Global-Tech Appliances Inc. announced its net sales and earnings for the third quarter of fiscal 2005 ended Dec. 31, 2004. The holding company owns subsidiaries that manufacture and market a wide range of appliances.
Net sales for the third quarter of fiscal 2005 were U.S. $8.3 million, compared to $17.8 million for the third quarter of fiscal 2004. Net loss for the third quarter of fiscal 2005 was $4.7 million, or $0.39 per share, compared to a net loss of $0.8 million, or $0.07 per share, in the prior corresponding fiscal period.
Net sales for the 9 months ended Dec. 31, 2004 were $29.7 million, compared to $52.4 million for the prior corresponding 9-month period. Net loss for the first 9 months of fiscal 2005 was $11.4 million, or $0.94 per share, compared to a net loss of $0.7 million, or $0.06 per share, in the first 9 months of fiscal 2004. This represents an increase in net loss of $10.7 million between the periods presented.
This increase in net loss resulted, in part, from a $3.5 million increase in business development expenses and costs associated with new product activities to $6.3 million in the current 9-month period from $2.8 million in such expenses for the 9-month period ended Dec. 31, 2003. Operating results were also negatively impacted by the lower absorption of fixed overhead resulting from the decreased sales in core business, the compamy said.
"Our financial performance in the third quarter continues to be adversely impacted by weak sales in our core business. Additionally, we recently determined that supporting major Japanese brands was a more suitable alternative for launching our line of liquid crystal display (LCD) televisions than attempting to market these products in the U.S. through secondary brands," said John C.K. Sham, president and CEO. "Accordingly, we are currently pursuing a number of original design manufacturing projects with a few major Japanese companies and are encouraged by their interest in collaborating with us to produce high-end LCD TVs and other display products for the Japanese market."
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