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NIVS (NIV) Announces Full Year and Fourth Quarter 2009 Results

HUIZHOU, China, March 25 /PRNewswire-Asia-FirstCall/ — NIVS IntelliMedia Technology Group, Inc. (“NIVS” or the “Company”) (NYSE: NIV), a consumer electronics company that designs, manufactures and sells intelligent audio and visual products, announced today that net sales for the three months ended December 31, 2009, were $62.7 million compared to $42.6 million in the comparable prior year period, an increase of 47.2%. The increase in sales during the fourth quarter of 2009 compared to the fourth quarter of 2008 was attributed primarily to an increased demand for the Company’s intelligent audio and video products as a result of the economic recovery that began in China, and market expansion efforts. Net sales for the full year ended December 31, 2009 were $185.2 million, an increase of $41.6 million, or 29.0% compared to $143.6 million for the year ended December 31, 2008. The increase in revenue was also attributed primarily to the increased demand for and sales of the Company’s intelligent audio and video products, which the Company believes was the result of its market expansion efforts.

Income from operations during the fourth quarter 2009 was $12.5 million, an increase of $8.6 million or 220.5% compared to $3.9 million in the comparable prior year period. The increase in income from operations was attributable in part to the reversal of $2.7 million of bad debt charges in the fourth quarter. For the year ended December 31, 2009, the Company reported income from operations of $28.5 million, an increase of $10.0 million, or 54.1% from $18.5 million in the comparable prior year period.

Mr. Tianfu Li, NIVS’ Chairman and CEO, said, “I am delighted at our strong 2009 fourth quarter and full year performance and completing our first year of trading on the NYSE Amex. We acquired our U.S. listing during a challenging economic environment and succeeded in expanding our business within the Chinese domestic market as well as in international markets. We believe our 2009 performance provides a solid foundation from which to grow in 2010. Our management team is focused on achieving outstanding operational performance and the continuance of increasing shareholder value.”

During the fourth quarter of 2009, the Company reported net income of $11.0 million, or $0.28 per diluted share compared to $1.9 million, or $0.04 per diluted share, in the comparable period of 2008, an increase of $9.1 million. For the year ended December 31, 2009, the Company reported net income of $23.5 million, or $0.59 per diluted share, an increase of $10.5 million, or 80.8% from $13 million, or $0.41 per diluted share, in 2008.

Liquidity and Capital Resources

The Company had unrestricted cash and cash equivalents of approximately $5.9 million at December 31, 2009, compared with $0.5 million at December 31, 2008. In addition, the Company had approximately $4.8 million in restricted cash at December 31, 2009, as compared to $11.7 million at December 31, 2008. The Company had working capital of approximately $3.3 million at December 31, 2009 and a working capital deficit of $18.6 million at December 31, 2008.

The Company had short-term bank loans of approximately $51.7 million and $54.7 million as of December 31, 2009 and 2008, respectively.

During 2009, the Company spent $9.6 million on capital expenditures compared to $16.8 million in 2008. Depreciation and amortization was $5.9 million in 2009 compared to $4.9 million in 2008.

Business Outlook

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 preeminent integrated consumer electronics company. The Company intends to further enhance its balance sheet 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 tripling of revenue year-over-year of the intelligent audio and visual products in the fourth quarter of 2009, the Company believes that its integration of 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 its operating segments and remains confident about the business and growth of the AV consumer electronics industry, and believes that its integrated strengths should allow it to expand market share within its core market and help to capture opportunities in new markets, enabling the Company to deliver sustained strong financial results and greater share value.

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 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 weakness(es) in its internal controls; the Company’s ability to effectively integrate the operations and management of acquisition targets, including Dongri; the Company’s entry into the mobile phone manufacturing business; 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; 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 (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 2009 year-end earnings conference call will take place on Thursday, March 25, 2010, at 11:00 a.m. Eastern Time and will also be webcast over the internet.

To participate, callers should dial 800- 867-0938, callers dialing from China or Hong Kong should dial U.S. 1 -480-293-0647. Participants should ask for the “NIVS IntelliMedia Conference Call.”

A simultaneous webcast will also be available via http://w.on24.com/r.htm?e=199373&s=1&k=7FAA2EC2A3CC7CCB87A1899E1BEEE123

In addition, a replay of the conference call will be archived and available until April 25, 2010 at the following numbers: Domestic callers – 800-406-7325 or 303-590-3030, access code: 4263795. Callers from China or Hong Kong: U.S. 1-800-406-7325, access code 4263795.

