Industries International Reports 23% Rise in Revenues for First Quarter of 2004.Business Editors SHENZHEN Shenzhen (shĕn`jŭn`), city (1994 est. pop. 695,600), S Guangdong prov., China, on the South China Sea, N of Hong Kong. Designated a special economic zone in 1979, the city's spectacular economic growth led China to create over a dozen more , China and LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--May 17, 2004 Chairman Sees Continued Sales Growth and Profitability for Remainder of 2004 to be Fueled Primarily by Sales of Telecom-Related Products First Quarter Highlights: -- Revenues grew 23% year-over-year driven primary by rise in sales of phone products -- Excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. extraordinary item, Company achieves net income of $1.29 million, an increase of over 30% from net income of $897,000 in year-ago quarter -- Including extraordinary item, Company reports loss of ($525,000), or ($0.02) per share compared with net income of $897,000, or $0.05 in year-ago quarter -- Company strengthens balance sheet with over $33.9 million in cash, or $1.20 per share, with only $2.42 million in long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. debt -- INDI INDI Irish Nutrition & Dietetic Institute INDI I'm Not Doing It Receives Largest Order Ever -- $20 Million Contract to Manufacture Bell(R) Telephones Industries International, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :IDUL) (INDI), a rapidly growing manufacturer and distributor of communications-related technology and batteries in China, today reported financial results for the first quarter ending March 31, 2004. Revenue totaled $14.09 million, up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 23% from $11.45 million reported in the first quarter of 2003. Telephone-Related Products Drive Revenue Growth The revenue growth during the first quarter was primarily due to increased sales of INDI's communications terminal Terminus of a communications circuit at which data can be either entered or received; located with the originator or ultimate addressee. Also called CT. products, primarily corded and cordless telephones A cordless telephone or portable telephone is a telephone with a wireless handset which communicates via radio waves with a base station connected to a fixed telephone line (POTS) and can only be operated near (typically within 100 meters or 328 ft from) its base station . The telecom equipment division reported first-quarter 2004 revenue of $8.79 million, up 32% from $6.64 million a year earlier. The increase was due to new revenue channels and the expansion of old ones. Sales of lithium lithium (lĭth`ēəm) [Gr.,=stone], metallic chemical element; symbol Li; at. no. 3; at. wt. 6.941; m.p. about 180.54°C;; b.p. about 1,342°C;; sp. gr. .534 at 20°C;; valence +1. Lithium is a soft, silver-white metal. and lithium-ion batteries Lithium-ion batteries (sometimes abbreviated Li-ion batteries) are a type of rechargeable battery commonly used in consumer electronics. They are currently one of the most popular types of battery for portable electronics, with one of the best energy-to-weight ratios, no , the Company's other source of revenue, were $5.30 million in the latest quarter, up 10% from $4.81 in the first quarter of 2003. First Quarter Net Income, Excluding Extraordinary Item, Increases by over 30% During the first quarter, INDI recorded a one-time extraordinary item of $1.81 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's stock compensation plan. Excluding this item, the Company's first quarter 2004 net income would have been $1.29 million, or $0.05 per share, an increase of over 30% from earnings of $897,000, or $0.05 per share, in the year-ago quarter. Including this item, the Company reported a net loss for the first quarter of 2004 of ($525,000), or ($0.02) per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $897,000, or $0.05 per fully diluted share in the year-ago quarter. "We are very pleased with our financial and operational performance for the first quarter, which extends our track-record of growing over 20% year-over-year," said Dr. Kit Tsui, Chairman and Chief Executive Officer of Industries International. "Our overall growth of over 20% coupled with 32% growth in our terminal products is strong evidence that we are successfully beginning to penetrate the enormous demand among Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. consumers for the latest in phone technology. The increase in our battery business was more modest, but it showed that demand for our products is rising steadily from OEMs in various industries, from telecom to transportation." Continued Financial Improvements Across Business Segments Across both divisions of INDI, the combined cost of manufacturing and other costs of sales rose to $10.17 million in the first quarter of 2004 from $8.02 million a year earlier, leaving a gross profit of $4.01 million, up 15.7% from $3.47 in the first quarter of 2003. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. fell year-over-year to 28.3% from 30.2%. The overall margin decrease was related to an increase in operating costs operating costs npl → gastos mpl operacionales and expenses due to the Company's entry into lower margin but higher volume product lines. INDI expects its margins to steadily improve going forward as it reaches a critical mass and, more significantly, once it begins manufacturing and delivering on its $20 million contract from Unical Enterprises, Inc. to manufacture Bell(R) Phones. Sales and marketing expenses decreased approximately 14% to $467,000 from $540,000 a year earlier, due primarily to lower advertising costs. General and administrative expenses rose 46%, to $668,000 in the first quarter of 2004 from $457,000 a year earlier. The Company attributed the rise to start-up Start-up The earliest stage of a new business venture. costs relating to the Company's new corporate office in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . Research and development expenses decreased 3.1%, to $281,000 from $290,000, mainly because of reduced use of raw materials in R&D. Depreciation and amortization expenses decreased 14.7% in the first quarter of 2004, to $116,000 from $136,000 in the first quarter of 2003. The Company noted that it shifted its production strategy to an Original Equipment Manufacturer (OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and ) methodology during 2003 and had outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, all of its manufacturing activities by the end of that year. The category of other operating costs and expenses experienced an increase to $1.99 million in the first quarter of 2004 from $150,000 a year earlier. As mentioned earlier, the primary expense in this category was a $1.81 million expense due to the Company's equity compensation plan. Company Strengthens Balance Sheet On March 31, 2004, INDI reported cash and cash equivalents of $33.9 million, up from $32.6 million on December December: see month. 