BETHESDA, MD
-- (MARKET WIRE)
-- 02/23/11
India Globalization Capital, Inc. (NYSE Amex: IGC) announced financial results for its third fiscal quarter ended
December 31, 2010. IGC competes in the rapidly growing materials and
infrastructure industry in India.
Total Revenue was $484K for the three months ended December 31, 2010, as
compared to $5.9M for the three months ended December 31, 2009. The
decline in revenue this quarter as compared to the three months ended
December 31, 2009 is due to two critical factors which either have been
resolved, or we expect will be resolved soon.
First, we experienced delays in bringing our new state of the art crusher
on line at our largest quarry due to weather delays. That crusher was
fully operational in January.
Second, we have been severely restricted in our ability to ship iron ore to
our Chinese customers because of a temporary stoppage of iron ore exports,
by the Government of Karnataka, in an effort to put processes in place to
control the export of illegally mined iron ore. The ports where we have
our facilities have been closed for the export of iron ore since July 2010.
The Indian high court recently ordered that the processes to control
illegal mining must be put in place by March 31, 2011. Based on this, it
is expected that the iron ore exports will be resumed in April 2011. This
temporary stoppage has impacted virtually all exporters of iron ore who
ship higher grade ore from the west coast of India.
Selling, General and Administrative expenses were approximately $1.0M for
this quarter compared to about $3.0M for the same quarter last year.
Management focused on expense control given the restrictions to our
business model.
Consolidated net loss for the quarter was approximately $1.76M compared to
a consolidated net loss of $6.17M for the same period last year. The net
loss in 2009 was primarily due to largely non-cash charges from the
de-consolidation of our subsidiary Sricon Infrastructure.
The loss per basic share for the quarter was ($0.12) per share, compared to
($.48) per share for the same quarter last year.
As of December 31, 2010 the Company had $ 3.37M of cash and cash
equivalents including restricted cash. Book value per basic share was
approximately $1.56 while tangible book value after subtracting goodwill
was approximately $1.14 per basic share. Net working capital was
approximately $2.4M.
Mr. Mukunda, CEO, commented: "In the past year, we have created a strong
platform in the materials business with two producing quarries and an iron
ore export business. While we are disappointed with our financial results
for this quarter, we remain very optimistic in our business model. We have
already seen a rebound in the quarry business that will be reflected in our
current quarter. Since early January, after weather related delays in
bringing our new crusher fully on-line, our Quarry business is now
dramatically increasing production and we expect that the quarrying
business line will be profitable in this current quarter. The two quarries
combined, have estimated reserves of about 10 million to 11 million metric
tons of rock aggregate, or about $40M of reserves, that we will quarry over
the next several years. We also expect that our ore export business will
continue its growth when the temporary ban is lifted. Our basic markets
remain strong and growing and we believe that we have now turned the corner
in our execution to fully exploit the opportunities before us."
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
--------------------------
December 31, March 31,
2010 2010
(unaudited) (audited)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,470,191 $ 842,923
Accounts receivable, net of allowances 5,475,428 4,783,327
Inventories 332,345 162,418
Advance taxes 41,452 119,834
Deferred income taxes - 25,345
Dues from related parties 3,125,000 3,114,572
Prepaid expenses and other current assets 1,175,636 2,054,462
------------ ------------
Total current assets $ 11,620,052 $ 11,102,881
Goodwill 6,167,301 6,146,720
Property, plant and equipment, net 1,455,742 1,748,436
Investments in affiliates - 8,443,181
Investments in unquoted equity securities 8,443,181 -
Investments -- others 1,081,820 810,890
Deferred income taxes 4,575,799 4,075,461
Restricted cash 1,902,996 2,169,939
Other non-current assets 1,702,987 872,184
------------ ------------
Total assets $ 36,949,878 $ 35,369,692
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 1,416,196 $ 1,389,041
Trade payables 3,683,297 1,839,405
Accrued expenses 127,804 461,259
Notes payable 3,920,000 4,120,000
Dues to related parties - 149,087
Other current liabilities 63,008 149,942
------------ ------------
Total current liabilities $ 9,210,305 $ 8,108,734
Other non-current liabilities 1,102,074 1,107,498
------------ ------------
Total liabilities $ 10,312,379 $ 9,216,232
------------ ------------
