HONG KONG, Nov. 18, 2010 /PRNewswire-Asia/ -- ACL Semiconductors (OTC Bulletin Board: ACLO), a leading China-based distributor of Samsung memory electronic products in Hong Kong and Southern China, reported financial results for the quarter ended September 30, 2010.
Quarterly Highlights:
Mr. Alan Yang, Chairman and Chief Executive Officer of ACL Semiconductors, commented, "The third quarter of 2010 demonstrated another quarter of year-over-year revenue growth. Our total revenue was up 34.6% in the quarter ended September 30, 2010, as compared to the same period last year. These outstanding results also reflect the success of our business model and the macro economic factors across Hong Kong and Southern China. 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. During the quarter, we began to promote Samsung's high density NAND Flash (4GB and above) in order to capture a larger market share as well as to push the high density products to the mainstream market. This promotion was successful, which resulted in our increased sales volume for the quarter."
For the quarter ended September 30, 2010, ACL Semiconductors reported net revenue of $102.3 million, an increase from $76.0 million, or 34.6%, compared to the same period last year. The year-over-year revenue growth was primarily due to an increase of sales volume in the PRC market. Net loss for the quarter ended September 30, 2010 was $77,000, compared to net income of $1.0 million in the same period last year. The net loss resulted primarily from increased pricing pressure on our products and our promotion of Samsung's NAND products. Earnings per diluted share was $0.00 for the quarter ended September 30, 2010, as compared to $0.03 in the same period last year.
Gross profit for the quarter ended September 30, 2010 was $950,000, down 60.6% from $2.4 million for the quarter ended September 30, 2009, primarily due to lower margins resulting from the factors mentioned above. Gross margin for the quarter ended September 30, 2010 was 0.9%, down from 3.2% as compared to the quarter ended September 30, 2009. The decrease in gross profit and gross margin was mainly due to the decrease in the average selling prices of our products as the market became saturated with excess supply.
Mr. Yang continued, "During the quarter we continued to pursue initiatives to improve our internal financial performance and minimize unnecessary costs. We recorded an 11.2% decrease in operating expenses as compared to the corresponding quarter in 2009. We expect our sales turnover to remain stable in the fourth quarter of 2010. We also expect global market demand and the average selling prices of our products to remain stable in the fourth quarter 2010. We are confident in our outlook as the electronics sector is expected to grow for the remainder of the year and we are well-positioned to take advantage of the foreseeable growth in China's market."
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 mobile phones, digital cameras and laptop computers to MP3 players and 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.
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Investor Contacts: |
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Kun Lin Lee |
Joseph Villalta |
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Chief Financial Officer |
The Ruth Group |
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ACL Semiconductors Inc. |
+1 646-536-7003 |
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+1 415-812-8626 |
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+852-3666-9939 |
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Media Contact: |
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Jason Rando |
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The Ruth Group |
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+1-646-536-7025 |
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-Financial Tables Attached-
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ACL SEMICONDUCTORS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
September 30, |
September 30, |
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2010 |
2009 |
2010 |
2009 |
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(Unaudited) |
(Restated) |
(Unaudited) |
(Restated) |
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Net sales |
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Related parties |
$ |
128,768 |
$ |
67,885 |
$ |
3,689,719 |
$ |
543,884 |
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Other |
102,166,288 |
75,906,352 |
287,148,690 |
213,764,992 |
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Less discounts to customers |
- |
(806) |
- |
(8,244) |
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102,295,056 |
75,973,431 |
290,838,409 |
214,300,632 |
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Cost of sales |
101,344,423 |
73,559,599 |
285,129,901 |
206,475,372 |
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Gross profit |
950,633 |
2,413,832 |
5,708,508 |
7,825,260 |
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Operating expenses |
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Selling |
25,521 |
42,384 |
78,909 |
100,818 |
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General and administrative |
964,455 |
1,072,334 |
3,145,044 |
3,594,524 |
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(Loss) income from operations |
(39,343) |
1,299,114 |
2,484,555 |
4,129,918 |
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Other income (expenses) |
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Rental income |
30,000 |
19,744 |
90,000 |
64,359 |
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Interest expense |
(105,399) |
(87,828) |
(311,268) |
(370,638) |
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Management and service income |
10,885 |
7,039 |
30,090 |
21,219 |
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Net income on cash flow hedge |
- |
17,724 |
15,410 |
66,445 |
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Interest income |
569 |
304 |
854 |
31,327 |
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(Loss) profit on disposal of fixed assets |
- |
(2,404) |
(308) |
18,946 |
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Exchange differences |
(5,486) |
(13,191) |
(20,443) |
(17,036) |
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Miscellaneous |
5,131 |
384 |
26,609 |
13,137 |
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(Loss) income before income taxes provision |
(103,643) |
1,240,886 |
2,315,499 |
3,957,677 |
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Income taxes (reverse) provision |
(26,907) |
253,954 |
357,364 |
651,390 |
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Net (Loss) income |
$ |
(76,736) |
$ |
986,932 |
$ |
1,958,135 |
$ |
3,306,287 |
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Earnings per share - basic and diluted |
$ |
- |
$ |
0.03 |
$ |
0.07 |
$ |
0.12 |
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Weighted average number of shares - |
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basic and diluted |
28,729,936 |
28,729,936 |
28,729,936 |
28,729,936 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
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ACL SEMICONDUCTORS INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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As of |
As of |
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September 30, |
December 31, |
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2010 |
2009 |
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(Unaudited) |