31, 2003 with only $2.4 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Of the $33.9 million, approximately $11.8 million represented restricted cash. Cash, net of long-term debt, stood at approximately $31.5 million, or $1.11 per share, based on 28,322,000 weighted average shares outstanding on March 31, 2004. The Company's current ratio was 1.71 on March 31, 2004, up from 1.58 at the end of 2003. Dr. Tsui commented, "The significant improvements in our balance sheet, with over $30 million in cash and virtually no long-term debt, should provide us with the financial flexibility to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on a number of growth strategies we have in the pipeline for the remainder of 2004 and beyond." Company Raises $5.8 Million Towards Acquisition of 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. Software Company During the first quarter, INDI raised $5.8 million through the issuance of 2,521,745 new shares of common stock to a group of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. as part of a private equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. . The proceeds of the financing is expected to be used towards financing its proposed acquisition of a leading 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-based software company that distributes semiconductors, microchips and micro-controller units (MCUs). The acquisition, when complete, will provide INDI with a fully vertically integrated operation, including a supply of MCUs, R&D and production and distribution of final products. The target company, which has grown over double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. since its inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. , is one of the fastest growing, profitable and high-tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. software companies in Hong Kong This is a list of companies from Hong Kong.
INDI Receives $20 Million Order to Manufacture Bell(R) Phones During the first quarter, the Company announced that it has received an order totaling $20 million from US-based Unical Enterprises, Inc. to manufacture Bell(R) phones by Northwestern Bell Northwestern Bell Telephone Company served the states just north of the Southwestern Bell area, including: Iowa, Minnesota, South Dakota, North Dakota, and Nebraska. Phones www.nwbphones.com and Mountain Bell brand cordless telephones. The contract represents over 50% of INDI's 2003 sales for its telecom subsidiary and, more importantly, will serve as the catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. for INDI's aggressive international growth plans since the phones will be sold in the U.S., Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and China. The initial order will be for
Bell's 5.8 GHz model cordless telephones, the most technologically
advanced cordless telephones on the market today. INDI has already begun
the manufacturing of these phones and expects initial revenue
contributions to be recognized beginning in the second quarter of 2004.Company Provides Positive Guidance for 2004 "During the first quarter, we expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. significant management time and energy to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. our corporate offices to the 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. , initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. and complete our largest order yet -- a $20 million order to manufacture Bell telephones -- and to grow our business across all segments by a minimum of 20%," said Dr. Tsui. "The success of these goals coupled with a number of new strategic initiatives to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. later have laid the foundation for accelerated growth for INDI for the remainder of 2004. Based only on the contracts on-hand and a strong pipeline of potential new customers, we believe we will continue to achieve 20% plus growth in both revenues and earnings for the remainder of the year. The growing Chinese demand for telecom-related products combined with the rising affluence of the average Chinese customer -- a reflection of China's economy -- should enable us to meet our financial and operational goals and enhance shareholder value." If you would like to be added to IDUL's investor email lists, please contact Zack Noory with Investor Relations Investor relations The process by which the corporation communicates with its investors. International at znoory@irintl.com. About Industries International Industries International Incorporated is comprised of two wholly-owned subsidiaries, Broad Faith, Limited, and Li Sun Power International, Limited. Broad Faith is engaged in the development, production and distribution of communications terminal products, mainly corded and cordless telephones which are sold under the trademark Wondial(TM) throughout China. Its other wholly-owned subsidiary, Li Sun Power International Limited, engages in the manufacturing of lithium and lithium-ion batteries and testing equipment for chemical composition and functioning of batteries. For further information, please visit the Company's website at www.industriesintl.com. 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. Statement -- This press release contains 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 involve risks, uncertainties and assumptions that, if they never materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. or if they prove incorrect Incorrect means to not be correct and may also refer to:
In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenue, or other financial items, any statements of the plans, strategies, and objectives of management for future operations, any statements concerning proposed new products, services or developments, any statements regarding future economic conditions or performance, statements of belief and any statements of assumptions underlying any of the foregoing. These statements are based on expectations as of the date of this press release. Actual results may differ materially from those projected because of a number of risks and uncertainties, including those detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. The Company assumes no obligations and does not intend to update these forward-looking statements.
