EXHIBIT 1
[LOGO] GLOBAL-TECH
APPLIANCES INC.
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
Hong Kong, November 13, 2002-- Global-Tech Appliances Inc. (NYSE: GAI) announced
today its net sales and earnings for the second quarter of fiscal 2003 ended
September 30, 2002.
Net sales for the second quarter of fiscal 2003 were $23.7 million, compared to
$24.8 million for the second quarter of fiscal 2002. Net income for the second
quarter of fiscal 2003 was $2.4 million, or $0.20 per share, the same as in the
prior corresponding fiscal period. Results for the second quarter of fiscal 2003
and 2002 included the operations of Lite Array, Inc., a flat-panel electronic
display business in which the Company acquired a controlling interest effective
May 31, 2001.
Net sales for the six months ended September 30, 2002 were $45.3 million,
compared to $48.1 million for the prior corresponding six-month period. Net
income for the first half of fiscal 2003 rose approximately 2% to $4.6 million,
or $0.38 per share, compared to $4.5 million, or $0.37 per share, in the first
half of fiscal 2002.
Net sales for Lite Array's thin film electroluminescent, or TFEL, display
operation were $0.5 million in the first half of fiscal 2003 and were immaterial
in the prior corresponding fiscal period. Net losses associated with the TFEL
display business were $1.0 million in the first half of fiscal 2003, compared to
$0.6 million in the first half of fiscal 2002. An agreement to sell Lite Array's
TFEL display business, including its interest in a manufacturing joint venture
in Jiangmen, China, was executed in October of 2002, subject to certain closing
conditions, in an effort to reduce the ongoing overhead and administrative costs
that have impacted the Company's profitability. Lite Array is currently focusing
its R&D efforts on accelerating its organic light emitting diode, or OLED,
display program to develop and produce OLED displays, which incurred expenses of
about $0.5 million in the first half of fiscal 2003.
John C.K. Sham, President and Chief Executive Officer, said: "As previously
announced, we are experiencing a slowdown in orders, particularly for kitchen
appliances and from our customers in Europe, both somewhat prompted by the
global economic downturn. However, due to stringent cost control measures,
operating income rose to 9.4% and 9.5% of net sales, respectively, for the
second quarter and first half of fiscal 2003, compared to 7.3% and 6.6% in the
corresponding periods in the prior fiscal year. Net income increased less than
operating income as a result of lower interest rates on our cash investments,
but still exceeded 10% of net sales in the second quarter and the first half of
fiscal 2003."
Mr. Sham continued, "Clearly, we have seen a reluctance from our customers,
mostly the brand marketers, to make purchase commitments at historic levels due
to their concern about
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slower holiday retail sales. We believe that a return to normal order rates and
inventory levels in the U.S. may soon occur, but only if consumer confidence
improves."
Mr. Sham concluded, "We remain convinced that our new product development
program and long-term diversification strategy of developing technology-oriented
products are essential to the Company's future growth. Our net cash and
short-term investment position increased by $2.9 million, or $0.23 per share, to
$59.1 million, or $4.87 per share, in the first half of fiscal 2003, which we
believe is sufficient at this time to support and fund our growth strategies."
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(R), DeLonghi(R), Dirt Devil(R), Eureka(R), Hamilton Beach(R),
Krups(R), Morphy Richards(R), Mr. Coffee(R), Proctor-Silex(R), Sunbeam(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, the financial condition of the Company's customers,
product demand and market acceptance, new product development, reliance on 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.
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[LOGO] GLOBAL-TECH
APPLIANCES INC.
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts expressed in United States dollars)
Three Months Ended Six Months Ended
September 30, September 30,
------------------------------------------------------------
2002 2001 2002 2001
---------- ----------- --------- ---------
(unaudited) (unaudited) (unaudited) (unaudited)
(in thousands, except per share data)
Net sales ........................................................... $ 23,702 $ 24,812 $ 45,343 $ 48,090
Cost of goods sold .................................................. (17,290) (18,496) (32,829) (36,731)
---------- ----------- --------- ---------
Gross profit ........................................................ 6,412 6,316 12,514 11,359
Selling, general and administrative expenses ........................ (4,010) (4,355) (7,879) (7,985)
Share of losses in joint venture .................................... (168) (147) (325) (201)
---------- ----------- --------- ---------
Operating income .................................................... 2,234 1,814 4,310 3,173
Other income, net ................................................... 415 617 708 1,436
---------- ----------- --------- ---------
Income before income taxes .......................................... 2,649 2,431 5,018 4,609
Provision for income taxes .......................................... (226) (193) (439) (304)
---------- ----------- --------- ---------
Income before minority interests .................................... 2,423 2,238 4,579 4,305
Minority interests .................................................. - 181 - 186
---------- ----------- --------- ---------
Net income .......................................................... $ 2,423 $ 2,419 $ 4,579 $ 4,491
========== =========== ========= =========
Basic and diluted earnings per common share ......................... $ 0.20 $ 0.20 $ 0.38 $ 0.37
========== =========== ========= =========
Basic and diluted weighted average number of shares
outstanding ......................................................... 12,140 12,138 12,140 12,138
========== =========== ========= =========
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APPLIANCES INC.
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in United States dollars)
September 30, 2002 March 31, 2002
---------------------------------------
(unaudited) (audited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 31,893 $ 48,589
Short-term investments 28,497 8,678
Accounts receivable, net 16,453 12,318
Deposits, prepayments & other assets 2,696 2,158
Inventories, net 10,423 9,646
---------------------------------------
Total current assets 89,962 81,389
Property, plant and equipment 33,454 34,198
Land use rights 1,976 2,002
Intangible assets 4,243 4,603
Promissory note receivable 728 775
Loan to a director 306 306
---------------------------------------
Total assets $ 130,669 $ 123,273
=======================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings $ 77 $ 76
Current portion of long-term bank loans 696 715
Accounts payable 10,582 6,238
Amount due to a director - 180
Fees payable for license 1,000 1,800
Fees payable for land use rights 275 275
Salaries and allowance payable 944 541
Advance payments from customers 216 43
Accrued expenses 1,336 1,961
Investment in a joint venture 198 246
Income tax provision 3,585 4,384
---------------------------------------
Total current liabilities 18,909 16,459
Long-term bank loans 503 272
Deferred tax liabilities, net 43 43
---------------------------------------
Total liabilities 19,455 16,774
---------------------------------------
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, 2002 and March 31,
2002 128 128
Additional paid-in capital 81,753 81,753
Retained earnings 33,994 29,415
Accumulated other comprehensive deficit (61) (197)
Less: Treasury stock, at cost, 689,147 shares as of September 30,
2002 and March 31, 2002 (4,600) (4,600)
---------------------------------------
Total shareholders' equity 111,214 106,499
---------------------------------------
Total liabilities and shareholders' equity $ 130,669 $ 123,273
=======================================
21/F . Citicorp Centre
18 Whitfield Road
Causeway Bay, Hong Kong
[GRAPHIC] (852) 2814-0601
[GRAPHIC] (852) 2873-0591