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SHENZHEN, China, Sept. 23, 2013 /PRNewswire/ -- Cogo Group, Inc. ("Cogo," or the "Company") (NASDAQ: COGO) a leading gateway for global semiconductor companies to access the industrial and technology markets in China, announced today that the Company's Audit Committee, assigned to oversee the negotiation of the transaction by the Board of Directors, has signed a Sale and Purchase Agreement to sell just over 30% of its assets to its founder, CEO and Chairman, Jeffrey Kang, for a purchase price of $80 million. The transaction is expected to close before the end of 2013.

At the NASDAQ close on September 20, 2013, Cogo's share price was at $2.18. The Company expects to continue purchasing its ordinary shares pursuant to a 10b5-1 plan during the upcoming blackout period.

SHENZHEN, China, Sept. 9, 2013 /PRNewswire/ -- Cogo Group, Inc. ("Cogo," or the "Company") (NASDAQ: COGO) a leading gateway for global semiconductor companies to access the industrial and technology markets in China, announced today that the transaction to sell just over than 30% of its assets (which generated 98.7% of its revenues of its revenues in Q1 2013) to its founder, CEO and Chairman, Jeffrey Kang, is progressing smoothly since it was announced on July 15.

The Company's Audit Committee, assigned to oversee the negotiation by the Board of Directors, has signed a letter of intent relating to the sale with Mr. Kang's wholly owned company. The letter of intent calls for a purchase price of $80 million. Mr. Kang has proposed that the transaction close before the end of 2013.

At the NASDAQ close on September 6, 2013, Cogo's share price was $2.09 a share. Mr. Kang said, "We will continue to repurchase stocks and another 10b5-1 plan will be set up to allow us to buy during the blackout period from September 25, 2013."

Mr. Kang reiterated an earlier statement that there is no intention for the Company to go private; it intends to retain its listed status.

Second Quarter 2013 Financial Results

• Revenue in the second quarter ended June 30, 2013, was $184.9 million, down 4.1% from a year earlier, while net income for the same period was $1.7 million, down 6.2% from $1.8 million reported in the same period in 2012.
• Non-GAAP net income was $4.4 million down 14.4% from $5.2 million reported for the same period in 2012.
• Diluted Earnings per share ("EPS") came to $0.05 and, on a non-GAAP basis, $0.13 a share.

Jeffrey Kang, CEO and Chairman of Cogo, commented, "The Audit Committee, comprising the three independent board members of Cogo, continues to make progress in the due diligence process on my proposal to purchase certain of Cogo's net assets."

Mr. Kang said: "If the transaction is approved, it is expected that Cogo would dispose most of its components business while all services and technical solutions businesses would become Cogo's core business. The bulk of Cogo's accounts receivable, inventories, accounts payable and bank loans would be sold to the buyer under the proposal. The disposal of the net assets in a cash transaction is expected to increase Cogo's net cash position. The sale would allow the company to focus on developing a higher margin service and technical solution business, thus creating greater value for shareholders."

Mr. Kang added, "Management believes that retaining the Company's listing will provide greater return for its shareholders than privatization. While the proceeds could also fund the Company's buyback program for investors who wish to sell their shares of the Company, it allows the Company to continue to leverage its listed status to develop higher margin business and venture to new business to generate greater value to shareholders."

SHENZHEN, China, July 15, 2013 /PRNewswire/ -- Cogo Group, Inc. ("Cogo," or the "Company") (NASDAQ: COGO), a leading gateway for global semiconductor companies to access the industrial and technology markets in China, today announced that its founder, CEO and Chairman, Jeffrey Kang, submitted a proposal to the Cogo Board of Directors for the purchase of approximately 30.5% of Cogo's net assets, which as of the first quarter of 2013, generated approximately 98.7% of Cogo's revenues through a company he wholly owns, Brilliant Group Global Limited ("Brilliant Group").

The proposed purchase price is US$80 million. Mr. Kang has proposed that the transaction close before the end of 2013. Since this is a related-party transaction, the Board of Directors has delegated the review and negotiation of the potential transaction to the Company's Audit Committee, which is comprised of three independent directors. The Audit Committee is expected to oversee the entire process. In accordance with the Company's organizational documents, the Company anticipates that it will hold a meeting of stockholders to approve the transaction if the transaction is approved by Audit Committee.

