Attached files
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| 8-K - BEFUT International Co., Ltd. | v211578_8k.htm |
For
Immediate Release
Contact:
Crescendo
Communications, LLC
David
Waldman, Vivian Huo or Klea Theoharis
Tel:
(212) 671-1020
E-mail:
bfut@crescendo-ir.com
BEFUT Announces
109% Increase in Revenue and 93% Increase in Net Income for the
Second
Quarter of Fiscal 2011
Dalian City, China – February 15,
2011 – BEFUT International Co., Ltd. (the “Company” or “BEFUT”) (OTCBB:
BFTI), a developer, manufacturer and distributor of wire and cable
products in China, today announced its financial results for the second quarter
of fiscal 2011 and six months ended December 31, 2010.
Financial
Highlights (year-over-year):
|
|
-
|
Revenue
increased 109% to $14.9 million the second quarter of fiscal 2011 and 144%
to $30.8 million for the six months ended December 31,
2010
|
|
|
-
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Gross
profit increased 107% for the second quarter of fiscal 2011 and 133% for
the six months ended December 31,
2010
|
|
|
-
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Net
income increased 93% to $1.9 million, or $0.07 per share, for the second
quarter of fiscal 2011 and 144% to $4.2 million, or $0.14 per share for
the six months ended December 31,
2010
|
Mr.
Hongbo Cao, Chairman and CEO, commented, “Our focus on developing the most
advanced products in the cable and wire industry combined with our reputation
for quality and extensive sales network across China is proving to be a winning
formula for the Company. For the second quarter of fiscal 2011
revenue grew 109% to $14.9 million and net income increased 93% to $1.9
million. We experienced increased demand across all of our product
lines and our customer base now includes some of the largest conglomerates in
China. Additionally, we benefitted from our recent decision to
relocate our production facilities to Dalian’s Changxing Island
Harbor Industrial Zone, which currently has a total production capacity of 2,400
km of cable per year—three times the amount of cable we were able to produce at
our old manufacturing facility. We plan to further increase our
production capacity to approximately 4,000 km of cable in the coming years to
accommodate the growing demand for our products.”
Mr. Cao
continued, “In July 2010, we acquired Dalian Yuansheng Technology
Co., Ltd., which enables us to develop and manufacture carbon fiber
composite cable and other specialty cable for upgrading China’s power
grid. As compared to pure metal cable, carbon fiber composite cable
is lighter, has better electrical conductivity and can better
withstand increased external pressure caused by
natural disasters. As a result, we plan to make carbon fiber cable a
key focus for the Company over the next few years.
“As we
look ahead, we see substantial opportunities to grow our
business. Key elements of our growth strategy include new product
introductions, entering new markets, broadening of our customer base and further
expansion of our manufacturing facilities. These initiatives are
currently underway. We are particularly excited about new products in
our pipeline, such as specialty cables for wind and solar
applications. We are also conducting R&D with the National
Nuclear Industry Research Institute to develop technology that will boost the
overall technical level of nuclear cables used in
China.”
Revenue
for the second quarter ended December 31, 2010 was $14.9 million, compared to
$7.1 million for the second quarter ended December 31, 2009. The increased
revenue reflects growing demand across all product lines from new and existing
customers and increased capacity to accommodate the demand. Gross profit was
$3.9 million for the three months ended December 31, 2010, as compared to $1.9
million for the three months ended December 31, 2009. Operating income was $2.7
million for the three months ended December 31, 2010, as compared to $1.4
million for the three months ended December 31, 2009. Net income for
the three months ended December 31, 2010 was $1.9 million, or $0.07 per diluted
share, compared to net income of $1.0 million, or $0.03 per diluted share, for
the same period the previous year.
