NIVS Announces 2010 Second Quarter Results
-- Net sales increased 89.7% to $77.6 million
-- Diluted EPS increased to $0.14 from $0.11
HUIZHOU, China, Aug. 11 /PRNewswire-Asia-FirstCall/ -- NIVS IntelliMedia Technology Group, Inc. ("NIVS" or the "Company") (NYSE Amex: NIV), a consumer electronics company that designs, manufactures and sells intelligent audio and visual products and mobile phones, announced today that net sales for the second quarter ended June 30, 2010 were $77.6 million, an increase of $36.7 million or 89.7 %, from $40.9 million in the comparable prior year quarter. Net sales for the six months ended June 30, 2010 more than doubled to $151.7 million from $70.1 million in the comparable prior year period.
Income from operations for the second quarter ended June 30, 2010 was $8.9 million, an increase of $3.0 million, or 50.8 %, from $5.9 million in the prior year period. For the six month period ended June 30, 2010, the Company reported income from operations of $15.7 million, an increase of $6.5 million, or 70.7%, from $9.2 million in the comparable prior year period.
For the second quarter ended June 30, 2010, the Company reported net income of $6.8 million, or $0.14 per diluted share, an increase of $2.1 million, versus $4.7 million, or $0.11 per diluted share, in the second quarter of 2009. For the six months ended June 30, 2010, the Company reported net income of $12.2 million, or $0.27 per diluted share, an increase of $5.1 million, or 71.8%, compared to $7.1 million, or $0.18 per diluted share, during the comparable prior year period.
Mr. Tianfu Li, NIVS' Chairman and CEO, said, "We are pleased to report a strong financial performance in the second quarter. Our relationship with China Telecom began to produce anticipated results and we are now working with China Mobile and China Unicom as well to further enhance our mobile phone business category. Our acquisition of Dongri was also validated by its strong performance at this point in the year. The continued growth of our traditional audio/visual products division is expected to increase revenue by 20-30% over 2009 and our mobile phone products should contribute $80-$100 million of revenue for 2010. Our objective is to sustain strong growth across all our operating segments, expand market share within our core markets and take advantage of opportunities in new markets."
Liquidity and Capital Resources
The Company had an unrestricted cash balance of approximately $25.1 million as of June 30, 2010, compared with $5.9 million as of December 31, 2009. In addition, the Company also had approximately $2.2 million in restricted cash as of June 30, 2010, compared with $4.8 million as of December 31, 2009. The Company received $21.9 million of net proceeds from its secondary offering on April 19, 2010.
The Company had bank loans of approximately $63.1 million and $51.7 million as of June 30, 2010 and December 31, 2009.
Net cash provided by operating activities was $2.9 million for the six months ended June 30, 2010, compared to net cash provided by operating activities of $3.2 million for the same period of 2009. Accounts receivable increased to $41.8 million from $33.2 million at the end of the first half of 2009, while DSO was 44.8 days.
Business Outlook
The Company's financial position improved strongly in the second quarter of 2010 as the Company's newly acquired mobile phone manufacturing operations contributed a meaningful amount of revenue. The Company believes that these and other fundamentals that have been established will contribute to the Company's continued rapid growth in 2010.
For the remainder of 2010, the Company intends to continue its strong marketing and new product launch momentum, and remain focused on executing the goal of becoming China's pre-eminent integrated consumer electronics company. The Company intends to further enhance its income statement by focusing on cutting operating costs and streamlining operating efficiencies. In addition, the Company will continue to focus on R&D and add to its product portfolio, such as 3G mobile handsets, for example. As demonstrated by the robust year-over-year revenue growth of its intelligent audio and visual products in the first quarter of 2010, the Company believes that the integration of its solid technology, design, manufacturing, distribution, product and marketing continues to be well-received by its customers and end users.
The Company intends to sustain its strong growth across all operating segments and remains confident about the growth of the mobile phone and consumer electronics industry. Management further believes that the Company's integrated strengths should allow it to expand market share within its core market and help to capture opportunities in new markets, enabling sustained strong financial results and greater share value.
