-- Positioned as a Leading Distributor of Samsung Memory Products in Southern China --
-- Sees Gradual Increase of Global Demand for Memory Products in Second Half 2010 --
HONG KONG, Aug. 24 /PRNewswire-Asia/ -- ACL Semiconductors (OTC Bulletin Board: ACLO.OB), a leading China-based distributor of Samsung memory electronic products in Hong Kong and Southern China, reported financial results for the second quarter ended June 30, 2010.
Quarterly Highlights:
-- Net revenue up 18% year over year to $89.53 million
-- Gross margin at 2.2%
-- Diluted earnings per share at $0.02 compared to $0.04 a year ago
-- Over 150 customers in Hong Kong and Southern China
Mr. Alan Yang, Chairman and Chief Executive Officer of ACL Semiconductors, commented, "We are excited to report another quarter of year-over-year revenue growth. In the second quarter our total sales turnover was up 18% as compared to the previous year quarter. These outstanding results reflect the success of our business model and the macro economic factors across Hong Kong and Southern China. Momentum there in the electronic sector particularly for memory products continues into the third quarter as demand for consumer electronics remains robust."
For the second quarter of 2010, ACL Semiconductors reported net revenue of $89.53 million, increase from $75.83 million for the second quarter 2009. The year over year revenue growth was primarily due to an increase of sales volume in the PRC market. Net income for the second quarter ended June 30, 2010 was $593,895 compared to net income of $1.1 million for the second quarter of 2009. Earnings per diluted share was $0.02 for the second quarter 2010, as compared to $0.04 in the year ago quarter.
Gross profit for the second quarter 2010 was $1.9 million, down 24.6% from $2.5 million for the second quarter 2009 primarily due to lower margins. Gross margin for the second quarter of 2010 was 2.2%, down from 3.6% for the second quarter 2009. The decrease in gross profit and gross margins is mainly due to the decrease in average selling prices as the market became saturated with excess supply. The saturation was due to the excess supply intended for the United States and Europe that was pushed into the China market causing the selling price to decrease.
Mr. Yang continued, "During the quarter we continued to take initiatives to improve our internal financial performance and minimize unnecessary costs. We recorded a 9.3% decrease in operating expenses and a 4.5% decrease in interest expense, as compared to the corresponding quarter in 2009. We expect the global market demand and average selling price to pick up in the third quarter of 2010 as a result of the broader rebound in the semiconductor market. We are confident in our outlook as the electronics business is expected to grow for the remainder of the year and we are ready to take advantage of the foreseeable growth in China's market. Most importantly, we are proud of the distribution and product research we supply to Samsung as we are positioned to be a leading distributor of Samsung memory products in Southern China."
About ACL Semiconductors
ACL Semiconductors distributes electronic components under the "Samsung" brand name to the Hong Kong and South China markets. The memory chips are used from everything from a mobile phone, digital camera and laptop computer to an MP3 player or Wi-Fi products. 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 and are subject to the safe harbor created by 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.
ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
(Restated) (Restated)
Net sales
Related parties $2,119,515 $159,577 $3,560,951 $475,999
Other 87,412,775 75,667,934 184,982,401 137,858,640
Less discounts to
customers -- (449) -- (7,438)
89,532,290 75,827,062 188,543,352 138,327,201
Cost of sales 87,601,020 73,273,593 183,785,478 132,915,773
Gross profit 1,931,270 2,553,469 4,757,874 5,411,428
Operating expenses
Selling 28,586 36,256 53,388 58,434
General and
administrative 1,122,719 1,232,737 2,180,589 2,522,190
Income from operations 779,965 1,284,476 2,523,897 2,830,804
Other income (expenses)
Rental income 30,000 22,308 60,000 44,615
Interest expense (110,705) (115,918) (205,869) (282,810)
Management and
service income 10,884 7,641 19,205 14,180
Net income on cash
flow hedge -- 28,372 15,410 48,721
Interest income 192 2,312 285 31,022
(Loss) profit on
disposal of fixed
assets -- 21,350 (308) 21,350
Exchange differences (8,754) 7,699 (14,957) 5,555
Miscellaneous 20,518 5,310 21,479 3,354
Income before income
taxes provision 722,100 1,263,550 2,419,142 2,716,791
Income taxes provision 128,205 179,487 384,271 397,436
Net Income $593,895 $1,084,063 $2,034,871 $2,319,355
Earnings per share -
basic and diluted $0.02 $0.04 $0.07 $0.08
Weighted average number
of shares --
basic and diluted 28,729,936 28,729,936 28,729,936 28,729,936
ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
As of As of
June 30, December 31,
2010 2009
(Unaudited)
Current liabilities:
Accounts payable $22,023,418 $23,838,753
Accrued expenses 451,947 527,582
Lines of credit and loan facilities 12,645,544 9,013,813
Current portion of long-term debt 319,530 318,972
Current portion of capital lease 298,434 318,135
Income tax payable 861,012 505,078
Due to stockholders for converted
pledged collateral 112,385 112,385
Other current liabilities 159,863 282,475
Total current liabilities 36,872,133 34,917,193
Long-term liabilities
Long-term debts, less current
portion 2,589,265 2,747,981
Capital lease, less current portion 73,866 146,117
Deferred tax liabilities 19,468 19,468
Total long-term liabilities 2,682,599 2,913,566
Total Liabilities 39,554,732 37,830,759
Stockholders' equity:
Common stock - $0.001 par value;
50,000,000 shares authorized;
28,729,936 issued and outstanding
as of June 30, 2010 and December
31, 2009 respectively 28,730 28,730
Additional paid in capital 3,658,627 3,658,627
Retained earnings 2,989,056 954,185
Total stockholders' equity 6,676,413 4,641,542
Total Liabilities and Stockholders'
equity 46,231,145 42,472,301
ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
As of As of
June 30, December 31,
2010 2009
(Unaudited)
Current assets:
Cash and cash equivalents $2,986,215 $2,001,805
Restricted cash 2,088,374 2,086,504
Accounts receivable, net of
allowance for doubtful accounts of
$0 for 2010 and 2009 15,956,010 12,434,386
Inventories, net 5,323,246 6,048,116
Other current assets 232,453 274,351
Total current assets 26,586,298 22,845,162
Property, equipment and improvements,
net of accumulated depreciation and
amortization 8,261,132 8,179,765
Other deposits 145,159 213,535
Amount due from Mr. Yang 11,238,556 11,233,839
Total Assets 46,231,145 42,472,301
Source: ACL Semiconductors, Inc.