Revenue
for the six months ended December 31, 2010 was $30.8 million, compared to $12.6
million for the six months ended December 31, 2009. Gross profit was
$8.2 million for the six months ended December 31, 2010, as compared to $3.5
million for the six months ended December 31, 2009. Operating income was $5.9
million for the six months ended December 31, 2010, as compared to $2.4 million
for the six months ended December 31, 2009. Net income for the six
months ended December 31, 2010 was $4.2 million, or $0.14 per diluted share,
compared to net income of $1.7 million, or $0.06 per diluted share, for the same
period the previous year.
About
BEFUT International Co., Ltd.
BEFUT is
a manufacturer of specialty cables in northeastern China for sale to industries,
including, ship building, nuclear power plants, mining and
petrochemical. The Company’s cable products consist of (i)
traditional electric power system cable and (ii) an assortment of specialty
cable, including marine cable, mining specialty cable and petrochemical
cable. BEFUT has recently begun to develop carbon fiber composite
cable products. The Company has also developed the capability to
produce other types of special cables such as submarine cable and certain “new
energy” cable, including cable for wind and solar energy. BEFUT’s switch
application business mainly includes high and low voltage distribution cabinet
switches and crane electronic control switches, which complement the cable
product offerings.
Safe
Harbor Statement
This
press release contains forward-looking statements concerning the Company's
business, products and financial results. The Company's actual results may
differ materially from those anticipated in the forward-looking statements
depending on a number of risk factors including, but not limited to, the
following: general economic and business conditions, development, shipment,
market acceptance, additional competition from existing and new competitors,
changes in technology, and various other factors beyond the Company's control.
All forward-looking statements are expressly qualified in their entirety by this
Safe Harbor Statement and the risk factors detailed in the Company's reports
filed with the SEC. BEFUT undertakes no duty to revise or update any
forward-looking statements to reflect events or circumstances after the date of
this release, except as required by applicable law or regulation.
(tables
follow)
Consolidated
Balance Sheets
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December
31,
|
June
30,
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|||||||
|
2010
|
2010
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|||||||
|
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(Unaudited)
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|||||||
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Assets
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||||||||
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Current
assets:
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||||||||
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Cash
and cash equivalents
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$ | 761,460 | $ | 1,319,173 | ||||
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Restricted
cash
|
3,494,084 | 1,181,095 | ||||||
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Accounts
receivable, net of allowance for doubtful accounts of
$85,783
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||||||||
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and
$83,295 at December 31, 2010, and June 30, 2010,
respectively
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17,292,392 | 9,292,310 | ||||||
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Inventory
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5,234,237 | 2,543,789 | ||||||
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Loans
to unrelated parties
|
1,888,835 | 1,054,090 | ||||||
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Bank
loan security deposits
|
1,089,206 | 1,031,100 | ||||||
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Advance
payments
|
1,929,467 | 693,473 | ||||||
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Due
from related party
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- | 472,838 | ||||||
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Other
current assets
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1,227,666 | 521,739 | ||||||
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Total
current assets
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32,917,347 | 18,109,607 | ||||||
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Property
and equipment, net
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32,394,534 | 31,618,074 | ||||||
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Other
assets:
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||||||||
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Intangibles,
net
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15,485,194 | 15,669,375 | ||||||
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Advance
payments – Research & Development
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2,151,106 | 2,088,714 | ||||||
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Total
other assets
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17,636,300 | 17,758,089 | ||||||
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Total
assets
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$ | 82,948,181 | $ | 67,485,770 | ||||
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Liabilities
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||||||||
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Current
liabilities:
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Accounts
payable and accrued expenses
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$ | 2,770,621 | $ | 3,119,646 | ||||
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Trade
notes payable
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3,034,000 | - | ||||||
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Short-term
bank loans
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9,086,830 | 6,039,300 | ||||||
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Current
portion of long-term bank loans
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758,500 | 294,600 | ||||||
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Loans
from unrelated parties
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2,220,740 | 370,000 | ||||||
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Advances
from customers
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1,007,947 | 533,806 | ||||||