As a condition of the proposed transaction, Brilliant Group would be required to pay $750,000 to Cogo on a quarterly basis for Cogo's remaining subsidiaries and the target companies to continue to provide cross guarantees to each other until the end of 2014. Consideration is proposed to be payable in 2 installments, of which $10 million would be payable on Closing and $70 millionby the end of 2013.

Upon completion of the transaction, Net Asset Value of Cogo shares is expected to be more than $6 a share. At the NASDAQ close on July 12, 2013, Cogo's share price was $2.05 a share.

Based on Cogo's Q1 2013 unaudited results as filed on Form 6-K on May 31, 2013, the proposed target assets represent approximately 30.5% of the Company's net assets, 98.7% of its revenues and 66.5% of its gross profit.

A portion of the proceeds of the sale will be reserved for Cogo's buyback program. There are more than 3.6 million outstanding shares under Cogo's current buyback program authorized for repurchase out of the original 10 million shares. Management plans to authorize another plan to repurchase up to 10 million shares upon completion of the current program. As of July 12, 2013, there are approximately 29.4 million outstanding shares, of which insiders own approximately 40.8%. The Company will continue to disclose all material information relating to the proposed transaction in order to be able to continue to execute buyback program in accordance with applicable securities law requirements.

"This proposed deal is set to maximize shareholder value, and I am excited about what it means for our shareholders," said Mr. Kang. "Upon the completion of this deal, Cogo is estimated to have more than $140 million net cash based on Q1's financials and other assets, and a small amount of higher margin services and system solution revenue. The deal will help the Company evolve into a light asset, service revenue oriented business. The Company has no intention to dissolve or go private. The plan is to maintain the Company's listing position with a business focus that aims to create greater value for shareholders."

SHENZHEN, China, May 15, 2013 /PRNewswire/ -- Cogo Group, Inc. ("Cogo" or the "Company") (Nasdaq: COGO), a leading gateway for global semiconductor companies to access the industrial and technology sectors in China, today announced its preliminary unaudited financial results for the quarter ended March 31, 2013.

Revenue in the first quarter was approximately $182.4 million, compared to $169.3 million reported in the first quarter of 2012. Gross margin for the first quarter was between 6.2% and 6.7%.

Total cash, including pledged bank deposits, was $143.3 million at the end of the first quarter of 2013, up from $141.5 million as ofDecember 31, 2012. Bank borrowings decreased from $98.6 million as of December 31, 2012 to $81.2 million as of March 31, 2013. Net cash was $62.1 million as of March 31, 2013.

During the trading days of January 1, 2013 to May 13, 2013, the Company repurchased approximately 1.6 million shares of its ordinary shares at an average price per share of approximately $2.02 and a total cost of more than $3.2 million pursuant to the current stock repurchase program. Cogo has repurchased almost 5.2 million shares since September 24, 2012 under the current repurchase program, and there are approximately 4.8 million shares left of the 10 million shares authorized for the program. Cogo continues to view share buybacks as a strategic use of cash.

"While management is pleased with the Company's business growth and sustainable profitability, we are disappointed with the Company's stock performance, which is currently trading at far below its net asset value. The Company's end market is still growing but competition has intensified. Therefore, pressure on our gross margin is rising and the Company may require more working capital to sustain growth. In light of the foregoing, management has been contemplating a long-term balanced strategy. Among other initiatives, we are currently exploring new service business opportunities that would provide higher margins. It remains management's top priority to improve shareholder value," said Mr. Jeffrey Kang , CEO and Chairman of Cogo.

Fourth Quarter 2012 Financial Results

• Revenue for the fourth quarter was $198.8 million, an increase of 17.3% from $169.5 million reported for the same period in 2011.
• Net income attributable to Cogo Group, Inc. for the fourth quarter of 2012 was $0.2 million or diluted EPS attributable to Cogo Group, Inc. of $0.01 on a U.S. GAAP basis, compared to net loss attributable to Cogo Group, Inc. of $35.8 million, or Diluted EPS attributable to Cogo Group, Inc. of $(0.99), in the fourth quarter of 2011. Non-GAAP net income attributable to Cogo Group, Inc. was $3.9 million, or $0.11 Non-GAAP diluted EPS attributable to Cogo Group, Inc. for the fourth quarter of 2012.

