SOURCE: India Globalization Capital, Inc.

India Globalization Capital, Inc.

July 17, 2012 08:43 ET

India Globalization Capital Announces Financial Results for Fiscal Year Ended March 31, 2012

BETHESDA, MD--(Marketwire - Jul 17, 2012) - India Globalization Capital, Inc. (NYSE MKT: IGC) (NYSE Amex: IGC), a company competing in the rapidly growing materials and infrastructure industry, announced financial results for the Fiscal Year Ended (FYE) March 31, 2012.

Ram Mukunda, CEO of India Globalization Capital, said, "We had some significant challenges in our business this past year but made enormous progress in repositioning the company for profitable growth in the future."

Mukunda explained, "Because of the moratorium on iron ore mining throughout southern India, which lasted for all of fiscal 2012, we were unable to fill our orders from Chinese customers. Further, the integration of Ironman has been more complex and taken longer than we anticipated. Yet, with the integration of Ironman nearing completion, our mines in China will begin operating this current quarter. Additionally, the revenue from those mines will be augmented by our exports of iron ore from India when the Indian government relieves the mining ban. Recent press reports and government statements indicate that mines in Karnataka, India will be reopened this fiscal year. Our plan for fiscal 2013 is to integrate Ironman and begin production in China, ship iron ore from India to China when the mines in India open, and consider another acquisition in the materials space to supplement our current facilities in Linxi."

Mukunda added, "Some highlights from fiscal 2012 include, 1) we settled or paid down almost $3.79 million in notes, short term borrowing and trade payables; 2) we reached a settlement with Sricon, adding liquidity to our balance sheet; 3) we acquired Ironman with two mine sites and two beneficiation plants; 4) we purchased a third mine and equipped it with a state of the art beneficiation plant increasing the value of our total iron ore reserves in Linxi to about $550 million; and 5) we repositioned the Company to become profitable by cutting costs and realigning SG&A in India and investing in mines in China that will soon begin production."

In FYE 2012, the Company reported a GAAP loss of ($7.75 million), and an EPS of ($.27), compared to a loss of about ($20.24 million) in FYE 2011. The GAAP loss includes several non-cash and one-time expenses related primarily to the acquisition of Ironman and the impending settlement with Sricon. Moving forward we have a significantly reduced and realigned SG&A and debt structure that will help bring the Company to profitability.

Total revenue was $4.199 million for the FYE March 31, 2012, compared to $4.073 million for FYE 2011.

Selling General and Administrative (SG&A) expenses for FYE 2012 including one-time and non-cash charges was about $4.7 million compared to about $7.2 million for FYE 2011. The expenses in fiscal 2012 include costs related to the acquisition and integration of Ironman and the settlement with Sricon.

In FYE 2012, interest expense was about $984 thousand compared to about $1.59 million in FYE 2011. Cost of capital remains high, though we have taken significant steps this year to decrease interest expenses. Not including the liabilities eliminated by Ironman, the Company in fiscal 2012 eliminated: 1) a $2.12 million note that carried 30% interest, 2) about $691 thousand in short term borrowing, and 3) about $974 thousand in trade payables. As of March 31, 2012 the Company had $724,243 in working capital.

The Company has access to about INR 140 million ($2.5 million at an exchange rate of 55 INR to 1 USD) in funds that have been deposited by the National Highway Authority of India (NHAI) with the High Court in India against an arbitration award that was won by TBL. The amount deposited pursuant to an order by the judge of the High Court, includes principal of the award plus interest. The Company is allowed to access the amount deposited with the court immediately, but needs to make arrangements to provide a letter of credit to the High Court. The Company is working on arranging the letter of credit, which is routine, and expects to access the full $2.5 million.

As of March 31, 2012, the Company's stockholders' equity was $15.8 million compared to $7.2 million for the period ended March 31, 2011. The stockholders' equity increased due to the acquisition of Ironman. The Company reported total assets of $25.2 million on March 31, 2012 versus $18.1 million on March 31, 2011.

About IGC:

Based in Bethesda, Maryland, India Globalization Capital (IGC) is a materials and infrastructure company operating in India and China. For more information about IGC, please visit IGC'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," "post," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "proposed," "confident" or "continue" or the negative of those terms and similar words. These forward-looking statements are based on the existing beliefs, assumptions, expectations, estimates, projections, and understandings of the management of IGC concerning PRC Ironman with respect to future events at the time these statements are made. These statements are not a guarantee of future developments and are subject to risks, uncertainties, and other factors, some of which are beyond IGC's control and are difficult to predict. Consequently, actual results may differ materially from information contained in the forward-looking statements as a result of future changes or developments in our business, our competitive environment, infrastructure demands, Iron ore availability and governmental, regulatory, political, economic, legal and social conditions in China.