    For more information, please contact:

    Company Contact:
     Jason Wong
     Vice President Investor Relations
     Tel:   +86-138-299-16919
     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)

                                               December 31,       December 31,
                                                   2009               2008
    Assets
    Current Assets
    Cash and cash equivalents                   $5,916,224          $461,504
    Trade receivables, net                      33,228,955        20,364,356
    Inventories, net                             9,626,048        11,279,832
    Prepaid expenses, deposit and other
     receivables                                 8,641,448            81,690
    VAT refundable                                 869,202         1,094,090
    Restricted cash                              4,840,137        11,681,595
    Total current assets                        63,122,014        44,963,067
    Property, equipment and construction
     in progress, net                           58,409,374        56,331,487
    Advances to suppliers                       16,649,904        15,286,028
    Intangible assets, net                       2,295,244         2,343,383
    Total Assets                              $140,476,536      $118,923,965

    Liabilities and Shareholders' Equity
    Current Liabilities
    Accounts payable - trade                    $3,932,115        $2,020,363
    Accrued liabilities and other
     payable                                     1,485,577         1,441,922
    Wages payable                                  801,972           800,744
    Corporate tax payable                        1,372,117         2,744,518
    Various taxes payable                          494,678           470,860
    Customer deposits                                   --         1,393,171
    Short-term loans                            43,987,358        35,871,715
    Bank notes payable                           7,712,609        18,849,201
    Total current liabilities                   59,786,426        63,592,494
    Due to shareholder                                  --         7,842,780
    Total Liabilities                           59,786,426        71,435,274

    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
     December 31, 2009 and December 31,
     2008, respectively                                 --                --
    Common stock, $0.0001 par value,
     100,000,000 shares authorized,
     40,675,347 and 36,855,714 shares
     issued and outstanding at December
     31, 2009 and December 31, 2008,
     respectively                                    4,068             3,686
    Additional paid-in capital                  21,717,239        12,663,513
    Accumulated other comprehensive
     income                                      3,979,941         3,960,012
    Statutory reserve fund                       5,722,107         3,568,869
    Retained earnings (unrestricted)            47,497,211        26,193,371
    Total NIVS IntelliMedia Technology
    Group, Inc. Shareholders' Equity            78,920,566        46,389,451
    Noncontrolling interest                      1,769,544         1,099,240
    Total Shareholders' Equity                  80,690,110        47,488,691
    Total Liabilities & Shareholders'
     Equity                                   $140,476,536      $118,923,965

    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 Year Ended
                            December 31,        December 31,      December 31,
                                   2009                2008             2007
    Revenues               $185,197,972        $143,630,679      $77,626,516
    Other Revenues              282,289             414,968          516,415
    Cost of Goods Sold     (142,416,067)       (109,762,476)     (58,864,342)
    Gross Profit             43,064,194          34,283,171       19,278,589

    Selling Expenses          6,761,597           5,376,083        3,269,414

    General and
     administrative
    Amortization                 78,665              68,788           62,175
    Depreciation                331,153             337,445          327,575
    Bad debts (recovery)     (2,745,003)          2,531,479          473,218
    Merger cost                      --           1,785,696               --
    Stock-based
     compensation                    --             765,000               --
    Other general and
     administrative           4,850,370           3,171,458        2,548,047
    Total general and
     administrative           2,515,185           8,659,866        3,411,015
    Research and
     development              5,314,781           1,737,323          373,472
    Total operating
     expenses                14,591,563          15,773,272        7,053,901
    Income from
     operations              28,472,631          18,509,899       12,224,688

    Other income
     (expenses)
    Government grant            575,870              31,713           28,138
    Write-down of
     inventory                       --            (131,837)        (105,106)
    Interest income                   6                  91          234,655)
    Interest expense         (1,566,976)         (2,208,051)      (1,791,490)
    Imputed interest                 --            (656,167)        (526,428)
    Sundry income
     (expense), net              11,407             (51,714)        (111,405)
    Total other
     income (expenses)         (979,693)         (3,015,965)      (2,271,636)

    Income before
     non-controlling
     interest and
     income taxes            27,492,938          15,493,934        9,953,052
    Income taxes             (3,406,230)         (2,031,031)      (1,268,963)
    Net income               24,086,708          13,462,903        8,684,089

