Global-Tech Advanced Innovations Reports Fiscal 2010 Financial Results with a Return to Profitability

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today announced its financial results for fiscal year 2010 and the fourth quarter ended March 31, 2010.

Net sales for the fiscal year ended March 31, 2010 were $101.9 million, an increase of 16.6%, when compared to $87.4 million in fiscal 2009. Net profit for fiscal 2010 was $3.5 million, or $1.14 per share, compared to a loss of $5.8 million, or $1.91 per share, in fiscal 2009.

Net sales for the fourth quarter of fiscal 2010 increased approximately 29.3% to $21.6 million, compared to $16.7 million in the fourth quarter of fiscal 2009. Net income for the fourth quarter of fiscal 2010 was $0.05 million, or $0.01 per share, compared to a net loss of $4.2 million, or $1.36 per share, in the fourth quarter of fiscal 2009.

John C.K. Sham, the Company’s President and Chief Executive Officer, said: “We are pleased to report that we have achieved improved financial results in fiscal 2010. However, we remain cautious about future operating results, given the potential decline in volume and profit margins in the home appliances segment. We anticipate that the electronic components segment will remain relatively stable in fiscal 2011 and expect continued growth in the electronic manufacturing services segment.”

Mr. Sham continued, “While many of our customers resumed more normalized purchasing patterns in late 2009 and early 2010, this purchasing pattern could be indicative of improved consumer confidence based on the assumption that the worldwide economic recovery would continue. However, given the inherent unpredictability of the current economic climate, customers are likely to remain cautious, which makes it difficult for us to gauge our business prospects for the coming months.”

Mr. Sham concluded, “For fiscal 2011, we intend to utilize additional capital for expansion of our business in the Chinese and Asian markets. In fiscal 2010, revenues from Asia were 47.5% of our net sales and we expect sales in Asia to exceed 60% of net sales in fiscal 2011. A major factor in increasing revenues in Asia has been the progress of our electronic manufacturing service business, which was started less than two years ago. Production capacity is expected to double by the end of fiscal 2011 with additional investment in equipment and infrastructure.”

Global-Tech Advanced Innovations Inc. is a holding company, owning subsidiaries that manufacture and market a diversified portfolio of products and services, such as complementary metal oxide semiconductor (CMOS) camera modules (CCMs), floor care products, and electronic manufacturing services (EMS). The primary focus of its subsidiaries is to develop and market high-quality products and services for the communications industries within the China market, as well as 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 ADVANCED INNOVATIONS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts expressed in United States dollars)
	Fiscal Years Ended March 31,
		2010			2009
	(unaudited)			(audited)
Net sales	$	101,929,489		$	87,387,372
Cost of goods sold		(84,888,868	)		(81,500,506	)
Gross profit		17,040,621			5,886,866
Selling, general and administrative expenses		(14,096,417	)		(13,074,795	)
Other operating income, net		179,565			1,674,332
Operating profit (loss)		3,123,769			(5,513,597	)
Interest income, net		276,778			533,486
Other income, net		454,919			431,993
Loss on dissolution of a subsidiary		-			(1,028,875	)
Gain on disposal of subsidiaries		-			157,597
Profit (loss) before income taxes		3,855,466			(5,419,396	)
Income tax expense		(389,135	)		(421,026	)
Net income (loss)	$	3,466,331		$	(5,840,422	)
Basic and diluted earning (loss) per share of common stock	$	1.14		$	(1.91	)
Basic and diluted weighted average number of shares of common stock		3,037,969			3,051,216

GLOBAL-TECH ADVANCED INNOVATIONS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts expressed in United States dollars)
	March 31,
		2010			2009
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,808,596		$	11,312,882
Time deposits		-			4,410,951
Restricted cash		4,397,602			4,389,880
Available-for-sale investments		15,989,430			15,985,288
Accounts and bills receivable, net		23,244,365			18,438,329
Inventories		9,409,801			8,448,398
Prepaid expenses		277,938			264,147
Deposits and other assets		1,914,871			1,492,514
Legal claims receivable		5,090,153			5,100,246
Amount due from a related party		28,818			33,011
Amount due from a jointly-controlled entity		21,631			69,523
Convertible note		-			5,598,487
Interest receivable		-			504,000
Total current assets		85,183,205			76,047,656
Interests in jointly-controlled entities		-			-
Property, plant and equipment, net		22,708,372			24,592,448
Land use rights, net		3,033,152			3,073,105
Deposits paid for purchase of property, plant and equipment		57,716			200,696
Deferred tax assets		104,381			-
Total assets	$	111,086,826		$	103,913,905
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		5,131,151			7,962,971
Bills payable		1,503,595			-
Discounted bills		3,363,543			-
Customer deposits		965,282			716,670
Accrued salaries, allowances and other employee benefits		3,777,337			3,194,216
Accrual for loss contingencies		5,966,820			6,076,640
Other accrued liabilities		6,896,715			6,233,965
Income tax payable		5,708,526			5,501,086
Total current liabilities		33,312,969			29,685,548
Deferred tax liabilities		38,112			27,344
Total liabilities		33,351,081			29,712,892
Shareholders' equity:
Common stock, par value $0.04 per share; 12,500,000 shares authorized; 3,228,564 and 3,228,564 shares issued and outstanding as of March 31, 2010 and 2009		129,143			129,083
Additional paid-in capital		84,280,027			84,266,412
Accumulated deficit		(7,088,232	)		(10,554,563	)
Accumulated other comprehensive income		5,078,128			5,021,266
Less: Treasury stock, at cost, 189,587 and 189,387 shares as of March 31, 2010 and 2009		(4,663,321	)		(4,661,185	)
Total shareholders’ equity		77,735,745			74,201,013
Total liabilities and shareholders' equity	$	111,086,826		$	103,913,905