Global-Tech Appliances Reports Third Quarter Results.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)--March 1, 2002 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 2002 ended December December: see month. 31, 2001. Net sales for the third quarter of fiscal 2002 were $19.5 million compared to $29.8 million for the third quarter of fiscal 2001. Net income for the third quarter of fiscal 2002 was $1.0 million, or $0.09 per share, compared to $2.8 million, or $0.23 per share, in the third quarter of fiscal 2001. Results for the third quarter of fiscal 2002 included the operations of Lite Array, Inc., a flat-panel display flat-pan·el display n. A thin lightweight video display used in laptop and notebook computers and employing liquid crystals, electroluminescence, or a similar alternative to cathode-ray tubes. Also called flat screen. business in which the Company acquired a controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail effective May 31, 2001. Net sales for the nine months ended December 31, 2001 were $67.6 million compared to $84.9 million for the first nine months of the prior fiscal year. Net income for the first three quarters of fiscal 2002, which included the results of Lite Array, declined to $5.5 million, or $0.46 per share, compared with $8.6 million, or $0.71 per share, in the same prior year period. John C.K. Sham, President and Chief Executive Officer, stated: "Our traditional small appliance Small appliance refers to a class of home appliances that are semi-portable or which are used on tabletops, countertops, or other platforms. Such items are contrasted with major appliances, which are typically fixtures that cannot be easily moved. business continues to be negatively affected as fewer and fewer financially secure customers participate in the business. While we made steady progress at Lite Array by achieving consistent production in the quarter, delays in securing orders for that business resulted in losses which adversely impacted the quarter by $0.5 million, or $0.04 per share, and the nine months by $0.7 million, or $0.06 per share." Mr. Sham continued, "As we have previously stated, if adequate returns are not achieved from our current business, we plan to devote our resources to other product categories. Our recent acquisition of heat engine technology is an area of considerable promise. The Company has reallocated and reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. its engineering and development resources and intends to concentrate on a number of innovative products and product categories outside of the small appliance arena and on expanding the Company's floor care business." Mr. Sham concluded, "Internally, we have implemented further cutbacks and are being diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in controlling costs to maintain profitability. Circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or have clearly demonstrated the importance of changing our focus and diversifying the Company into a manufacturer of technology-oriented products. The progress is proceeding as planned and we believe that it will pay off in the near future." Global-Tech is an original 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), 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), Moulinex Moulinex is a French brandname of small electrical appliances and kitchen equipment and is owned by Groupe SEB. Moulinex was originally established as a company in 1937, however at the beginning of September 2001, Moulinex declared bankruptcy. (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 key strategic alliances, availability and cost of raw materials, the timely and proper execution of certain business plans, currency fluctuations, uncertainties associated with investments, the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 thousands of United States dollars)
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------- -----------------------
2001 2000 2001 2000
-------- ------- ------- --------
(unaudited) (unaudited) (unaudited) (unaudited)
(in thousands, except per share data)
Net sale $ 19,488 $ 29,755 $ 67,578 $ 84,881
Cost of goods sold (14,785) (23,370) (51,516) (66,322)
-------- ------- ------- --------
Gross profit 4,703 6,385 16,062 18,559
Selling, general and
administrative
expenses (3,374) (4,475) (11,359) (12,292)
Share of losses
in joint venture (540) - (741) -
-------- ------- ------- --------
Operating income 789 1,910 3,962 6,267
Other income, net 194 1,045 1,630 2,781
-------- ------- ------- --------
Income before
income taxes 983 2,955 5,592 9,048
Provision for
income taxes (93) (169) (397) (490)
-------- ------- ------- --------
Income before
minority interests 890 2,786 5,195 8,558
Minority interests 150 - 336 -
-------- ------- ------- --------
Net income $ 1,040 $ 2,786 $ 5,531 $ 8,558
======== ======= ======= ========
Net income per
common share $ 0.09 $ 0.23 $ 0.46 $ 0.71
======== ======= ======= ========
Weighted average
number of shares
outstanding 12,138 12,136 12,138 12,134
======== ======= ======= ========
GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)
December 31, March 31,
------------ -----------
2001 2001
------------ -----------
(unaudited) (audited)
------------ -----------
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 49,081 $ 28,489
Short-term investments 7,661 31,221
Interests in joint venture 5,983 -
Accounts receivable, net 11,070 9,390
Deposits, prepayments
& other assets 3,078 9,160
Inventories, net 10,976 14,898
------------ -----------
Total current assets 87,849 93,158
Property, plant and equipment 37,497 38,493
Goodwill (Note 1) 4,845 -
Intangible assets 1,835 13
Loan to a director 307 384
------------ -----------
Total assets $132,333 $ 132,048
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings 78 -
Current portion of
long-term bank loans 795 1,139
Accounts payable 5,878 14,007
Advance payments from customers 177 184
Accrued expenses 5,300 3,737
Income tax provision 3,408 3,014
------------ -----------
Total current liabilities 15,636 22,081
Long-term bank loans 402 908
Minority interests 1,163 -
------------ -----------
Total liabilities 17,201 22,989
------------ -----------
Shareholders' equity:
Common stock, par value $0.01;
50,000,000 shares authorized;
12,830,000 shares issued as of
December 31, 2001 and
March 31, 2001 128 128
Additional paid-in capital 81,662 81,662
Retained earnings 37,980 32,456
Accumulated other
comprehensive deficit (14) (550)
------------ -----------
119,756 113,696
Less: Treasury stock, at cost (4,624) (4,637)
------------ -----------
Total shareholders' equity 115,132 109,059
------------ -----------
Total liabilities and
shareholders' equity $132,333 $132,048
============ ===========
(Note 1)
The amount represented the excess of cost over fair value of net
assets acquired of Global Lite Array (BVI) Limited ("Lite Array") on
May 31, 2001. On that day, Global-Tech Appliances Inc. entered into an
agreement to acquire 76.75% of the outstanding shares of Lite Array.
Total consideration for 76.75% of the outstanding shares of Lite Array
was approximately $9.8 million.
Management has assessed the fair value of the purchase consideration of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $9.8 million and the fair value of the net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. acquired and liabilities assumed of Lite Array based on their best estimates at the acquisition date. The fair value of the 76.75% of the net assets acquired is approximately $4.9 million. Since the formal appraisal process of the net assets acquired and liabilities assumed of Lite Array has not yet been completed as of December 31, 2001, the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of purchase consideration and the excess of cost over fair value of net assets acquired are subject to change upon the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the appraisals. |
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