    Net income
     attributable to
     the non-
     controlling
     interest                  (629,630)           (429,490)        (217,569)

    Net income
     attributable NIVS
     IntelliMedia
     Technology Group,
     Inc.                   $23,457,078         $13,033,413       $8,466,520

    Basic earnings
     per share - net
     income
     attributable to
     NIVS's common
     shareholders                 $0.59               $0.41            $0.31

    Weighted-average
     shares
     outstanding,
     Basic                   39,858,756          31,553,197       27,546,667

    Diluted earnings
     per share - net
     income
     attributable to
     NIVS's common
     shareholders                 $0.59               $0.41            $0.31

    Weighted-average
     shares
     outstanding,
     Diluted                 39,858,756          31,967,040       27,546,667

    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 Year Ended
                                              December 31,
                               2009               2008               2007
    Cash Flows From
     Operating
     Activities

    Net income             $24,086,708        $13,462,903         $8,684,089
    Adjustments to
     reconcile net
     income to net
     cash provided by
     operating
     activities:

    Imputed interest                --            656,167            526,428
    Bad debt expense
    (recovery)              (2,745,003)         2,531,479            473,218
    Depreciation
     expense                 5,850,550          4,887,386          1,169,319
    Amortization
     expense                    78,665             68,788             62,175
    Stock-based
     compensation                   --            765,000                 --
    Write-down of
     inventory                      --            131,837            105,106
    Changes in
     operating assets
     and liabilities:
    Trade receivables      (10,117,126)       (18,385,002)        (4,838,184)
    Advances to
     suppliers                 350,934          1,318,827        (13,640,207)
    Prepaid expenses
     and deposits                   --            (63,105)            38,265
    Inventories, net         1,655,152          6,067,538        (15,908,385)
    VAT refundable             225,021         (1,094,090)                --
    Accounts payable,
     accrued
     liabilities and
     customer deposits         561,647        (12,650,271)        12,402,518
    Various taxes
     payable                    23,761            283,149           (315,905)
    Wages payable                1,131            192,522            436,329
    Corporate tax
     payable                (1,372,734)         1,018,753          1,092,944
    Net cash
     provided by
     (used in)
     operating
     activities             18,598,706           (808,119)        (9,712,290)

    Cash Flows From
     Investing
     Activities
    Restricted cash          6,842,875         (9,698,348)          (276,104)
    Deposits for
     Dongri
     Acquisition            (8,559,748)                --                 --
    Purchases of
     property, plant
     and equipment          (5,232,911)       (15,326,949)       (15,297,640)
    Payments made for
     construction in
     progress               (4,405,199)        (1,480,627)                --
    Purchases of
     intangible assets         (31,605)           (28,830)                --
    Due from related
     parties                        --          2,213,370          4,801,648
    Short-term
     investment,
     marketable
     securities                     --                 --               (650)
    Net cash used in
     investing
     activities            (11,386,588)       (24,321,384)       (10,772,746)

    Cash Flows From
     Financing
     Activities
    Net borrowing
     from bank loans
     payable                 8,111,292          3,230,239         15,985,886
    Net borrowing
     (repayment) in
     bank notes
     payable               (11,138,878)        12,744,638           (145,438)
    Capital lease
     payable                        --                 --            (61,669)
    Net proceeds of
     share issuances         1,212,382         10,487,474                 --
    Due to
     shareholder                    --         (3,165,990)         4,916,614
    Net cash
     provided by
     (used in)
     financing
     activities             (1,815,204)        23,296,361         20,695,393
    Effect of
     exchange rate
     changes on cash            57,806            855,995            668,904
    Net increase in
     cash and cash
     equivalents             5,454,720           (977,147)           879,261

    Cash and cash
     equivalents,
     beginning of
     period                    461,504          1,438,651            559,390
    Cash and cash
     equivalents, end
     of period              $5,916,224           $461,504         $1,438,651

    Supplemental
     disclosure
     information:
    Interest expense
     paid                   $1,706,762         $2,208,051         $1,791,490
    Income taxes paid       $4,773,839         $2,031,031         $1,268,963

    Non cash
     investing and
     financing
     activities:
    Exchange of
     investment for
     equipment                     $--                $--        $12,824,623
    Conversion of Li
     debt to common
     stock                  $7,841,726                $--                $--
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