SOURCE: India Globalization Capital, Inc.

India Globalization Capital, Inc.

February 16, 2012 08:00 ET

India Globalization Capital Announces Financial Results for the Quarter Ended December 31, 2011

BETHESDA, MD--(Marketwire - Feb 16, 2012) - India Globalization Capital, Inc. (NYSE Amex: IGC)

  • Completes acquisition of Ironman.
  • Strengthens balance sheet.
  • Expands capacity at beneficiation plant by 50%.
  • Projects a swing to profitability in Fiscal 2013.

India Globalization Capital, Inc. (NYSE Amex: IGC), a company competing in the burgeoning Indian and Chinese materials and infrastructure industries, announced financial results for the Third quarter of Fiscal Year 2012 that Ended December 31, 2011.

Ram Mukunda CEO of IGC said, "This quarter the team has been focused on completing the acquisition of Ironman. In addition we are in the process of expanding capacity at the beneficiation plant by 50%. We also acquired a mining property, which at $127 per ton has an estimated $225 million of iron ore reserves. This brings our total projected reserves of iron ore and rock aggregate to about $590 million. We expect the new plant to be operational by the end of March and in time for the beginning of our fiscal year starting April 1, 2012. In addition we are in the process of increasing synergies between our Indian operations and Chinese operations. We have a unique strategy of shipping low-grade ore to our plants and processing it to a higher grade before selling it to our customers. This allows us to take advantage of the price arbitrage between low grade and high grade ore."

The acquisition of Ironman closed on December 31, 2011 and therefore our consolidated financials include a consolidation of the balance sheet but not the income statement of Ironman. The profit and loss consolidation will commence on January 1, 2012 and will be included in the next quarter ending March 31, 2012.

Total revenue for IGC was $987 thousand for the three months ended December 31, 2011, as compared to $484 thousand for the three months ended December 31, 2010. As there is still a ban on iron ore exports from Karnataka, we increased domestic trading. The revenue reported for December 31, 2011 does not include an additional $879 thousand that was generated by our rock aggregate joint venture, because we own 49% of the joint venture. The revenue in the Joint Venture was up by 37% from $642 thousand in the previous quarter ended September 30, 2011. We continue to see strong demand for both ore and aggregate in our local markets in India.

The selling general and administrative expenses (SG&A) were $969 thousand for the three months ended December 31, 2011 compared to $1,054 thousand for the three months ended December 31, 2010. In this quarter, we included $400 thousand of one-time charges related to the acquisition of Ironman.

Consolidated net loss for the three months ended December 31, 2011 was $1.914 million compared to a consolidated net loss of $1.762 million for the three months ended December 31, 2010. In this quarter the net loss includes a one-time charge of $400 thousand for the acquisition of Ironman and $818 thousand in a foreign exchange translation loss. Over the quarter, the Indian rupee weakened drastically against the US dollar.

The Company reported a GAAP net loss of ($0.09) per basic share versus a GAAP net loss of ($0.12) per basic share for the three months ended December 31, 2010. The non-GAAP pro forma EPS inclusive of all one-time charges and inclusive of Ironman was a net profit of $0.04 per basic share.

As of December 31, 2011, the Company's stockholders' equity was approximately $14,079,469 compared to $7,292,859 for the period ended March 31, 2011. The increase was from the acquisition of Ironman. The Company reported total assets of approximately $35.1 million on December 31, 2011 versus approximately $18.16 million on March 31, 2011. The increase was from the consolidation of the Ironman balance sheet. The Company reported cash, cash equivalents, and restricted cash used as deposits of approximately $4.62 million. The Company reported notes payable and short-term borrowings of $4.25 million as of December 31, 2011 versus $4.82 million as of March 31, 2011. The Company repaid $571 thousand in the nine-month period.

INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
All amounts in USD except share data
As of
December 31, 2011 March 31, 2011
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,444,972 $ 1,583,284
Accounts receivable, net of allowances 5,971,786 3,312,051
Inventories 767,432 133,539
Advance taxes 41,452 41,452
Dues from related parties 239,947 -
Prepaid expenses and other current assets 3,097,845 1,474,838
Total current assets $ 14,563,434 $ 6,545,164
Goodwill 952,836 410,454
Property, plant and equipment, net 8,021,606 1,231,761
Intangible assets 3,880,957 -
Investments in affiliates 6,303,315 6,428,800
Investments-others 766,060 877,863
Deferred income taxes 180,929 -
Restricted cash 182,619 1,919,404
Other non-current assets 246,863 748,623
Total assets $ 35,098,619 $ 18,162,069
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 764,871 $ 901,343
Trade payables 998,560 1,311,963
Accrued expenses 1,316,012 349,149
Notes payable 3,485,254 3,920,000
Taxes payable 3,085,107 -
Other taxes payable 1,764,816 -
Dues to related parties 310,643 -
Deferred tax liabilities 135,980
Other current liabilities 1,091,603 94,892
Total current liabilities $ 12,952,846 $ 6,577,347
Deferred income taxes 713,897 -
Other non-current liabilities 4,270,023 1,209,479
Total liabilities $ 17,936,766 $ 7,786,826
Shares potentially subject to rescission rights (4,868,590 shares issued and outstanding) 3,082,384 3,082,384
Stockholders' equity:
Common stock - $.0001 par value; 150,000,000 shares authorized; 47,591,843 issued and outstanding as of December 31, 2011 and 14,890,181 issued and outstanding as of March 31, 2011 4,760 1,490
Additional paid-in capital 48,887,101 38,860,319
Accumulated other comprehensive income (2,625,115 ) (2,502,596 )
Retained earnings (Deficit) (33,252,738 ) (29,692,907 )
Total equity attributable to the parent $ 13,014,008 $ 6,666,306
Non-controlling interest 1,065,461 626,553
Total stockholders' equity $ 14,079,469 $ 7,292,859
Total liabilities and stockholders' equity $ 35,098,619 $ 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
(Unaudited)
All amounts in USD except share data
Three months ended December 31, Nine months ended December 31,
2011 2010 2011 2010
Revenues $ 986,799 $ 484,106 $ 2,959,167 $ 3,294,103
Cost of revenues (excluding depreciation and amortization) (1,024,817 ) (457,379 ) (2,902,650 ) (3,053,512 )
Selling, general and administrative expenses (968,890 ) (1,054,894 ) (2,354,405 ) (2,399,503 )
Depreciation (42,360 ) (461,627 ) (169,225 ) (659,002 )
Operating income (loss) $ (1,049,268 ) $ (1,489,794 ) $ (2,467,113 ) $ (2,817,914 )
Interest expense (174,353 ) (307,630 ) (624,086 ) (718,339 )
Amortization of debt discount - - - (356,436 )
Interest income 59,629 40,657 186,061 170,438
Other income, net (716,364 ) (25,914 ) (706,440 ) 34,558
Income before income taxes and minority interest attributable to non-controlling interest $ (1,880,356 ) $ (1,782,681 ) $ (3,611,578 ) $ (3,687,693 )
Earnings in Income from Affiliates (33,588 ) - 28,463 -
Income taxes benefit/ (expense) - 20,212 - 475,226
Net income/(loss) $ (1,913,944 ) $ (1,762,469 ) $ (3,583,115 ) $ (3,212,467 )
Non-controlling interests in earnings of subsidiaries 12,569 13,451 23,284 16,014
Net income / (loss) attributable to common stockholders $ (1,901,375 ) $ (1,749,018 ) $ (3,559,831 ) $ (3,196,453 )
Earnings/(loss) per share attributable to common stockholders:
Basic and diluted $ (0.09 ) $ (0.12 ) $ (0.17 ) $ (0.23 )
Weighted-average number of shares used in computing earnings per share amounts:
Basic and diluted 21,301,092 14,750,483 20,880,604 13,814,634
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 and China. We operate beneficiation plants in China and rock aggregate sites in India. We supply materials to the burgeoning infrastructure industries in India and China. For more information about IGC, please visit IGC's website at www.indiaglobalcap.com. For more information on our Chinese operations, including a video on the iron ore beneficiation process, please visit the Web site at www.hfironman.net

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 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, 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 and regulatory 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 IGC's amended Annual Report on Form 10-K for the year ended March 31, 2011 and Schedule 14A filed on December 9, 2011 with the Securities and Exchange Commission.

Contact Information

  • Contact Information
    Investor Relations
    John Selvaraj
    301-983-0998