HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today announced its financial results for the fiscal year ended March 31, 2014.
Net sales for fiscal 2014 were $62.7 million, compared to net sales of $66.8 million in fiscal 2013. Net loss for fiscal 2014 was $10.7 million, or $3.47 per share, compared to a net loss of $2.1 million, or $0.65 per share, in fiscal 2013.
Net sales for the fourth quarter of fiscal 2014 were $17.7 million, compared to $13.9 million in the corresponding period in fiscal 2013. Net loss for the fourth quarter of fiscal 2014 was $3.2 million, or $1.04 per share, compared to a net loss of $2.3 million, or $0.75 per share, for the corresponding quarter in fiscal 2013.
As previously announced, the Company’s electronic manufacturing services (EMS) business became a discontinued operation in December 2013. The loss from discontinued operations in fiscal 2014 was $5.5 million, compared to $2.6 million in fiscal 2013.
As of March 31, 2014, the Company had leased approximately 76,000 square meters of excess production space out of 122,000 square meters that were no longer utilized as a result of the discontinuation of the EMS business in fiscal 2014 and the home appliance business in fiscal 2012. Subsequent to fiscal year end, the Company entered into a five-year contract to lease 26,000 square meters of production space (including equipment) located in the facility that previously housed our EMS business. In spite of contractual obligations, leasing income will ultimately depend upon the continuing financial viability of the lessee’s operations.
John C.K. Sham, the Company's President and Chief Executive Officer, said: “During fiscal 2014 our remaining operations, namely electronic components, did not generate sufficient income to cover expenses, primarily due to pricing concessions caused by intense market competition. Despite an increase in unit volume of approximately 8%, net sales declined approximately 7%.”
Mr. Sham continued, “We expect unit volume within our electronic components business to grow in fiscal 2015 and, provided that we are able to improve yields and increase productivity in our new COB operation, the electronic components business should gradually return to profitability. As in prior years, innovation will continue to be a driving force in improving our financial results.”
Mr. Sham concluded, “We expect that income generated through the leasing of those portions of our facilities that previously housed our discontinued operations will be sufficient to cover a majority of the expenses associated with maintaining our factory complex in Dongguan, China.” While leasing our excess production space is currently being utilized to generate income, we are also exploring other viable options which can fully recognize and create more value from this property.”
Global-Tech Advanced Innovations Inc. is a holding company, owning subsidiaries that manufacture and market electronic components and other related products, such as complementary metal oxide semiconductor (CMOS) 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.
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GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Amounts expressed in United States dollars, except per share data) |
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Year Ended
March 31, |
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| 2014 | 2013 | 2012 | ||||||||||
| (audited) | (audited) | (audited) | ||||||||||
| Net sales | $ | 62,692,901 | $ | 66,827,070 | $ | 55,212,779 | ||||||
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Cost of goods sold |
(57,999,265 | ) | (56,854,674 | ) | (48,384,573 | ) | ||||||
| Gross profit | 4,693,636 | 9,972,396 | 6,828,206 | |||||||||
| Selling, general and administrative expenses | (13,148,067 | ) | (12,383,973 | ) | (7,026,786 | ) | ||||||
| Other operating income , net | - | - | 28,589 | |||||||||
| Operating profit (loss) | (8,454,431 | ) | (2,411,577 | ) | (169,991 | ) | ||||||
| Interest income, net | 685,138 | 1,504,166 | 95,477 | |||||||||
| Other income (expenses), net | 2,396,789 | 583,315 | 1,124,478 | |||||||||
| Income (Loss) from continuing operations before income taxes | (5,372,504 | ) | (324,096 | ) | 1,049,964 | |||||||
