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8-K - LIHUA INTERNATIONAL INC. | v186731_8k.htm |
Exhibit
99.1
Lihua
International Provides Corporate Update
Announces
10% Year-to-Date Increase in Customer Base;
2009
SAIC Annual Reports Available on Company Website
DANYANG,
China, May 24 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA)
("Lihua" or the "Company"), a leading Chinese developer, designer, manufacturer,
marketer and distributor of low cost, high quality alternatives to pure copper
products, such as refined copper products and superfine and magnet wire,
including copper clad aluminum ("CCA") wire, today provided an update on several
key business initiatives including customer growth and production capacity
expansion.
Growth in
Customer Base:
Since the
beginning of 2010, the Company has added 30 new customers, bringing its total
customer count to approximately 330. This represents a 10% increase in Lihua's
customer base compared with 300 customers on December 31, 2009.
"The
momentum from our strong first quarter performance has continued into the first
half of our second quarter, as we have added 30 new customers since the
beginning of the year and continue to expand agreements with our existing
customers," said Jianhua Zhu, Chairman and CEO of Lihua. "Volume demand
continues to exceed manufacturing capacity, and we are working diligently to
expand capacity in an effort to better address this significant
opportunity."
Mr. Zhu
added, "Lihua is uniquely positioned as a provider of low-cost alternatives to
pure copper, with a business model that allows us to pass raw material exposure
to our end customers. As such, our business is relatively unaffected by changes
in commodity pricing. Based on our proprietary refinery technology, which
qualifies our refined, recycled, high-purity material as pure copper, we are
able to maintain a material cost advantage over other suppliers of pure copper
products who require newly-mined or imported copper."
Production
Capacity Expansion:
In order
to meet increasing market demand, Lihua has been aggressively expanding both its
scrap copper refinery and wire production capacity. Additionally, Lihua is
considering an expansion of its portfolio of refined copper products to address
a broader range of customer requests. During the first quarter of 2010, Lihua
added two new proprietary high-speed production lines, increasing annual
capacity to 20,000 tons. The Company plans to further increase both its copper
wire and CCA wire production capacity during the remainder of the year. With the
net proceeds of $32.5 million from its April 2010 public offering, Lihua is
planning to complete a land purchase for the construction of a new smelting
facility in the fourth quarter of 2010, and expects this new facility to come on
line during the fourth quarter of 2011. Lihua expects to add 75,000 tons of
annual smelting capacity upon completion of the new facility.
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"We are
working hard to expand our scrap copper refinery capacity, while continuing the
previously announced expansion of our copper wire and CCA wire drawing capacity.
With clear market advantages and a compelling demand environment, we expect to
achieve growth consistent with our guidance throughout the remainder of the
year," Mr. Zhu concluded.
2009 SAIC
Annual Report Filing:
On May
14, 2010, the Company filed the 2009 annual reports of its two Chinese operating
subsidiaries (Lihua Electron and Lihua Copper) with the State Administration for
Industry & Commerce (SAIC) in the People's Republic of China. The SAIC is
the Chinese government agency responsible for issuing and renewing companies'
business licenses. The SAIC reports were prepared in accordance with Chinese
accounting rules and policies, and reflect financial information relating to
Lihua Electron and Lihua Copper on an unconsolidated basis. By giving effect to
reconciliation adjustments, the results contained in these reports are
consistent with results reported in the Company's audited financial statements
as filed with the U.S. Securities and Exchange Commission. The original filing
documents are available on Company's website: at www.lihuaintl.com
.
2010
First Quarter Results:
On May 5,
2010, Lihua reported sales of $63.2 million for its first quarter ended March
31, 2010, an increase of 208% over the first quarter of 2009. Gross profit
increased 107% year-over-year to $11.8 million. Net income for the quarter was
$7.4 million, or $0.28 per share, an 85% increase over $4.0 million or $0.18 per
share for the year-ago period.
Additionally,
in conjunction with the release of its first quarter 2010 results, the Company
raised its full-year 2010 gross profit and net income guidance. Lihua now
expects its 2010 gross profit to be between $48.9 million and $50.7 million, and
non-GAAP net income to be between $35.1 million and $36.3 million. This compares
with previous guidance of $47.1 million to $48.9 million in gross profit and
$34.6 million to $35.8 million in net income.
About
Lihua International, Inc.
Lihua
International, through its two wholly-owned subsidiaries, Lihua Electron and
Lihua Copper, is a leading value-added manufacturer of copper replacement
products for China's rapidly growing copper wire and copper replacement product
market. Lihua is one of the first vertically integrated companies in China to
develop, design, manufacture, market and distribute lower cost, high quality
alternatives to pure copper magnet wire and pure copper alternative products.
Lihua's products include copper-clad aluminum wire ("CCA") and pure copper
products including copper wire and copper rod, which are produced from recycled
scrap copper. Lihua's products are sold in China either directly to
manufacturers or through distributors in the wire and cable industries and
manufacturers in the consumer electronics, white goods, automotive, utility,
telecommunications and specialty cable industries. Lihua's corporate and
manufacturing headquarters are located in the heart of China's copper industry
in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com
.
To be
added to the Company's email distribution for future news releases, please send
your request to lihua@tpg-ir.com.
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Safe
Harbor Statement
This
press release contains certain statements that may be deemed to be
"forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, that address activities, events or
developments that the Company expects, projects, believes or anticipates will or
may occur in the future, including, without limitation, statements about its
business or growth strategy, general industry conditions including availability
of copper or recycled scrap copper, future operating results of the Company,
capital expenditures, expansion and growth opportunities, bank borrowings,
financing activities and other such matters, are forward-looking statements.
Although the Company believes that its expectations stated in this press release
are based on reasonable assumptions, actual results may differ from those
projected in the forward-looking statements.
Please
note that information in this press release reflects management views as of the
date of issuance.
For more
information, please contact:
Lihua
International, Inc.Daphne Huang
EVP of
Corporate Finance and Director of Investor Relations
Tel: +1-516-717-9939
Email:
daphne.huang@lihuaintl.comThe
Piacente Group, Inc.
Investor
Relations
Brandi
Floberg or Lee Roth
Tel: +1-212-481-2050
Email: lihua@tpg-ir.com
SOURCE
Lihua International, Inc.
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