ACL Semiconductors Reports Fourth Quarter and Full Year 2011 Financial Results

HONG KONG, April 23, 2012 /PRNewswire-Asia/ -- ACL Semiconductors Inc. (OTC Bulletin Board: ACLO.OB) ("ACL"), a China-based distributor of memory components in Hong Kong and Southern China, reported unaudited financial results for the fourth quarter of the fiscal year ended December 31, 2011 and the audited financial results for the full year ended December 31, 2011.

Mr. Chung-Lun Yang, Chairman and Chief Executive Officer of ACL, commented, "While 2011 was a challenging macroeconomic year across the global semiconductor business, ACL maintained its market position and undertook strategic initiatives to broaden our business model and set the foundation for future growth and higher gross margins. The bottom line for the year was affected by an allowance of doubtful accounts which in effect offsets the Company's accounts receivables for the fiscal year 2011. Without such allowance ACL would have shown a profit for 2011 in spite of the pricing pressures that were evident industry wide."   

Mr. Yang, continued, "We remain focused on pursuing opportunities to penetrate the rapidly expanding three 'C' markets - computers, consumer electronic appliances and communication technologies.  In the first quarter of 2012, we believe we successfully moved to assure success in this arena.  Of major importance was the non-binding MOU to acquire Jussey Investments Limited ("Jussey"), the majority owner of USmart Electronic Products Limited ("USmart"), broadening our platform from distribution to manufacturing and design.  In addition, we signed a non-binding MOU to acquire Systematic Semiconductor Limited ("Systematic") (known as Superb Sino Holdings Ltd. BVI) that provides high margin, global brand components, diversifying ACL with new brands.  Also during the first quarter we announced a new joint venture with Tomen Devices Corporation, a Japan based seller of Samsung components.  The joint venture called ATMD (Hong Kong) Limited ("ATMD") will expand our geographic footprint for distribution of Samsung semiconductors in mainland China. These transactions meet our objective of strengthening our product portfolio and expanding into divergent geographic regions. We believe that ACL is well positioned to benefit from the anticipated demand driven revenue growth for NAND Flash in 2012 due to the continued expansion in the global smartphone and tablets market."

Recent Developments

In April 2012, the Company entered into a non-binding memorandum of understanding with Jussey, an independent third party that is the majority owner of USmart. USmart specializes in the manufacture and distribution of computer peripherals, premium smartphones, high-end tablets, flash storage, communication devices and consumer electronics appliances.

In March 2012, ATMD, the largest distributor of Samsung semiconductor products in Greater China, was established through the formation of a joint venture between ACL (through its wholly-owned subsidiary, ACL International Holdings Ltd.) and Tomen Devices.  The joint venture agreement became effective on April 1, 2012 and the joint venture is owned 30% and 70% by ACL and Tomen, respectively.  Pursuant to the joint venture agreement, Tomen is responsible for securing the financing when necessary and ACL is responsible for promoting the sales of Samsung products and developing new customers for ATMD.  ACL, in addition to its substantial involvement in the management of ATMD, will continue its business operation as a distributor of memory products in the Greater China region and seek other business opportunities in such field.

In February 2012, the Company entered into a non-binding memorandum of understanding with an independent third party that is a profitable trader and procurement network specialist of memory products, Systematic. An acquisition is expected to be consummated within 60 days upon the completion of a satisfactory due diligence exercise.

Fourth Quarter Results

For the fourth quarter ended December 31, 2011, ACL reported net revenue of $73.2 million, compared to $117.9 million in the same period last year. Net loss for the quarter ended December 31, 2011 was $2.3 million, compared to net loss of $24,874 in the same period last year. Loss per diluted share was $0.08 for the quarter ended December 31, 2011, as compared to a loss of $0 in the same period last year.

Gross profit for the fourth quarter of 2011 was $0.9 million, a decrease of 49.2%, compared to the same period last year. Gross profit margin for the fourth quarter of 2011 was 1.2%, compared to 1.4% in the same period last year.

Full Year 2011 Results

Net sales for the fiscal year 2011 were $368.9 million, as compared to $408.7 million in the 2010 fiscal year. This reduction is largely a reflection of the weak consumer confidence globally present in 2011.

Gross profit for the fiscal year 2011 was $6.2 million, a decrease of 16.4%, from $7.4 million in the fiscal year 2010. Gross profit margin for fiscal year 2011 eased to 1.67% from 1.81% in fiscal year 2010. These results are largely due to reduced average selling prices of semiconductors as a result of weakened global economic sentiments; DRAM in particular has been affected by unexpected declining prices (down approximately 27%).

The Company recorded a net loss of $1.7 million for the fiscal year 2011, as compared to net income of $1.9 million in the fiscal year 2010.

During the year ended December 31, 2011, net cash used for operating activities amounted to $9,945,170, net cash provided by investing activities amounted to $6,233,947, net cash provided by financing activities amounted to $2,804,626.

About ACL Semiconductors Inc.

In 2011, ACL Semiconductors Inc. distributed electronic components under the "Samsung" brand name to the Hong Kong and South China markets. The semiconductor products are used in everything from mobile phones, digital cameras and laptop computers to MP3 players and Wi-Fi products. Starting April 1, 2012, ACL is distributing the Samsung semiconductor products through ATMD, a newly established joint venture with Tomen Devices. For more information about ACL Semiconductors Inc. please visit ACL Semiconductors' corporate website at http://www.acl-semicon.com.

Forward-Looking Statements

This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and  similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the company's products, general acceptance of the company's products and technologies, competitive factors, timing, and other risks described in the company's SEC reports and filings.

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SOURCE ACL Semiconductors Inc.