Shares potentially subject to rescission
rights (3,307,830 shares issued and
outstanding) $ 2,202,421 $ -
Stockholders' equity:
Common stock -- $.0001 par value; 75,000,000
shares authorized; 13,824,207 issued and
outstanding as of December 31, 2010 and
12,989,207 issued and outstanding as of
March 31, 2010 $ 1,383 $ 1,300
Additional paid-in capital 38,260,358 36,805,724
Accumulated other comprehensive income (2,543,631) (2,578,405)
Retained earnings (Deficit) (12,648,453) (9,452,000)
------------ ------------
Total stockholders' equity $ 23,069,657 $ 24,776,619
Non-controlling interest $ 1,365,421 $ 1,376,841
------------ ------------
Total liabilities and stockholders' equity $ 36,949,878 $ 35,369,692
============ ============
The accompanying notes should be read in connection with the financial
statements.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
December 31, December 31,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Revenues $ 484,106 $ 5,909,024 $ 3,294,103 $ 13,994,503
Cost of revenues (457,379) (5,326,393) (3,053,512) (11,829,440)
------------ ------------ ------------ ------------
Gross profit 26,727 582,631 $ 240,591 $ 2,165,063
Selling, general
and administrative
expenses (1,054,894) (3,049,603) (2,399,503) (4,446,137)
Depreciation (461,627) (101,991) (659,002) (519,812)
------------ ------------ ------------ ------------
Operating income
(loss) $ (1,489,794) $ (2,568,963) $ (2,817,914) $ (2,800,886)
------------ ------------ ------------ ------------
Compensation
expenses - (123,139) - (123,139)
Interest expense (307,630) (252,619) (718,339) (1,019,687)
Amortization of
debt discount - (178,218) (356,436) (178,218)
Interest income 40,657 37,314 170,438 139,641
Equity in
(gain)/loss of
affiliates 16,446 16,446
Other income, net (25,914) 3,570 34,558 6,836
------------ ------------ ------------ ------------
Income before
income taxes and
minority interest
attributable to
non-controlling
interest $ (1,782,681) $ (3,065,609) $ (3,687,693) $ (3,959,007)
Income taxes
benefit/(expense) 20,212 103,281 475,226 (54,486)
Extraordinary items
Loss on dilution of
stake in Sricon - (3,205,616) - (3,205,616)
------------ ------------ ------------ ------------
Net income/(loss) $ (1,762,469) $ (6,167,944) $ (3,212,467) $ (7,219,109)
Non-controlling
interests in
earnings of
subsidiaries 13,451 (7,574) 16,014 (72,599)
------------ ------------ ------------ ------------
Net income/(loss)
attributable to
common
stockholders $ (1,749,018) $ (6,175,518) $ (3,196,453) $ (7,291,708)
============ ============ ============ ============
Earnings/(loss) per
share attributable
to common
stockholders:
Basic and
diluted $ (0.12) $ (0.48) $ (0.23) $ (0.56)
Weighted-average
number of shares
used in computing
earnings per share
amounts:
Basic and
diluted 14,750,483 12,898,291 13,814,634 12,898,291
The accompanying notes should be read in connection with the financial
statements.
About IGC
Based in Bethesda, Maryland, India Globalization Capital (IGC) is a
materials and construction company operating in India. We supply iron ore
to China and rock aggregate to the infrastructure industry in India. For
more information about IGC, please visit the company's web site at
www.indiaglobalcap.com.
Forward-Looking Statements:
Some of the statements contained in this press release that are not
historical facts constitute forward-looking statements under the federal
securities laws. Forward-looking statements can be identified by
the use of the words "may," "will," "should," "could," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "intends," "potential,"
"proposed," or "continue" or the negative of those terms. These statements
reflect management's current views and are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected, expressed or implied in these statements. Factors that
could cause actual results to differ, relate to: (i) ability of the parties
to successfully execute on contracts and business plans, (ii) ability to
raise capital and the structure of such capital including the exercise of
warrants, (iii) exchange rate changes between the U.S. dollar and the
Indian rupee, (iv) weather conditions in India and (v) the ability of the
Company to access ports on the west coast of India. Readers are cautioned
not to place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events, or
otherwise. Other factors and risks that could cause or contribute to actual
results differing materially from such forward looking statements have been
discussed in greater detail in the Company's amended Annual Report on Form
10-K for the year ended March 31, 2010 filed with the Securities and
Exchange Commission on January 28, 2011.
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India Globalization Capital, Inc.
Investor Relations Contact:
Mr. John Selvaraj
301-983-0998
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