EX-1 3 dex1.txt PRESS RELEASE DATED DECEMBER 6, 2001 EXHIBIT 1 5 Thursday December 6, 7:33 am Eastern Time Press Release SOURCE: Global-Tech USA, Inc. Global-Tech Appliances Reports Second Quarter Results HONG KONG--(BUSINESS WIRE)--Dec. 6, 2001-- Global-Tech Appliances Inc. (NYSE: GAI - news) announced today its net sales and earnings for the second quarter of --- ---- fiscal 2002 ended September 30, 2001. Net sales for the second quarter of fiscal 2002 declined 23.5% to $24.8 million, compared to $32.4 million for the second quarter of fiscal 2001. Net income decreased for the second quarter of fiscal 2002 to $2.4 million, or $0.20 per share, compared to $4.0 million, or $0.33 per share, for the corresponding period in fiscal 2001. Results for the second quarter of fiscal 2002 included the operations of Lite Array, Inc., a flat-panel display business in which the Company acquired a controlling interest effective May 31, 2001. Net sales for the six months ended September 30, 2001 declined 12.7% to $48.1 million, compared to $55.1 million for the prior corresponding six-month period. Net income for the first half of fiscal 2002, which included the results of Lite Array, decreased to $4.5 million, compared to $5.8 million in the first half of fiscal 2001. John C.K. Sham, President and Chief Executive Officer, said: "As anticipated and announced in the previous quarter, our business has been negatively impacted by the global economic slowdown, particularly in the retail sector. While Lite Array has managed to commence production of some flat-panel displays during the quarter, its sales were immaterial and the loss in the operation impacted the quarter by $0.6 million, or $0.05 per share." Mr. Sham continued, "Additionally, the bankruptcy filing of Moulinex S.A., one of our key customers, also impacted our business in the quarter. These combining factors are likely to affect our net sales for the balance of the fiscal year but may be offset in part as the initiatives that we have taken to promote our floor care business come into fruition. Accordingly, the Company has implemented significant cutbacks and cost control measures, including reduced compensation for certain members of management, in an effort to remain profitable." Mr. Sham concluded, "Our strategy to change our focus and diversify the Company into a manufacturer of technology-oriented products is progressing as planned. While we believe that Lite Array may generate significant sales and ultimately profits within the coming twelve months, it's just a beginning part of our overall transition. We are continuing to pursue new technologies and businesses that can benefit from our manufacturing capabilities and remain committed to accelerating our plans to diversify the Company, which we believe will increase shareholder value." 6 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(R), Hamilton Beach(R), Krups(R), Morphy Richards(R), Moulinex(R), Mr. Coffee(R), Proctor-Silex(R), Sunbeam(R), and West Bend(R). 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," "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, 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 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 dollars)
---------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended September 30, September 30, 2001 2000 2001 2000 (unaudited) (unaudited) (unaudited) (unaudited) (in thousands, except per share data) Net sales $ 24,812 $ 32,414 $ 48,090 $ 55,126 Cost of goods sold (18,496) (25,065) (36,731) (42,952) Gross profit 6,316 7,349 11,359 12,174 Selling, general and administrative expenses (4,355) (3,869) (7,985) (7,817) Share of losses in joint venture (147) - (201) - Operating income 1,814 3,480 3,173 4,357 Other income, net 617 776 1,436 1,734 Income before income taxes 2,431 4,256 4,609 6,091 Provision for income taxes (193) (255) (304) (321) Income before minority interests 2,238 4,001 4,305 5,770 Minority interests 181 - 186 - Net income $ 2,419 $ 4,001 $ 4,491 $ 5,770 ======== ======== ======== ======== Net income per share $ 0.20 $ 0.33 $ 0.37 $ 0.48 ======== ======== ======== ======== Weighted average number of shares outstanding 12,138 12,133 12,138 12,133 -------------------------------------------------------------------------------------------------------
7 GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts expressed in United States dollars)
September 30, March 31, 2001 2001 (unaudited) (audited) (in thousands) ASSETS Current assets: Cash and cash equivalents $ 47,446 $ 28,489 Short-term investments 9,650 31,221 Interests in joint venture 5,798 - Accounts receivable, net 10,208 9,390 Deposits prepayments & other assets 2,952 9,160 Inventories, net 14,056 14,898 -------- --------- Total current assets 90,110 93,158 Property, plant and equipment 38,428 38,493 Excess of cost over fair value of net assets acquired 4,845 - Intangible assets 1,818 13 Loan to a director 384 384 -------- --------- Total assets $135,585 $ 132,048 ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term bank borrowings $ 81 $ - Current portion of long-term bank loans 1,235 1,139 Accounts payable 9,389 14,007 Advance payments from customers 74 184 Accrued expenses 5,668 3,737 Income tax provision 3,315 3,014 -------- --------- Total current liabilities 19,762 22,081 Long-term bank loans 330 908 Minority interests 1,313 - -------- --------- Total liabilities 21,405 22,989 Shareholders' equity: Preferred stock, par value $0.01; 1,000,000 shares authorized, no shares issued - -
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September 30, March 31, 2001 2001 (unaudited) (audited) (in thousands) Common stock, par value $0.01; 50,000,000 shares authorized; 12,830,000 shares issued; 12,830,000 shares issued as of September 30, 2001 and March 31, 2001 128 128 Additional paid-in capital 81,662 81,662 Retained earnings 36,940 32,456 Accumulated other comprehensive deficit 74 (550) -------- -------- 118,804 113,696 Less: Treasury stock, at cost (4,624) (4,637) Total shareholders' equity 114,180 109,059 -------- -------- Total liabilities and shareholders' equity $135,585 $132,048 ------------------------------------------------------------------------------------------------------------
Contact: Global-Tech USA, Inc., New York Brian Yuen Tel.: 212-683-3320 Web Page: http://www.businesswire.com/cnn/gai.shtml ----------------------------------------- 9