Global-Tech Advanced Innovation (NASDAQ:GAI)

HONG KONG--(BUSINESS WIRE)--

Global-Tech Advanced Innovations Inc. (GAI) (the “Company”) today announced that the Company completed the merger of Timely Merit Limited with and into the Company (the “merger”) by completing the registration of the merger with the Registrar of Corporate Affairs of the British Virgin Islands. Following the completion of the merger, the Company will become a privately held company and the ordinary shares of the Company (the “Shares”) will no longer be traded on the Nasdaq Stock Market LLC (“NASDAQ”).

Under the terms of the merger agreement, each of the Shares issued and outstanding immediately prior to the effective time of the merger has been cancelled in exchange for the right to receive $8.85 in cash, without interest and net of any applicable withholding taxes, other than the Shares beneficially owned by Mr. John C.K. Sham, Wing Shing Holdings Company Limited, Ms. Shun Chi Hui, Ms. Jenny Tsai and Ms. Estee Sham and the Shares held by the Company or any of its subsidiaries (collectively, the “Excluded Shares”). The Excluded Shares have been automatically cancelled for no consideration at the effective time of the merger. The Company did not receive any notice of objection from any shareholder prior to the vote to approve the merger at the extraordinary general meeting, which is required for exercising any dissenter rights under the BVI Companies Act.

HONG KONG--(BUSINESS WIRE)--

Global-Tech Advanced Innovations Inc. (GAI) (the �Company�) today announced that it has entered into an agreement and plan of merger (the �Merger Agreement�) with Timely Star Limited, a company with limited liability incorporated under the laws of the British Virgin Islands (�Parent�), and Timely Merit Limited, a company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of Parent (�Merger Sub�).

Pursuant to the terms of the Merger Agreement, each of the Company�s ordinary shares (a �Share�) issued and outstanding immediately prior to the effective time of the merger will be cancelled in exchange for the right to receive US$8.85 in cash per Share, without interest, except for (i) the Shares (the �Rollover Shares�) beneficially owned by Mr. John C.K. Sham (the president and chief executive officer the Company, �Mr. Sham�), Wing Shing Holdings Company Limited, Hui Shun Chi, Jenny Tsai and Estee Sham (collectively, the �Rollover Shareholders�), (ii) the Shares beneficially owned by the Company or any of its Subsidiaries (together with the Rollover Shares, the �Excluded Shares�), and (iii) the Shares owned by holders of Shares who have validly exercised and not effectively withdrawn or lost their appraisal rights pursuant to Section 179 of the BVI Business Companies Act, 2004, as amended. The per Share consideration of US$8.85 represents a premium of approximately 195.0% over the closing price on July 31, 2015 and a premium of approximately 162.9% over the 30-trading day volume-weighted average closing price on July 31, 2015, the last trading day prior to the Company�s announcement that it had received a �going private� proposal from Mr. Sham and certain of his controlled or affiliated entities on August 1, 2015. Collectively, the Shares owned by the Rollover Shareholders represent approximately 66.8% of the Company�s total issued and outstanding share capital.

The transaction will be financed through a combination of cash contributed by Mr. Sham and equity contributed by the Rollover Shareholders. Mr. Sham has entered into a guaranty in favor of the Company.

The Company�s Board of Directors, acting upon the unanimous recommendation of a special committee formed by the Board of Directors (the �Special Committee�), approved the Merger Agreement and the merger contemplated in the Merger Agreement and resolved to recommend that the Company�s shareholders vote to approve and authorize the Merger Agreement and the merger. The Special Committee, which is composed solely of independent directors unrelated to Parent, Merger Sub or any of the Rollover Shareholders, negotiated the terms of the Merger Agreement with the assistance of its legal and financial advisors.

The merger contemplated in the Merger Agreement, which is currently expected to close during the first quarter of 2016, is subject to various closing conditions, including the approval by an affirmative vote of shareholders representing (i) 50% or more of the Company�s ordinary shares present and voting in person or by proxy as a single class at an extraordinary general meeting of the Company�s shareholders convened to consider the approval and adoption of the Merger Agreement and the merger, and (ii) 50% or more of the Company�s ordinary shares present and voting in person or by proxy as a single class, excluding the Excluded Shares, as well as certain other customary closing conditions. Mr. Sham and the other Rollover Shareholders have agreed under a supporting agreement to vote all the Rollover Shares in favor of the merger. If completed, the merger will result in the Company becoming a privately-held company and its Shares would no longer be listed on the NASDAQ Stock Market LLC.

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced its financial results for the quarter ended September 30, 2015 (the Company's second quarter of fiscal 2016).

Net sales for the second quarter of fiscal 2016 were $20.1 million, compared to $21.1 million for the corresponding quarter in fiscal 2015. Net loss for the second quarter of fiscal 2016 was $2.2 million, or $0.72 per share, compared to a net loss of $2.2 million, or $0.74 per share, for the second quarter of fiscal 2015.

Net sales for the six months ended September 30, 2015 were $35.4 million, compared to $45.7 million in the corresponding six-month period in fiscal 2015. Net loss for the first six months of fiscal 2016 was $3.2 million, or $1.06 per share, compared to a net loss of $2.5 million, or $0.83 per share, for the first half of fiscal 2015.