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Income
taxes payable
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3,120,515 | 1,655,747 | ||||||
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Other
current liabilities
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1,334,564 | 969,787 | ||||||
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Total
current liabilities
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23,333,717 | 12,982,886 | ||||||
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Long-term
bank loan
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14,108,100 | 14,435,400 | ||||||
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Total
liabilities
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37,441,817 | 27,418,286 | ||||||
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Equity
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||||||||
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Stockholders’
equity:
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Preferred
stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or
outstanding
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- | - | ||||||
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Common
stock, $0.001 par value, 200,000,000 shares authorized, 29,715,640 and
29,715,666 shares issued and outstanding at December 31, 2010 and June 30,
2010, respectively
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29,716 | 29,716 | ||||||
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Additional
paid-in capital
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21,838,047 | 21,838,047 | ||||||
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Statutory
reserves
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1,181,189 | 1,181,189 | ||||||
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Retained
earnings
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17,994,979 | 13,810,157 | ||||||
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Accumulated
other comprehensive income
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3,447,965 | 2,166,533 | ||||||
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Total
stockholders’ equity
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44,491,896 | 39,025,642 | ||||||
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`
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||||||||
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Noncontrolling
interest
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1,014,468 | 1,041,842 | ||||||
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Total
equity
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45,506,364 | 40,067,484 | ||||||
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Total
liabilities and equity
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$ | 82,948,181 | $ | 67,485,770 | ||||
Consolidated
Statements of Operations and Other Comprehensive Income
(Unaudited)
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For
the Three Months Ended
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For
the Six Months Ended
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|||||||||||||||
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December 31,
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December 31,
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2010
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2009
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2010
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2009
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Sales
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$ | 14,871,164 | $ | 7,126,044 | $ | 30,801,975 | $ | 12,609,703 | ||||||||
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Cost
of sales
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10,954,272 | 5,235,323 | 22,625,032 | 9,098,097 | ||||||||||||
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Gross
profit
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3,916,892 | 1,890,721 | 8,176,943 | 3,511,606 | ||||||||||||
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Operating
expenses:
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Selling
expenses
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149,643 | 14,828 | 188,250 | 36,701 | ||||||||||||
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General
and administrative expenses
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1,032,259 | 442,264 | 2,043,879 | 1,030,549 | ||||||||||||
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Total
operating expenses
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1,181,902 | 457,092 | 2,232,129 | 1,067,250 | ||||||||||||
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Income
from operations
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2,734,990 | 1,433,629 | 5,944,814 | 2,444,356 | ||||||||||||
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Other
income (expenses):
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||||||||||||||||
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Government
subsidy
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180,155 | 304,704 | 316,642 | 354,658 | ||||||||||||
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Interest
expense, net
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(493,390 | ) | (5,195 | ) | (879,788 | ) | (137,504 | ) | ||||||||
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Other
income (expenses)
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107,024 | (403,138 | ) | 138,145 | (397,441 | ) | ||||||||||
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Total
other income (expenses)
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(206,211 | ) | (103,629 | ) | (425,001 | ) | (180,287 | ) | ||||||||
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Income
before provision for income tax
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2,528,779 | 1,330,000 | 5,519,813 | 2,264,069 | ||||||||||||
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Provision
for income tax
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614,895 | 336,819 | 1,422,030 | 585,723 | ||||||||||||
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Net
income
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1,913,884 | 993,181 | 4,097,783 | 1,678,346 | ||||||||||||
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Less:
Net loss attributable to noncontrolling interest
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(22,681 | ) | (963 | ) | (87,038 | ) | (6,121 | ) | ||||||||
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Net
income attributable to BEFUT International Co., Ltd.