Jeffrey Kang, CEO and Chairman of Cogo, remarked, "Cogo generated record revenue in both the fourth quarter of 2012 and the full year 2012, and we remained profitable in these uncertain economic times. Management believes that the stock is currently trading far below the Company's net asset value. We will continue to seek ways to improve and maximize shareholder value."

SHENZHEN, China, Dec. 21, 2012 /PRNewswire/ -- Cogo Group, Inc. (NASDAQ: COGO) ("Cogo" or the "Company"), one of the leading gateways for global semiconductor companies to access the industrial and technology markets in China, today announced that since the close of the sale of certain Cogo subsidiaries to Chairman and CEO Jeffrey Kang on November 15, 2012, it has repurchased 3,220,152 shares of Cogo ordinary shares in the open market. There are approximately 6.5 million shares left on the current 10 million share Cogo corporate stock buyback program. Another 10b5-1 plan has been set up to allow the company to repurchase shares during the blackout period from December 24, 2012, to one day after the Company announces its fourth quarter preliminary results.

SHENZHEN, China, Sept. 24, 2012 /PRNewswire/ -- Cogo Group, Inc. (NASDAQ: COGO) ("Cogo" or the "Company"), one of the leading gateways for global semiconductor companies to access the industrial and technology markets in China, announced today the appointment of Andy Liu as Chief Financial Officer and director of the board, effective September 23, 2012.

Mr. Liu replaces Frank Zheng, who resigned from his position as Chief Financial Officer and a director of the Company.  Mr. Zheng will continue with the Company as an advisor.

Cogo's CEO and Chairman, Jeffrey Kang, said, "On behalf of the Board of Directors, we are pleased to have Andy join our management team. We appreciate Frank's great contribution to the Company as CFO since 2008 and as a board member since January 2005."

Andy Liu joined Cogo as an Associate of Group Accounting in 2004. During his tenure with the Company, Mr. Liu has been instrumental in shaping the Company's accounting policies and procedures, as well as developing the Company's accounting team. He was promoted several times since joining the Company and was named Vice President of Group Accounting in June 2012. Prior to joining Cogo, Mr. Liu was Finance Manager at Shanghai Shengde TCL Electronics from 2003- 2004 and Accounting Supervisor with Shenzhen Universe (Group) Co., Ltd. (Shenzhen A Shares: 0023), responsible for the accounts of the listed company, from 2001 to 2003. Andy was an auditor with Zhong Tian Qin (Shenzhen) Certified Public Accountants from 1990 to 2001.

Andy holds a B.S. degree in International Accounting from Tianjin University of Finance and Economics and is a candidate for membership in the ACCA (Association of Chartered Certified Accountants).

SHENZHEN, China, Sept. 24, 2012 /PRNewswire/ -- Cogo Group, Inc. (NASDAQ: COGO) Cogo, one of the leading gateways for global semiconductor companies to access the industrial and technology markets in China, today announced the current status of the proposal by its CEO and Chairman, Jeffrey Kang, through his personal investment vehicle, Envision Global Group ("Envision"), to purchase certain Company subsidiaries[i] representing approximately 30% of the Company's total assets, liabilities and business operations.  The Audit Committee continues to conduct due diligence to understand the legal and accounting ramifications in the many different jurisdictions involved.

However, the material terms are anticipated to be as follows:

• Total consideration will be $78 million, which will be paid in two installments, $10 million at closing and an additional $68 million on or before December 31, 2012.
• In the event the second installment payment is not made, title to the target companies will be transferred back to Cogo.
• Cross guarantees to banking institutions among the companies will be maintained, subject to approval by applicable banks, in order to maintain better financing terms for all the companies.

Additionally, since Cogo is not currently in possession of any material insider information, it can begin executing a stock buyback program for Cogo shares on the open market pursuant to a 10b5-1 plan it has put in place with its broker.  In May 2012, at the company's Annual General Meeting, Cogo shareholders authorized a 10 million-share buyback program.  Given that Cogo shares trade at approximately 30% of Tangible Book Value ("TBV") as reported at the end of the second quarter of 2012, the Company believes that a buyback program is a prudent use of cash.     

Consistent with prior publicly reported figures, Envision would have gross margins in the range of 5-6%, which is below the 7.1% gross margins reported for all of Cogo in the second quarter of 2012. Additionally, Envision would currently constitute approximately 25-30% of total Cogo revenue.  