Guidance for 2010 business operations
Overall, the Company anticipates that it will generate $290-340 million of revenue in 2010, with gross and net margins estimated to be similar to those realized in the first half of the year.
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 and mobile phone 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 ability to remediate the significant deficiencies and/or material weaknesses in its internal controls; the Company's ability to effectively integrate the operations and management of acquisition targets, including Dongri; the Company's ability to timely deliver products; the Company's ability to timely 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 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; and changes in the laws of the PRC that affect 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 (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 an obligation to update these forward-looking statements.
Investor Conference Call
The Company's 2010 second quarter earnings conference call will take place on Thursday, August 12, 2010, at 11:00 a.m. Eastern Time and will also be webcast over the internet.
To participate, callers should dial 877-941-2930, callers dialing from China or Hong Kong should dial U.S. 1 -480-629-9690. Participants should ask for the "NIVS IntelliMedia Conference Call."
A simultaneous webcast will also be available via: http://w.on24.com/r.htm?e=232212&s=1&k=5DF8C248B9767B43D5D18B4714E9775A
In addition, a replay of the conference call will be archived and available until September 12, 2010 at the following numbers: Domestic callers 1-800-406-7325 or 303-590-3030, access code: 4343967. International callers: U.S. 303-590-3030, access code 4343967.
For more information, please contact:
Company Contact:
Jason Wong
Vice President Investor Relations
Tel: +86-138-2991-6919
Email: [email protected]
Investor Contact:
United States & Canada
BPC Financial Marketing
John Baldissera
Tel: +1-800-368-1217
NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
Consolidated Balance Sheets
(In US Dollars)
June 30, December 31,
2010 2009
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $25,109,270 $5,916,224
Trade receivables, net 41,809,772 33,228,955
Inventories, net 23,061,799 9,626,048
Prepaid expenses, deposit and
other receivables 139,148 8,641,448
VAT refundable 1,939,157 869,202
Restricted cash 2,241,033 4,840,137
Total current assets 94,300,179 63,122,014
Property, equipment and
construction in progress, net 73,902,654 58,409,374
Advances to suppliers 15,555,000 16,649,904
Intangible assets, net 14,615,809 2,295,244
Total Assets $198,373,642 $140,476,536
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $16,675,196 $3,932,115
Accrued liabilities and other
payable 1,368,921 1,485,577
Wages payable 965,159 801,972
Corporate tax payable 743,561 1,372,117
Various taxes payable 8,339 494,678
Customer deposits 258,448 --
Short-term loans 55,960,095 43,987,358
Bank notes payable 7,163,441 7,712,609
Total current liabilities 83,143,160 59,786,426
Total Liabilities 83,143,160 59,786,426
Shareholders' Equity
NIVS IntelliMedia Technology Group,
Inc.'s shareholders' equity
Preferred stock, $0.0001 par value,
10,000,000 shares authorized, 0
shares issued and outstanding at
June 30, 2010 and December 31,
2009, respectively -- --
Common stock, $0.0001 par value,
100,000,000 shares authorized,
47,970,179 and 40,675,347 shares
issued and outstanding at June 30,
2010 and December 31, 2009,
respectively 4,797 4,068
Additional paid-in capital 43,875,642 21,717,239
Accumulated other comprehensive
income 4,118,206 3,979,941
Statutory reserve fund 5,722,107 5,722,107
Retained earnings (unrestricted) 59,414,506 47,497,211
Total NIVS IntelliMedia Technology
Group, Inc. Shareholders' Equity 113,135,258 78,920,566
Noncontrolling interest 2,095,224 1,769,544
Total Shareholders' Equity 115,230,482 80,690,110
Total Liabilities & Shareholders'
Equity $198,373,642 $140,476,536
The accompanying notes are an integral part of these consolidated
financial statements.
NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
Consolidated Statements of Income
(In US Dollars)
For The Three Months Ended For The Six Months Ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $77,602,309 $40,859,722 $151,709,981 $70,116,450
Other Revenues 61,242 61,377 122,463 152,449
Cost of Goods Sold (61,512,350) (31,173,544) (122,460,063) (54,270,324)
Gross Profit 16,151,201 9,747,555 29,372,381 15,998,575
Selling Expenses 1,917,136 2,126,889 3,518,877 3,268,112
General and
administrative
Amortization 818,107 18,348 1,629,327 35,793
Depreciation 89,178 83,054 176,039 164,324
Other general and
administrative 2,204,155 822,075 3,423,794 1,964,990
Total general and
administrative 3,111,440 923,477 5,229,160 2,165,107
Research and
development 2,255,131 762,940 4,918,365 1,335,475
Total operating
expenses 7,283,707 3,813,306 13,666,402 6,768,694
Income from
operations 8,867,494 5,934,249 15,705,979 9,229,881
Other income
(expenses)
Interest expense (437,797) (324,162) (830,741) (886,225)
Sundry income
(expense), net (194,266) 66,928 (75,603) 76,909
Total other income
(expenses) (632,063) (257,234) (906,344) (809,316)
Income before
noncontrolling
interest and income
taxes 8,235,431 5,677,015 14,799,635 8,420,565
Income taxes (1,434,178) (961,914) (2,560,523) (1,275,869)
Net income 6,801,253 4,715,101 12,239,112 7,144,696
Net income
attributable to the
noncontrolling
interest (186,082) (119,616) (321,817) (180,744)
Net income
attributable NIVS
IntelliMedia
Technology Group,
Inc. $6,615,171 $4,595,485 $11,917,295 $6,963,952
Basic earnings per
share - net income
attributable to
NIVS's common
shareholders $0.14 $0.11 $0.27 $0.18
Weighed-average
shares outstanding,
Basic 46,186,998 40,648,149 43,431,172 39,028,629
Diluted earnings per
share - net income
attributable to
NIVS's common
shareholders $0.14 $0.11 $0.27 $0.18
Weighed-average
shares outstanding,
Diluted 46,186,998 40,648,149 43,431,172 39,028,629
The accompanying notes are an integral part of these consolidated
financial statements.
NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In US Dollars)
For The Six Months Ended June 30,
2010 2009
(Unaudited) (Unaudited)
Cash Flows From Operating Activities
Net income $12,239,112 $7,144,696
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 3,461,705 2,896,131
Amortization expense 1,629,327 35,793
Changes in operating assets and
liabilities:
Accounts receivable (5,866,406) (2,718,868)
Advances to suppliers 1,252,115 2,217,681
Prepaid expenses and deposits 32,294 54,435
Inventories, net (10,584,584) (9,314,448)
VAT refundable (1,068,857) 965,270
Accounts payable, accrued
liabilities and customer
deposits 2,889,487 (477,025)
Various taxes payable (487,530) 1,391,928
Wages payable 18,732 (257,633)
Corporate tax payable (630,289) 1,272,528
Net cash provided by (used in)
operating activities 2,885,106 3,210,488
Cash Flows From Investing Activities
Restricted cash 2,605,218 (2,922,126)
Cash paid for Dongri Acquisition (4,969,525) --
Purchases of property, plant and
equipment (12,870,501) (3,270,839)
Payments made for construction in
progress (1,785,119) --
Purchases of intangible assets (82,887) (16,973)
Net cash used in investing
activities (17,102,814) (6,209,938)
Cash Flows From Financing Activities
Net borrowing from bank loans
payable 11,824,500 1,967,923
Net borrowing (repayment) in bank
notes payable (558,910) (363,124)
Net proceeds of share issurances 22,159,132 1,212,374
Net cash provided by (used in)
financing activities 33,424,722 2,817,173
Effect of exchange rate changes
on cash (13,968) 2,411
Net increase in cash and cash
equivalents 19,193,046 (179,866)
Cash and cash equivalents, beginning
of period 5,916,224 461,504
Cash and cash equivalents, end of
period $25,109,270 $281,638
--
Supplemental disclosure information:
Interest expense paid $829,708 $886,225
Income taxes paid $3,188,402 $1,275,869
Non-cash investing and financing
activities:
Conversion of Li debt to common
stock $-- $(7,841,726)
Issuance of shares for cashless
warrants exercise $-- $94
The accompanying notes are an integral part of these consolidated
financial statements.
SOURCE NIVS IntelliMedia Technology Group, Inc.
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