John C.K. Sham, the Company's President and Chief Executive Officer, said: "Operating results for the second quarter of fiscal 2016 were similar to the corresponding period in fiscal 2015, with realized cost and operating efficiencies being offset by declining commodity pricing. The nature of the CCM business and eroding margins is unlikely to change in the foreseeable future as capacity in China continues to grow."

Mr. Sham continued, "Despite the challenges facing our CCM business, we are increasing our efforts to improve the progress of our medical device technology. We continue to focus on marketing and R&D and are hopeful that this business could eventually improve our operating results."

Mr. Sham concluded, "Given the commoditization of the CCM business, we continue to work on strategic alternatives to enhance shareholder value. We are hopeful that our cost-reduction efforts will begin to have a positive impact on operating results as we expect inflationary pressures to ease as the Chinese economy slows."

Recent Developments

Announced Receipt of Going Private Offer

• On August 1, 2015, the Company's board of directors (the �Board�) received an unsolicited preliminary non-binding proposal letter (the �Proposal Letter�), dated August 1, 2015, from Mr. John C.K. Sham, President and Chief Executive Officer of the Company, and certain of his controlled or affiliated entities (collectively, the �Acquirer�), proposing a potential offer to acquire all of the outstanding common shares of the Company (the �Offer�) not already beneficially owned or controlled by the Acquirer for $8.75 in cash per share (�Shares�). According to the Proposal Letter, the Acquirer plans to form an acquisition company for the purpose of implementing the Offer, and the Offer is intended to be financed with a combination of cash and debt.
• On August 5, 2015, in response to the Proposal Letter received by the Board from the Acquirer, the Board formed a special committee of independent directors who are not affiliated with the Acquirer (the �Special Committee�) to consider potential transactions involving the Company, including the previously announced Proposal Letter. The Special Committee consists of Mr. Barry J. Buttifant and Mr. Patrick Po-On Hui, with Mr. Buttifant acting as the chairman of the Special Committee.
• Since August 2015, the Special Committee has retained Houlihan Lokey (China) Limited as its independent financial advisor, Cleary Gottlieb Steen & Hamilton LLP as its United States legal counsel and Maples & Calder as its British Virgin Islands legal counsel to assist in the evaluation of potential transactions involving the Company, including the Proposal Letter received by the Board from the Acquirer.
  
  The Special Committee cautions the Company�s shareholders and others considering trading its securities that the Special Committee is continuing its evaluation of the Offer or other alternatives and that, at this time, no decisions have been made by the Special Committee with respect to the Company�s response to the Offer. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed or that the Offer or any other transaction will be approved or consummated.

• Net sales for the first quarter of fiscal 2016 ended June 30, 2015 were $15.3 million, compared to net sales of $24.6 million for the corresponding quarter in fiscal 2015.
• Net loss for the first quarter of fiscal 2016 was $1.0 million, or $0.34 per share, compared to a net loss of $0.3 million, or $0.10 per share, for the first quarter of fiscal 2015.

John C.K. Sham, the Company's President and Chief Executive Officer, said: �As anticipated, net sales decreased significantly when compared to the prior corresponding period, due almost entirely to declining sales in commodity CCMs, a lower price-point category where increases in labor and overhead costs have eliminated any advantage previously held over competitors.�

Mr. Sham continued, �Despite a decrease in overall sales, average unit pricing improved as a result of a more favorable product mix and our efforts to control production costs, leading to increases in profit margins.�

Mr. Sham concluded, �The outlook on our overall business is tempered by growing sentiment of a slowing Chinese economy together with the potential impacts of the recent devaluation of the Chinese currency, as much of our business is U.S. dollar related. We do not expect our business to improve in the near future as our customers are likely to take a conservative position to reduce excess inventory and are prepared to make further cost reductions if necessary in an effort to protect our continued viability.�

HONG KONG--(BUSINESS WIRE)--

Global-Tech Advanced Innovations Inc. (GAI) (the Company) today announced that the special committee of the board of directors (the Special Committee), which was formed by the Company�s board of directors (the �Board�), plans to retain Cleary Gottlieb Steen & Hamilton LLP as its United States legal counsel, Maples & Calder as its British Virgin Islands legal counsel and Houlihan Lokey (China) Limited as its independent financial advisor to assist in the evaluation of potential transactions involving the Company, including the unsolicited preliminary non-binding proposal dated August 1, 2015 that the Board received from the Company�s President and Chief Executive Officer, Mr. John C.K. Sham, and certain of his controlled or affiliated entities (collectively, the �Acquirer�), to acquire all of the outstanding common shares of the Company not currently beneficially owned or controlled by the Acquirer in a �going private� offer (the Proposed Offer).

The Special Committee cautions the Company�s shareholders and others considering trading its securities that the Special Committee is continuing its evaluation of the Proposed Offer or other alternatives and that, at this time, no decisions have been made by the Special Committee with respect to the Company�s response to the Proposed Offer. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed or that the Proposed Offer or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Global-Tech Advanced Innovations Inc. is a holding company, owning subsidiaries that manufacture and market electronic components and other related products, such as complementary metal oxide semiconductor (CMOS) 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 other countries throughout the world.

