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NIVS Announces 2010 First Quarter Results and Guidance for Year 2010
May 10, 2010 (05:05 PM EDT)


-- Net income increased 121% to $5.3 million

-- Diluted EPS increased to $0.13 from $0.06

-- Company offers guidance for balance of 2010

HUIZHOU, China, May 10 /PRNewswire-Asia-FirstCall/ -- NIVS IntelliMedia Technology Group, Inc. ("NIVS" or the "Company") (NYSE Amex: NIV), a consumer electronics company that designs, manufactures and sells intelligent audio and visual products and mobile phones, announced today that net sales for the three months ended March 31, 2010, were $74.1 million compared to $29.3 million in the comparable prior year period, an increase of 153%. The increase in sales during the first quarter of 2010 compared to the first quarter of 2009 was attributed primarily to the launch of the Company's mobile phone business and increased 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 first quarter 2010 was $6.8 million, an increase of $3.5 million from $3.3 million in the comparable prior year period. The increase in income from operations was attributable to the increase in revenue from mobile phone and intelligent audio and video products.

For the quarter ended March 31, 2010, the Company reported net income of $5.3 million, or $0.13 per diluted share compared to $2.4 million, or $0.06 per diluted share, in the comparable period of 2009, an increase of $2.9 million.

Mr. Tianfu Li, NIVS' Chairman and CEO, said, "We are pleased to report our first quarter results as well as a robust outlook for the full-year 2010. We anticipate our traditional audio/visual products division to increase 20-30% over 2009 and our mobile phone product to contribute $60 - 90 million of revenue for 2010. Our objective is to sustain strong growth across all our operating segments, expand market share within our core markets and take advantage of opportunities in new markets."

Liquidity and Capital Resources

The Company had an unrestricted cash balance of approximately $7.9 million as of March 31, 2010, as compared to $5.9 million as of December 31, 2009. In addition, the Company also had approximately $3.1 million in restricted cash as of March 31, 2010, as compared to $4.8 million as of December 31, 2009. The Company received $21.9 million of net proceeds from its secondary offering which went effective April 19, 2010.

The Company had bank loans of approximately $54.5 million and $51.7 million as of March 31, 2010 and December 31, 2009, respectively.

Net cash provided by operating activities was $8.6 million for the three months ended March 31, 2010, compared to net cash provided by operating activities of $4.3 million for the first quarter of 2009. Accounts receivable decreased to $30.7 million from $33.2 million at the end of the first quarter of 2009, while DSO improved to 38 days versus 58 days in the prior quarter.

Business Outlook

The Company's financial position improved strongly in first quarter of 2010 as the Company's newly acquired mobile phone manufacturing operations began to contribute revenue. The Company believes that these and other fundamentals that have been established will contribute to the Company's continued rapid growth in 2010.

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 income statement 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 robust year-over-year revenue growth of its intelligent audio and visual products in the first quarter of 2010, the Company believes that the integration of its 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 operating segments and remains confident about the growth of the mobile phone and consumer electronics industry. Management further believes that the Company's integrated strengths should allow it to expand market share within its core market and help to capture opportunities in new markets, enabling sustained strong financial results and greater share value.

Guidance for 2010 business operations

The Company expects 20-30% growth in fiscal 2010 for its traditional audio and visual products compared with fiscal 2009, with gross and net profit margin maintained at approximately 22-25% and 10-12%, respectively. The mobile phone business is a new product line for the Company and is expected to contribute $60-90 million of revenue in 2010 and with gross and net profit margins ranging from approximately 10-18% and 5-9%, respectively. The Company hopes to further enhance its margins by incorporating increased product functionality and enhanced product design into its recently acquired mobile phone manufacturing operations.

Overall, the Company anticipates that it will generate $280-330 million of revenue, with gross and net margins estimated to range between 19-21% and 7-10%, respectively, in 2010.

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 and mobile phone 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 weaknesses in its internal controls; the Company's ability to effectively integrate the operations and management of acquisition targets, including Dongri; 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; the market acceptance of the Company's products; exposure to product liability and defect claims; 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 ( http://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 2010 first quarter earnings conference call will take place on Tuesday, May 11, 2010, at 11:00 a.m. Eastern Time and will also be webcast over the internet.

