Global-Tech Appliances Reports Fiscal Year Financial Results and Anticipates Rapid Growth in Its CCM Business

Global-Tech Appliances Inc. (NYSE: GAI) today announced its financial results for the fiscal year and fourth quarter ended March 31, 2007. Net sales for the fiscal year ended March 31, 2007 were $60.3 million, compared to $73.8 million in the prior fiscal year. Included in net sales for fiscal 2007 were sales of approximately $12.3 million of complementary metal oxide semiconductor (CMOS) camera modules (CCMs), up approximately $6.3 million from the prior fiscal year. Net loss for fiscal 2007 was $1.2 million, or $0.10 per share, compared to a net loss of $11.2 million, or $0.92 per share, in the prior fiscal year. Included in the net loss for fiscal year 2007 was a non-recurring gain of approximately $4.0 million, which was reflected in gain on disposal of subsidiaries resulting from the establishment of a joint venture with Anwell Technologies Limited (Anwell). Pursuant to this joint venture, the Company sold a 70% stake in one of its subsidiaries to Anwell in exchange for a $5.6 million convertible note, and the gain from such partial disposal was recognized in the first quarter of fiscal 2007. Net sales for the fourth quarter of fiscal 2007 were $13.5 million, compared to $15.7 million for the fourth quarter of fiscal 2006. Net loss for the fourth quarter of fiscal 2006 was $1.8 million, or $0.15 per share, compared to a net loss of $1.2 million, or $0.10 per share, in the prior corresponding fiscal period. John C.K. Sham, the Company’s President and Chief Executive Officer, said: "While net sales were down in fiscal 2007, our net loss decreased significantly compared to fiscal 2006, even though the Company’s core business of floor care and kitchen appliance products were, and are expected to remain, adversely impacted by the continuing increase in material costs, particularly plastic resin and copper, as well as the continuing appreciation of the Chinese currency. In upcoming fiscal years, however, we expect the Company’s core business to play a diminishing role in our financial results as our electronic components business continues to grow.” Mr. Sham continued, "Although capacity constraints and component availability limited our CCM sales in the fourth quarter of fiscal 2007 to a level similar to the prior quarter and the fourth quarter of fiscal 2006, we have recently alleviated this situation by expanding our clean room and production lines and managed to secure additional commitments of certain components from our key suppliers, which should enable us to continue growing the CCM business. While we anticipate our CCM business will grow rapidly in the coming months, we also expect to maintain a steady level of business in our core business with our major floor care customer.” Mr. Sham concluded, "After a few years of pursuing new ventures to further diversify and transform our business, we have started to realize some positive results and are encouraged by the rapid sales increase in our CCM business, which has been growing beyond our expectations. Even though our CCM business caters primarily to the expanding cellular phone market in China, we are currently undertaking efforts to explore and expand into other component businesses and electronic manufacturing services (EMS) which we expect will further enhance our sales growth and financial performance in the next few years.” Global-Tech Appliances Inc. is a holding company, owning subsidiaries that manufacture and market a wide range of consumer electrical products worldwide, including floor care products and small household appliances. These products are marketed by customers under brand names such as Black & Decker®, DeLonghi®, Dirt Devil®, Eureka®, Hamilton Beach®, Kenwood®, Pentax®, Presto®, Proctor-Silex®, Sanyo®, Sunbeam®, and West Bend®. Except for historical information, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should,” "estimates," or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including but not limited to, the impact of competitive products and pricing, demand for new and existing products in our core business, the financial condition of the Company’s customers, product demand and market acceptance especially of our new products, the success of new product development especially in the area of cellular phone components and solutions, compact camera modules and other pending projects, reliance on material customers, suppliers and key strategic alliances, the terms and conditions of customer contracts and purchase orders, availability and cost of raw materials, the timely and proper execution of certain business plans, including the plan to diversify and transform a portion of manufacturing capacity to higher-value, technology-oriented products, currency fluctuations, including the revaluation of the Chinese Renminbi, the imposition by China’s trading partners of economic sanctions and/or protective tariffs on Chinese manufactured goods, uncertainties associated with investments, the regulatory environment, fluctuations in operating results, the impact of changing global, political and economic conditions and other risks detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission including its most recent Report on Form 20-F. The Company does not undertake to update its forward-looking information, or any other information contained or referenced in this press release to reflect future events or circumstances.     GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts expressed in United States dollars)   Fiscal Years Ended March 31, 2007 2006 (unaudited) (audited)   Net sales $ 60,290,794 $ 73,812,100 Cost of goods sold   (56,762,423 )   (69,816,822 ) Gross profit (loss) 3,528,371 3,995,278 Selling, general and administrative expenses (12,454,368 ) (18,010,869 ) Other operating income, net   608,244     2,379,964   Operating loss (8,317,753 ) (11,635,627 ) Interest expense (317 ) (55,435 ) Interest income 2,063,566 1,278,093 Other income (expenses), net 1,728,337 (846,015 ) Gain on disposal of subsidiaries 3,951,520 - Share of losses of jointly controlled entities   (186,503 )   -   Loss before income taxes (761,150 ) (11,258,984 ) Benefit from (provision for) income taxes   (482,661 )   22,998   Net loss before minority interests (1,243,811 ) (11,235,986 ) Minority interests   77,110     12,592   Net loss $ (1,166,701 ) $ (11,223,394 )   Basic and diluted loss per share of common stock $ (0.10 ) $ (0.92 )   Basic and diluted weighted average number of shares of common stock   12,223,608     12,223,608     GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts expressed in United States dollars)   March 31, 2007   2006 (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $ 29,824,914 $ 27,313,746 Time deposit 67,688 - Available-for-sale investments 14,869,990 18,715,682 Accounts and bills receivable, net 9,535,635 8,446,502 Inventories 9,086,113 10,780,816 Prepaid expenses 174,422 252,585 Deposits and other assets 2,379,856 1,677,041 Legal claims receivable 5,395,377 4,577,186 Amount due from a jointly controlled entity   41,082     -   Total current assets 71,375,077 71,763,558   Interests in jointly controlled entities 306,854 - Property, plant and equipment, net 20,747,180 24,164,775 Land use rights, net 2,442,535 2,151,444 Convertible note 5,241,705 - Interest receivable   168,000     -   Total assets $ 100,281,351   $ 98,079,777     LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term bank borrowings $ - $ 37,698 Accounts payable 6,279,477 5,075,248 Temporary receipts 622,797 157,402 Accrued salaries, allowances and employee benefits 2,068,564 1,860,177 Accrued expenses 2,162,003 2,367,539 Accrual for contingent losses 5,638,328 5,464,134 Amount due to a related party 4,664 - Income tax payable   4,005,811     3,730,043   Total current liabilities 20,781,644 18,692,241 Deferred tax liabilities   119,463     38,619   Total liabilities   20,901,107     18,730,860   Shareholders' equity:         Common stock, par value $0.01; 50,000,000 shares authorized; 12,902,755 shares issued and outstanding as of March 31, 2007 and 2006 129,028 129,028 Additional paid-in capital 84,154,401 83,030,824 Retained earnings (accumulated deficit) (287,028 ) 879,673 Accumulated other comprehensive losses (122,710 ) (197,161 ) Less: Treasury stock, at cost, 679,147 shares as of March 31, 2007 and 2006   (4,493,447 )   (4,493,447 ) Total shareholders’ equity   79,380,244     79,348,917   Total liabilities and shareholders' equity $ 100,281,351   $ 98,079,777