Global-Tech Appliances Reports Third Quarter Results and Increased Net Cash Value Per Share.Business Editors 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)--Jan. 31, 2003 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 today 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 third quarter of fiscal 2003 ended December December: see month. 31, 2002. Net sales for the third quarter of fiscal 2003 were $16.5 million, compared to $19.5 million for the third quarter of fiscal 2002. Net income for the third quarter of fiscal 2003 was $0.8 million, or $0.06 per share, compared to $1.0 million, or $0.09 per share, in the prior corresponding fiscal period. The decline in net sales for the third quarter was evenly spread amongst all of the Company's product categories as the major retailers lowered their expectations for the holiday season and stocked more low-end low-end adj. 1. Cheapest in a line of merchandise: low-end subcompact cars. 2. Informal Of, relating to, or intended for low-income consumers; downscale: promotional products. Additionally, one of the Company's major customers lost some shelf space to new entrants in the floor care category. Net sales for the nine months ended December 31, 2002 were $61.4 million, compared to $67.5 million for the prior corresponding nine-month period. Net income for the first three quarters of fiscal 2003 was $5.3 million, or $0.44 per share, compared to $5.5 million, or $0.46 per share, in the first nine months of fiscal 2002. As previously announced, the Company executed an agreement to sell the thin film electroluminescent See electroluminescence and EL display. , or TFEL TFEL Thin-Film Electroluminescent TFEL Task Force Enduring Look TFEL Teaching For Effective Learning , display operation of its subsidiary, Lite Array, Inc., on October October: see month. 30, 2002. Accordingly, the financial statements reflect the sales and expenses associated with the TFEL display business as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . Lite Array is now totally dedicated to its organic light emitting diode See LED. , or 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. , display R&D program, which costs approximately $1.5 million per annum Per annum Yearly. to pursue. John C.K. Sham, President and Chief Executive Officer, said: "As previously announced, the overall business environment continues to be soft. While simple, small electrical appliances are becoming very price competitive, we believe that our shift in focus to more complex appliances, particularly floor care products, was a positive move that will continue to produce new business opportunities for the Company." Mr. Sham continued, "Though the global economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. continues to be a challenge, the Company's net cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investment position increased by $7.4 million, or $0.61 per share, to $63.6 million, or $5.24 per share, during the nine-month interim period, despite the ongoing expenditures on a number of product development initiatives. We are dedicated to sustaining our existing business while attempting to generate consistent free cash flow so that we can continue funding the R&D programs and initiatives to further support the strategies of transforming the Company's business." Mr. Sham concluded, "We are now actively working on a number of development programs, several of which utilize new technologies that we believe will positively redirect re·di·rect tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re the focus of our business in the next three to four years. We are not relying on all of our development projects to succeed, but we do expect to see positive results from certain of these projects. We believe that once these successful development projects attain market acceptance, they will provide us with a sustainable, growing revenue and income stream." 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 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), 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 Krups is a German kitchen appliance manufacturer that has for many years been the world's leading manufacturer of coffee and espresso machines. The company also produces a number of household appliances, including meat slicers, food processors, blenders, coffee grinders and (R), Morphy Richards Morphy Richards is a leading business firm located in the Swinton Meadows Industrial Estate, Swinton near Mexborough, South Yorkshire. It specialises in the manufacturing of toasters, hairdryers, bread makers, kettles and sandwich toasters and other appliances. (R), Mr. Coffee(R), Proctor-Silex(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). 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, the financial condition of the Company's customers, product demand and market acceptance, the success of new product development, reliance on material customers and key strategic alliances, 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. GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts expressed in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollars)
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------- ---------------------
2002 2001 2002 2001
---------- ----------- ----------- ---------
(unaudited) (unaudited) (unaudited)(unaudited)
(in thousands, except per share data)
Net sales $16,544 $19,470 $61,403 $67,536
Cost of goods sold (12,418) (14,774) (44,836) (51,491)
------- ------- ------- -------
Gross profit 4,126 4,696 16,567 16,045
Selling, general and
administrative
expenses (3,487) (3,301) (11,034) (10,686)
------- ------- ------- -------
Operating income 639 1,395 5,533 5,359
Other income, net 413 194 1,172 1,630
------- ------- ------- -------
Income from continuing
operations before income
taxes 1,052 1,589 6,705 6,989
Provision for income taxes (110) (93) (546) (397)
------- ------- ------- -------
Income from continuing
operations 942 1,496 6,159 6,592
Discontinued operations
Loss from operations of
discontinued TFEL
business (including
gain on disposal of
US $29,000) (175) (606) (812) (1,397)
Minority interests - 150 - 336
------- ------- ------- -------
Net income $ 767 $ 1,040 $ 5,347 $ 5,531
======= ======= ======= =======
Basic and diluted earnings
per common share $ 0.06 $ 0.09 $ 0.44 $ 0.46
======= ======= ======= =======
Basic and diluted weighted
average number of shares
outstanding 12,141 12,138 12,141 12,138
======= ======= ======= =======
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in United States dollars)
December 31, March 31,
2002 2002
-----------------------------
(unaudited) (audited)
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 25,130 $ 48,589
Short-term investments 39,442 8,678
Accounts receivable, net 9,858 12,318
Deposits, prepayments & other assets 2,490 2,158
Inventories, net 8,149 9,646
-----------------------------
Total current assets 85,069 81,389
Property, plant and equipment 32,580 34,198
Land use rights 1,964 2,002
License 3,792 4,317
Patents 248 286
Promissory note receivable 728 775
Loan to a director 230 306
----------------------------
Total assets $124,611 $123,273
=============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings $ - $ 76
Current portion of long-term bank loans 582 715
Accounts payable 5,539 6,238
Amount due to a director - 180
Fees payable for license - 1,800
Fees payable for land use rights 275 275
Salaries and allowance payable 908 541
Advance payments from customers 9 43
Accrued expenses 1,195 1,961
Investment in a joint venture - 246
Income tax provision 3,691 4,384
-----------------------------
Total current liabilities 12,199 16,459
Long-term bank loans 386 271
Deferred tax liabilities, net 43 43
-----------------------------
Total liabilities 12,628 16,773
-----------------------------
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 December 31, 2002
and March 31, 2002 128 128
Additional paid-in capital 81,753 81,753
Retained earnings 34,763 29,416
Accumulated other comprehensive deficit (61) (197)
Less: Treasury stock, at cost, 689,147
shares as of December 31, 2002
and March 31, 2002 (4,600) (4,600)
-----------------------------
Total shareholders' equity 111,983 106,500
-----------------------------
Total liabilities and shareholders'
equity $ 124,611 $123,273
=============================
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