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) (the �Company�) today announced that its Board of Directors (the �Board�) has formed a special committee (the �Special Committee�) to consider potential transactions involving the Company, including the previously announced unsolicited preliminary non-binding proposal, which the Board received from Company�s President and Chief Executive Officer, Mr. John C.K. Sham, and certain of his controlled or affiliated entities (collectively, the �Acquirer�), on August 1, 2015. In that proposal, the Acquirer stated that it intends to acquire all of the outstanding common shares of the Company not currently beneficially owned or controlled by the Acquirer in a �going private� offer (the �Proposed Offer�).

The Special Committee consists of two independent, disinterested directors of the Company, Mr. Barry J. Buttifant and Mr. Patrick Po-On Hui, with Mr. Buttifant acting as the chairman of the Special Committee. The Special Committee intends to retain independent legal and financial advisors to assist it in its work.

The Company cautions its shareholders and others considering trading its securities that neither the Board nor the Special Committee has made any decision with respect to the Company�s response to the Proposed Offer. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the Proposed Offer or that the Proposed Offer or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced that its Board of Directors (the �Board�) has received an unsolicited preliminary non-binding proposal letter, dated August 1, 2015, from Mr. John C.K. Sham, President and Chief Executive Officer of the Company, and certain of his controlled or affiliated entities (collectively, the �Acquirer�), proposing a potential offer to acquire all of the outstanding common shares of the Company (the �Offer�) not already beneficially owned or controlled by the Acquirer for $8.75 in cash per share (�Shares�).

According to the proposal letter, the Acquirer plans to form an acquisition company for the purpose of implementing the Offer, and the Offer is intended to be financed with a combination of cash and debt. The proposal letter states that the Acquirer is confident of its ability to timely secure adequate financing to consummate the Offer subject to the terms and conditions set out therein. A copy of the proposal letter is attached hereto as Exhibit A.

The Company�s Board of Directors intends to form a special committee comprised of and selected by independent directors (the �Special Committee�) to consider the proposal and any resulting Offer. The Special Committee is authorized to retain advisors, including an independent financial advisor and legal counsel, to assist it in evaluating any such proposal or Offer.

The Board cautions the Company�s shareholders and others considering trading in its securities since the Board has just received the unsolicited preliminary non-binding proposal letter from the Acquirer and no decisions have been made with respect to the Company�s response to the proposal. There can be no assurance that any definitive offer will be made, or that if an offer is received, that such an offer or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

HONG KONG--(BUSINESS WIRE)--

Global-Tech Advanced Innovations Inc. (GAI) today announced its financial results for the fiscal year ended March 31, 2015.

Net sales for fiscal 2015 were $78.0 million, up 24.4%, when compared to net sales of $62.7 million in fiscal 2014. Net loss for fiscal 2015 was $6.4 million, or $2.11 per share, when compared to a net loss of $10.6 million, or $3.47 per share, in fiscal 2014. Included in net loss for fiscal 2014 was $5.5 million from discontinued operations.

Net sales for the fourth quarter of fiscal 2015 were $16.2 million, compared to $17.7 million in the corresponding period in fiscal 2014. Net loss for the fourth quarter of fiscal 2015 was $1.7 million, or $0.68 per share, compared to a net loss of $3.2 million, or $1.06 per share, for the corresponding quarter in fiscal 2014.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “We continue to focus our efforts on improving our productivity and efficiency in our electronic components business. Despite increased volume and better product mix when compared to fiscal 2014, improvements were insufficient to generate positive cash flow during fiscal 2015.”

Mr. Sham continued, “Our leasing program for those portions of our facility that previously housed our now discontinued home appliance and EMS operations is currently generating sufficient income to cover the costs of maintaining our factory complex in Dongguan, China.”

Mr. Sham concluded, “Advancements in our medical product business continued in fiscal year 2015, as we continue to penetrate target markets.”

Global-Tech Advanced Innovations Inc. is a holding company, owning subsidiaries that manufacture and market electronic components and other related products, such as complementary metal oxide semiconductor (CMOS) 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 other countries throughout the world.

GLOBAL-TECH ADVANCED INNOVATIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2014 AND 2013

Management Discussion and Analysis

Net sales. Our net sales include sales of electronic components (primarily CCMs), products incorporating CCMs and raw materials for customer prototypes. Net sales consist of gross amounts invoiced less discounts and VAT, if applicable. Sales are typically denominated in RMB for sales in the PRC and denominated in US$ for export sales. Our most significant material costs are typically denominated in dollars but all our other costs are in local currency.

The CCM business, which constitutes the bulk of our net sales of electronic components, was established in mid-fiscal 2006, and expanded rapidly until the worldwide economic slowdown in the fall of 2008. Recently, the business had seen gradual improvement as the Chinese telecommunication market resumed growth but pricing continued to deteriorate. Net sales in fiscal 2015 increased by 25.3% to $78.0 million, of which $75.9 million was CCMs, from net sales of $65.6 million, of which $60.6 million was CCMs, in fiscal 2014 primarily due to a more favorable mix of business as well as increased volume offset by price reductions.

Unit sales of CCMs in fiscal 2015 increased by 23.6% to 30.4 million units from 24.6 million units in fiscal 2014. Of the 30.4 million units sold in fiscal 2015, 29% were produced on our COB lines and the balance using the CSP process. Sales of higher pixel units (greater than 5.0 megapixel) in fiscal 2015 were 29.6% of unit sales compared to 14.5% in fiscal 2014. Average unit prices increased approximately 3% from the prior year due to the favorable mix.