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1,936,565 | 994,144 | 4,184,821 | 1,684,467 | ||||||||||||
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Other
comprehensive income
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||||||||||||||||
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Foreign
currency translation adjustment
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597,575 | 263 | 1,281,432 | 48,070 | ||||||||||||
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Comprehensive
income
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$ | 2,534,140 | $ | 994,407 | $ | 5,466,253 | $ | 1,732,537 | ||||||||
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Basic
earnings per share
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$ | 0.07 | $ | 0.03 | $ | 0.14 | $ | 0.06 | ||||||||
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Diluted
earnings per share
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$ | 0.07 | $ | 0.03 | $ | 0.14 | $ | 0.06 | ||||||||
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Weighted
average number of common shares outstanding:
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||||||||||||||||
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Basic
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29,715,640 | 29,511,277 | 29,715,640 | 29,511,277 | ||||||||||||
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Diluted
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29,786,677 | 30,280,532 | 29,771,813 | 30,280,532 | ||||||||||||
Consolidated
Statements of Cash Flows
(Unaudited)
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For
the Six Months Ended
|
||||||||
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December 31,
|
||||||||
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2010
|
2009
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|||||||
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Cash
flows from operating activities:
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||||||||
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Net
Income
|
$ | 4,097,783 | $ | 1,678,346 | ||||
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Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
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Depreciation
and amortization
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1,583,652 | 718,680 | ||||||
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Changes
in current assets and current liabilities:
|
||||||||
|
Accounts
receivable
|
(7,894,969 | ) | (53,500 | ) | ||||
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Inventory
|
(2,574,960 | ) | (1,000,998 | ) | ||||
|
Advance
payments
|
(1,066,359 | ) | (197,666 | ) | ||||
|
Other
current assets
|
(935,345 | ) | (1,032,681 | ) | ||||
|
Accounts
payable and accrued expenses
|
(176,022 | ) | 1,637,214 | |||||
|
Trade
notes payable
|
2,983,200 | (1,173,120 | ) | |||||
|
Advances
from customers
|
450,523 | (174,496 | ) | |||||
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Income
taxes payable
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1,391,612 | 585,724 | ||||||
|
Other
current liabilities
|
711,714 | 104,016 | ||||||
|
Total
adjustments
|
(5,526,954 | ) | (586,827 | ) | ||||
|
Net
cash provided by (used in) operating activities
|
(1,429,171 | ) | 1,091,519 | |||||
|
Cash
flows from investing activities:
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||||||||
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Due
from related party
|
478,809 | - | ||||||
|
Additions
to property and equipment
|
(755,610 | ) | (1,594,161 | ) | ||||
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Additions
to construction in progress
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(39,808 | ) | (2,442,107 | ) | ||||
|
Advance
payment for fixed assets
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(104,131 | ) | (8,011,520 | ) | ||||
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Acquisition
of intangible assets
|
(5,964 | ) | (6,452 | ) | ||||
|
Long-term
investment
|
- | 2,933 | ||||||
|
Loans
to unrelated parties
|
(789,809 | ) | 1,521,543 | |||||
|
Net
cash used in investing activities
|
(1,216,513 | ) | (10,529,764 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Restricted
cash
|
(2,239,572 | ) | 586,000 | |||||
|
Bank
loan security deposits
|
(26,849 | ) | (163,877 | ) | ||||
|
Loans
from unrelated party
|
1,819,753 | 2,274,251 | ||||||
|
Proceeds
(repayment) of short-term bank loans
|
2,844,524 | (2,786,160 | ) | |||||
|
Proceeds
(repayment) of long-term bank loans
|
(298,320 | ) | 14,664,000 | |||||
|
Proceeds
from minority shareholders
|
59,183 | 43,992 | ||||||
|
Net
cash provided by financing activities
|
2,158,719 | 14,618,206 | ||||||
|
Effect
of foreign currency translation on cash
|
(70,748 | ) | (4,369 | ) | ||||
|
Net
increase (decrease) in cash and cash
equivalents
|
(557,713 | ) | 5,175,592 | |||||
|
Cash
and cash equivalents – beginning
|
1,319,173 | 210,301 | ||||||
|
Cash
and cash equivalents – ending
|
$ | 761,460 | $ | 5,385,893 | ||||