Global-Tech Appliances Reports Record Sales and Earnings for the Fourth Quarter and Fiscal Year.HONG n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. KONG--(BUSINESS WIRE)--May 28, 1998--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 ) announced record sales and net income for the fourth quarter and fiscal year ended March 31, 1998. Global-Tech's fourth quarter sales were $22.1 million, an increase of 26% over sales of $17.6 million in the fourth quarter of 1997. Net income for the fourth quarter was $1.8 million, or earnings per share of $0.22, compared to $1.2 million, or $0.16 earnings per share in the fourth quarter of 1997. For the fiscal year 1998, Global-Tech reported sales of $118.3 million, an increase of 89%, compared to sales of $62.7 million in the prior year. Net income for the year rose 169% to $13.7 million, or earnings per share of $1.71, compared to $5.1 million, or earnings per share of $0.64, in fiscal 1997. "Our ODM (Original Design Manufacturer) A contract manufacturer that uses its own designs and intellectual property (IP). See contract manufacturer. strategy, in which Global-Tech focuses on developing and offering new and innovative products to our customers, worked exceptionally well in 1997," said John Sham, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Global-Tech, "and that momentum carried into fiscal 1998. Last year, we were able to develop and introduce over 20 new products which supported our performance and produced record sales and earnings." Global-Tech has begun to use the proceeds of its recent initial public offering to expand the Dongguan manufacturing facility in order to enhance the ODM process. As of today, over 300,000 sq.ft. have been completed in addition to the existing 850,000 sq.ft. With the expanded capacity, Global-Tech plans to develop more ODM products to further 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. its customer base. Global-Tech is an original design manufacturer of a wide range of small household appliances in four primary product categories: kitchen appliances; personal, beauty and health care products; travel products and accessories; and garment care products. The Company designs and develops proprietary new products which it manufactures for well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. household appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. companies under brand names such as Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. Beach(R), Krups(R), Mr.Coffee(R), Proctor-Silex(R), Revlon(R), Sunbeam(R), and Vidal Sassoon Vidal Sassoon (born January 17, 1928) is a hairdresser. Sassoon was born to Jewish parents in London. His father was from Thessaloniki in northern Greece with Iraqi origins, and his mother, whose family was originally from Kiev, was born in London. (R). -0-
Year Ended Three Months Ended
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
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(unaudited) (unaudited)
Amount Expressed in Thousands, Except for Per Share Data
Net Sales $118,336 $62,699 $22,131 $17,577
Cost of Goods Sold 86,521 46,031 16,237 12,895
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Gross Profit 31,815 16,668 5,894 4,682
Selling, General and
Administrative Expenses 15,476 10,378 3,715 3,081
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Operating Income 16,339 6,290 2,179 1,601
Interest Expense & Other
Income, Net 1,178 773 194 256
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Income Before
Income Taxes 15,161 5,517 1,985 1,345
Income Tax Expense 1,452 407 193 100
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Net Income $13,709 $5,110 $1,792 $1,245
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Net Income Per
Share $1.71 $0.64 $0.22 $0.16
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Weighted Average
No. of Shares
Outstanding 8,000,000 8,000,000 8,000,000 8,000,000
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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," "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 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.
CONTACT: Global-Tech USA, Inc.
Brian Yuen
President & CEO
tel: 212-683-3320
fax: 212-725-4880
or
Georgeson & Company
Peter Firestein
(212) 440-9889
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