Despite our efforts to promote our higher pixel camera modules for laptops and note pads, our telecom business was still responsible for the majority of sales revenue, where competition continues to be intense and many new competitors have been established.

While we expect our CCM volume will not increase in fiscal 2016, improvement in the mix of the business, price stability and cost reductions will be critical to improving profitability.

Our product sales of scanners and security devices incorporating CCMs met our modest expectations in fiscal 2015, and amounted to $4.9 million of business compared to $3.7 million in the prior year. We expect a modest increase in this business in fiscal 2016 primarily from our range of document scanners and our ID reader that was introduced in 2015, but establishing a more effective distribution network will be essential for this business to grow materially.

Net loss. Net loss for the group for fiscal 2015 was approximately $6.4 million, or $2.11 per share, as compared to a net loss of $10.6 million, or $3.47 per share for fiscal 2014.

Third Quarter 2015 Financial Results

• Net sales for the third quarter of fiscal 2015 were $16.2 million, compared to $20.5 million for the corresponding quarter in fiscal 2014.
• Net loss for the third quarter of fiscal 2015 was $1.8 million, or $0.59 per share, compared to a net loss of $0.7 million, or $0.22 per share, for the third quarter of fiscal 2014.

Mr. Sham continued, “The trend of declining prices for five and eight mega-pixel camera modules continued in the third quarter of 2015, with prices decreasing by approximately 30% when compared to a year ago. The rapid pace at which pricing is declining has offset most of our cost saving measures resulting in little to no improvement in the operating results."

Mr. Sham concluded, “Despite disappointing results in the third quarter of fiscal 2015, we continue to improve our yields and reduce our overall operating costs. We remain hopeful that as market conditions stabilize, our efforts will result in a return to sustainable profitability. In the interim, we are continuing to rent the unused space in our facilities to further offset our operating costs as we focus our efforts on developing new products and pursue new business opportunities. We will provide additional information regarding new business opportunities if and when these opportunities materialize into confirmed projects.”

• Net sales for the second quarter of fiscal 2015 were $21.1 million, an increase of approximately 76% when compared to $12.0 million for the corresponding quarter in fiscal 2014.
• Net loss for the second quarter of fiscal 2015 was $2.2 million, or $0.74 per share, compared to a net loss of $5.2 million, or $1.70 per share, for the second quarter of fiscal 2014.

John C.K. Sham, the Company's President and Chief Executive Officer, said: �Sales in our electronic components business experienced growth in the first half of fiscal 2015, with unit sales increasing nearly 120% compared to the previous year; however, concurrent declines in pricing of approximately 30% offset any potential gains in operating results. This is despite an improved product mix of higher-pixel units for our CCMs.�

Mr. Sham continued, �Competition in the electronic business remains high, with new entrants entering the market almost daily. This coupled with the current instability in the industry will require us to reconsider any further investment in additional chip-on-board (COB) production lines.�

Mr. Sham concluded, �The future success of our electronic components business will depend upon our ability to attract new customers and drive volume while at the same time improving margins, whether through the reduction of our manufacturing costs or through increases in price and innovation.�

First Quarter 2015 Financial Results

• Net sales for the first quarter of fiscal 2015 ended June 30, 2014 were $24.6 million, compared to net sales of $12.5 million from continuing operations for the corresponding quarter in fiscal 2014.
• Net loss for the first quarter of fiscal 2015 was $0.3 million, or $0.10 per share, compared to a net loss of $1.5 million, or $0.51 per share, for the first quarter of fiscal 2014.

John C.K. Sham, the Company's President and Chief Executive Officer, said: "Despite an 82% increase in shipments of our CCM units and an overall increase of 104% in net sales in the electronic components segment, profitability in this segment declined about $0.4 million when compared to the prior year. This decline in profitability is primarily attributable to pricing concessions necessitated by the intense competition within the industry, as well as continuing increases in labor and overhead costs."

Mr. Sham continued, "While we are continuing our efforts towards increasing productivity, the key to improving our operating results remains improving our product mix, specifically the increased sales, as a percentage of overall sales, of higher-pixel CCM units which only represented approximately 18% of our unit volume in the first quarter of fiscal 2015. Operating results for the first quarter of fiscal 2015 benefited from the leasing of the facilities that previously housed our discontinued home appliance and EMS businesses, which generated approximately $1.0 million in gross income and $0.3 million in income after depreciation, taxes and common charges."

Mr. Sham concluded, "Our primary business focus remains the improvement of profit margins of our electronic components business segment and we are evaluating whether capital improvements and/or other strategic actions can adequately address current operating issues. In the interim, our cash position remains strong and is expected to gradually improve as our rental income increases."

GLOBAL-TECH ADVANCED INNOVATIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE FISCAL YEARS ENDED MARCH 31, 2014, 2013 AND 2012

Management Discussion and Analysis

Net sales

Our net sales include sales of electronic components (primarily CCMs), products incorporating CCMs and raw materials for customer prototypes. Net sales consist of gross amounts invoiced less discounts and VAT, if applicable. Sales are typically denominated in RMB for sales in the PRC and denominated in US$ for export sales. Our most significant material costs are typically denominated in dollars but all our other costs are in local currency.

