ACL Semiconductors Reports Fourth Quarter and Full Year 2012 Financial Results

HONG KONG, April 17, 2013 /PRNewswire/ -- ACL Semiconductors Inc. (OTCBB:ACLO) ("ACL"), an integrated China-based designer, manufacturer and distributor of advanced technologies spanning smartphone and semiconductor components, reported financial results for the fourth quarter and full year ended December 31, 2012.

Mr. Ben Wong, Chief Executive Officer of ACL Semiconductors, commented, "2012 was a significant year in the history of ACL and featured the acquisition of Jussey enabling the Company to tap into the lucrative telecommunications industry. As a result of this acquisition, we expect our primary business to shift to selling smartphone products whereas 2012 sales came mostly from selling memory products."

Mr. Wong continued, "Several key factors will continue to differentiate us from competitors in Hong Kong and PRC. Of the five types of 3G wireless standards in the telecommunication industry, three are adopted in China by the major mobile network carriers, China Unicom, China Telecom and China Mobile. The Company, through USmart and eVision, has access to two of the three 3G wireless standards, namely, W-CDMA and CDMA2000 for its smartphones development. Moreover, eVision has a strong R&D team specializing in the CDMA2000 mobile network. Finally, ATMD - the Company's joint venture with Tomen and one of the largest distributors of Samsung's memory products for Hong Kong and Southern China markets - is expected to be in a highly competitive position compared to other U.S., European, Japanese and Taiwanese memory products manufacturers and distributors."

Mr. Wong concluded, "In 2013, we expect universal NAND flash demand to slightly increase driven by applications such as smartphones, tablets and solid-state drives. However, DRAM revenue is expected to continue to be influenced by global economic conditions."

Recent Developments

In February 2013, the Board of Directors of the Company appointed Mr. Ben Wong as the Company's Chief Executive Officer to replace Mr. Chung-Lun Yang. Mr. Yang continues to act as the Chairman of the Board of Directors.

In November 2012, ACL's stockholders approved the proposed amendment to the Company's certificate of incorporation to change the Company's corporate name from ACL Semiconductors Inc. to USmart Mobile Device Inc. This name change will be effective as of April 17, 2013.

In September 2012, the Company acquired Jussey, a company incorporated in British Virgin Islands, which owns 100% equity interest in eVision Telecom Limited ("eVision"), a Hong Kong incorporated company, and 80% equity interest in USmart Electronic Products Limited ("USmart"), a Hong Kong incorporated company, which wholly owned Dongguan Kezheng Electronics Limited ("Kezheng"), a wholly foreign-owned enterprise ("WFOE") organized under the laws of the PRC. Through this acquisition, the Company has diversified its product portfolio and customers' network, obtained design and manufacturing capabilities, and tapped into the expanding telecommunication industry with access to the 3G baseband licenses.

Fourth Quarter Results

For the fourth quarter ended December 31, 2012, ACL Semiconductors reported net revenue of $38.1 million, compared to $73.2 million in the same period last year.

Gross profit for the fourth quarter of 2012 was $(1.2) million, compared to $0.9 million in the same period last year. Gross profit margin for the fourth quarter of 2012 was (3.2) %, compared to 1.2% in the same period last year.

Net loss for the quarter ended December 31, 2012 was $4 million, compared to net loss of $2.3 million in the same period last year. Loss per diluted share was $0.12 for the quarter ended December 31, 2012, as compared to a loss of $0.08 in the same period last year.

Full Year 2012 Results

Net sales for 2012 were $161.4 million, as compared to $368.9 million in 2011 fiscal year. This reduction is largely due to the Company's transfer of its Samsung distributor business to ATMD, in addition to weak and volatile global economic conditions in 2012.

Gross profit for 2012 was $0.4 million, a decrease of 94%, from $6.2 million in 2011. Gross profit margin for 2012 decreased to 0.24% from 1.67% in 2011. These results were largely due to reduced average selling prices of semiconductors as a result of weakened global economic conditions and an inventory provision of $1.6 million for the year ended December 31, 2012.

The Company recorded a net loss of $4.9 million for 2012, as compared to net loss of $1.7 million in 2011. This result was due to the reflection of current global economic conditions and increasing operating expenses generated by the establishment of the joint venture and acquisition that occurred in 2012. On average, the Company sold its products at a reduced selling price to encourage the turnover of the Company's price sensitive products in response to the deteriorated market conditions which resulted in a decrease in gross profit margin and an increase in net loss.

During the year ended December 31, 2012, net cash provided by operating activities amounted to $2.8 million, net cash used for investing activities amounted to $1.5 million, and net cash used for financing activities amounted to $1.3 million.

About ACL Semiconductors

ACL Semiconductors is an integrated China-based designer, manufacturer and distributor of advanced technologies spanning smartphone and semiconductor components. Through the September 2012 acquisition of USmart Electronic Products, ACL has become a one-stop solution provider of smartphone components serving OEM customers spanning local China mobile phone companies and established telecom carriers. Following the formation of the ATMD joint venture with Tomen Devices in April 2012, ACL has retained a 30% stake in the business focused on supplying Samsung semiconductors and LCD products in Greater China. For more information about ACL Semiconductors 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. 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.