Global-Tech Appliances Reports First Quarter Results and Announces Receipt of Purchase Orders for LCD Televisions.HONG KONG Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. -- Global-Tech Appliances Inc. (NYSE NYSE See: New York Stock Exchange : GAI GAI General Applet Interface GAI Giustizia e Affari Interni (Italian) GAI Global-Tech Appliances Inc GAI Guild of Architectural Ironmongers GAI Global Atmospherics Inc GAI General Ability Index GAI Great American Insurance ) today announced its net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and earnings for the first quarter of fiscal 2005 ended June 30, 2004. Net sales for the first quarter of fiscal 2005 were $9.9 million, compared to $17.8 million for the first quarter of fiscal 2004. Net loss for the first quarter of fiscal 2005 was $2.8 million, or $0.23 per share, compared to a net income of $0.6 million, or $0.05 per share, in the prior corresponding fiscal period. John C.K. Sham, President and Chief Executive Officer, said: "As anticipated, the results for the first quarter of fiscal 2005 reflect a slowdown and de-emphasis of certain products in our core business, in addition to a significant increase in our expenditure for the research and development of our display programs. In this fiscal quarter, the expenditure incurred by our display programs contributed to over half of our net loss. For fiscal 2005, we plan to spend about $6 million to further support and expand research and development for our display programs." Mr. Sham continued, "We are pleased to announce, however, that our wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Global Display Limited, has received initial purchase orders from a new customer in the USA for its 17" and 30" flat panel high-definition liquid crystal display televisions Liquid crystal display television (LCD TV) is television that uses LCD technology for its visual output. The technology used is generally TFT. In the early 2000s, LCD flat-panels captured a large part of the computer monitor market from traditional CRTs. (LCD TVs A flat panel TV that uses LCD technology or a rear-projection TV that is based on LCD microdisplay panels. See flat panel TV, rear-projection TV and LCD. ). These purchase orders are meaningful in that they validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our belief that we can design and produce high-quality televisions that will be attractive to, and cost effective for, consumers in what we consider to be one of the most important markets. Additionally, we believe that other potential customers will now have greater confidence in our ability to manufacture and market display products." Mr. Sham concluded, "While we expect our results in the next two fiscal quarters to be similar to the first fiscal quarter of 2005 due to our continuing investment in new product programs, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our performance will improve as display shipments accelerate." Global-Tech is a holding company, owning subsidiaries that manufacture and market a wide range of consumer electrical products worldwide, including floor care products and small household appliances. These products are marketed by customers under brand names such as Black & Decker(R), DeLonghi(R), Dirt Devil Dirt Devil is a brand name household vacuum cleaner. It is an icon and one of the best selling in the United States. There are two main units Power for large houses, and RV unit for smaller houses or apartments, as well as a number of other floor care products including hand-held (R), Eureka(R), GE(R), Hamilton Beach(R), Kenwood(R), Proctor-Silex(R), Sanyo(R), Sunbeam(R), and West Bend West Bend, industrial city (1990 pop. 23,916), seat of Washington co., E Wis., on the Milwaukee River; inc. 1885, consolidated with Barton in 1961. Tools and dies, plastics, machines, dairy items, and leather products are made there. A two-year branch of the Univ. (R). Global-Tech's subsidiary, Global Display Limited, is currently developing a wide range of consumer products incorporating high-definition flat panel displays A thin display screen for computer and TV usage. The first flat panels appeared on laptop computers in the mid-1980s, and the LCD technology became the standard. Stand-alone LCD screens became available for desktop computers in the mid-1990s and exceeded sales of CRTs for the first time (FPDs) that utilize liquid crystal display liquid crystal display (LCD) Optoelectronic device used in displays for watches, calculators, notebook computers, and other electronic devices. Current passed through specific portions of the liquid crystal solution causes the crystals to align, blocking the passage of