-- 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 (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 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: jason@nivsgroup.com 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.
NIVS IntelliMedia Technology Group, Inc.
CONTACT: Company Contact: Jason Wong, Vice President Investor Relations,
+86-138-299-16919, or jason@nivsgroup.com; Investor Contact: BPC Financial
Marketing, United States & Canada, John Baldissera, +1-800-368-1217