Envision will operate independently from Cogo.  Both Cogo and Envision will make reasonable efforts to maintain the operations of Envision in the ordinary historical course consistent with past practices and to preserve its relationships with its major customers, suppliers and others having business dealings with the Cogo. 

Mr Kang commented, "I believe this transaction is the most effective way to achieve multiple goals, including maximizing shareholder value.  First, this helps to validate Cogo's significant financial assets.  At the end of the second quarter of 2012, the estimated TBV for Cogo was well over $6.00 a share, which is more than triple our current market capitalization. Second, the logistics of the sale should not disrupt any business operations and our plan going forward is intended to continue fulfillment of all commitments in a seamless manner. Guaranteeing that these relationships and commitments will not be negatively affected by this transaction is a critical element for me."  

Mr Kang commented, "I anticipate very little, if any business or end market overlap, between Cogo and Envision.   Although the two entities may initially target similar end markets and customers, Cogo and Envision will utilize different products from different suppliers, and, therefore, we thus see limited, if any, business competition between the two entities.   We expect each entity to continue to grow its business, continuing to service its customers and generate solid operating profit even in these uncertain macro-economic conditions."

SHENZHEN, China, March 15, 2012 /PRNewswire/ -- Cogo Group, Inc. ("Cogo", or the "Company") (NASDAQ: COGO), a leading gateway for global semiconductor companies to access the industrial and technology markets in China, today announced that its founder, CEO and Chairman, Jeffrey Kang, proposed to the Cogo Board of Directors that he purchase a series of operating entities accounting for approximately 30% of Cogo's total assets, liabilities and revenue through his personal investment venture, Envision Global Group.

The total purchase price is expected to be between $60 million and $82 million, depending on the results of an appraisal by an appraisal firm. The deal is expected to close during the second quarter of 2012, subject to approval by an audit committee that is comprised of the independent directors on Cogo's Board. Since this is a related-party transaction, the audit committee will oversee the entire process through to the deal's closure.

The transaction provides an implied share valuation of $6-$8 a share. At the NASDAQ close on March 13, Cogo's share price stood at $1.84 a share.

The proposal includes the purchase of a series of Cogo's operating entities accounting for approximately 30% of all assets and liabilities (including inventories, accounts receivables and bank debt), and about 30% of total Cogo revenue. It is expected that the purchased entities will have higher working capital requirements than the current Cogo corporate average. Mr. Kang will continue to serve as Chairman and CEO of Cogo on a full-time basis. While independent from Cogo, the purchased entities will continue to be run in the same manner as before. Management of the purchased entities will be promoted from within, while Mr. Kang will only serve as a non-executive director.   

Subject to stockholder approval, a portion of the proceeds of the sale will be used to fund a buyback of up to 10 million of Cogo's outstanding shares.

"I am excited to announce my proposal for this unique transaction intended to unlock value for Cogo shareholders," said Mr. Kang. "Currently, our share price is less than 30% of Cogo's tangible book value, which does not even take into account the fact that our business generated over $5 million in Non-GAAP operating profit in the fourth quarter of 2011."

Fourth Quarter 2011 Results

• Revenue for the fourth quarter was $169.5 million, an increase of 49.3% from $113.5 million reported for the same period in 2010.
• Non-GAAP net income attributable to Cogo Group, Inc. was $4.7 million, or $0.13 Non-GAAP diluted EPS attributable to Cogo Group, Inc. for the fourth quarter of 2011 vs. $0.24 in prior year.

Jeffrey Kang, CEO and Chairman of Cogo, remarked, "Cogo generated record revenue in both the fourth quarter of 2011 and the full year 2011, and we remained solidly profitable on a Non-GAAP basis in these uncertain economic times. However, we expect that the tightened credit policy in China will continue to negatively affect our Small and Medium Enterprise ("SME") business lines for the rest of 2012. While there are media reports of an impending loosening of credit policies for SMEs in China, we would not expect these changes to materially affect our business until 2013."

Mr. Kang continued, "Overall demand in the fourth quarter stayed relatively robust across our end-markets but the strength came largely from our blue-chip customers. As we have indicated before, any relative mix shift of our business to Blue-chip customers will negatively affect our gross margins and cash flow. We expect working capital demands to remain high and we will likely continue to see pressure on gross margins as we maintain our market share and wait for our SME business lines to show improvement. Our operating cash outflow in the fourth quarter of 2011 was $23.7 million."

