The approval by the Chinese government of a joint venture to tTC manufacture cellular telephones in China will help boost the fortunes of Universal Security Instruments Inc., an Owings Mills-based video and electronics company that is part of the deal.
Universal, which manufactures all its products in China, has a 15 percent stake in the $3.5 million project to make cellular telephones for the Chinese market. Another 15 percent of the project is held by a Hong Kong company, and the remaining 70 percent is owned by the Chinese government.
"We think that will be a very successful joint venture for us," said Harvey Grossblatt, Universal's vice president and chief financial officer. "They have to buy cellular telephones. They can't communicate any other way."
Approval for the venture came this week and production is expected to begin in April or May, Mr. Grossblatt said. He did not have estimates of how many phones will be sold.
The good news comes after a dismal third quarter ended Dec. 31 that saw the company lose $463,901, or 14 cents a share, compared to net income of $62,202, or 2 cents a share, for the previous third quarter. Sales fell by 18.5 percent to $6.0 million from $7.3 million a year ago.
The third quarter included $200,000 in expenses associated with the company's cost reduction programs and special promotional allowances to sell slow-moving inventory. Besides those costs, Universal was hurt by rising interest rates and poor videotape sales causes by stiff competition, Mr. Grossblatt said.
Universal Security Instruments Inc.
Owings Mills
.. .. .. .. .. .. .. .. .. .. .. .Ticker .. .. .. ..Yesterday's
.. .. .. .. .. .. .. .. .. .. .. .Symbol .. ..Cls... .. ...Chg.
.. .. .. .. .. .. .. .. .. .. .. ..USEC .. .. .1 1/8 .. .. .. .unch
Period ended
12/31 .. .. .. .. .. .. .. ..3rd qtr. .. ..Year ago .. .. Chg.
Revenue .. .. .. .. .. .. ...$5,956 .. .. .$7,309 .. ...-18.5%
Net Income .. .. .. .. .. ...$(464) .. .. .$62 .. .. .. . ..--
Primary EPS .. .. .. .. .. ..$(0.14) .. ...$0.02 .. .. .. ..--
.. .. .. .. .. .. .. .. .. ..9 mos. .. .. .Year ago .. ...Chg.
Revenue .. .. .. .. .. .. ...$19,285 .. ...$19,864 .. ...+2.9%
Net Income .. .. .. .. .. ...$(410) .. .. .$332 .. .. .. ...--
Primary EPS .. .. .. .. .. ..$(0.13) .. ...$0.10 .. .. .. ..--
Figures in thousands (except per share data.)