Global-Tech Advanced Innovations Reports Third Quarter Results for Fiscal 2013; Makes Significant In

Global-Tech Advanced Innovations Reports Third Quarter Results for Fiscal 2013; Makes Significant Investment

to Expand CCM Business

HONG KONG--(BUSINESS WIRE)-- Global-Tech Advanced Innovations Inc. (NAS: GAI) today announced its financial results for the fiscal quarter ended December 31, 2012 (the Company's third quarter of fiscal 2013).


Net sales for the third quarter of fiscal 2013 were $20.6 million, compared to $22.3 million for the corresponding quarter in fiscal 2012. Net income for the third quarter of fiscal 2013 was $0.06 million, or $0.01 per share, compared to a net income of $3.3 million, or $1.09 per share, for the third quarter of fiscal 2012, which included $1.7 million in income from discontinued operations, net of taxes. As a result of the discontinued operation of our home appliance segment in January 2012, proper accounting treatment requires that net sales for the third quarter of fiscal 2012 exclude approximately $21.9 million in sales of home appliances.

Net sales for the nine months ended December 31, 2012 were $67.2 million, up approximately 24% when compared to $54.2 million in the corresponding nine-month period in fiscal 2012. Net income for the first nine months of fiscal 2013 was $0.3 million, or $0.10 per share, compared to a net income of $2.9 million, or $0.97 per share, for the first nine months of fiscal 2012. As a result of the discontinued operation of our home appliance segment in January 2012, proper accounting treatment requires that net sales for the first nine months of fiscal 2012 exclude approximately $49.0 million in sales of home appliances.

John C.K. Sham, the Company's President and Chief Executive Officer, said: "The growth momentum of our CCM business was slowed in the third quarter of fiscal 2013 by the unanticipated placement of purchase orders by some of our key customers for lower cost, lower pixel CCMs rather than higher pixel CCMs. The slowing momentum in our CCM business, together with rapidly rising labor costs in our electronic manufacturing service (EMS) business, adversely impacted our financial results for the third quarter of fiscal 2013."

Mr. Sham continued, "As discussed in prior releases and filings, opportunity remains for growth of our CCM business. To that end, significant investments were recently made towards the installation of two chip-on-board (COB) production lines and a COB sampling line, both of which we anticipate will expand and enhance our production capacity. A Class 10 clean room has been constructed to compliment the new COB equipment. Thus far, production yields utilizing the new equipment during trial production runs have approached maximum levels. We anticipate that the new equipment will enable the company to expand further into the higher-pixel CCM markets and target new customers. We expect that the expansion of our product lines and capacity will result in our CCM business regaining momentum."

Mr. Sham concluded, "We have implemented cost reduction measures to reduce the operating costs of our EMS business and we remain optimistic that these steps will gradually reverse the decline in profitability of our EMS business. Through these efforts, as well as the pursuit of other options that might become available, we remain committed to returning value to our shareholders."

Global-Tech Advanced Innovations Inc. is a holding company, owning subsidiaries that manufacture and market a diversified portfolio of products, such as complementary metal oxide semiconductor (CMOS) and camera modules (CCMs). The primary focus of its subsidiaries is to develop and market high-quality products for the communications industry in China and export such products to markets in North America, Europe, and other countries throughout the world.

Except for historical information, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act 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, demand for new and existing products in our core business, the financial condition of the Company's customers, product demand and market acceptance especially of our new products, the success of new product development especially in the area of cellular phone components and solutions, compact camera modules and other pending projects, 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 and transform a portion of manufacturing capacity to higher-value, technology-oriented products, currency fluctuations, including the revaluation of the Chinese Renminbi, the imposition by China's trading partners of economic sanctions and/or protective tariffs on Chinese manufactured goods, 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 U.S. 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

December 31,

Nine Months Ended

December 31,

2012

2011

2012

2011

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net sales

$ 20,632

$ 22,347

$ 67,164

$ 54,152

Cost of goods sold

(18,154)

(18,063)

(57,670)

(45,747)

Gross profit

2,478

4,284

9,494

8,405

Selling, general and administrative expenses

(3,750)

(2,690)

(11,202)

(7,715)

Other operating income (expense)

-

-

-

29

Operating income (loss)

(1,272)

1,594

(1,708)

719

Interest income, net

163

50

508

187

Other income (expense), net

272

137

666

717

Income (loss) from continuing operations before income taxes

(837)

1,781

(534)

1,623

Income tax expenses

384

(147)

282

(280)

Income (loss) from continuing operations

(453)

1,634

(252)

1,343

Income (loss) from discontinued operations, net of tax

486

1,700

486

1,557

Net income (loss)

33

3,334

234

2,900

Net income (loss) attributable to non-controlling interests

27

(16)

78

36

Net income (loss) attributable to shareholders

$ 60

$ 3,318

$ 312

$ 2,936

Basic earnings (loss) per common share

$ 0.01

$ 1.09

$ 0.10

$ 0.97

Diluted earnings (loss) per common share

$ 0.01

$ 1.09

$ 0.10

$ 0.97

Basic weighted average number of shares outstanding

3,040

3,039

3,040

3,039

Diluted weighted average number of shares outstanding

3,040

3,039

3,040

3,039

GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in thousands of United States dollars)

December 31,
2012

March 31,

2012

(unaudited)

(audited)

ASSETS

Current assets:

Cash and cash equivalents

$ 28,016

$ 39,793

Restricted cash

12,030

4,546

Available-for-sale investments

7

2,006

Accounts and bills receivable, net

34,843

30,273

Inventories

5,778

5,374

Prepaid expenses

196

150

Deposits and other assets

5,221

769

Amount due from a related party

19

12

Total current assets

86,110

82,923

Interests in jointly-controlled entities

-

-

Property, plant and equipment, net

22,488

21,934

Land use rights, net

3,053

3,083

Deposits paid for purchase of property, plant and equipment

1,755

66

Available for sales investments

1,044

1,034

Total assets

$ 114,450

$ 109,040

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term bank loans

5,249

4,000

Accounts payable

9,252

8,164

Customer deposits

640

861

Accrued salaries, allowances and other employee benefits

4,376

3,102

Other accrued liabilities

11,252

6,638

Income tax payable

5,353

6,158

Total current liabilities

36,122

28,923

Deferred tax liabilities

27

27

Total liabilities

36,149

28,950

Shareholders' equity:

Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,230,064 shares issued as of December 31 and March 31, 2012

129

129

Additional paid-in capital

85,039

84,786

Accumulated deficit

(12,420)

(9,691)

Accumulated other comprehensive income

10,462

9,697

Less: Treasury stock, at cost, 189,587 shares as of December 31 and March 31, 2012

(4,663)

(4,663)

Total Global-Tech Advanced Innovations Inc. shareholders' equity

78,547

80,258

Non-controlling interests

(246)

(168)

Total equity

78,301

80,090

Total liabilities and shareholders' equity

$ 114,450

$ 109,040



Global-Tech Advanced Innovations Inc.
Cecilia Au-Yeung, 852-2814-0601
investorrelations@global-webpage.com

KEYWORDS: United States Asia Pacific North America New York Hong Kong

INDUSTRY KEYWORDS:

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