The CCM business, which constitutes the bulk of our net sales of electronic components, was established in mid-fiscal 2006, and expanded rapidly until the worldwide economic slowdown in the fall of 2008. Recently, the business had seen gradual improvement as the Chinese telecommunication market resumed growth but pricing continued to deteriorate. Net sales in fiscal 2014 decreased by 7.1% to $60.6 million from net sales of $65.2 million in fiscal 2013 primarily due to a less favorable mix of business as well as price reductions.

Unit sales in fiscal 2014 increased by 8.0% to 24.6 million units of which 31% were commodity type VGA units and approximately 14% were produced using our new chip on board process.

Despite our efforts to promote our higher pixel camera modules for laptops and note pads, our telecom business was still responsible for the majority of sales revenue, where competition continues to be intense.

While we expect volume to increase significantly in fiscal 2015, the mix of the business will be critical to improving profitability.

Our product sales of scanners and security device incorporating CCMs did not meet our expectations in fiscal 2014, but amounted to $3.7 million of business compared to $3.8 million in the prior year. We expect a modest increase in this business in fiscal 2015 primarily from our range of document scanners, but establishing a more effective distribution network will be essential for this business to grow materially.

Net loss

Net loss for the group for fiscal 2014 was approximately $10.6 million, or $3.47 per share, as compared to a net loss of $2.0 million, or $0.65 per share for fiscal 2013.

Third Quarter 2013 Financial Results

• Net sales for the third quarter of fiscal 2014 were $20.5 million, up approximately 31% when compared to $15.6 million for the corresponding quarter in fiscal 2013.
• Net loss for the third quarter of fiscal 2014 was $0.7 million, or $0.22 per share, compared to a net income of $0.1 million, or $0.02 per share, for the third quarter of fiscal 2013.

John C.K. Sham, the Company's President and Chief Executive Officer, said: As previously disclosed, increasing expenses, including rising labor costs, downward pricing demands and a weakening Chinese domestic market required the closure of our EMS business. In connection with our exit from the EMS business, we incurred $0.9 million in impairment charges, $0.9 million in severance costs, and $0.2 million in provision for doubtful debts for the nine-month period ended December 31, 2013. The closure of our EMS business, while disappointing, allows us to concentrate additional resources towards the further development of our electronic components business as well as the pursuit of other potential opportunities."

Mr. Sham continued, "As part of our plans to improve our profitability, we intend to lease the space and equipment that were formerly used in the operation of our EMS business, together with other excess manufacturing space, until we can achieve a more productive utilization of this space."

Mr. Sham concluded, "We are continuing to explore and evaluate potential opportunities to further expand our electronic components business beyond camera modules for mobile phones and computer tablets, but for any such expansion to be viable, low labor input would need to be maintained which could prove difficult given the issues with both the cost and availability of labor in the southern part of China."

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 other countries throughout the world.

Second Quarter 2014 Financial Results

• Net sales for the second quarter of fiscal 2014 were $12.6 million, compared to $26 million for the corresponding quarter in fiscal 2013.
• Net loss for the second quarter of fiscal 2014 was $5.2 million, or $1.70 per share, compared to a net income of $0.2 million, or $0.07 per share, for the second quarter of fiscal 2013.

As previously disclosed, the results of the Company�s EMS business have been adversely affected by rising labor costs, high turnover and downward pricing demands from major customers. Given the weakening Chinese domestic market, management felt that these issues were likely to continue, if not worsen, and that the decision to close the EMS business was necessary to avoid incurring further losses. John C.K. Sham, the Company's President and Chief Executive Officer, said: �After careful review and consideration of this quarter�s results, it became clear that this business was no longer economically viable for us in our current location.�

Mr. Sham continued, �Our electronic components customers, particularly our largest CCM customer, recently rebalanced their inventory which not only impacted our volume, but also the mix of our camera modules. Production from our new COB (chip-on-board) production lines increased, but many shipments were delayed until the next fiscal quarter."

Mr. Sham concluded, �We are continuing to evaluate strategic alternatives, which include the potential leasing of our EMS facilities, which we believe could generate more positive results than would be possible from continuing current operations. Despite disappointing results from our EMS business, we remain committed to our goal of enhancing shareholder value and are diligently evaluating other opportunities. We expect improvement in the operating results of our electronic components business in the upcoming quarter.�

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 other countries throughout the world

First Quarter 2014 Financial Results

• Net sales for the quarter ended June 30, 2013 were $14.8 million, compared to net sales of $20.5 million for the corresponding quarter in fiscal 2013.
• Net loss for the first quarter of fiscal 2014 was $1.5 million, or $0.51 per share, compared to a net income of $0.05 million, or $0.02 per share, for the first quarter of fiscal 2013.