light. (LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. ), plasma display panel See plasma display. (PDP (1) (Plasma Display Panel) See plasma display. (2) (Policy Decision Point) See COPS and XACML. (3) (Programmed Data P ), liquid crystal on silicon Liquid crystal on silicon (LCOS or LCoS) is a "micro-projection" or "micro-display" technology typically applied in projection televisions. It is a reflective technology similar to DLP projectors; however, it uses liquid crystals instead of individual mirrors. (LCOS (Liquid Crystal on Silicon) A technology used to make microdisplays for rear-projection TVs and head-mounted displays (HMDs). Each LCoS chip hosts a grayscale LCD shutter sandwiched between a cover glass and a mirror. ), optical, and digital display technologies. Lite Array, Inc., another subsidiary of Global-Tech, is developing a range of display modules utilizing proprietary small molecule organic light emitting diode See LED. (OLED (Organic Light Emitting Device, Organic Light Emitting Diode) A thin film light-emitting technology that is expected to compete with LCD and plasma TVs as well as LCD monitors and readouts. ) technology. These modules are expected to be initially marketed to consumer electronics companies for use in cellular phones and MP3 players A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. . Except for historical information, certain statements contained herein are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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, the financial condition of the Company's customers, product demand and market acceptance, the success of new product development, 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 diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. 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 its forward-looking information, or any other information contained or referenced in this press release to reflect future events or circumstances.
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts expressed in thousands of United States dollars, except
per share data)
Three Months Ended
June 30,
------------------------
2004 2003
----------- -----------
(unaudited) (unaudited)
Net sales $ 9,899 $ 17,788
Cost of goods sold (8,740) (13,663)
----------- -----------
Gross profit 1,159 4,125
Selling, general and administrative expenses (4,229) (3,898)
----------- -----------
Operating income (loss) (3,070) 227
Other income, net 246 384
----------- -----------
Income (loss) from continuing operations
before income taxes (2,824) 611
Provision for income taxes - (60)
----------- -----------
Net income (loss) $ (2,824) $ 551
=========== ===========
Basic earnings (loss) per common share $ (0.23) $ 0.05
=========== ===========
Diluted earnings (loss) per common share $ (0.23) $ 0.05
=========== ===========
Basic weighted average number of shares
outstanding 12,198 12,140
=========== ===========
Diluted weighted average number of shares
outstanding 12,198 12,157
=========== ===========
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)
June 30, March 31,
2004 2004
----------- -----------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,225 $ 15,103
Restricted cash 401 400
Callable deposit 5,000 5,000
Short-term investments 43,280 43,983
Accounts receivable, net 6,816 9,991
Deposits, prepayments and other assets 2,965 2,497
Inventories 14,678 8,809
----------- -----------
Total current assets 84,365 85,783
Loan to a director 152 152
Property, plant and equipment 30,598 30,791
Land use rights 1,874 1,887
License 2,724 2,898
Patents 218 223
Promissory note receivable - 553
----------- -----------
Total assets $ 119,9310 $ 122,287
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 48 48
Current portion of long-term bank loans 252 374
Accounts payable 5,323 5,131
Fees payable for land use rights - 91
Salaries and allowances payable 746 677
Accrued expenses 2,468 2,037
Income tax payable 3,753 3,753
----------- -----------
Total current liabilities 12,590 12,111
Deferred tax liabilities 143 143
----------- -----------
Total liabilities 12,733 12,254
----------- -----------
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; 12,883,055 and
12,857,045 shares issued as of June 30,
2004 and March 31, 2004 129 129
Additional paid-in capital 82,034 81,871
Retained earnings 30,258 33,082
Accumulated other comprehensive deficit (730) (556)
Less: Treasury stock, at cost, 679,147
shares as of June 30, 2004
and March 31, 2004 (4,493) (4,493)
----------- -----------
Total shareholders' equity 107,198 110,033
----------- -----------
Total liabilities and shareholders'
equity $ 119,931 $ 122,287
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