- 3Q09 Revenue Increases 6.0% YoY to $52.4 Million -

- 3Q09 Net Income Increases 23.6% YoY to $5.6 Million -

- 3Q09 Net Cash Provided by Operating Activities of $9.3 Million -

- Reaffirms FY09 Revenue and Profit Margin Forecast -

HUIZHOU, Guangdong, China, Nov. 12 /PRNewswire-Asia-FirstCall/ -- NIVS IntelliMedia Technology Group, Inc., (NYSE Amex: NIV) ("NIVS" or the "Company"), an integrated consumer electronics company that designs, manufactures, markets and sells intelligent audio and video products, today reported its financial results for the third quarter ended September 30, 2009.

    Third quarter 2009 Business Achievements
    -- Building the NIVS Brand.  The Company continued its advertising on CCTV,
       consolidating its product road show and marketing campaign to further
       develop the NIVS brand.  The Company also launched a billboard
       advertising campaign with Precise Media to promote their products in
       driving schools -- which in China are on specialized, closed-course
       campuses -- in Beijing, Shanghai, Guangzhou, Sichuan, Fujian and
       Shandong.  In addition, the Company carried out face-to-face promotions
       in major malls throughout Beijing, Shanghai, Guangzhou and Shenzhen
       during the summer holiday.  Finally, to capitalize on the growing
       popularity of online sales in China, the Company further cooperated
       with leading 3C electronics information portals, http://www.pcpop.com
       and http://www.zom.com.cn, by placing advertisements on their sites.

    -- Broadening Distribution.  The Company participated in Berlin's IFA
       electronics fair to help broaden its brand recognition and customer
       base globally.  Their cooperation with home appliance chain retailers,
       Gome and Suning, continued to extend the Company's domestic sales
       channels, while their Hong Kong agent brought them distribution
       expansion overseas.  Finally, in entering the mobile phone market and
       working with China Telecom, the company widely broadened their
       distribution to this new customer base.

    -- Signed contract with audio industry legend.  The Company signed an OEM
       and ODM contract with Acoustic Research ("AR"), a major speaker
       manufacturer and developer in the US.  NIVS is now the sole
       manufacturer and distributor of AR speakers in China and Hong Kong.

    -- Entering the multi-billion dollar 3G market in China.  The Company was
       granted a license to manufacture mobile phones by the Ministry of
       Industry and Information Technology. The Company has begun to operate
       its mobile phone business in mainland China under NIVS's own brand name
       and introduced a dual-mode EVDO/GSM 3G handset to the market.

    -- Signed letter of intent to work with China Telecom.  The Company signed
       a letter of intent to manufacture 3G mobile phones for China Telecom,
       one of the three largest telecom operators in China.

    -- Strengthening Balance Sheet.  The Company significantly improved its
       cash flow and cash position since the end of the second quarter 2009

Third quarter 2009 Financial Results

In the third quarter of 2009, total revenue grew 6.0% to $52.4 million, from $49.4 million a year ago, driven by increased demand, success of new products, and greater brand recognition. Revenue for intelligent audio and video equipment increased 200% to $25.3 million, compared to $8.4 million for the same period in 2008. Reflecting the company's drive to expand its higher-end intelligent audio and video sales, revenue for standard audio equipment decreased 35.4% to $18.7 million, compared to $29.0 million for the same period in 2008. Revenue for televisions decreased 15.9% to $5.8 million, from $6.9 million a year ago.

Gross profit in the third quarter of 2009 increased to $12.1 million, compared to $11.3 million for the same period last year. Correspondingly, gross margin increased 24 basis points year-over-year to 23.1% from 22.9% in the prior year's third quarter, driven by a price increase on the Company's intelligent audio equipment products and a decrease in production cost.

Operating expenses were $5.1 million for the third quarter of 2009, or 9.7% of total revenue, compared to $5.5 million, or 11.1% of total revenue a year ago. Selling expenses for the third quarter of 2009 totaled $2.9 million, an increase of 124.2% compared to $1.3 million for the same period in the prior year, as the Company increased television advertising and marketing activities. General and administrative expenses were $1.1 million for the third quarter of 2009, a decrease of 72.7% compared to $3.9 million for the same period in 2008. The high operating expenses during the previous year were primarily due to merger costs and stock-based compensation. Research and development expenses were approximately $1.1 million for the third quarter of 2009, an increase of $0.9 million from $0.3 million in the prior year's period, as the Company continued to develop of new product offerings.