John C.K. Sham, the Company's President and Chief Executive Officer, said: �The Company�s first quarter of fiscal 2014 saw a decrease in net sales of electronic components of approximately $5.2 million when compared to the corresponding quarter in fiscal 2013 due primarily to declines in customer production levels. Despite lower sales, we are encouraged by the recent production and shipment of our new 8.0 and 5.0 megapixel CCMs utilizing our newly installed chip-on-board (COB) production lines, which we believe to be crucial to returning the Company to profitability.�

Mr. Sham continued, �Rising labor costs, high turnover and decreased productivity continue to have significant adverse effects on our operating results. As these issues are likely to persist, we expect to make significant changes in the operation of our businesses in an effort to offset these factors. Additionally, as previously disclosed, a weakening Chinese economy continues to adversely affect our EMS business segment which relies exclusively on the Chinese domestic market. Accordingly, we are considering strategic alternatives, including the potential leasing of our SMT equipment and the facility that houses and operates such equipment in an effort to generate additional income and to improve our financial performance.�

Mr. Sham concluded, �We anticipate that our electronic components business will return to at least prior year performance levels in the second half of fiscal 2014, provided that sales of our newer 8.0 and 5.0 CCMs continue to grow as anticipated. Until such time as this occurs or another business opportunity presents itself, we will continue to rent the excess space in our manufacturing facility to supplement our income.�

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced its financial results for the fiscal year ended March 31, 2013.

Net sales for fiscal 2013 were $81.1 million, an increase of approximately 16.4% when compared to net sales of $69.7 million in fiscal 2012. Net loss for fiscal 2013 was $2.0 million, or $0.65 per share, compared to a net income of $1.4 million, or $0.46 per share, in fiscal 2012.

Net sales for the fourth quarter of fiscal 2013 were $13.9 million, compared to $15.5 million in the corresponding period in fiscal 2012. Net loss for the fourth quarter of fiscal 2013 was $2.3 million, or $0.75 per share, compared to a net loss of $1.5 million, or $0.51 per share, for the corresponding quarter in fiscal 2012.

Despite incurring losses in fiscal 2013, the Company�s cash flow remained positive as our net cash position increased approximately $1.9 million to $42.2 million, primarily due to a significant reduction in accounts receivables, partially offset by capital expenditures. Net cash (a non-GAAP measure) is defined as cash and cash equivalents plus restricted cash less short-term debt (a GAAP reconciliation has been provided below). In providing our net cash position, we believe our shareholders, as well as potential investors, gain a better understanding of the Company�s potential for future growth and are better able to assess the Company�s financial strength and available resources.

SG&A expenses in fiscal 2013 did not increase materially from fiscal 2012 when discontinued operations are included and most of the increase was due to exchange rate appreciation of the Renminbi against the U.S. dollar.

John C.K. Sham, the Company's President and Chief Executive Officer, said: �The Company�s fourth quarter continues to be our weakest quarter, due at least in part to business disruptions relating to the Chinese New Year. Rising labor costs coupled with labor shortages in southern China negatively impacted our operating results. The developing slowdown in the Chinese economy also adversely impacted our business, most significantly in our EMS segment.�

Mr. Sham continued, �We are striving to address these and other cost issues, including certain manufacturing costs previously absorbed by our home appliance business prior to its discontinuation in January 2012. As part of these efforts, we have started to lease some of the unused space in our manufacturing facility that was previously occupied by our home appliance business. However, we do not expect our efforts to adjust our cost structure will have a material impact on our operating results until the second or third quarter of fiscal 2014, at which time we believe we will return to profitability. Until such time we expect our net cash position to continue to remain strong.�

Mr. Sham concluded, �As previously disclosed, the expansion of our CCM production capacity through the installation of three chip-on-board (COB) production lines and a Class 10 clean room was recently completed. We are pleased to report that our CCM business has started receiving orders that require the use of our new COB production lines. Since COB production lines are capable of producing higher-pixel camera modules and other precision-related devices, we believe that our CCM business will continue to grow through the addition of new customers and the sale of higher profit margin products. As such, we are cautiously optimistic about the growth opportunities of our CCM business and expect our CCM sales to increase and profitability in this business segment to gradually improve in the coming months.�

Third Quarter 2013 Financial Results

• Net sales were $20.6 million, compared to $22.3 million for the corresponding quarter in fiscal 2012.
• Net income 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.

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 CaOB 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.

First Quarter 2013 Results

• Net sales for the quarter ended June 30, 2012 were $20.5 million, up approximately 54% when compared to $13.3 million for the corresponding quarter in fiscal 2012.
• Net income for the first quarter of fiscal 2013 was $0.05 million, or $0.02 per share, compared to a net loss of $1.6 million, or $0.51 per share, for the first quarter of fiscal 2012.

John C.K. Sham, President and Chief Executive Officer, said, “Our electronic components business increased 78% in the first quarter of fiscal 2013 over the corresponding period in fiscal 2012, which nearly offset the absence of sales from our discontinued home appliances segment (based on home appliances sales in the corresponding quarter of fiscal 2012). Gross margins for the quarter were adversely impacted by depreciation charges of approximately $320,000 for the facilities which were formerly utilized for the home appliances business. Additionally, in the first quarter of fiscal 2012, the home appliances business absorbed approximately $0.9 million of G&A expenses, which were reflected in the loss from discontinued operations, whereas those expenses in the first quarter of fiscal 2013 were reflected mostly in selling, general and administrative expenses.”

Mr. Sham continued, “We are pleased with the continued strength of our CCM business, specifically in domestic markets, and expect further improvements in fiscal 2013. We expect to begin incorporating several new products into our existing product lines in fiscal 2013.”