| Income tax benefit (expense) | 255,927 | 841,900 | (1,228,625 | ) | ||||||||
| Income (Loss) from continuing operations | (5,116,577 | ) | 517,804 | (178,661 | ) | |||||||
| Income (Loss) from discontinuing operations, net of tax | (5,547,024 | ) | (2,589,063 | ) | 1,595,997 | |||||||
| Net income (loss) | (10,663,601 | ) | (2,071,259 | ) | 1,417,336 | |||||||
| Net income (loss) attributable to non-controlling interests | 108,044 | 107,958 | (6,659 | ) | ||||||||
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Net income (loss) attributable to shareholders of Global-Tech Advanced Innovations Inc |
$ |
(10,555,557 |
) |
$ |
(1,963,301 |
) |
$ |
1,410,677 |
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| Basic and diluted earnings (loss) from continuing operations per share of common stock | $ | (1.65 | ) | $ | 0.21 | $ | (0.06 | ) | ||||
| Basic and diluted earnings (loss) per share of common stock | $ | (3.47 | ) | $ | (0.65 | ) | $ | 0.46 | ||||
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Basic and diluted weighted average number of shares of common stock |
3,041,625 | 3,040,310 | 3,039,727 | |||||||||
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GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(Amounts expressed of United States dollars) |
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March 31,
2014 |
March 31,
2013 |
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| (audited) | (audited) | |||||||
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ASSETS |
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| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,820,300 | $ | 32,385,376 | ||||
| Time deposits | 11,339,515 | - | ||||||
| Restricted cash | 4,013,565 | 14,592,289 | ||||||
| Available-for-sale investments | 1,050,500 | 17,153 | ||||||
| Accounts and bills receivable, net | 21,216,884 | 19,713,608 | ||||||
| Inventories | 7,162,867 | 5,392,332 | ||||||
| Prepaid expenses | 123,462 | 181,224 | ||||||
| Deposits and other assets | 2,475,765 | 5,044,456 | ||||||
| Amount due from a related party | 12,569 | 18,841 | ||||||
| Total current assets | 70,215,427 | 77,345,279 | ||||||
| Interests in jointly-controlled entities | - | - | ||||||
| Property, plant and equipment, net | 26,316,958 | 26,528,681 | ||||||
| Land use rights, net | 2,923,424 | 3,026,537 | ||||||
| Deposits paid for purchase of property, plant and equipment | 212,134 | 280,146 | ||||||
| Available-for-sale investments | - | 1,045,200 | ||||||
| Total assets | $ | 99,667,943 | $ | 108,225,843 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | 7,279,629 | 4,826,241 | ||||||
| Accounts payable | 12,520,080 | 7,134,526 | ||||||
| Customer deposits | 1,138,500 | 1,331,100 | ||||||
| Accrued salaries, allowances and other employee benefits | 2,980,622 | 4,367,642 | ||||||
| Other accrued liabilities | 5,720,757 | 9,643,638 | ||||||
| Income tax payable | 4,233,169 | 4,659,313 | ||||||
| Total current liabilities | 33,872,757 | 31,962,460 | ||||||
| Deferred tax liabilities | 5,183 | 5,180 | ||||||
| Total liabilities | 33,877,940 | 31,967,640 | ||||||
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Shareholders' equity: |
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Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,233,814 |
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and 3,230,814 shares issued as of March 31, 2014 and 2013 |
129,253 |
129,233 |
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| Additional paid-in capital | 85,103,910 | 85,053,402 | ||||||
| Statutory reserves | 1,340,229 | 1,238,361 | ||||||
| Accumulated deficit | (26,590,366 | ) | (15,932,941 | ) | ||||
| Accumulated other comprehensive income | 10,854,689 | 10,709,740 | ||||||
| Less: Treasury stock, at cost, 189,587 shares as of March 31, 2014 and 2013 | (4,663,321 | ) | (4,663,321 | ) | ||||
| Total Global-Tech Advanced Innovations Inc. shareholders’ equity | 66,174,494 | 76,534,474 | ||||||
| Non-controlling interests | (384,491 | ) | (276,271 | ) | ||||
| Total shareholders’ equity | 65,790,003 | 76,258,203 | ||||||
| Total liabilities and shareholders' equity | $ | 99,667,943 | $ | 108,225,843 | ||||