Income from operations of $7.0 million in third quarter 2009 increased $1.2 million, or 20.7%, from $5.8 million in third quarter of 2008. Operating margins increased to 13.4%, versus 11.8% for the same period in 2008.

Income tax provisions for the third quarter of 2009 were approximately $1.2 million, as compared to approximately $0.6 million from the same period last year, primarily due to an increase in taxable income. The Company's effective tax rate for the third quarter was 15% compared to 12.5% in the same period last year.

Net income was $5.6, or $0.11 per fully diluted share, for the three months ended September 30, 2009, an increase of $1.0 million, or 23.6%, from $4.6 million, for the same period in 2008.

Mr. Tianfu Li, Chairman and CEO of NIVS, commented, "We are very pleased with our performance this quarter. Our improved sales demonstrate the success of our recent marketing efforts, highlighted by a year-over-year tripling of our higher-priced intelligent audio and visual products. We are very pleased with our success in enhancing our balance sheet, and we aim to continue to cut operating costs and streamline our operating efficiencies. During the quarter, we successfully signed an OEM and ODM contract with the legendary Acoustic Research, which should help us to continue to improve on our design and manufacturing of high-end products. We are also particularly happy to have entered the enormous 3G telecommunications market in China. Our cooperation with China Telecom exemplifies our efforts to rapidly forge stronger relationships with the country's three telecom giants to further penetrate the market and grow our NIVS brand. As such, we feel comfortable that we have created a strong foundation for the remainder of 2009 and beyond."

Liquidity and Capital Resources

The Company's cash balance grew by $2.0 million to $2.3 million as of September 30, 2009, despite retiring approximately $10 million of notes payable during the quarter. Net cash provided by operating activities was $9.3 million for the three months ended September 30, 2009, compared to net cash used by operating activities of $2.9 million for the second quarter of 2009. Accounts receivable increased to $29.5 million from $23.1 million at the end of the second quarter of 2009, while DSOs improved to 51 days, from 52 days in the prior quarter and remained better than the Company's target of 60 days.

Financial Outlook

For the full year 2009, NIVS reaffirms its revenue projection of approximately $172 million to $186 million, a projected 20% to 30% increase compared to 2008. The Company also reaffirms full year 2009 net profit margin will remain firm in the historical range of 9-10%.

Mr. Li continued, "With the holiday season ahead, we anticipate strong demand for our consumer electronics products in China. For the remainder of 2009, we intend to continue our strong marketing and new product launch momentum, as we remain focused on executing our goal of becoming China's preeminent integrated consumer electronics company. In addition, we will continue to focus in R&D and adding to our product portfolio. We will also continue our efforts to expand our mobile handset product line. We believe that our integrated combination of solid technology, design, manufacturing, distribution, product and marketing will elevate NIVS to become an eventual household name brand that consumers know and trust for all their household electronics needs in China."

Conference Call

The Company will hold a conference call to discuss the financial results at 8:00 a.m. ET on Thursday, November 12, 2009. The Company invites you to join the call by dialing 1-480-629-9664. A live webcast of the conference call will be available at http://www.nivsgroup.com . A replay of the call will be available from November 12, 2009 to November 26, 2009. Listeners may access the replay by dialing 1-303-590-3030, passcode: 4184138.

About NIVS IntelliMedia Technology Group, Inc.

NIVS IntelliMedia Technology Group is an integrated consumer electronics company that designs, manufactures, markets and sells intelligent audio and video products in China, Greater Asia, Europe, and North America. The NIVS brand has received "Most Popular Brand" distinction in China's acoustic industry for three consecutive years, among numerous other awards. NIVS has developed leading Chinese speech interactive technology, which forms a foundation for the Company's intelligent audio and visual systems, including digital audio, LCD televisions, digital video broadcasting ("DVB") set-top boxes, peripherals and more.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties, including, but not limited to the Company's reliance on its major customers for a large portion of its net sales; the Company's ability to develop and market new products; the Company's ability to continue to borrow and raise additional capital to fund its operations; the Company's ability to collect aging trade receivables and the effect of a growing doubtful account allowance; the Company's ability to accurately forecast amounts of supplies needed to meet customer demand; exposure to market risk through sales in international markets; the market acceptance of the Company's products; exposure to product liability and defect claims; fluctuations in the availability of raw materials and components needed for the Company's products; protection of the Company's intellectual property rights; changes in the laws of the PRC that affect the Company's operations; development of a public trading market for the Company's securities; and the cost of complying with current and future governmental regulations and the impact of any changes in the regulations on the Company's operations. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the discussed above and in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