Mr. Sham concluded, “We continue our efforts to develop products for use in certain medical applications which, while not currently generating significant revenues, we remain optimistic will ultimately have a positive impact on our overall business. We are pleased with our successful exit from the home appliance business, which caused no major disruption to our financial position. We are hopeful that we will be able to secure a lessee for the facilities that were previously occupied by our home appliances operations which we anticipate would serve to offset a portion of the Company’s fixed costs.”

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ: GAI) today announced that the Company’s Board of Directors has approved a special cash dividend of $1.00 per share payable on September 5, 2012 to shareholders of record at the close of business on August 22, 2012.

“As previously reported, our business has recognized steady improvements, with a return to profitability in fiscal 2012. We have successfully completed our exit from the home appliance business, which has provided significant relief to the Company’s working capital requirements and presented us with the opportunity to return capital to our shareholders while still maintaining ample resources to support foreseeable growth. We believe that this special dividend is an appropriate way to reward shareholders for their continued support,” said John C.K. Sham, the Company’s President and Chief Executive Officer.

Mr. Sham continued, “We are excited about the future growth potential of our CCM and EMS business segments and expect significant increases in sales in both segments in fiscal 2013. Our exit from the home appliance business was a major stride forward in our transition to a high-technology focused company.”

Mr. Sham concluded, “As we continually assess our current capital structure and how to best deploy our capital, the Company’s board of directors may consider the declaration of additional cash dividends and/or the establishment of a regular dividend. However, the declaration of future dividends will depend upon the Company’s financial position, strategic plans and general business conditions at that time.”

We encourage shareholders to contact their brokers and tax advisors in order to understand the Nasdaq Rules and Regulations as well as relevant tax implications regarding the effect of selling shares of our common stock following the record date on their eligibility to receive the dividend.

Financial results for the fiscal year ended March 31, 2012.

• Net sales for fiscal 2012 were $69.7 million, an increase of approximately 21% when compared to net sales of $57.5 million for fiscal 2011.
• Net income for fiscal 2012 was $1.4 million, or 0.46 per share, compared to a net loss of $4.0 million, or $1.32 per share, in fiscal 2011.
• Net sales as reported in the Company's Annual Report on Form 20-F for fiscal 2012 and fiscal 2011 exclude sales for the home appliances segment of approximately $53.9 million and $40.0 million, respectively, which is reflected as a discontinued operation following the Company's exit from the home appliances business in January 2012.

John C.K. Sham, the Company's President and Chief Executive Officer, said: Major strides were made in fiscal 2012 towards the Company's transition and transformation from primarily a manufacturer and exporter of home appliances to the production and supply of electronic components and the provision of electronic manufacturing services (EMS) to China's telecommunications market. We believe these types of business present great opportunities for continued growth and success.

Mr. Sham continued, "Declining margins in the home appliances business required us to diversify and refocus our efforts towards more profitable businesses. This transition has been accomplished thus far through the utilization of internal resources rather than long-term borrowing, which we believe has positioned the Company for future growth."

Mr. Sham concluded, "We are excited about the future prospects of our electronic components and EMS businesses and are in the process of exploring new business opportunities, including disposable medical instruments, which we believe will enhance shareholder value in the long term."

Third Quarter 2012 Results

• Net sales for the third quarter of fiscal 2012 were $44.2 million, an increase of approximately 81% when compared to $24.4 million for the corresponding quarter in fiscal 2011.
• Net income for the third quarter of fiscal 2012 was $3.3 million, or $1.09 per share, compared to a net loss of $1.5 million, or $0.48 per share, for the third quarter of fiscal 2011.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “Our third quarter is typically our strongest and we were pleased with the improved financial performance in several areas of our business. Improved results in the third quarter of fiscal 2012 were due in part to sales increases and improved profit margins in the Company’s three business segments, as well as declining commodity prices in the second half of calendar 2011 and the easing of inflationary pressures in China. These factors, while contributing positively to the Company’s third quarter operating results, are likely to change in the near future.”

Mr. Sham continued, “As previously announced, we are nearing completion of our exit from the home appliance business and, with the cooperation from our customers, were able to manufacture additional inventory during the transitional period to ensure a smooth phase out process for both the Company and its customers. As stated above, the increase in purchase orders from customers seeking to increase inventory positively impacted our financial results for this quarter.”

Mr. Sham concluded, “Our assets, particularly our liquid resources, continue to increase and, as of December 31, 2011, on a per share basis, far exceed the current trading price of the Company’s stock. We believe we can use resources previously dedicated to the home appliance segment more effectively by reallocating these resources and the efforts of the Company’s management and employees towards business opportunities that we believe will provide better margins and positive returns on investment.”

Second Quarter 2012

• Net sales for the second quarter of fiscal 2012 were $33.8 million, an increase of 35% when compared to $25.0 million for the corresponding quarter in fiscal 2011.
• Net income was $1.2 million, or $0.39 per share, compared to a net loss of $0.9 million, or $0.29 per share, for the second quarter of fiscal 2011.

John C.K. Sham, the Company's President and Chief Executive Officer, said: "While net sales improved in the second quarter and first half of fiscal 2012, our year to date gross profit margins were less than margins in fiscal 2011 as costs of labor, materials and utilities continued to increase. Although commodity prices have recently eased, energy and labor costs continue to rise, which must be addressed as part of our plans to improve profitability."