To participate, callers should dial 877-941-2329, callers dialing from China or Hong Kong should dial U.S. 1 -480-629-9721. Participants should ask for the "NIVS IntelliMedia Conference Call."

A simultaneous webcast will also be available via http://w.on24.com/r.htm?e=210464&s=1&k=A504489552144075983F9D9E3185DA31 .

In addition, a replay of the conference call will be archived and available until June 11, 2010 at the following numbers: Domestic callers: 800-406-7325 or 303-590-3030, access code: 4295859. Callers from China or Hong Kong: U.S. +1-303-590-3030, access code 4295859.

    For more information, please contact:

    Company Contact:
     Jason Wong
     Vice President Investor Relations
     Tel:   +86-138-2991-6919
     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)

                                                March 31,        December 31,
                                                  2010              2009
                                               (Unaudited)
    Assets
    Current Assets
    Cash and cash equivalents                   $7,932,105        $5,916,224
    Trade receivables, net                      30,669,043        33,228,955
    Inventories, net                            20,777,015         9,626,048
    Prepaid expenses, deposit and other
     receivables                                     8,250         8,641,448
    VAT refundable                                 627,721           869,202
    Deferred tax assets                            459,520                --
    Restricted cash                              3,120,309         4,840,137
    Total current assets                        63,593,963        63,122,014
    Property, equipment and construction
     in progress, net                           66,923,901        58,409,374
    Advances to suppliers                       16,148,531        16,649,904
    Intangible assets, net                      15,370,183         2,295,244
    Total Assets                              $162,036,578      $140,476,536


    Liabilities and Shareholders' Equity
    Current Liabilities
    Accounts payable                           $16,946,415        $3,932,115
    Accrued liabilities and other payable        1,434,662         1,485,577
    Wages payable                                  928,219           801,972
    Corporate tax payable                        1,014,520         1,372,117
    Various taxes payable                           48,164           494,678
    Customer deposits                            1,067,379                --
    Short-term loans                            47,645,340        43,987,358
    Bank notes payable                           6,811,705         7,712,609
    Total current liabilities                   75,896,404        59,786,426

    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
     March 31, 2010 and December 31,
     2009, respectively                                 --                --

    Common stock, $0.0001 par value,
     100,000,000 shares authorized,
     40,675,347 and 40,675,347 shares
     issued and outstanding at March 31,
     2010 and December 31, 2009,
     respectively                                    4,068             4,068


    Additional paid-in capital                  21,717,239        21,717,239
    Accumulated other comprehensive
     income                                      3,987,102         3,979,941
    Statutory reserve fund                       5,722,107         5,722,107
    Retained earnings (unrestricted)            52,799,335        47,497,211
    Total NIVS IntelliMedia Technology
     Group, Inc. Shareholders' Equity           84,229,851        78,920,566
    Noncontrolling interest                      1,910,323         1,769,544
    Total Shareholders' Equity                  86,140,174        80,690,110
    Total Liabilities and Shareholders'
     Equity                                   $162,036,578      $140,476,536



            NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                 (In US Dollars)


                                                March 31,         March 31,
                                                  2010              2009
                                              (Unaudited)       (Unaudited)

     Revenues                                  $74,107,672       $29,256,728
     Other Revenues                                 61,221            91,072
     Cost of Goods Sold                        (60,947,713)      (23,096,780)
     Gross Profit                               13,221,180         6,251,020

     Selling Expenses                            1,601,741         1,141,223

     General and administrative
     Amortization                                  811,220            17,445
     Depreciation                                   86,861            81,270
     Other general and administrative            1,219,639         1,142,915
     Total general and administrative            2,117,720         1,241,630
     Research and development                    2,663,234           572,535
     Total operating expenses                    6,382,695         2,955,388
     Income from operations                      6,838,485         3,295,632

