33% and 19%, respectively, compared to the corresponding quarter in fiscal 2011, while sales of home appliances (primarily floor care products) nearly tripled due to the Company’s planned exit from this business segment in the fourth quarter of fiscal 2012 and the related increase in purchase orders from customers seeking to increase their inventory.

Net income for the third quarter of fiscal 2012 was $3.3 million, or $1.09 per share, compared to a net loss of $1.5 million, or $0.48 per share, for the third quarter of fiscal 2011.

Net sales for the nine months ended December 31, 2011 were $103.1 million, up approximately 37% when compared to $75.2 million in the corresponding nine-month period in fiscal 2011. In the first nine months of fiscal 2012, net sales of home appliances, electronic components and EMS revenues increased approximately 60%, 25% and 5%, respectively, compared to the corresponding period in fiscal 2011. Net income for the first nine months of fiscal 2012 was $2.9 million, or $0.97 per share, compared to a net loss of $1.5 million, or $0.51 per share, for the first nine months of fiscal 2011.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “Our third quarter is typically our strongest and we were pleased with the improved financial performance in several areas of our business. Improved results in the third quarter of fiscal 2012 were due in part to sales increases and improved profit margins in the Company’s three business segments, as well as declining commodity prices in the second half of calendar 2011 and the easing of inflationary pressures in China. These factors, while contributing positively to the Company’s third quarter operating results, are likely to change in the near future.”

Mr. Sham continued, “As previously announced, we are nearing completion of our exit from the home appliance business and, with the cooperation from our customers, were able to manufacture additional inventory during the transitional period to ensure a smooth phase out process for both the Company and its customers. As stated above, the increase in purchase orders from customers seeking to increase inventory positively impacted our financial results for this quarter.”

Mr. Sham concluded, “Our assets, particularly our liquid resources, continue to increase and, as of December 31, 2011, on a per share basis, far exceed the current trading price of the Company’s stock. We believe we can use resources previously dedicated to the home appliance segment more effectively by reallocating these resources and the efforts of the Company’s management and employees towards business opportunities that we believe will provide better margins and positive returns on investment.”

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 North America, Europe, and 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 ADVANCED INNOVATIONS 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,
        2011           2010         2011           2010
        (unaudited)         (unaudited)         (unaudited)         (unaudited)
                                 
Net sales         $     44,221             $     24,404             $     103,122             $     75,190    
Cost of goods sold               (36,810     )               (22,054     )               (89,275     )               (66,583     )
Gross profit             7,411                 2,350                 13,847                 8,607    
Selling, general and administrative expenses             (4,113     )             (3,851     )             (11,612     )             (11,778     )
Other operating income (expense)               -                     1                     29                     1,114      
Operating income (loss)             3,298                 (1,500     )             2,264                 (2,057     )
Interest expense             (8     )             (103     )             (141     )             (200     )
Interest income             57                 137                 315                 370    
Other income, net               134                     97                     742                     591      
Income (loss) from operations before income taxes             3,481                 (1,369     )             3,180                 (1,296     )
Provision for income taxes               (147     )               (82     )               (280     )               (253     )
Net income (loss)             3,334                 (1,451     )             2,900                 (1,549     )
Net income (loss) attributable to non-controlling interests               (16     )               -                     36                     -      
Net income (loss) attributable to shareholders         $     3,318               $     (1,451     )         $     2,936               $     (1,549     )
                                 
Basic and diluted earnings (loss) per common share         $     1.09               $     (0.48     )         $     0.97               $     (0.51     )
                                 
Basic and diluted weighted average number of shares outstanding               3,039                     3,039                     3,039                     3,039      
                                                 
 
GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)
           
       
December 31,
2011
         
March 31,
2011
        (unaudited)         (audited)
                 
ASSETS                
Current assets:                
Cash and cash equivalents
        $     35,420             $     19,205    
Time deposits             -                 1,534    
Restricted cash             2,876                 19,461    
Available-for-sale investments             9,005                 7    
Accounts and bills receivable, net             36,033                 35,632    
Inventories             8,615                 10,849    
Prepaid expenses             138                 282    
Deposits and other assets             1,196                 1,712    
Legal claims receivable             -                 16    
Amount due from a related party             20                 29    
Amount due from a jointly-controlled entity               -                     14      
Total current assets             93,303                 88,741    
Interests in jointly-controlled entities             -                 -    
Property, plant and equipment, net             22,776                 25,013    
Land use rights, net             3,112                 3,061    
Deposits paid for purchase of property, plant and equipment             20                 112    
Available for sales investments               2,998                     3,009      
Total assets         $     122,209               $     119,936      
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
Short-term bank loans             4,000                 12,585    
Accounts payable             14,268                 10,353    
Bills payable             2,233                 1,279    
Temporary receipts             640                 821    
Accrued salaries, allowances and other employee benefits             6,122                 5,608    
Accrual for loss contingencies             -                 31    
Other accrued liabilities             7,686                 7,576    
Income tax payable               5,350                     5,318      
Total current liabilities             40,299                 43,571    
Deferred tax liabilities               28                     28      
Total liabilities               40,327                     43,599      
Shareholders' equity:
   
 
   
 
   
 
   
 
Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,229,314 shares issued as of December 31 and March 31, 2011            
129
               
129
   
Additional paid-in capital             84,778                 84,752    
Accumulated deficit             (8,165     )             (11,101     )
Accumulated other comprehensive income             10,013                 7,395    
Non-controlling interests             (210     )             (175     )
Less: Treasury stock, at cost, 189,587 shares as of December 31 and March 31, 2011               (4,663     )               (4,663     )
Total shareholders’ equity               81,882                     76,337      
Total liabilities and shareholders' equity         $     122,209               $     119,936      

Contact:
Global-Tech Advanced Innovations Inc.
Cecilia Au-Yeung, (852) 2814-0601 (Hong Kong)
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.businesswire.com/cnn/gai.shtml

 

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