    For more information, please contact:

    Company Contact:
     Jason Wong
     Vice President Investor Relations
     Tel:  +86-138 299 16919
     Email: jason@nivsgroup.com

    Investor Contact:
    ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

                         (Financial Tables to Follow)



            NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                                 (In US Dollars)

                                          September 30,        December 31,
                                               2009                2008
                                           (Unaudited)

    Assets
     Current Assets
       Cash and cash equivalents       $       2,286,326  $          461,504
       Trade receivables, net                 29,526,807          20,364,356
       VAT refundable                            228,845           1,094,090
       Inventories, net                       22,440,402          11,279,832
       Restricted cash                         5,579,619          11,681,595
       Prepaid expenses and other
        receivables                               24,682              81,690
     Total current assets                     60,086,681          44,963,067
     Property and equipment, net              55,302,005          56,331,487
     Advances to suppliers                    14,558,721          15,286,028
     Intangible assets, net                    2,301,176           2,343,383
    Total Assets                       $     132,248,583  $      118,923,965

    Liabilities and Shareholders'
     Equity
     Current Liabilities
       Accounts payable-trade          $       4,434,623  $        2,020,363
       Customer deposit                           65,042           1,393,171
       Accrued liabilities and other
        payable                                  949,937           1,441,922
       Various taxes payable                   1,959,416             470,860
       Short-term loans                       40,387,647          35,871,715
       Wages payable                             526,202             800,744
       Bank notes payable                      8,742,092          18,849,201
       Corporate tax payable                   5,064,923           2,744,518
     Total current liabilities                62,129,882          63,592,494
     Due to shareholder                               --           7,842,780
    Total liabilities                         62,129,882          71,435,274

    Equity
    NIVS IntelliMedia Technology Group,
     Inc.'s shareholder equity
     Preferred stock, $0.0001 par
      value, 10,000,000 shares
      authorized, 0 shares outstanding
      at September 30, 2009
      and December 31, 2008                         --                  --
     Common stock, $0.0001 par value,
      100,000,000 shares authorized,
      40,675,347 and 36,855,714 shares
      issued and outstanding at
      September 30, 2009 and December 31,
      2008, respectively                           4,068               3,686
     Additional paid-in capital               21,717,239          12,663,513
     Accumulated other comprehensive
      income                                   3,932,687           3,960,012
     Statutory surplus reserve fund            3,568,869           3,568,869
     Retained earnings (unrestricted)         39,414,109          26,193,371
    Total NIVS IntelliMedia Technology
     Group, Inc.                              68,636,972          46,389,451
    Shareholders' Equity
    Noncontrolling interest                    1,481,729           1,099,240
    Total Equity                              70,118,701          47,488,691

    Total Liabilities & Equity         $     132,248,583  $      118,923,965



            NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Operations
                                 (In US Dollars)

                       For The Three Months Ended  For The Nine Months Ended
                             September 30,               September 30,
                           2009          2008          2009         2008
                        (Unaudited)  (Unaudited)    (Unaudited)  (Unaudited)