"Due to the continued reduced visibility in our business, we will not provide any specific guidance for the first quarter of 2012" Mr. Kang said.

Jeffrey Kang, CEO of Cogo commented, "While I am pleased that our results in the third quarter of 2011 exceeded consensus estimates for both revenue and pro-forma earnings, the continued tightening of credit in China, particularly as it relates to the Small and Medium Enterprise Markets ("SME"), has materially reduced our visibility into our various end markets. Consequently, we will suspend providing guidance for the fourth quarter of 2011, although we plan to remain profitable."

"We continue to view the current market conditions as a time to increase market share versus weakened competitors and we plan to continue to invest in personnel and new sales offices. We are in a cyclical business and when macro economic conditions improve, we will be well positioned to benefit. In the third quarter of 2011, we grew our customer count by 14% year over year to 1,729. In this period of uncertainty, we find that our global semiconductor partners and our customer base increasingly rely on our technical services and solutions."

Mr. Kang continued, "The revenue shift towards our blue-chip customers and away from our SME customer base, which we cited during our last earnings call in August, continued in the third quarter and we expect this trend to continue well into 2012. As expected, this shift continues to produce lower gross margins and larger working capital requirements. Any strategy change to reduce our exposure to certain businesses that require particularly high working capital requirements would take a few quarters to completely implement. While we have invested heavily in working capital in the last two quarters to grow our footprint, Cogo still has a strong and liquid balance sheet. In the third quarter, we purchased 2 million shares of Cogo common stock. While we continue to view buybacks as a strategic use of cash, we remain focused in the very short-term on utilizing the balance sheet to drive market share and strengthen our relationships with our customers and global semiconductor partners. However, at some point, our revenue growth rates could be affected by future restrictions to our bank lending facilities, particularly if credit conditions continue to tighten in China."

Financial Results

Net income attributable to Cogo Group, Inc. for the third quarter of 2011 was $2.3 million, down 50.6% from $4.6 million reported in the same period last year, with Non-GAAP net income attributable to Cogo Group, Inc. down 26.5% over the same period last year. Earnings per share ("EPS") Diluted attributable to Cogo Group, Inc. on a US GAAP basis was $0.06, and Non-GAAP EPS Diluted attributable to Cogo Group, Inc. was $0.16, down 23.8% from the third quarter of 2010.

Effective as of July 15, 2011, Comtech Broadband Corporation Limited ("Comtech Broadband"), Comtech International (Hong Kong) Limited and Keen Awards Limited (collectively, the "Borrowers"), each indirect wholly owned subsidiaries of Cogo Group, Inc. (the "Company"), entered into an amendment, dated July 4, 2011, to the general banking facility with Bank of China (Hong Kong) Limited ("BOC") dated April 28, 2010, as amended December 31, 2010 (the "Amendment").

Pursuant to the terms of the Amendment, BOC extended to the Borrowers a general banking facility which consists of the following:

(1) Overdraft ("O/D"): the maximum facility amount is USD1,000,000 or its equivalent amount in Hong Kong dollars. It bears interest rate at 2% per annum plus the HIBOR or USD LIBOR depending on the currency of the O/D;

(2) An Import Invoice Financing and Export Invoice Discounting Facility, each with a facility limit of USD39,500,000 and a tenor of 75 days;

(3) An Outward Documentary Bill with a facility limit of USD25,000,000; and

(4) Combined Facilities with a maximum facility amount of USD30,000,000, including standby letters of credit/ letters of guaranty (Standby L/C / L/G) with the facility limit of USD10,000,000, Import Invoice Financing, Export Invoice Discounting, and other specified facility products described in the Amendment.

The Borrowers delivered to BOC an irrevocable standby letter of credit in an amount of USD20,000,000 given by Nanyang Commercial Bank (China Limited, Shenzhen Branch), as well as a USD15,000,000 Charge of Deposit to secure the general banking facilities. The liabilities of Comtech Broadband under the Amendment are guaranteed by an unlimited continuing corporate guaranty by the Company, as well as unlimited continuing cross guarantees by the Borrowers.

