India Globalization Capital Inc. (IGC), Files 10-Q for the Quarter Ended December 31, 2008
Most of the one-time expenses in the quarter came from costs related to curtailing contracts
by Impact Wire Tuesday, February 17, 2009
For the Quarter Ending December 31, IGC reported revenue of approximately $3.8 million. The Company reported a net loss of approximately $1.7 million inclusive of approximately $1.5 million of one-time expenses and approximately $300,000 of foreign exchange losses. The basic and fully diluted Loss Per Share, was approximately $0.20.
Most of the one-time expenses in the quarter came from costs related to curtailing contracts, which we were unable to perform because of the tightening of credit, as discussed on our last conference call. We also incurred legal costs from the warrant tender offer and capital raising activity. The foreign exchange losses occurred as the US dollar strengthened against the Indian Rupee.
For the nine months ended December 31, 2008, IGC reported revenue of approximately $32 million; net income, before one-time expenses, of around $600,000, and EPS, before one-time expenses, of around $0.16 (EPS). For the nine months ended December 31, 2008, inclusive of one-time expenses IGC reported a net loss of about $374 thousand and EPS of ($0.04).
Ram Mukunda, chief executive officer of IGC said: "As we said in the last quarter, due to illiquidity we began to adjust our business model and stream line our operations. Specifically, we have taken the following steps: 1) we have curtailed the number of contracts we are working, 2) we have subcontracted, or off loaded some of our contracts to other contractors, and 3) we have taken steps to shed costs, including laying off personnel.
"In order to better position ourselves to obtain and generate liquidity we have taken the following steps: 1) we have stepped up our efforts to collect claims that have been launched against contracting agencies for work delays, 2) we have begun the process of creating a new subsidiary called IGC-IMT based in India, which will be responsible for our mining and trading activity, and 3) we are engaged in the process of using the new subsidiary to obtain additional senior secured credit facilities."
Mukunda continued, "while we continue to be very bullish about the long term prospects of the infrastructure sector in India, for the short and medium term we are being pro active in conserving the relative strength of our balance sheet by scaling down operations and constraining growth until there is visibility on when the global illiquidity will abate."
-- Revenue for the nine months ended December 2008 was approximately $32.3 million compared to pro forma revenue of $21.9 million for the nine months ended December 2007, for the predecessor companies, an increase of about 47%;
-- Operating Profit was around $5.4 million excluding one-time expenses for the nine months ended December 2008 compared to approximately $4.3 million for the nine months ended December 2007, for the predecessor companies. For the nine months ended December 2008 operating profit was approximately $3.4 million, inclusive of about $2 million of one-time expenses;
-- Income, inclusive of one time cash and non-cash expenses, before taxes and before minority interest, for the nine months ended December 2008 was about $2.5 million or 8% of revenue.
-- As of December 31, 2008 IGC reported Total Stockholders equity of approximately $24.3 million.
-- As of December 31, 2008, IGC reported consolidated total assets of $55.6 million as compared to $67.6 million as of March 31, 2008. Most of the difference is attributed to the U.S. dollar strengthening against the Indian Rupee. The dollar rose by around 20 percent between March 31, 2008 and December 31, 2008 and most of the Company's assets are accounted for in Indian Rupees.
Based in Bethesda, Maryland, IGC operates through two infrastructure companies in India, Sricon Infrastructure Private Limited ("Sricon") and Techni Bharathi, Limited ("TBL"). IGC, through its subsidiaries, has three core businesses: (1) Highway and other heavy construction, (2) Mining & quarrying and (3) Civil construction and engineering of high-temperature plants. Most of IGC's operations are based in India. The Company has offices in Maryland, Mauritius, Nagpur, Cochin, Delhi and Bangalore. Copies of IGC's filings with the SEC containing information about IGC, its Indian operations and other relevant documents are available at no charge at the SEC's Internet site (http://www.sec.gov). For more information about IGC, please visit the Company's web site at www.indiaglobalcap.com.
This press release may contain forward-looking statements. 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, which could cause actual results to differ, relate to: (i) the ability of the parties to successfully win new contracts, execute on contracts and business plan, (ii) our ability to raise additional capital and the structure of such capital including the exercise of warrants, and (iii) changes in the exchange rate between the US Dollar and the Indian Rupee. We undertake 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 Form 10-KSB.
(1) The unaudited results of operations are not necessarily indicative of results of operations that may have actually occurred had the acquisitions taken place on the dates noted, or the future financial position or operating results of the Company. The results and adjustments are based upon available information and assumptions that the Company believes are reasonable.
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