EXHIBIT 2
BW2113 FEB 15, 2001 5:02 PACIFIC 08:02 EASTERN
(BW) (GLOBAL-TECH) (GAI) Global-Tech Appliances Reports Improved Third Quarter
Results Despite Slowdown in U.S.
Housewares Business
Business Editors
HONG KONG--(BUSINESS WIRE)--Feb. 15, 2001--Global-Tech Appliances Inc. (NYSE -
GAI) today announced improved results for the third quarter of fiscal 2001 ended
December 31, 2000.
Net sales for the third quarter of fiscal 2001 increased 15% to $29.8 million,
compared to $25.9 million for the third quarter of fiscal 2000. Net income for
the third quarter of fiscal 2001 was $2.8 million, or $0.23 per share, the same
as in the prior corresponding fiscal period.
Net sales for the nine months ended December 31, 2000 increased 17% to $84.9
million, compared with $72.8 million for the nine months in the prior fiscal
year. Net income for the first three quarters of fiscal 2001 rose 17% to $8.6
million, or $0.71 per share, compared with $7.3 million, or $0.61 per share, in
the same prior year period. Net income in the first nine months of fiscal 2000
was impacted by an unusual expense of $500,000 relating to professional expenses
for exploratory acquisition-related activities.
John C.K. Sham, President and Chief Executive Officer, stated: "The improvement
in net sales demonstrated our ability to achieve growth despite the depressed
holiday retail environment for housewares in the U.S. More importantly, we
believe that our customers and most retailers completed the year without much
excessive inventory, as reordering patterns for the fourth fiscal quarter to
date have remained consistent. Our emphasis in forming strong alliances with a
few top-quality brands in the U.S. and Europe continues to support our solid
foundation for continued growth."
Mr. Sham continued, "Our performance to date has not been adversely impacted by
the demise of several financially troubled retailers and the recently announced
reorganization of Sunbeam Corporation. Currently, Sunbeam accounts for less than
7% of the Company's total net sales and no open receivables were outstanding at
the time of its reorganization filing. We believe that our substantial sales
concentration with Sunbeam at one time has dropped considerably in the last two
years to a level that significantly reduces its possibility of materially
affecting our overall business."
Mr. Sham concluded, "Though we have been able to achieve top-line growth for the
last three consecutive quarters and expect double-digit growth for the current
fiscal year, we plan to introduce and offer new products to gradually normalize
our margins and are implementing solutions to reduce our fuel and energy costs.
We remain focused and committed on product development while we continue our
efforts to diversify our customer base and introduce new and proprietary
products in other product categories to further improve our overall
performance."
Global-Tech is an original designer, manufacturer, and marketer of a wide range
of small household appliances in six primary product categories: kitchen
appliances; personal, beauty and health care products; garment care products;
travel products and accessories; floor care products;
and environmental care products. The Company's products are marketed by its
customers under brand names such as Black & Decker(R), DeLonghi(R), Dirt
Devil(R), Hamilton Beach(R), Krups(R), Morphy Richards(R), Moulinex(R), Mr.
Coffee(R), Proctor-Silex(R), Remington(R), Sunbeam(R), Vidal Sassoon(R), and
West Bend(R).
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, product demand and market acceptance, new product
development, reliance on key strategic alliances, availability and cost of raw
materials, the regulatory environment, fluctuations in operating results 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.
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts expressed in thousands of United States dollars)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2000 1999 2000 1999
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)
(in thousands, except per share data)
Net sales $ 29,755 $ 25,879 $ 84,881 $ 72,837
Cost of goods sold (23,370) (19,627) (66,322) (55,321)
-------- -------- -------- --------
Gross profit 6,385 6,252 18,559 17,516
Selling, general and
administrative expenses (4,475) (4,416) (12,292) (12,037)
Unusual item - - - (500)
-------- -------- -------- --------
Operating income 1,910 1,836 6,267 4,979
Other income, net 1,045 957 2,781 2,585
-------- -------- -------- -------
Income before income taxes 2,955 2,793 9,048 7,564
Provision for income taxes (169) (41) (490) (229)
-------- -------- -------- --------
Net income $ 2,786 $ 2,752 $ 8,558 $ 7,335
======== ======== ======== =======
Net income per share $ 0.23 $ 0.23 $ 0.71 $ 0.61
======== ======== ======== =======
Weighted average number
of shares outstanding 12,136 12,121 12,134 12,104
======== ======== ======== =======
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)
December 31, March 31,
2000 2000
---- ----
(unaudited) (audited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 40,644 $ 53,647
Investment in US treasury bills
and marketable securities 13,282 20,278
Accounts receivable, net 12,020 7,167
Deposits prepayments & other assets 9,002 3,364
Inventories, net 22,104 18,160
-------- --------
Total current assets 97,052 102,616
Property, plant and equipment 33,396 29,305
Construction-in-progress 5,438 7,320
Patents 14 14
Loan to a director 384 461
-------- --------
Total assets $136,284 $139,716
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term bank loans 1,604 1,063
Accounts payable 12,853 8,736
Advance payments from customers 94 71
Accrued expenses 3,223 3,029
Income tax provision 2,993 2,505
-------- --------
Total current liabilities 20,767 15,404
Long-term bank loans 689 1,407
-------- --------
Total liabilities 21,456 16,811
-------- --------
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;
12,137,353 shares outstanding as of
December 31, 2000; 12,126,101 shares
outstanding as of March 31, 2000 128 128
Additional paid-in capital 81,662 81,662
Retained earnings 38,245 46,237
Accumulated other comprehensive deficit (570) (364)
Less: Treasury stock, at cost,
692,647 shares, as of December 31, 2000;
703,899 shares as of March 31, 2000 (4,637) (4,758)
--------- ---------
Total shareholders' equity 114,828 122,905
--------- --------
Total liabilities and
shareholders' equity $136,284 $139,716
========= ========
CONTACT: Brian Yuen
212-683-3320
http://www.businesswire.com/cnn/gai.shtml
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KEYWORD: HONG KONG INTERNATIONAL ASIA PACIFIC
INDUSTRY KEYWORD: MANUFACTURING COMPUTERS/ELECTRONICS
CONSUMER/HOUSEHOLD RETAIL