Additionally, the Amendment requires that (i) the Company retain at least 50% of its equity interest in Comtech Broadband, (ii) Mr. Jingwei "Jeffrey" Kang remains as the single largest beneficial owner of the Company's shares as well as the Chairman of the Board of Directors, (iii) the Company maintains a tangible net worth of not less than RMB1 Billion, (iv) the Company maintains its NASDAQ listing; (v) the Consolidated Net Borrowing Ratio shall not exceed 0.25x and (vi) the bills transaction volume shall not be less than USD200,000,000 in which the outward bills transaction volume is not less than USD 100,000,000 annually.

Fourth Quarter Highlights:

• Revenue for the fourth quarter was $113.5 million, an increase of 28.9% compared to $88.1 million reported for the same period in 2009.
• Non-GAAP net income attributable to Cogo Group, Inc. was $9.3 million or $0.24 Non-GAAP EPS Diluted attributable to Cogo Group, Inc. for the fourth quarter of 2010 compared to EPS Diluted attributable to Cogo Group, Inc. of $0.11, in the fourth quarter of 2009.

As announced on February 1, 2011, management's guidance for the first quarter of 2011 is $95-$100 million in revenue and estimated Non-GAAP EPS Diluted of $0.19. As noted in the March 1, 2011 press release, the Company's first quarter of 2011 results are progressing better than initially expected. The Company continues to target longer term gross margins of 15% and operating margins of 10%.

Jeffrey Kang, CEO and Chairman of Cogo, remarked, "We are following up a strong 2010 with a great start to 2011. As we indicated on March 1, 2011, our first quarter results are tracking better than expected. We expect 2011 to be another year of strong revenue growth and operating margin expansion. The closing of the MDC Tech acquisition in January 2011 also provides us with a strong foothold in two fast growing Industrial markets: Health Care and Smart Grid."

Financial results for its third quarter ended September 30, 2010.

• Record quarterly revenue of $100.2 million, up 22.1% from $82.0 million for the same quarter of 2009.

• Net income attributable to Cogo Group, Inc. for the third quarter of 2010 was $4.6 million, up 38.2% from $3.4 million in the same period last year.

• Non-GAAP net income of $8.0 million (excluding share-based compensation expenses, acquisition-related costs, including amortization of intangible assets and related deferred taxation) attributable to Cogo Group, Inc. up 19.1% from the same period last year.

•  Earnings per share ("EPS") Diluted attributable to Cogo Group, Inc. on a GAAP basis was $0.12, and $0.21 on a Non-GAAP basis.  Non-GAAP Diluted EPS was up 16.7% from the third quarter of 2009.

Business Outlook

Management's guidance for the fourth quarter of 2010 is

• $107-108 million in revenue
• Non-GAAP EPS Diluted of $0.22-0.23.
• The Company continues to target longer term gross margins of 15% and operating margins of 10%.

Jeffrey Kang, CEO and Chairman of Cogo, remarked, "I am very pleased by the continued strong execution by the Cogo team in the third quarter of 2010, and I remain optimistic about our prospects for the rest of 2010 and 2011. Cogo's strong growth in the third quarter demonstrates our return to a sustainable high growth mode. I continue to see promising new opportunities in a variety of end markets, including automotive, HDTV, smart meters/smart grid, tablets and 3G Smartphones and across all of our industrial verticals. The Company is using  cash to help drive revenue growth and opportunistically repurchase stock. I also anticipate growth in our Small and Medium Enterprise 'SME' customer base and continued growth of our SME Average Revenue Per User ('ARPU').  We believe an improving 3G handset landscape is helping to drive growth in our digital media end market, primarily through increased dollar content per device.

"While China's GDP growth may slow in 2011 versus 2010, recent manufacturing data from China indicates a very robust economy, and I am confident that the government's monetary and fiscal policies will continue to drive very strong economic growth, and at the same time attempt to stem concerns over inflation. I also expect technology spending to remain on its positive trajectory. Overall, I consider China to be a very favorable place to do business and see multiple opportunities for new revenue growth as we head into 2011," Mr. Kang said.

