Global-tech Advanced Innovations (GAI) Inactive
Filed: 22 Oct 03, 12:00am
Exhibit 3
| Release: | IMMEDIATE RELEASE | |||||
| Contact: | Brian Yuen Global-Tech USA, Inc. Tel.: 212-683-3320 | |||||
| Web Page: | http://www.businesswire.com/cnn/gai.shtml | |||||
GLOBAL-TECH APPLIANCES REPORTS FIRST QUARTER RESULTS AND
EXPECTS IMPROVED COMPANY PERFORMANCE AND GROWTH FROM
ITS DISPLAY-ORIENTED PRODUCTS IN CALENDAR YEAR 2004
Hong Kong, August 11, 2003 — Global-Tech Appliances Inc. (NYSE: GAI) today announced its net sales and earnings for the first quarter of fiscal 2004 ended June 30, 2003.
Net sales for the first quarter of fiscal 2004 were $17.8 million, compared to $21.3 million for the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2004 was $0.6 million, or $0.05 per share, compared to $2.2 million, or $0.18 per share, in the prior corresponding fiscal period.
John C.K. Sham, President and Chief Executive Officer, said: “The decline in net sales and profitability for the first quarter of fiscal 2004 reflects, in part, the Company’s de-emphasis of certain product categories that are less attractive and profitable, particularly kitchen appliances, in order to further advance the implementation of new business initiatives and opportunities that we believe will provide for more sustainable and profitable growth.”
Mr. Sham continued, “For fiscal 2004, we anticipate sacrificing short-term profits in an attempt to accelerate our previously announced diversification plans that were designed to augment our long-term growth strategy. Particularly, by accelerating our efforts on the development of display-oriented products, we have been able to design and produce several prototypes of flat-panel plasma and LCD high-definition televisions (HDTVs), as well as other products incorporating liquid crystal on silicon (LCOS), optical, and digital technologies. We have begun tooling for some of these products and concurrently initiated preliminary sales discussions with potential customers.”
Mr. Sham concluded, “Based on the positive feedback we have been receiving on some of our display-oriented products from our initial customer contacts, we are more convinced that this strategic initiative was appropriate. While it’s too early to gauge the outcome of the opportunities which the Company is currently pursuing, we are encouraged and optimistic at this point and believe that these opportunities will lead to improved growth in the sales of display-oriented products, which we anticipate will improve our overall Company performance in calendar year 2004.”
Global-Tech is a designer, manufacturer, and marketer of a wide range of small household appliances in four primary product categories: kitchen appliances; garment care products; travel products and accessories; and floor care products. The Company’s products are marketed by its customers under brand names such as Black & Decker®, DeLonghi®, Dirt Devil®, Eureka®, GE®, Hamilton Beach®, Kenwood®, Morphy Richards®, Proctor-Silex®, Sanyo®, Sunbeam®, and West Bend®.
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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,” “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, the financial condition of the Company’s customers, product demand and market acceptance, the success of new product development, reliance on material customers and key strategic alliances, 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, 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 Securities and Exchange Commission including its most recent Report on Form 20-F. The Company does not undertake to update our forward-looking information, or any other information contained or referenced in this press release to reflect future events or circumstances.
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GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts expressed in thousands of United States dollars, except per share data)
| Three Months Ended June 30, | ||||||||
| 2003 | 2002 | |||||||
| (unaudited) | (unaudited) | |||||||
Net sales | $ | 17,788 | $ | 21,335 | ||||
Cost of goods sold | (13,663 | ) | (15,305 | ) | ||||
Gross profit | 4,125 | 6,030 | ||||||
Selling, general and administrative expenses | (3,898 | ) | (3,583 | ) | ||||
Operating income | 227 | 2,447 | ||||||
Interest expense | (6 | ) | (21 | ) | ||||
Interest income | 229 | 259 | ||||||
Other income, net | 161 | 39 | ||||||
Income from continuing operations before income taxes | 611 | 2,724 | ||||||
Provision for income taxes | (60 | ) | (212 | ) | ||||
Income from continuing operations | 551 | 2,512 | ||||||
Loss from discontinued operations, net of applicable income tax (nil) | — | (356 | ) | |||||
Income before minority interests | 551 | 2,156 | ||||||
Minority interests | — | — | ||||||
Net income | $ | 551 | $ | 2,156 | ||||
Basic earnings per common share | $ | 0.05 | $ | 0.18 | ||||
Diluted earnings per common share | $ | 0.05 | $ | 0.18 | ||||
Basic weighted average number of shares outstanding | 12,140 | 12,140 | ||||||
Diluted weighted average number of shares outstanding | 12,157 | 12,140 | ||||||
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GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)
| June 30, 2003 | March 31, 2003 | |||||||
| (unaudited) | (unaudited) | |||||||
| ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,633 | $ | 21,515 | ||||
Short-term investments | 43,571 | 41,401 | ||||||
Restricted cash | 839 | 831 | ||||||
Accounts receivable, net | 14,034 | 10,247 | ||||||
Deposits, prepayments & other assets | 2,596 | 2,681 | ||||||
Inventories, net | 7,630 | 7,507 | ||||||
Total current assets | 88,303 | 84,182 | ||||||
Property, plant and equipment | 31,892 | 32,649 | ||||||
Promissory note receivable | 716 | 716 | ||||||
Land use rights | 1,925 | 1,938 | ||||||
License | 3,419 | 3,593 | ||||||
Patents | 237 | 242 | ||||||
Loan to a director | 228 | 228 | ||||||
Total assets | $ | 126,720 | $ | 123,548 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term bank loans | 494 | 512 | ||||||
Accounts payable | 7,484 | 5,153 | ||||||
Fees payable for land use rights | 273 | 273 | ||||||
Salaries and allowances payable | 688 | 585 | ||||||
Accrued expenses | 1,376 | 1,576 | ||||||
Income tax payable | 3,787 | 3,727 | ||||||
Total current liabilities | 14,102 | 11,826 | ||||||
Long-term bank loans | 237 | 316 | ||||||
Deferred tax liabilities, net | 65 | 65 | ||||||
Total liabilities | 14,404 | 12,207 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock, par value $0.01; 1,000,000 shares authorized, no shares issued | — | — | ||||||
Common stock, par value $0.01; 50,000,000 shares authorized; 12,830,000 shares issued as of June 30, 2003 and March 31, 2003 | 128 | 128 | ||||||
Additional paid-in capital | 81,753 | 81,753 | ||||||
Retained earnings | 35,233 | 34,682 | ||||||
Accumulated other comprehensive deficit | (198 | ) | (622 | ) | ||||
Less: Treasury stock, at cost, 689,147 shares as of June 30, 2003 and March 31, 2003 | (4,600 | ) | (4,600 | ) | ||||
Total shareholders’ equity | 112,316 | 111,341 | ||||||
Total liabilities and shareholders’ equity | $ | 126,720 | $ | 123,548 | ||||
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