- Strong sales, orders for new LED-backlit LCD TVs, which began shipping in May
SHENZHEN, China, Aug. 12 /PRNewswire-Asia/ -- AIVtech International Group Co. (OTC Bulletin Board: ECOH) ("AIVtech" or the "Company"), a provider of consumer electronics products in both domestic and international markets, today announced its unaudited financial results for the second quarter ended June 30, 2010.
Second-Quarter 2010 Highlights
-- Revenue increased 20.5% to $9.5 million as compared to $7.9 million for
the second quarter of the prior year
-- Gross profit increased 11.9% to $2.4 million from $2.1 million in the
year-ago quarter
-- Operating income increased 20.7% to $1.9 million from $1.6 million in
the year-ago quarter
-- Net income was $1.6 million, or $0.08 per basic and diluted share, a
13.4% increase from $1.4 million, or $0.07 per basic and diluted share,
in the year-ago quarter
-- In May 2010, the Company began shipping LED-backlit LCD televisions and
subsequently received several large orders
-- Added two new independent directors to the Board of Directors and hired
an Investor Relations Director
First-Half 2010 Highlights
-- Revenues in the first half of 2010 were $28.7 million, a 143% increase
over revenues of $11.8 million in the first half of 2009
-- Net income in the first half of 2010 was $5.4 million, or $0.27 per
basic and diluted share, a 174% increase versus net income of $2.0
million, or $0.10 per basic and diluted share, in the first half of
2009
"So far this year, we have made significant progress in the execution of our business plan and have experienced solid revenue and net-income growth. Our newly launched line of LED TVs is gaining acceptance in the market, and we have announced orders of $3.7 million following the launch of this product line in May. In addition, we maintained our market position in furniture audio products and multimedia speakers. Overall, we are confident that we will achieve strong top and bottom-line growth for the whole of 2010," commented Mr. JinLin Guo, AIVtech's Chairman and Chief Executive Officer. "We also enhanced our corporate governance with the addition of two new independent directors and have engaged an investor relations director to facilitate communication with our investors."
Financial Results for the Second Quarter 2010
Total revenue for the second quarter was $9.5 million, representing a $1.6 million or 20.5% increase compared to the same period last year. The year-over-year increase in revenue was primarily due to contracts with new customers and strong sales volume in the Company's three product categories. Growth in furniture audio was driven by sales of gaming and music chairs, and growth in multimedia speakers was driven by sales of the Digi Panda music player. In addition, the Company began shipping LED-backlit LCD TVs in May and announced two large orders for this new product in recent months.
Gross profit increased by 11.9% to $2.4 million from $2.1 million in the same period last year, driven primarily by the increase in revenue. The gross margin was 25.1% in the second quarter of 2010 compared to 27.0% in the same period last year, primarily due to the change in product mix, as the recently introduced LED TVs carry a relatively lower margin. Although LED TVs carry a lower margin, the Company views this market as a major opportunity and expects operating leverage to begin offsetting lower TV margins in early 2011.
Selling, general and administrative expenses decreased by 13.5% to $477,982 from $552,352 in the same period last year. The decrease is mainly due to better expense controls, as well as lower advertising and R&D expense.
Income tax expense totaled $240,538, compared to $158,734 in the year ago period.
Net income was $1.6 million, or $0.08 per basic and diluted share, a 13.4% increase from $1.4 million, or $0.07 per basic and diluted share, in the same period last year.
First-Half 2010 Results
Revenue for the six months ended June 30, 2010 increased 143.0% to $28.7 million compared to $11.8 million for the six months ended June 30, 2009. Gross profit was $7.5 million, up 133.9% from $3.2 million in the six months ended June 30, 2009. Gross margin was 26.0% compared to 27.0% in the same period of 2009. Operating income was $6.3 million, up 186.8% from $2.2 million for the same period of 2009. Net income for the six months ended June 30, 2010 was $5.4 million, or $0.27 per basic and diluted share, up 173.7% from $2.0 million, or $0.10 per basic and diluted share, in the comparable period in 2009.
Financial Condition
Cash and cash equivalents increased by $322,314, or 8.9%, to $3.9 million as of June 30, 2010, from $3.6 million as of December 31, 2009. Working capital was $6.2 million as of June 30, 2010, a substantial increase from $667,303 as of December 31, 2009. The Company had $737,307 of short-term loans as of June 30, 2010, versus no debt as of December 31, 2010. Stockholders' equity was $6.7 million as of June 30, 2010, versus $1.2 million as of December 31, 2010, owing to strong profitability in the first half of 2010.
Cash flow from operations was $4.1 million in the six months ended June 30, 2010, versus an outflow of $2.1 million in the six months ended June 30, 2009, primarily driven by higher profitability and $3.3 million in inventory reduction, versus a $5.6 million inventory increase in the first six months of 2009. Purchase of property, plant, and equipment was $138,619 in the six months ended June 30, 2010, versus $72,160 in the first six months of 2009, owing to the installation of the manufacturing line for LED-backlit LCD TVs.
