SHENZHEN, China, May 17, 2011 /PRNewswire-Asia-FirstCall/ -- AIVtech International Group Co. (OTC BB: AIVI) ("AIVtech" or the "Company"), a provider of originally designed electronic products, today announced the financial results for the first quarter ending March 31, 2011. The Company will host an earnings conference call to discuss the financial results on May 18, 2011 at 4:15 p.m. Eastern.
"While our first quarter results came in beneath expectations, we remain confident in our previously stated net income guidance of $13.7 million or $0.61 per share for the 2011 full year. We believe that we will make up much of the shortfall in earnings during the rest of year," commented Mr. Jinlin Guo, Chairman and CEO of AIVtech, "Additionally, we received several large orders during the first quarter that were not fulfilled until April which materially impacted the financial results in the first quarter. However, these orders will be reported during the second quarter of 2011. Our estimated revenue for the month of April is $6.5 million. The majority of these orders pertained to our audio furniture product line. The timing of these orders was a contributing factor in the decrease in revenue during the 2011 first quarter and subsequent increase in inventory. Another factor in the year over year decline in earnings was that during the fourth quarter of 2009 we relocated our manufacturing facility from Shenzhen to Dongguan which forced us to temporarily suspend the production of furniture audio products until January 2010. By producing December 2009 orders in the first quarter of 2010, this substantially increased revenues during that period. Adjusted for the two impactful events described above, our revenue during the 2011 first quarter would have been more in line with our expectations."
Financial Results for the Three Months Ended March 31, 2011
Revenue for the three months ended March 31, 2011 totaled $11.4 million, a decrease of 66.7%, compared to $19.0 million from the same period in 2010. Several large orders in our audio furniture division were delivered on April 15, 2011 adding significant revenue in the second quarter of 2011 instead of the first quarter. Our estimated revenue for the month of April is $6.5 million. In December 2009, the Company relocated its manufacturing facility from Shenzhen to Dongguan and temporarily suspended production until January 2010. As a result orders scheduled for the fourth quarter of 2009 were fulfilled during the first quarter of 2010.
Cost of sales for the three month period ending March 31, 2011 totaled $8.9 million compared to $14 million for the same period in 2010. Gross profit decreased 97% to $2.6 million for the first three months of 2011 compared to $5.1 million for the same period of 2010. Gross profit margin for the first three month period of 2011 was 22.5% compared to 26.6% for the same period in 2010 primarily due to the $2.9 million in LED TV revenue in 2011 as compared to no revenue in 2010.
SG&A margin for the first quarter of 2011 was 6.1% of revenue versus 3.5% of revenue in the same period of 2010, up 2.6%, mainly due to higher advertising spending to drive TV sales. The company also incurred higher product testing expenses.
During the first quarter of 2011, AIVtech's tax rate was 14.7%, up 3.1% year over year.
Net income for the three months ending March 31, 2011 decreased to $1.7 million compared to $3.9 million for the same three months of 2010. Basic and diluted earnings per share for the first quarter of 2011 totaled $0.07 per share based on 22.5 million shares compared to basic and diluted earnings per share for the same period in 2010 of $0.37 based on 10.4 million shares.
Liquidity and Capital Resources
As of March 31, 2011, AIVtech had approximately $14.8 million in cash. Inventories totaled $5.5 million due to outstanding orders that were fulfilled on April 15, 2011. Total current assets and total assets were $29.7 million and $30.8 million as of March 31, 2011. Accounts payable increased to $6.2 million as of March 31, 2011 due to the work in progress to deliver extra products in the second quarter of 2011. Total current liabilities and total liabilities were $11.9 million. Current ratio improved to 2.5 to 1 as of March 31, 2011, an improvement as compared to 2.3 to 1 on December 31, 2010. As of March 31, 2011 working capital totaled $17.8 million, an increase of $9.3 million compared to $8.5 million as of December 31, 2010. Total shareholders' equity was approximately $18.8 million as of March 31, 2011, an increase of $10 million from approximately $8.9 million on December 31, 2010.
2010 First Quarter Conference Call Details:
Mr. Jinlin Guo, Chairman and CEO and Mr. Yinlin Shi, CFO will host a conference call to discuss the financial results for the 2011 first quarter ending March 31, 2011 on Wednesday, May 18, 2011 at 4:15 p.m. Eastern.
It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:15 p.m. Eastern call. A telephonic replay of the conference call may be accessed approximately two hours after the call through June 1, 2011. Please dial 877-870-5176 for U.S. or 858-384-5517 for international callers and entering the access code, 4440649.
There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the "Investor Relations/Events" tab of the Company's website at http://aivtechgroup.com/en/ir.asp?itemid=219 or at http://viavid.net/dce.aspx?sid=00008665.
About AIVtech International Group Co.
AIVtech International Group Co. is the parent company of wholly owned subsidiary Shenzhen AIVtech Company Limited ("Shenzhen AIVtech"), which owns 70% of Dongguan AIVtech Company Limited ("Dongguan AIVtech"). AIVtech's founder, Chairman, and CEO Jinlin Guo owns the remaining 30% of Dongguan AIVtech. Shenzhen AIVtech also owns 60% of the newly formed subsidiary Henan AIVtech Technology Company, Ltd. ("Henan AIVtech") and Chairman Jinlin Guo owns the rest 40%. Founded in 2004, the Company focuses on the integration of electronic products, such as multimedia speakers and video games, with furniture and has coined the term "electronic furniture" to describe its products. The Company has three major product categories: (1) electronic furniture, including video chairs with built-in speakers and vibration, as well as leisure furniture with built-in audio/video systems; (2) multimedia/digital speakers; and (3) video products, which includes a new video conferencing system called the Interactive Intelligent Panel. For more information, visit http://www.aivtechgroup.com.
Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations of signing new customers and contracts, developing new products, projected revenues and earnings, and the success of new products. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which are relevant as of the date of the given press release and should not be relied upon as of any subsequent date. AIVtech International Group Co. undertakes no obligation to update the forward-looking information contained in this press release.
For more information, please contact:
HSC Global, an affiliate of HC International, Inc.
Alan Sheinwald, President
Tel: (914) 669-8885
SOURCE AIVtech International Group Co.