INDUSTRIES INTERNATIONAL INCORPORATED
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(Unaudited)
For Three Months
Ended March 31,
-------------------
2004 2003
(in USD) (in USD)
Operating revenues
Net sales $14,091 $11,454
Rental income 97 29
--------- ---------
Total operating revenues 14,188 11,483
--------- ---------
Operating expenses
Manufacturing and other costs of sales 10,174 8,015
Sales and marketing 467 540
General and administrative 668 457
Research and development 281 290
Depreciation and amortization 116 136
Other operating costs and expenses 1,988 150
--------- ---------
Total operating expenses 13,694 9,588
--------- ---------
Operating income 494 1,895
Interest expenses (208) (262)
Other (expenses) income, net 46 27
--------- ---------
Income before income taxes and minority interest 333 1,658
Provision for income taxes (291) (174)
--------- ---------
Income before minority interest 42 1,484
Minority interest in income of combined
subsidiaries (567) (587)
--------- ---------
Net income (loss) $ (525) $ 897
========= =========
Net income, excluding one-time non-cash stock
compensation expense $ 1,290 $ 897
========= =========
Earnings (loss) per share:
Basic weighted average number of common stock
outstanding 28,322 19,256
--------- ---------
Basic net income (loss) per common stock $ (0.02) $ 0.05
========= =========
Basic net income per common stock, excluding one-
time non-cash stock compensation expense $ 0.05 $ 0.05
========= =========
INDUSTRIES INTERNATIONAL INCORPORATED
CONDENSED COMBINED BALANCE SHEETS
(amount in thousands, except per share data)
(Unaudited)
As of As of
March 31, December 31,
2004 2003
---------- -------------
(in USD) (in USD)
ASSETS
Current assets:
Cash and cash equivalents(a) $33,897 $32,607
Marketable securities 715 -
Guaranteed investment contract 1,210 1,210
Accounts receivable, net 17,600 19,034
Due from related parties, director and
employees 6,168 1,821
Inventories 4,816 3,064
Prepaid expenses and other current assets 1,870 2,274
---------- -------------
Total current assets 66,276 60,010
Goodwill 1,761 1,761
Property, plant and equipment, net 8,888 9,136
---------- -------------
Total assets $76,925 $70,907
========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Debts maturing within one year $11,795 $11,795
Accounts payable - trade 7,808 7,142
Due to principal stockholder 7,945 7,840
Other payable 5,420 5,420
Tax payable 905 967
Accrued expenses and other accrued
liabilities 4,896 4,883
---------- -------------
Total current liabilities 38,769 38,047
---------- -------------
Non-current liabilities
Long-term debts 2,419 2,419
---------- -------------
Minority interests in combined subsidiaries 9,660 10,878
---------- -------------
Stockholders' equity:
Common stock 1,204 1,102
Additional paid-in capital 25,139 18,750
Deferred stock compensation (11,951) (12,500)
Dedicated reserves 3,705 3,479
Retained earnings 8,616 8,732
Accumulated other comprehensive loss (636) -
---------- -------------
Total stockholders' equity 26,077 19,563
---------- -------------
Total liabilities and stockholders' equity $76,925 $70,907
========== =============
(a) Amount includes $11,795,000 in restricted cash
INDUSTRIES INTERNATIONAL INCORPORATED
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
(amount in thousands)
(Unaudited)
Three months Twelve months ended
ended March 31, December 31,
------------------- -------------------
2004 2003
(in USD) (in USD)
Cash flows from operating
activities
Net income $(525) $1,182
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 116 1,880
Minority interest in net
income of consolidated
subsidiaries 567 3,314
Non-cash compensation costs 1,813 3,979
Provision for doubtful
accounts (72) 213
Net loss on sales, disposal
or impairment of long-lived
assets and marketable
securities, net - 128
Changes in assets and
liabilities, net of effects
from acquisitions:
Accounts receivable, net 1,434 (2,605)
Inventories, net (1,752) 1,386
Due from related parties (4,347) (130)
Due from directors and
employees (1,563) 22
Prepaid expenses and other
current assets 404 1,827
Accounts payable - Trade 666 577
Due to principal stockholder 105 (205)
Due to related parties 0 (163)
Tax payable (62) (454)
Accrued expenses and other
accrued liabilities 13 (446)
------------------- -------------------
Net cash provided by operating
activities $(3,203) $10,505
------------------- -------------------
Cash flows provided by (used
in) investing activities
Acquisition of subsidiaries,
net of cash - -
Acquisition of marketable
securities (715) -
Acquisition of guaranteed
investment contract - -
Purchase of property, plant
and equipment (21) (830)
Proceeds on disposal of
marketable securities - 1,541
Proceeds on disposal of
property, plant and
equipment 3 8,877
------------------- -------------------
Net cash provided by (used
in) investing activities $(733) $9,588
------------------- -------------------
Cash flows used in financing
activities
Issue of share capital 5,226 -
Borrowings of short-term
debt 1,814 11,799
Repayments of short-term
debt (1,814) (17,064)
Borrowings of long-term debt - 2,420
------------------- -------------------
Net cash from (used in)
financing activities $5,226 $(2,845)
------------------- -------------------
Net increase (decrease) in
cash and cash equivalents 1,290 17,248
Cash and cash equivalents,
beginning of fiscal year 32,607 15,359
------------------- -------------------
Cash and cash equivalents, end
of fiscal year $33,897 $32,607
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