EXHIBIT 1
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 SECOND QUARTER RESULTS AND
EXPECTS POSITIVE IMPACT FROM ITS NEW BUSINESS INITIATIVES
Hong Kong, November 13, 2003 — Global-Tech Appliances Inc. (NYSE: GAI) announced today its net sales and earnings for the second quarter of fiscal 2004 ended September 30, 2003.
Net sales for the second quarter of fiscal 2004 were $16.8 million, compared to $23.5 million for the second quarter of fiscal 2003. Net loss for the second quarter of fiscal 2004 was $0.5 million, or $0.04 per share, compared to a net income of $2.4 million, or $0.20 per share, in the prior corresponding fiscal period. Results for the second quarter of fiscal 2003 included a net loss of $0.3 million from discontinued operations.
Net sales for the six months ended September 30, 2003 were $34.6 million, compared to $44.9 million for the prior corresponding six-month period. Net income for the first half of fiscal 2004 was $0.1 million, or $0.01 per share, compared to $4.6 million, or $0.38 per share, in the first half of fiscal 2003, which included losses from discontinued operations of $0.6 million.
John C.K. Sham, President and Chief Executive Officer, said: “While our operating performance for the second quarter was disappointing primarily due to increased costs and continuing pricing pressures in our core business, we are making good progress in securing new floor care business. We expect sales of floor care products to gradually improve in the first half of calendar 2004 as new models are introduced and our customer base expands. We believe this will result in increased growth of our core business.”
Mr. Sham continued, “In the interim, we are accelerating our efforts and dedicating additional resources to the development and production of display-oriented products. Informal expressions of interest received from potential customers of display-oriented products to date have exceeded expectations and we are currently working closely with certain of these entities to finalize their desired product designs and specifications. Shipment of some display-oriented products is expected to occur in the first half of calendar 2004.”
Mr. Sham concluded, “Our overall cash flow remains positive, which we believe should enable us to accelerate and support our new business initiatives. We remain thoroughly committed to pursuing the opportunities that are in sight and we continue to believe that our strategies to improve the Company’s growth and performance are on track.”
Global-Tech is a holding company whose subsidiaries currently design, manufacture, and market 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 products are marketed by customers under brand names such as Black & Decker®, DeLonghi®, Dirt Devil®, Eureka®, GE®, Hamilton Beach®, Kenwood®, Proctor-Silex®, Sanyo®, Sunbeam®, and West Bend®.
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
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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 United States dollars)
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 16,814 | $ | 23,524 | $ | 34,602 | $ | 44,859 | ||||||||
Cost of goods sold | (13,505 | ) | (17,113 | ) | (27,168 | ) | (32,418 | ) | ||||||||
Gross profit | 3,309 | 6,411 | 7,434 | 12,441 | ||||||||||||
Selling, general and administrative expenses | (4,056 | ) | (3,964 | ) | (7,954 | ) | (7,547 | ) | ||||||||
Operating income | (747 | ) | 2,447 | (520 | ) | 4,894 | ||||||||||
Other income, net | 277 | 483 | 661 | 760 | ||||||||||||
Income (loss) from continuing operations before income taxes | (470 | ) | 2,930 | 141 | 5,654 | |||||||||||
Provision for income taxes | 19 | (226 | ) | (41 | ) | (438 | ) | |||||||||
Income (loss) from continuing operations | (451 | ) | 2,704 | 100 | 5,216 | |||||||||||
Loss from discontinued operations, net of applicable income tax of nil | — | (281 | ) | — | (637 | ) | ||||||||||
Net income (loss) | $ | (451 | ) | $ | 2,423 | $ | 100 | $ | 4,579 | |||||||
Basic earnings (loss) per common share | $ | (0.04 | ) | $ | 0.20 | $ | 0.01 | $ | 0.38 | |||||||
Basic weighted average number of shares outstanding | 12,147 | 12,140 | 12,144 | 12,140 | ||||||||||||
Diluted earnings (loss) per common share | $ | (0.04 | ) | $ | 0.20 | $ | 0.01 | $ | 0.38 | |||||||
Diluted weighted average number of shares outstanding | 12,147 | 12,140 | 12,207 | 12,140 | ||||||||||||
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GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in United States dollars)
September 30, 2003 | March 31, 2003 | |||||||
(unaudited) | (audited) | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 20,112 | $ | 21,515 | ||||
Restricted cash | 841 | 831 | ||||||
Short-term investments | 43,411 | 41,401 | ||||||
Accounts receivable, net | 13,010 | 10,247 | ||||||
Deposits, prepayments & other assets | 3,306 | 2,681 | ||||||
Inventories, net | 7,787 | 7,507 | ||||||
Total current assets | 88,467 | 84,182 | ||||||
Property, plant and equipment | 31,076 | 32,649 | ||||||
Land use rights | 1,912 | 1,938 | ||||||
License | 3,245 | 3,593 | ||||||
Patents | 232 | 242 | ||||||
Promissory note receivable | 716 | 716 | ||||||
Loan to a director | 228 | 228 | ||||||
Total assets | $ | 125,876 | $ | 123,548 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term bank loans | $ | 443 | $ | 512 | ||||
Accounts payable | 6,757 | 5,153 | ||||||
Fees payable for land use rights | 273 | 273 | ||||||
Salaries and allowances payable | 982 | 585 | ||||||
Accrued expenses | 1,662 | 1,576 | ||||||
Income tax provision | 3,713 | 3,727 | ||||||
Total current liabilities | 13,830 | 11,826 | ||||||
Long-term bank loans | 159 | 316 | ||||||
Deferred tax liabilities, net | 119 | 65 | ||||||
Total liabilities | 14,108 | 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 September 30, 2003 and March 31, 2003 | 128 | 128 | ||||||
Additional paid-in capital | 81,753 | 81,753 | ||||||
Retained earnings | 34,733 | 34,682 | ||||||
Accumulated other comprehensive deficit | (353 | ) | (622 | ) | ||||
Less: Treasury stock, at cost, 679,147 and 689,147 shares as of September 30, 2003 and March 31, 2003 | (4,493 | ) | (4,600 | ) | ||||
Total shareholders’ equity | 111,768 | 111,341 | ||||||
Total liabilities and shareholders’ equity | $ | 125,876 | $ | 123,548 | ||||
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