GAI (MM)

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.

 

GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts expressed in United States dollars, except per share data)

  Year Ended

March 31,

  2014       2013       2012   (audited) (audited) (audited)   Net sales $ 62,692,901 $ 66,827,070 $ 55,212,779

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 )  

Net income (loss) attributable to shareholders of Global-Tech Advanced Innovations Inc

$

(10,555,557

)

$

(1,963,301

)

$

1,410,677

    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    

Basic and diluted weighted average number of shares of common stock

  3,041,625     3,040,310     3,039,727      

GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts expressed of United States dollars)

    March 31,

2014

March 31,

2013

(audited) (audited)

ASSETS

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    

Shareholders' equity:

 

 

 

 

Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,233,814

 

 

and 3,230,814 shares issued as of March 31, 2014 and 2013

129,253

129,233

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    

Global-Tech Advanced Innovations Inc.Hong KongCecilia Au-Yeung, (852) 2814-0601investorrelations@global-webpage.comhttp://global-webpage.newshq.businesswire.com