NIVS Expands Presence in Mobile Phone Product Manufacturing with Acquisition of Huizhou Dongri Digital Co., Ltd.
HUIZHOU, China, Jan. 19 /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, today announced that the Company executed a definitive acquisition agreement to acquire Huizhou Dongri Digital Co., Ltd., ("Dongri") a mobile phone product manufacturer located in the Huizhou Zhongkai Hi-tech Zone area.
The aggregate purchase price to be paid by the Company for Dongri is to be up to $23 million. $13 million will be paid within 30 days after closing, expected to be January 22, 2010, and up to an additional $10 million may be payable at future dates contingent on certain performance metrics of Dongri being met, as described below. With the acquisition of Dongri, the Company's production capacity will be increased to 1 million mobile phones per month, in keeping with the Company's demand for its overall mobile phone products.
If Dongri's after-tax income for the first half of 2010, January 1 - June 30, 2010, exceeds $1.91 million, then an additional $3 million will be paid to the former shareholders of Dongri. If Dongri's after-tax income for the first half of 2010 is between $955,000 and $1.91 million, then a pro-rata amount of $3 million shall be payable to the former Dongri shareholders based on the amount that the after-tax income exceeds $955,000 divided by 955,000. If Dongri's after-tax income for the first half of 2010 is less than $955,000 then no additional funds will be paid to the former Dongri shareholders pertaining to the financial performance of Dongri for the period January 1 - June 30, 2010.
If Dongri's after-tax income for the third quarter of 2010, July 1 - September 30, 2010, exceeds $1.03 million then $3 million shall be payable to the former Dongri shareholders. If Dongri's after-tax income for the third quarter of 2010 is between $514,000 and $1.03 million then a pro-rata amount of $3 million shall be payable to the former Dongri shareholders, where such pro-rata amount shall be calculated based on the amount that the after-tax income exceeds $514,000 divided by $514,000. If Dongri's after-tax revenue for the third quarter of 2010 is less than $514,000 then no additional funds will be paid to the former Dongri shareholders pertaining to that period.
If Dongri's after-tax income for the fourth quarter of 2010, October 1 - December 31, 2010 exceeds $1.18 million then $4 million shall be payable to the former Dongri shareholders. If Dongri's after-tax income for the fourth quarter of 2010 is between $590,000 and $1.18 million then a pro-rata amount of $4 million shall be payable to the former Dongri shareholders, where such pro-rata amount shall be calculated based on the amount that the after-tax income exceeds $590,000 divided by $590,000. If Dongri's after-tax income for the fourth quarter of 2010 is less than $590,000, then no additional funds will be paid to the former Dongri shareholders pertaining to that period.
All dollar figures used to calculate any additional payments, if any, owed to the former Dongri shareholders will be calculated in accordance with U.S. GAAP, as determined by the parent corporation, NIVS and confirmed by NIVS' independent auditor.
Additional payments owed to Dongri, if any, shall be made no later than the thirtieth day following the completion of NIVS' preparation of its financial statements for the respective period, calculated in accordance with U.S. GAAP and confirmed by NIVS' independent auditor and the filing of the related financial statements with the U.S. Securities and Exchange Commission.
In 2008 (the most recent figures available and subject to final confirmation by the Company), Dongri's revenue grew 349.94% to $13.25 million from $2.93 million in 2007. Gross profit in 2008 increased to $1.50 million, compared to $0.35 million in 2007. Gross margins for the 2008 and 2007 period were 11.34% and 11.85%, respectively. The 2008 net income of Dongri grew 445.52% to $1.34 million, compared to $0.25 million in 2007. Total assets of Dongri in 2008 and 2007 were $3.68 million and $6.86 million, respectively. Shareholders' equity in 2008 and 2007 was $3.85 million and $3.05, respectively.
Mr. Tianfu Li, Chairman and CEO of NIVS, commented "We are delighted at the opportunity to expand our product manufacturing capability with the acquisition of Dongri. Coupled with our recently announced relationship with China Potevio on the development of our own branded 3G mobile phone for introduction to Chinese consumers, we are looking forward to integrating the creativity of the respective teams for the benefit of the Company's mobile phone offerings."
About Huizhou Dongri Digital
Huizhou Dongri Digital Co., Ltd., was established in October of 2004 as a mobile phone product manufacturer. Their production facility totals 15,000 square meters with fully air-conditioned clean rooms and advanced manufacturing capabilities. The current production capacity allows for the production of 1.5 million mobile phones annually. The factory employs 650 production line personnel and 110 technical and managerial staff. Dongri has strong partnerships with Siemens, Samsung, Sony, Desay, TCL and other local China based mobile phone manufacturers. In addition to the Chinese domestic market, its products are distributed in Europe, India and Southeast Asia.
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. Ranked 43rd on Forbes' Top 100 Chinese Research and Development Companies, 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 effectively integrate the operations and management of 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 (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.
For more information, please contact:
Company Contact:
Jason Wong
Vice President Investor Relations
Tel: +86-138 299 16919
Email: [email protected]
Investor Contact:
United States & Canada
BPC Financial Marketing
John Baldissera
Tel: +1-800-368-1217
SOURCE NIVS IntelliMedia Technology Group, Inc.
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