Business Outlook
Looking ahead, the Company is committed to executing its strategy of growing revenues through higher sales of its newly introduced line of LED-backlit LCD TVs. The Company also expects to continue to introduce new products and expand its distribution channels by signing contracts with large retailers in China. "Looking at our current sales pipeline and the growing acceptance of our new LED TVs, we are confident that we will achieve growth in revenues and net income in 2010," concluded Mr. Guo.
About AIVtech International Group Co.
AIVtech International Group Co. is the parent company of wholly owned 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. 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) LCD/LED televisions. For more information, visit http://www.aivtechgroup.com .
Forward-Looking Statements
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.
- FINANCIAL TABLES FOLLOW -
AIVtech International Group Co.
Consolidated Balance Sheet
June 30, December 31,
2010 2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents $3,928,055 $3,605,741
Accounts receivable 3,867,939 2,040,088
Other receivables, net 191,990 42,121
Inventories 1,736,096 5,073,436
Total current assets 9,724,080 10,761,386
NON-CURRENT ASSETS
Property, plant and equipment, net 1,071,748 1,015,570
TOTAL ASSETS $10,795,828 $11,776,956
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Account payables and accrued expenses $2,502,122 $5,431,006
Short term loan 737,307 --
Income tax payable 240,059 233,191
Other payable 48,006 --
Due to shareholder 10,736 29,252
Dividend payable -- 4,400,634
Total current liabilities 3,538,228 10,094,083
Minority interest 573,695 439,264
Total Liabilities 4,111,923 10,533,347
STOCKHOLDERS' EQUITY
Registered capital 20,000 20,000
Additional paid-in capital 621,916 621,916
Statutory reserve 346,990 346,990
Retained earnings 5,286,069 (132,007)
Accumulated other comprehensive income 408,930 386,710
Total stockholders' equity 6,683,905 1,243,609
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,795,828 $11,776,956
AIVtech International Group Co.
Consolidated Statements of Income and Comprehensive Income
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
Sales, net $9,536,238 $7,916,721 $28,682,405 $11,801,267
Cost of sales (7,142,115) (5,777,459) (21,226,969) (8,613,991)
Gross Profit 2,394,123 2,139,262 7,455,436 3,187,276
Operating income/(expense)
Selling, general, and
administrative expense (477,982) (552,352) (1,152,837) (990,065)
Income from Operations 1,916,142 1,586,910 6,302,600 2,197,211
Other income/(expense) 7,209 422 7,209 2,044
Interest expense (6,327) -- (6,327) --
Profit before income tax 1,917,024 1,587,332 6,303,482 2,199,255
Income taxes (240,538) (158,734) (750,976) (219,926)
Net Income before Minority
Interest 1,676,486 1,428,599 5,552,506 1,979,330
Minority Interest (56,951) -- (134,430) --
Net Income $1,619,535 $1,428,599 $5,418,076 $1,979,330
Comprehensive Income
Net Income 1,619,535 1,428,599 5,418,076 1,979,330
Foreign currency
translation adjustment 25,566 (32,759) 22,220 (15,629)
Total Comprehensive Income 1,645,101 1,395,840 5,440,296 1,963,701
Net Income Per Basic and
Diluted Share $0.08 $0.07 $0.27 $0.10
Weighted average common
shares outstanding 20,000,000 20,000,000 20,000,000 20,000,000
AIVtech International Group Co.
Consolidated Statements of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES: 2010 2009
(Unaudited) (Unaudited)
Net income $5,418,076 $1,979,330
Adjustments to reconcile net income to net
cash provided by
Operating activities:
Depreciation 82,441 69,198
Net income attributed to minority interest
minority interest 134,431 --
Changes in assets and liabilities
provided/(used) cash:
Accounts receivable (1,827,851) (2,347,253)
Other receivable (149,869) (69)
Due from related party -- 1,523
Due to related party (18,516) (732)
Inventories 3,337,340 (5,611,234)
Accounts payable and accrued expenses (2,928,884) 1,475,782
Other payables 48,006 2,179,599
Income tax payable 6,868 158,544
Net cash provided by operating activities 4,102,041 (2,095,311)
CASH FLOWS FROM INVESTING ACTIVITIES：
Purchase of property & equipment (138,619) (72,160)
Net cash used in investing activities (138,619) (72,160)
CASH FLOWS FROM FINANCING ACTIVITIES：
Addition in short-term loan 737,307 --
Dividends paid (4,400,634) --
Net cash used in financing activities (3,663,327) --
Effect of exchange rate changes on cash and
cash equivalents 22,220 (15,628)
Net change in cash and cash equivalents 322,314 (2,183,099)
Cash and cash equivalents, beginning of period 3,605,741 2,443,464
Cash and cash equivalents, end of period $3,928,055 $260,365
For more information, please contact:
Company Contact:
Mr. Chris Durkin, Investor Relations Director
AIVtech International Group Co.
Email: chrisdurkin@aivtechgroup.com
Tel: +1-347-387-2061
Investor Relations Contact:
Mr. John Harmon, Sr. Account Manager
CCG Investor Relations
Email: john.harmon@ccgir.com
Tel: +1-646-833-3424