Factors that could cause actual results to differ, relate to the (i) ability of IGC 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, the Chinese RMB and the Indian rupee, (iv) weather conditions in China and India, (v) uncertainties with respect to the People's Republic of China's legal, regulatory and licensing environment, and (vi) ability of the Company to access ports on the coasts 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 Schedule 14A filed and Form 10-K for FYE 2012 filed with the Securities and Exchange Commission on December 9, 2011 and July 16, 2012, respectively.

 
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    As of March 31,  
    2012     2011 (as
restated)
 
             
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 562,948     $ 1,583,284  
  Accounts receivable, net of allowances     1,641,868       3,312,051  
  Inventories     387,481       133,539  
  Advance taxes     41,452       41,452  
  Deferred income taxes     -       -  
  Dues from related parties     -       -  
  Prepaid expenses and other current assets     2,586,514       1,474,838  
    Total current assets   $ 5,220,263     $ 6,545,164  
  Goodwill     965,738       410,454  
  Intangible assets     3,838,090       -  
  Property, plant and equipment, net     8,491,796       1,231,761  
  Investments in affiliates     5,109,058       6,428,800  
  Investments-others     637,620       877,863  
  Deferred income taxes     (14,076)       -  
  Restricted cash     12,773       1,919,404  
  Other non-current assets     998,816       748,623  
    Total assets   $ 25,260,078     $ 18,162,069  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
Short term borrowings and current portion of long term debt   $ 210,010     $ 901,343  
Trade payables     337,145       1,311,963  
Accrued expenses     916,710       349,149  
Notes payable     1,800,000       3,920,000  
Dues to related parties     310,681       -  
Deferred tax liabilities     135,980       -  
Loans others     222,389       -  
Other current liabilities     563,105       94,892  
    Total current liabilities   $ 4,496,020     $ 6,577,347  
  Deferred income taxes     713,897       -  
  Other non-current liabilities     4,233,978       1,209,479  
    Total liabilities   $ 9,443,895     $ 7,786,826  
                 
Shares potentially subject to rescission rights (4,868,590 shares issued and outstanding)     -       3,082,384  
                 
Stockholders' equity:                
Common stock -- $0001 par value; 150,000,000 shares authorized; 60,061,737 issued and outstanding at March 31, 2012 and 14,890,181 issued and outstanding at March 31, 2011   $ 6,007     $ 1,490  
  Additional paid-in capital     54,821,952       38,860,319  
  Accumulated other comprehensive income     (2,542,453 )     (2,502,596 )
  Retained earnings (Deficit)     (37,444,832 )     (29,692,907 )
    Total equity attributable to the parent   $ 14,840,674     $ 6,666,306  
Non-controlling interest   $ 975,509     $ 626,553  
    Total stockholders' equity     15,816,183       7,292,859  
    Total liabilities and stockholders' equity   $ 25,260,078     $ 18,162,069  
                 

The accompanying notes should be read in connection with the financial statements.

 
 
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
    Year ended March 31,  
    2012     2011 (as
restated)
 
             
    Revenues   $ 4,199,551     $ 4,073,919  
    Cost of revenues     (4,817,980 )     (3,914,655 )
                 
    Selling, General and Administrative expenses     (4,702,492 )     (7,283,089 )
    Depreciation     (996,403 )     (785,066 )
   Impairment Loss - Goodwill     -       (5,792,849 )
   Impairment Loss - Investment     (1,194,257 )     (2,184,599 )
Operating income (loss)     (7,511,581 )     (15,886,339 )
    Interest expense     (984,021 )     (1,395,433 )
    Amortization of debt discount/Loss on extinguishment of debt     -       (191,804 )
    Interest Income     267,192       262,826  
    Other Income     481,485       301,182  
                 
                 
Income before income taxes and minority interest attributable to non-controlling interest   $ (7,746,925 )     (16,909,568 )
    Earnings in income from affiliates     28,463       -  
    Income taxes benefit/ (expense)     (172,828)       (4,100,385)  
Net income   $ (7,891,290 )     (21,009,953 )
    Non-controlling interests in earnings of subsidiaries     139,365       769,046  
Net income / (loss) attributable to common stockholders   $ (7,751,925 )   $ (20,240,907 )
Earnings per share attributable to common stockholders:                
    Basic   $ (0.27 )   $ (1.34 )
    Diluted   $ (0.27 )   $ (1.34 )
Weighted-average number of shares used in computing earnings per share amounts:                
    Basic     29,089,358       15,108,920  
    Diluted     29,089,358       15,108,920  
                 

The accompanying notes should be read in connection with the financial statements.

Contact Information

  • Contact:
    John Selvaraj
    India Globalization Capital Inc.
    301-983-0998