     Revenue            $52,384,695  $49,411,468  $122,501,145 $101,048,363
     Other Sales             70,741      164,939       223,190      320,992
        Cost of Goods
         Sold           (40,334,025) (38,261,969)  (94,604,349) (77,852,802)
     Gross Profit        12,121,411   11,314,438    28,119,986   23,516,553
     Selling Expenses     2,884,365    1,286,796     5,534,265    2,649,900
     General and
      administrative
        Amortization         24,270       18,003        60,063        51,491
        Depreciation         83,903       87,859       248,227       249,068
        Bad debts                --      424,299            --       808,401
        Merger cost              --    1,783,586            --     1,783,586
        Stock-based
         compensation            --      765,000            --       765,000
        Others general and
         administrative     967,960      857,584     2,932,950     1,891,291
     Total general and
      administrative      1,076,133    3,936,331     3,241,240     5,548,837
     Research and
      development         1,122,003      261,141     2,457,478       668,323
        Total operating
         expenses         5,082,501    5,484,268    11,232,983     8,867,060
     Income from
      operations          7,038,910    5,830,170    16,887,003    14,649,493
     Other income
      (expenses)
        Government
         grant              335,459       21,506       402,382        21,506
        Interest
         income                   1      250,664             6       393,946
        Interest
         expense           (404,087)    (517,857)   (1,290,312)   (1,563,094)
        Imputed
         interest                --     (147,620)           --      (446,953)
        Sundry income
        (expense), net           --      (31,544)        9,981       (22,370)
     Total other income
      (expenses)            (68,627)    (424,851)     (877,943)   (1,616,965)
     Income before
      noncontrolling
      interest and
      income taxes        6,970,283    5,405,319    16,009,060    13,032,528
     Income taxes        (1,166,471)    (645,936)   (2,442,340)   (1,621,020)
     Net income           5,803,812    4,759,383    13,566,720    11,411,508
     Net income
      attributable to
      the noncontrolling
      interest             (165,238)    (196,195)     (345,982)     (363,328)
     Net income
      attributable NIVS
      IntelliMedia
      Technology Group,
      Inc.               $5,638,574   $4,563,188   $13,220,738   $11,048,180
     Basic earnings per
      share - net
      income attributable
      to NIVS's common
      shareholders            $0.14        $0.13         $0.22         $0.37
     Weighed-average
      shares outstanding,
      Basic              40,675,347   34,147,201    39,595,543   $29,746,845
     Diluted earnings
      per share - net
      income attributable
      to NIVS's common
      shareholders            $0.14        $0.13         $0.33         $0.37
     Weighed-average
      shares
      outstanding,
      Diluted            40,675,347   34,844,197    39,595,543    29,979,177




        NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
             Condensed Consolidated Statements of Cash Flows
                             (In US Dollars)

                                                For The Nine Months Ended
                                                        September 30,
                                                   2009           2008
                                                (Unaudited)    (Unaudited)
    Cash Flows From Operating
     Activities

      Net Income                               $   13,220,738   $ 11,048,180
      Adjustments to reconcile net
       income to net cash provided by
       operating activities:
        Noncontrolling interest                       345,982        363,328
        Imputed interest                                   --        446,953
        Bad debts                                          --        808,401
        Depreciation                                4,380,877      3,575,811
        Amortization                                   60,063         51,491
        Stock-based compensation                           --        765,000
        Changes in operating assets
         and liabilities:
                Account receivable-trade          (9,162,451)    (17,268,951)
                Interest receivables                      --        (393,919)
                Advance to suppliers for
                 purchases                           727,307      (9,583,376)
                Prepaid expenses and deposits         57,008      (2,569,116)
                Inventories, net                 (11,160,570)     10,499,518
                Restricted cash                    6,101,976      (2,334,918)
                VAT refundable                       865,245              --
                Accounts payable, accrued
                 liabilities and customer
                 deposits                            594,146      (4,925,735)
                Various taxes payable              1,488,556         795,962
                Wages payable                       (274,542)       (237,039)
                Corporate tax payable              2,320,405         604,280
                Net cash provided by operating
                 activities                        9,564,740      (8,354,130)


     Cash Flows From Investing Activities
      Purchases of property and equipment         (3,270,839)     (8,176,812)
      Purchases of intangible assets                 (55,161)        (28,674)
      Due from related parties                            --      (5,406,525)
      Short-term investment, marketable securities        --         568,063
                Net cash used in investing
                 activities                       (3,326,000)    (13,043,948)


     Cash Flows From Financing
      Activities
      Increase (decrease) in loans payable         4,515,932       3,020,190
      Increase (decrease) in notes payable       (10,107,109)     10,607,071
      Capital lease payable                               --              --
      Net proceeds of share issuance               1,212,382      10,487,474
      Due to shareholder                                  --      (1,875,133)
                Net cash provided by (used in)
                 financing activities             (4,378,795)     22,239,602
                Effect of exchange rate changes
                 on cash                             (35,123)        833,883
                Net increase in cash and cash
                 equivalents                       1,824,822       1,675,407


     Cash and cash equivalents,
      beginning of period                            461,504       1,438,651

     Cash and cash equivalents, end of
      period                                   $   2,286,326  $    3,114,058

    Supplemental disclosure information:

      Interest expense paid                    $   1,290,312  $    1,045,237
      Income taxes paid                        $   2,442,340  $      975,084

    Supplemental financial activities:
     Exchange of Li debt for common
      stock                                    $   7,841,726  $           --
     Issuance of shares for warrants
      exercise                                 $     946,640  $           --

SOURCE NIVS IntelliMedia Technology Group, Inc.

Back to top

RELATED LINKS
http://www.nivsgroup.com