On October 18, 2010, the Hong Kong Branch of China Merchants Bank (the “Bank”) entered into general banking facilities (the “Facilities”) with Comtech International (Hong Kong) Limited (the “Borrower”), a subsidiary of Cogo Group, Inc. (the “Company”). Pursuant to the facility letter, the Bank granted the Borrower the following facilities:

Facility I: A revolving loan facility of up to the lesser of (i) $20 million or (ii) the amount of the bank guarantee (“Bank Guarantee”) issued by Shenzhen Branch of China Merchants Bank (“Facility I”). The maturity date of Facility I is the earlier of (i) December 30, 2010 or (ii) five banking days prior to the expiration date of the Bank Guarantee. Facility I bears interest at a rate equal to the greater of LIBOR at the rate of one or two month periods or the cost of funds to the Bank, plus 1.3% per annum.

Facility II: A facility consisting of irrevocable letters of credit (“LC”), loans against a trust receipt (up to 180 days) (“TR”) and an invoice financing loan (up to 180 days) (“IFL”) up to a total amount of the lesser of $20 million or the aggregate amount of the Bank Guarantee (“Facility II”). Facility II commences on January 1, 2011 and matures on the earlier of (i) October 8, 2011 or (ii) five banking days prior to the expiration date of the Bank Guarantee. Commissions and interest on the facilities and loans under the Facility II are as follows:

Management's guidance for the third quarter of 2010 is $94-96 million in revenue and an estimated Non-GAAP EPS Diluted of $0.19-0.20. The Company continues to target longer term gross margins of 15% and operating margins of 10%.

Jeffrey Kang, CEO and Chairman of Cogo, remarked, "I am very pleased by the continued strong execution of the Cogo team in the second quarter of 2010, and we remain very optimistic about the remainder of the year. Cogo's strong growth in the second quarter demonstrates our return to a sustainable high growth mode. We are seeing promising new opportunities in the automotive, HDTV, smart meters, smart grid and 3G handset areas. We are using our balance sheet to help drive revenue growth and opportunistically repurchase stock, and we see new opportunities across all of our Industrial verticals. We also continue to anticipate growth in our Small and Medium Enterprise customer base. The 3G handset market in China will remain strong, and this will bring an increase in dollar content per device."

"While we acknowledge that China's GDP growth may slow down in the second half of the year, from an arguably overheated situation in the first half of 2010, we are confident that the government's monetary and fiscal policies will continue to drive very strong economic growth, and at the same time attempt to stem concerns on inflation. We also expect that technology spending will not slow down. All in all, we consider China to be a very favorable place.

Jeffrey Kang, Chairman & Chief Executive Officer, Cogo Group, Inc. said, "We are excited about the prospects of quickly integrating the sales and engineering talent to the overall Cogo platform. We believe that this transaction will provide a cost efficient way to quickly broaden our exposure to several rapidly growing industrial verticals. While we have seen an encouraging amount of contract activity already, we note that sales cycles can often be lengthy and forecasting the timing of generating revenue is difficult. With China's broad-based government infrastructure stimulus plan, we are excited about the growth prospects of the industrial applications market going into 2010."

Mr. Kang remarked, "I believe that Cogo's unique business position within the Chinese market together with its breadth of business relationships across a wide range of end markets and large net cash position will support sustained revenue growth in 2009 and into 2010. Even in this expected continued economic downturn, we are currently in margin expansion mode and expect to show year over year revenue growth every quarter in 2009. Additionally, we see solid revenue and margin expansion opportunities in 2010." Mr. Kang continued, "We believe that the worst of the China economic situation is behind us and we feel confident about a variety of growth prospects as we head into the second half of 2009 and beyond."

Mr. Kang remarked, 'While we continue to face economic uncertainty, we remain confident that we can continue to benefit from a variety of tailwinds, including the continued build-out of 3G networks in China and the country's overall economic stimulus plan. Cogo continues to generate solid operating cash flow and we are making progress towards our goal of 15% gross margin and 10% operating margins.'

Second Quarter Fiscal 2009 Guidance Ending June

*Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to the comapny's financial press releases. The GeoTeam® non-GAAP figures may, from time to time,  differ from company supplied figures.

Source: PR Newswire (May 6, 2009)

Guidance Report:

First Quarter Fiscal 2009 Guidance Ending March

*Non-GAAP EPS Figures exclude non-operating gains and losses. 

GeoTeam® Comment: The company did not provide insight into why 2009 first quarter EPS is forecasted to decline. 

Source: PR Newswire (February 12, 2009)