     Other income (expenses)
     Interest expense                             (392,944)         (562,063)
     Sundry income, net                            118,663             9,981
     Total other income (expenses)                (274,281)         (552,082)

     Income before noncontrolling
      interest and income taxes                  6,564,204         2,743,550
     Income taxes                               (1,126,345)         (313,955)
     Net income                                  5,437,859         2,429,595

     Net income attributable to the
      noncontrolling interest                     (135,735)          (61,128)

     Net income attributable NIVS
      IntelliMedia Technology Group, Inc.        5,302,124         2,368,467

     Earnings per share - net income
      attributable to NIVS's common
      shareholders - Basic and Diluted               $0.13             $0.06

     Weighted-average shares outstanding,
      Basic and Diluted                         40,675,347        37,391,115




            NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
                 Consolidated Statements of Comprehensive Income
                                 (In US Dollars)


                                         For The Three Months Ended March 31,
                                                   2010              2009
                                               (Unaudited)       (Unaudited)

     Net income                                 $5,437,859        $2,429,595

     Other comprehensive income, net of
      tax:
    Unrealized gain (loss) on foreign
     currency translation, net of tax               12,205           (99,507)
     Comprehensive income                        5,450,064         2,330,088

    Comprehensive income attributable to
     the noncontrolling interest                  (140,779)           (2,551)

     Comprehensive income attributable to
      NIVS's common shareholders                $5,309,285        $2,327,537




             NIVS IntelliMedia Technology Group, Inc. and Subsidiaries
                       Consolidated Statements of Cash Flows
                                  (In US Dollars)


                                           For The Three Months Ended March 31,
                                                    2010              2009
                                                (Unaudited)        (Unaudited)

    Cash Flows From Operating Activities

    Net income                                  $5,437,859         $2,429,595
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
    Depreciation expense                         1,632,168          1,420,781
    Amortization expense                           811,220             17,445
    Changes in operating assets and
     liabilities:
    Accounts receivable                          5,237,112          1,756,464
    Advances to suppliers                          640,165          3,328,933
    Prepaid expenses and deposits                       --           (274,772)
    Inventories, net                            (8,310,970)        (5,477,028)
    VAT refundable                                 241,619            939,552
    Deferred tax assets                           (296,359)                --
    Accounts payable, accrued liabilities
     and customer deposits                       4,042,034         (1,230,289)
    Various taxes payable                         (447,158)         1,398,917
    Wages payable                                  (17,395)          (351,015)
    Corporate tax payable                         (357,814)           310,587
    Net cash provided by operating
     activities                                  8,612,481          4,269,170

     Cash Flows From Investing Activities
    Restricted cash                              1,720,595         (1,049,975)
    Cash paid for Dongri Acquisition            (4,969,525)                --
    Purchases of property, plant and
     equipment                                  (5,389,958)        (2,919,384)
    Payments made for construction in
     progress                                     (642,803)                --
    Purchases of intangible assets                 (33,207)            (8,937)
    Short-term investment, marketable
     securities                                         --            (11,021)
    Net cash used in investing activities       (9,314,898)        (3,989,317)

    Cash Flows From Financing Activities
    Net borrowing from bank loans payable        3,603,923           (888,858)
    Net borrowing (repayment) in bank
     notes payable                                (902,126)         1,317,496
    Net proceeds of share issuances                     --          1,008,436
    Net cash provided by financing
     activities                                  2,701,797          1,437,074
    Effect of exchange rate changes on
     cash                                           16,501              2,784
    Net increase in cash and cash
     equivalents                                 2,015,881          1,719,711

     Cash and cash equivalents, beginning
      of period                                  5,916,224            461,504
     Cash and cash equivalents, end of
      period                                    $7,932,105         $2,181,215


    Supplemental disclosure information:
    Interest expense paid                         $390,771           $562,063
    Income taxes paid                           $1,480,228           $313,955

    Non-cash investing and financing
     activities:
    Conversion of Li debt to common stock              $--        $(7,841,726)
    Issuance of shares for cashless
     warrants exercise                                 $--                $94

SOURCE NIVS IntelliMedia Technology Group, Inc.