(Audited) |
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Current liabilities: |
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Accounts payable |
$ 22,188,469 |
$ 23,838,753 |
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Accrued expenses |
339,888 |
527,582 |
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Lines of credit and loan facilities |
11,534,508 |
9,013,813 |
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Current portion of long-term debt |
313,450 |
318,972 |
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Current portion of capital lease |
237,937 |
318,135 |
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Income tax payable |
808,068 |
505,078 |
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Due to stockholders for converted pledged collateral |
112,385 |
112,385 |
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Other current liabilities |
21,121 |
282,475 |
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Total current liabilities |
35,555,826 |
34,917,193 |
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Long-term liabilities |
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Long-term debts, less current portion |
2,516,195 |
2,747,981 |
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Capital lease, less current portion |
88,138 |
146,117 |
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Deferred tax liabilities |
45,504 |
19,468 |
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Total long-term liabilities |
2,649,837 |
2,913,566 |
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Total Liabilities |
38,205,663 |
37,830,759 |
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Stockholders' equity: |
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Common stock - $0.001 par value; 50,000,000 shares |
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authorized; 28,729,936 issued and outstanding as of |
28,730 |
28,730 |
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September 30, 2010 and December 31, 2009 respectively |
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Additional paid in capital |
3,658,627 |
3,658,627 |
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Retained earnings |
2,912,320 |
954,185 |
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Total stockholders' equity |
6,599,677 |
4,641,542 |
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Total Liabilities and Stockholders' equity |
44,805,340 |
42,472,301 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
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ACL SEMICONDUCTORS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) |
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Nine months ended |
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September 30, |
September 30, |
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2010 |
2009 |
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(Restated) |
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Cash flows provided by (used for) operating activities: |
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Net income |
$ 1,958,135 |
$ 3,306,287 |
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Adjustments to reconcile net income (loss) to net |
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cash provided by (used for) operating activities: |
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Depreciation and amortization |
270,426 |
191,352 |
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Bad debts |
- |
697,803 |
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Change in inventory reserve |
186,877 |
(258,718) |
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Loss (Gain) on disposal of fixed assets |
308 |
(18,946) |
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Issuance of common stocks to consultant as |
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professional fee under share option scheme |
- |
66,000 |
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Changes in assets and liabilities: |
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(Increase) decrease in assets |
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Accounts receivable – other |
(5,736,717) |
2,299,947 |
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Inventories |
2,527,390 |
54,969 |
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Other current assets |
146,286 |
277,541 |
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Other assets |
70,937 |
269,002 |
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Increase (decrease) in liabilities |
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Accounts payable |
(1,650,285) |
(3,153,144) |
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Accrued expenses |
(187,694) |
236,763 |
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Income tax payable |
302,991 |
640,265 |
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Other current liabilities |
(261,354) |
1,354,271 |
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Deferred tax |
26,036 |
11,125 |
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Total adjustments |
(4,304,799) |
2,668,230 |
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Net cash provided by (used for) |
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operating activities |
(2,346,664) |
5,974,517 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
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ACL SEMICONDUCTORS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (CONTINUED) |
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Cash flows used for investing activities: |
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Advanced from Aristo / Mr. Yang |
4,486,486 |
4,796,698 |
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Advanced to Aristo / Mr. Yang |
(5,482,132) |
(6,037,702) |
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(Increase) decrease of restricted cash |
(1,870) |
3,083,251 |
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Investment in restricted marketable securities |
- |
500,000 |
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Cash proceeds from sale of fixed assets |
81,154 |
48,077 |
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Purchases of fixed assets |
(207,471) |
(961,722) |
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Net cash provided by (used for) investing activities |
(1,123,833) |
1,428,602 |
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Cash flows provided by (used for) financing activities: |
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Net borrowings on lines of credit and notes payable |
2,520,696 |
(7,557,110) |
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Borrowing from long-term debt |
- |
769,231 |
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Principal payments under long-term debt |
(237,308) |
(145,405) |
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Principal payments under capital lease obligation |
(298,850) |
(136,510) |
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Net cash provided by (used for) financing activities |
1,984,538 |
(7,069,794) |
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Net increase (decrease) in cash and cash equivalents |
(1,485,959) |
333,325 |
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Cash and cash equivalents, beginning of period |
2,001,805 |
1,943,463 |
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Cash and cash equivalents, end of period |
$ 515,846 |
$ 2,276,788 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. |
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