ACL Semiconductors Reports Record First Quarter 2010 Performance

ACL Semiconductors (OTCBB: [ ACLO ]), a leading China-based distributor of Samsung memory electronic products, reported financial results for the first quarter ended March 31, 2010.

Mr. Alan Yang, Chairman and Chief Executive Officer of ACL Semiconductors, commented, "These outstanding financial results reflect the success of our business model and the macro economic factors across Hong Kong and Southern China. Revenues for the quarter reflect both increased prices and robust demand for electronic components. Fundamental to our continuing growth is our strong relationship with Samsung, which depends on ACL for continuing research and market intelligence to manage their product production and allocation.

"Momentum in the electronic sector particularly for memory products continued into the second quarter as demand for consumer electronics remained robust. We are also gaining increased confidence in our outlook as we continue to benefit from the broader rebound in the semiconductor sector. The electronics business is expected to grow in the forthcoming year and we are ready to take advantage of the foreseeable growth in China's market."

For the first quarter of 2010, ACL Semiconductors reported net revenue of $99.01 million, up 58.4% over $62.5 million for the first quarter 2009. The year over year revenue growth was primarily due to an increase of the average selling prices and continuous demand in memory products in the PRC market. Net income for the first quarter ended March 31, 2010 was $1.4 million compared to net income of $1.2 million for the first quarter of 2009. Earnings per diluted share was $0.05 for the first quarter 2009, as compared to $0.04 in the year ago quarter.

Gross profit for the first quarter 2010 was $2.8 million, down 1% from $2.9 million for the first quarter 2009 impacted by increased cost of sales as the rebound in the electronics market continued and saturization occurred. Gross margin for the first quarter of 2010 was 2.9%, down from 4.6% for the first quarter 2009. The decrease in gross margins for the first quarter 2010 compared to the first quarter 2009 is partially due to the increase in cost of sales when compared to the cost of sales in the corresponding quarter in 2009. During the first quarter of 2009 we experienced increased gross profit as a consequence of higher average selling prices and lower cost of sales as the market experienced a rebound in increased demand together with reduced supply.

Mr. Yang continued, "We are proud of the distribution and product research we continue to supply to Samsung and the role we play in assuring that Samsung receives up to date information on macro market trends and specific data regarding the overall memory product demand and specific product details.

"During the first quarter we took initiatives and reviewed policy changes to improve internal financial controls. Specific steps include evaluation of board composition and new procedures to oversee purchase and disbursements. We expect that these initiatives will increase the reliance and responsibility of our financial planning group and the ability to stay in compliance with SEC regulations."

About ACL Semiconductors
ACL Semiconductors distributes electronic components under the "Samsung" brand name to the Hong Kong and South China markets. The memory chips are used from everything from a mobile phone, digital camera and laptop computer to an MP3 player or Wi-Fi product. For more information about ACL Semiconductors please visit ACL Semiconductors' corporate website at [ http://www.acl-semicon.com ].

Forward-Looking Statements
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the company's products, general acceptance of the company's products and technologies, competitive factors, timing, and other risks described in the company's SEC reports and filings.

ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)


		Three Months Ended
		March 31, 2010			March 31, 2009

					(Restated)

Net sales
	Related parties	$	781,896		$	316,422
	Other		98,229,166			62,190,706
	Less discounts to customers		--			(6,989	)


			99,011,062			62,500,139


Cost of sales			96,184,458			59,642,180


	Gross profit		2,826,604			2,857,959

Operating expenses
	Selling		24,802			22,177
	General and administrative		1,057,869			1,355,453


Income from operations			1,743,933			1,480,329

Other income (expenses)
	Rental income		30,000			22,308
	Interest expense		(95,164	)		(166,892	)
	Management and service income		8,321			6,538
	Net income on cash flow hedge		15,410			20,349
	Interest income		93			33,631
	Loss on disposal of fixed assets		(308	)		--
	Exchange differences		(6,203	)		(9,029	)
	Miscellaneous		960			7


Income before income taxes provision			1,697,042			1,387,241

Income taxes provision			256,066			217,949


Net Income		$	1,440,976		$	1,169,292


Earnings per share - basic and diluted		$	0.05		$	0.04


Weighted average number of shares - basic and diluted			28,729,936			28,534,380

ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY


			As of March 31, 2010 (Unaudited)		As of December 31, 2009

Current liabilities:
	Accounts payable		$	19,802,763	$	23,838,753
	Accrued expenses			603,583		527,582
	Lines of credit and loan facilities			10,230,089		9,013,813
	Current portion of long-term debt			318,046		318,972
	Current portion of capital lease			328,292		318,135
	Income tax payable			732,807		505,078
	Due to stockholders for converted pledged collateral			112,385		112,385
	Other current liabilities			297,829		282,475


		Total current liabilities		32,425,794		34,917,193

Long-term liabilities
	Long-term debts, less current portion			2,669,597		2,747,981
	Capital lease, less current portion			128,556		146,117
	Deferred tax liabilities			19,468		19,468


		Total long-term liabilities		2,817,621		2,913,566


Total Liabilities				35,243,415		37,830,759


Stockholders' equity:
	Common stock - $0.001 par value; 50,000,000 shares authorized; 28,729,936 issued and outstanding as of March 31, 2010 and December 31, 2009 respectively			28,730		28,730
	Additional paid in capital			3,658,627		3,658,627
	Retained earnings			2,395,161		954,185


		Total stockholders' equity		6,082,518		4,641,542


Total Liabilities and Stockholders' equity				41,325,933		42,472,301

ACL SEMICONDUCTORS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)


			As of March 31, 2010 (Unaudited)		As of December 31, 2009


Current assets:
	Cash and cash equivalents		$	3,330,275	$	2,001,805
	Restricted cash			2,088,170		2,086,504
	Accounts receivable, net of allowance for doubtful accounts of $0 for 2010 and 2009			13,492,554		12,434,386
	Inventories, net			3,365,179		6,048,116
	Other current assets			163,358		274,351


		Total current assets		22,439,536		22,845,162

Property, equipment and improvements, net of accumulated depreciation and amortization				8,221,617		8,179,765

Other deposits				182,116		213,535

Amount due from Aristo / Mr. Yang				10,482,664		11,233,839


Total Assets				41,325,933		42,472,301

Contributing Sources

Market Wire

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ACL Semiconductors Reports Record First Quarter 2010 Performance