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.”