Global-Tech Advanced Innovations Announces Fiscal 2012 Results

Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced its financial results for the fiscal year ended March 31, 2012.

Net sales for fiscal 2012 were $69.7 million, an increase of approximately 21% when compared to net sales of $57.5 million for fiscal 2011. Net income for fiscal 2012 was $1.4 million, or 0.46 per share, compared to a net loss of $4.0 million, or $1.32 per share, in fiscal 2011. Net sales as reported in the Company’s Annual Report on Form 20-F for fiscal 2012 and fiscal 2011 exclude sales for the home appliances segment of approximately $53.9 million and $40.0 million, respectively, which is reflected as a discontinued operation following the Company’s exit from the home appliances business in January 2012.

Our net liquid assets increased over $12 million in fiscal 2012 to $43.4 million, primarily due to a reduction in working capital requirements following the Company’s exit from the home appliances business. Net liquid assets (a non-GAAP measure) is defined as cash and cash equivalents plus time deposits plus restricted cash plus available-for-sale investments less short-term bank loans (a GAAP reconciliation has been provided below). We believe the net liquid assets measure provides us, as well as our investors, additional information about our financial strength and available resources that, along with earnings, is helpful in understanding our business and potential for future growth.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “Major strides were made in fiscal 2012 towards the Company’s transition and transformation from primarily a manufacturer and exporter of home appliances to the production and supply of electronic components and the provision of electronic manufacturing services (EMS) to China’s telecommunications market. We believe these types of business present great opportunities for continued growth and success.”

Mr. Sham continued, “Declining margins in the home appliances business required us to diversify and refocus our efforts towards more profitable businesses. This transition has been accomplished thus far through the utilization of internal resources rather than long-term borrowing, which we believe has positioned the Company for future growth.

Mr. Sham concluded, “We are excited about the future prospects of our electronic components and EMS businesses and are in the process of exploring new business opportunities, including disposable medical instruments, which we believe will enhance shareholder value in the long term.”

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 United States dollars, except per share data)
 
Year Ended
March 31,
2012   2011   2010
(audited) (audited) (audited)
 
Net sales $ 69,652,705   $ 57,468,866   $ 48,039,625  

Cost of goods sold
  (59,008,973 )   (50,403,138 )   (39,722,076 )
Gross profit 10,643,732 7,065,728 8,317,549
Selling, general and administrative expenses (10,612,458 ) (11,317,767 ) (8,352,835 )
Other operating income , net   28,589     1,137,580     179,565  
Operating profit (loss) 59,863 (3,114,459 ) 144,279
Interest income, net 95,477 536,187 276,782
Other income, net   1,116,279     370,274     309,716  
Income (Loss) from continuing operations before income taxes 1,271,619 (2,207,998 ) 730,777
Income tax expense   (1,228,625 )   (204,122 )   (389,135 )
Income (Loss) from continuing operations 42,994 (2,412,120 ) 341,642
Income (Loss) from discontinuing operations, net of tax   1,374,342     (1,775,879 )   3,124,689  
Net income (loss) 1,417,336 (4,187,999 ) 3,466,331
Net income (loss) attributable to non-controlling interests   (6,659 )   175,028     -  

Net income (loss) attributable to shareholders of Global-Tech Advanced Innovations Inc.

$

1,410,677
 

$

(4,012,971

)

 

$

3,466,331
 
 
 
 
Basic and diluted earnings (loss) of common share $ 0.46   $ (1.32 ) $ 1.14  
 

Basic and diluted weighted average number of shares of common stock
  3,039,727     3,039,454     3,037,969  
GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed of United States dollars)
   
March 31,  

March 31,
2012

2011
(audited) (audited)

ASSETS
Current assets:
Cash and cash equivalents $ 39,792,733 $ 19,205,184
Time deposits - 1,534,204
Restricted cash 4,546,062 19,460,845
Available-for-sale investments 2,006,066 6,692
Accounts and bills receivable, net 30,273,062 35,632,294
Inventories 5,374,192 10,849,371
Prepaid expenses 149,558 282,391
Deposits and other assets 769,206 1,711,820
Legal claims receivable - 15,681
Amount due from a related party 11,798 28,737
Amount due from a jointly-controlled entity - 13,694
Total current assets   82,922,677     88,740,913  
Interests in jointly-controlled entities - -
Property, plant and equipment, net 21,933,787 25,013,340
Land use rights, net 3,083,128 3,060,555
Deposits paid for purchase of property, plant and equipment 66,617 112,126
Available for sales investments   1,033,800     3,009,200  
Total assets $ 109,040,009   $ 119,936,134  
 

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 4,000,000 12,585,054
Accounts payable 8,163,510 10,352,938
Bills payable - 1,278,754
Customer receipts 860,779 821,288
Accrued salaries, allowances and other employee benefits 3,102,335 5,607,570
Accrual for loss contingencies - 31,458
Other accrued liabilities 6,637,851 7,576,062
Income tax payable   6,157,885     5,318,002  
Total current liabilities 28,922,360 43,571,126
Deferred tax liabilities   27,017     27,549  
Total liabilities   28,949,377     43,598,675  

Shareholders' equity:

 

 

 
Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,229,314 shares issued as of March 31, 2012 and 2011

129,173

129,173
Additional paid-in capital 84,786,226 84,752,105
Accumulated deficit (9,690,526 ) (11,101,203 )
Accumulated other comprehensive income 9,697,445 7,395,275
Less: Treasury stock, at cost, 189,587 shares as of March 31, 2012 and 2011   (4,663,321 )   (4,663,321 )
Total Global-Tech Advanced Innovations Inc. shareholders’ equity 80,258,997 76,512,029
Non-controlling interests   (168,365 )   (174,570 )
Total equity   80,090,632     76,337,459  
Total liabilities and shareholders' equity $ 109,040,009   $ 119,936,134  

Reconciliation of Net Liquid Assets (Non-GAAP) to GAAP

Net Liquid Assets – Net liquid assets, a non-GAAP measure, is defined as cash and cash equivalents plus time deposits plus restricted cash plus available for sale investments less short-term bank loans.

   
Year Ended

March 31,
2012   2011
 
Net liquid assets $ 43,378,661 $ 30,631,071
Add: - -
Short-term bank loans 4,000,000 12,585,054
Less: - -
Available-for-sale investments (3,039,866 ) (3,105,892 )
Restricted cash (4,546,062 ) (19,460,845 )
Time deposits   -   (1,534,204 )
Cash and cash equivalents   39,792,733   19,205,184  

Copyright Business Wire 2010

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