Mr. Sham continued, "As previously announced, we are nearing completion of our exit from the home appliance business which will allow us to explore new business opportunities by focusing assets and personnel towards business activities which we believe will create short- and long-term value for our shareholders."

Mr. Sham concluded, "Our cash less short-term debt position has improved significantly since the end of fiscal year 2011 and, as of September 30, 2011, now exceeds $13.00 per share. We remain committed to the use of company resources to explore and pursue business opportunities that we believe have a good probability of success."

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) camera modules (CCMs) and floor care products. 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.

HONG KONG--(BUSINESS WIRE)--Global-Tech Advanced Innovations Inc. (NASDAQ:GAI) today announced that the Company received a letter dated September 12, 2011 from The Nasdaq Global Market stating that based upon its review of the Company’s market value of publicly held shares (MVPHS) for the last 30 consecutive business days, the Company’s common stock had not maintained a minimum market value of publicly held shares of $5 million as required for continued listing on The Nasdaq Global Market by Listing Rule 5450(b)(1)(C).

The notification letter has no effect at this time on the listing of the Company’s common stock on The Nasdaq Global Market. The Company’s common stock will continue to trade on The Nasdaq Global Market under the symbol “GAI.”

The notification letter states that the Company will be afforded 180 calendar days, or until March 12, 2012, to regain compliance with the MVPHS requirement. In order to regain compliance, the Company must maintain a MVPHS of at least $5 million for a minimum of ten consecutive business days.

Third Quarter Results:

• Net loss for the third quarter of fiscal 2011 was $1.5 million, or $0.48 per share, compared to a net income of $0.7 million, or $0.24 per share, for the third quarter of fiscal 2010

John C.K. Sham, the Company's President and Chief Executive Officer, said: "Despite increased revenues from our electronic component and electronic manufacturing service businesses when compared to the prior fiscal period, net results remain affected by the continued weakness in our floor care business and margin pressures, resulting from continuing inflation in China and significant increases in the cost of labor."

Mr. Sham concluded, "We remain optimistic that our continuing efforts to further develop and expand our product offerings in China, together with improved productivity, will ultimately lead to more favorable financial results."

• Net sales for the second quarter of fiscal 2011 were $25.0 million, compared to $29.0 million for the corresponding quarter in fiscal 2010.

• Net loss for the second quarter of fiscal 2011 was $0.9 million, or $0.29 per share, compared to a net income of $1.6 million, or $0.51 per share, for the second quarter of fiscal 2010.

John C.K. Sham, the Company's President and Chief Executive Officer, said: “While revenues from our electronic component and electronic manufacturing service (EMS) businesses increased when compared to both the first quarter in fiscal 2011 and the corresponding quarter in fiscal 2010, these increased revenues were insufficient to offset the continued decline in net sales of our floor care business.”

Mr. Sham continued, “Our overall gross profit margin remains weak as operating costs, particularly labor and energy costs, continue to increase. This increase in costs was attributable, in part, to rising inflation that has been taking place in China. Additionally, our fixed cost absorption rate increased due to declining activity. Accordingly, the Company must continue to refine its focus on productivity and efficiency."

Mr. Sham concluded, “We do not expect significant improvements in our floor care business during the remainder of fiscal 2011. Accordingly, we are increasing our efforts to incorporate proprietary elements into our electronic component business and improve efficiencies in our EMS business in an attempt to position and strengthen the Company’s prospects for growth in these businesses in the near future. The Company’s continued emphasis on the expansion of our business in China remains vital to long-term growth."

• Net sales for the quarter ended June 30, 2010 were $25.8 million, compared to $25.7 million for the corresponding quarter in fiscal 2010.

• Net income for the first quarter of fiscal 2011 was $0.8 million, or $0.26 per share, compared to a net income of $1.2 million, or $0.38 per share, for the first quarter of fiscal 2010. `

While there was less than a 1% increase in net sales, first quarter results revealed significant changes in sales trends when compared to the prior fiscal year. In the first quarter of fiscal 2011, net sales of home appliances declined 19%, electronic components increased 19% and electronic manufacturing service (EMS) revenues more than doubled, compared to corresponding net sales in the first quarter of fiscal 2010. In addition, sales to Asia markets in the first quarter of fiscal 2011 represented 48% of total net sales.

John C.K. Sham, President and Chief Executive Officer, said, “Our financial results in the first quarter of fiscal 2011 were indicative of the changes taking place within our business segments. While our electronic component and EMS businesses resumed their growth and maintained profitability, operating margins in our home appliance business continued to decline as a result of increases in material cost and wage inflation. The trend of increasing raw material cost and decreasing margins are threatening the continued viability of our home appliance business.”

Mr. Sham continued, “As we continue to diversify and refocus our efforts on the telecommunications business in China, weakening of the export markets we have been serving is having less of an impact on our overall business prospects. We plan to place less emphasis on our home appliance business as we continue to expand our capabilities and sales efforts on the EMS and electronic component businesses.”

Mr. Sham concluded, “Absent a recovery in the United States markets, we expect operating margins in our home appliance business will continue to decline as costs continue to increase and volume continues to decrease. However, we expect continued growth in the electronic component and EMS businesses, which may or may not be sufficient to offset ongoing weaknesses in the appliance business in the short term.”