Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today announced its financial results for the quarter ended September 30, 2014 (the Company’s second quarter of fiscal 2015).

Net sales for the second quarter of fiscal 2015 were $21.1 million, an increase of approximately 76% when compared to $12.0 million for the corresponding quarter in fiscal 2014. Net loss for the second quarter of fiscal 2015 was $2.2 million, or $0.74 per share, compared to a net loss of $5.2 million, or $1.70 per share, for the second quarter of fiscal 2014.

Net sales for the six months ended September 30, 2014 were $45.7 million, an increase of approximately 87% when compared to $24.5 million in the corresponding six-month period in fiscal 2014. Net loss for the first six months of fiscal 2015 was $2.5 million, or $0.83 per share, compared to a net income of $6.7 million, or $2.21 per share, for the first half of fiscal 2014.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “Sales in our electronic components business experienced growth in the first half of fiscal 2015, with unit sales increasing nearly 120% compared to the previous year; however, concurrent declines in pricing of approximately 30% offset any potential gains in operating results. This is despite an improved product mix of higher-pixel units for our CCMs.”

Mr. Sham continued, “Competition in the electronic business remains high, with new entrants entering the market almost daily. This coupled with the current instability in the industry will require us to reconsider any further investment in additional chip-on-board (COB) production lines.”

Mr. Sham concluded, “The future success of our electronic components business will depend upon our ability to attract new customers and drive volume while at the same time improving margins, whether through the reduction of our manufacturing costs or through increases in price and innovation.”

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

September 30,

  

Six Months Ended

September 30,

2014   2013 2014   2013
(unaudited) (unaudited) (unaudited) (unaudited)
 
Net sales $ 21,062 $ 11,994 $ 45,669 $ 24,462
Cost of goods sold   (20,340)   (11,422)   (43,205)   (22,611)
Gross profit 722 572 2,464 1,851
Selling, general and administrative expenses (3,361) (3,142) (6,315) (5,766)
Other operating income (expense)   -   -   -   -
Operating income (loss) (2,639) (2,570) (3,851) (3,915)
Interest income, net 85 170 189 302
Other income (expense), net   406   572   1,323   1,400
Income (loss) from continuing operations before income taxes (2,148) (1,828) (2,339) (2,213)
Income tax expenses   (103)   (66)   (227)   (30)
Income (loss) from continuing operations (2,251) (1,894) (2,566) (2,243)
Income (loss) from discontinued operations, net of tax   -   (3,320)   -   (4,537)
Net income (loss) (2,251) (5,214) (2,566) (6,780)
Net income (loss) attributable to non-controlling interests   15   47   30   73
Net income (loss) attributable to shareholders $ (2,236) $ (5,167) $ (2,536) $ (6,707)
 
Basic earnings (loss) per common share $ (0.74) $ (1.70) $ (0.83) $ (2.21)
 
Diluted earnings (loss) per common share $ (0.74) $ (1.70) $ (0.83) $ (2.21)
 
Basic and diluted weighted average number of shares outstanding   3,042   3,040   3,042   3,040
 
 

GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts expressed in thousands of United States dollars)

 
  September 30, 2014
Sept 30, 2014   March 31, 2014
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 15,732 $ 22,820
Time deposits 12,115 11,340
Restricted cash 4,185 4,014
Available-for-sale investments 1,052 1,050
Accounts and bills receivable, net 24,624 21,217
Inventories 10,464 7,163
Prepaid expenses 205 123
Deposits and other assets 3,223 2,476
Amount due from a related party   15   13
Total current assets 71,615 70,216
Interests in jointly-controlled entities - -
Property, plant and equipment, net 25,837 26,317
Land use rights, net 2,901 2,923
Deposits paid for purchase of property, plant and equipment 302 212
Available for sales investments - -
Total assets $ 100,655 $ 99,668
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 9,054 7,280
Accounts payable 13,256 12,520
Customer deposits 1,135 1,138
Accrued salaries, allowances and other employee benefits 3,126 2,981
Other accrued liabilities 6,161 5,721
Income tax payable   4,460   4,233
Total current liabilities 37,192 33,873
Deferred tax liabilities   5   5
Total liabilities   37,197   33,878
 

Shareholders' equity:

 

 

 

 

Common stock, par value $0.04 per share; 12,500,000 shares authorized;
  3,233,814 shares issued as of September 30 and March 31, 2014

129

129

Additional paid-in capital 85,104 85,104
Statutory reserves 1,340 1,340
Accumulated deficit (29,126) (26,590)
Accumulated other comprehensive income 11,089 10,855
Less: Treasury stock, at cost, 189,587 shares as of September 30 and March 31, 2014   (4,663)   (4,663)
Total Global-Tech Advanced Innovations Inc. shareholders’ equity 63,873 66,175
Non-controlling interests   (415)   (385)
Total equity   63,458   65,790
Total liabilities and shareholders’ equity $ 100,655 $ 99,668