BEFUT Announces 40.8% Increase in Revenue for the Third Quarter of Fiscal 2011
DALIAN CITY, China, May 13, 2011/PRNewswire-Asia-FirstCall/ -- 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 third quarter of fiscal 2011 and nine months ended March 31, 2011.
Financial Highlights (year-over-year):
- Revenue increased 40.8% to $9.4 million for the third quarter of fiscal 2011 and 108.3% to $40.2 million for the nine months ended March 31, 2011
- Gross profit increased 46.4% to $2.5 million for the third quarter of fiscal 2011 and 104.6% to $10.7 million for the nine months ended March 31, 2011
- Net income increased 24.1% to $0.8 million, or $0.03 per share, for the third quarter of fiscal 2011 and 111.4% to $4.9 million, or $0.17 per share for the nine months ended March 31, 2011
Mr. Hongbo Cao, Chairman and CEO, commented, "With China's large and increasing demand for cable and wire products, we are rapidly gaining domestic market share as evidenced by a 41% increase in year-over-year sales this quarter. In order to accommodate this growing demand, we recently added new production facilities, which significantly expand our capacity. We are currently operating at just 60% of total capacity, which should allow us to gain operating leverage and significantly increase our profitability as we continue to grow."
"In addition to our traditional cable, we are focusing on growing our high margin specialty cable products. We have a very strong R&D team and continue to introduce new products to the market based on our customers' needs. We now have 7 approved patents and 25 pending patents. In particular, our carbon fiber and other specialty cables incorporate unique technology that makes them lighter with better electrical conductivity. We will continue to strengthen our research team and develop new hi-tech cables. We believe this approach will help further differentiate us from competitors and enable us to capture additional market share in China."
"Looking ahead, we have aggressive sales and marketing initiatives underway. Demand within China is driven by increased construction and infrastructure development. We are adding new sales reps and sales offices across China. We are also expanding into new domestic markets such as submarine and 'new energy' cables."
Revenue for the third quarter ended March 31, 2011 was $9.4 million, compared to $6.7 million for the third quarter ended March 31, 2010. Gross profit was $2.5 million for the three months ended March 31, 2011, as compared to $1.7 million for the three months ended March 31, 2010. Operating income was $1.4 million for the three months ended March 31, 2011, as compared to $1.0 million for the three months ended March 31, 2010. Net income for the three months ended March 31, 2011 was $0.8 million, or $0.03 per diluted share, compared to net income of $0.6 million, or $0.02 per diluted share, for the same period the previous year.
Revenue for the nine months ended March 31, 2011 was $40.2 million, compared to $19.3 million for the nine months ended March 31, 2010. Gross profit was $10.7 million for the nine months ended March 31, 2011, as compared to $5.2 million for the nine months ended March 31, 2010. Operating income was $7.3 million for the nine months ended March 31, 2011, as compared to $3.4 million for the nine months ended March 31, 2010. Net income for the nine months ended March 31, 2011 was $4.9 million, or $0.17 per diluted share, compared to net income of $2.3 million, or $0.08 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
March 31, | June 30, | ||
2011 | 2010 | ||
Assets | (Unaudited) | ||
Current assets: | |||
Cash and cash equivalents | $ 446,658 | $ 1,319,173 | |
Restricted cash | 1,991,245 | 1,181,095 | |
Accounts receivable, net of allowance for doubtful accounts of $86,349 | 16,279,594 | 9,292,310 | |
and $83,295 at March 31, 2011, and June 30, 2010, respectively | |||
Inventory | 5,799,198 | 2,543,789 | |
Trade notes receivable | 669,290 | - | |
Loans to unrelated parties | 5,668,683 | 1,054,090 | |
Bank loan security deposits | 1,210,911 | 1,031,100 | |
Advance payments for inventory | 1,132,694 | 399,868 | |
Due from related party | - | 472,838 | |
Other current assets | 1,037,503 | 521,739 | |
Total current assets | 34,235,776 | 17,816,002 | |
Property and equipment, net | 32,250,107 | 31,618,074 | |
Other assets: | |||
Intangibles, net | 15,255,499 | 15,669,375 | |
Advance payments for property and equipment | 274,690 | 293,605 | |
Advance payments – Research & Development | 2,165,286 | 2,088,714 | |
Total other assets | 17,695,475 | 18,051,694 | |
Total assets | $84,181,358 | $67,485,770 | |
Liabilities | |||
Current liabilities: | |||
Accounts payable and accrued expenses | $ 2,827,356 | $ 3,119,646 | |
Short-term bank loans | 11,437,230 | 6,039,300 | |
Current portion of long-term bank loans | 763,500 | 294,600 | |
Loans from unrelated parties | 1,591,600 | 370,000 | |
Advances from customers | 2,460,833 | 533,806 | |
Income taxes payable | 3,502,071 | 1,655,747 | |
Other current liabilities | 1,185,812 | 969,787 | |
Total current liabilities | 23,768,402 | 12,982,886 | |
Long-term bank loan | 14,201,100 | 14,435,400 | |
Total liabilities | 37,969,502 | 27,418,286 | |
Equity | |||
Stockholders' equity: | |||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, | - | - | |
no shares issued or outstanding | |||
Common stock, $0.001 par value, 200,000,000 shares authorized, | 29,716 | 29,716 | |
29,715,640 and 29,715,666 shares issued and outstanding at | |||
December 31, 2010 and June 30, 2010, respectively | |||
Additional paid-in capital | 21,838,047 | 21,838,047 | |
Statutory reserves | 1,181,189 | 1,181,189 | |
Retained earnings | 18,818,441 | 13,810,157 | |
Accumulated other comprehensive income | 3,727,290 | 2,166,533 | |
Total stockholders' equity | 45,594,683 | 39,025,642 | |
Noncontrolling interest | 617,173 | 1,041,842 | |
Total equity | 46,211,856 | 40,067,484 | |
Total liabilities and equity | $84,181,358 | $67,485,770 | |
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | ||||
March 31, | March 31, | ||||
2011 | 2010 | 2011 | 2010 | ||
Sales | $9,443,346 | $ 6,708,410 | $40,245,320 | $19,318,113 | |
Cost of sales | 6,945,831 | 5,002,973 | 29,570,863 | 14,101,070 | |
Gross profit | 2,497,515 | 1,705,437 | 10,674,457 | 5,217,043 | |
Operating expenses: | |||||
Selling expenses | 146,144 | 11,300 | 334,393 | 48,001 | |
General and administrative expenses | 983,787 | 731,346 | 2,999,048 | 1,761,895 | |
Total operating expenses | 1,129,931 | 742,646 | 3,333,441 | 1,809,896 | |
Income from operations | 1,367,584 | 962,791 | 7,341,016 | 3,407,147 | |
Other income (expenses): | |||||
Government subsidy income | 84,352 | 331,138 | 251,834 | 685,796 | |
Interest income | 1,585 | 2,113 | 11,532 | 5,841 | |
Interest expense | (434,063) | (361,680) | (1,159,430) | (502,912) | |
Other income (expenses) | (19,152) | 2,930 | (45,334) | (394,511) | |
Total other income (expenses) | (367,278) | (25,499) | (941,398) | (205,786) | |
Income from continuing operations before provision for income tax | 1,000,306 | 937,292 | 6,399,618 | 3,201,361 | |
Provision for income tax | 364,396 | 306,698 | 1,786,426 | 892,421 | |
Income from continuing operations, net of tax | 635,910 | 630,594 | 4,613,192 | 2,308,940 | |
Discontinued operations: | |||||
Income from operations of discontinued subsidiary (including gain on disposal of $99,148 in 2011) | 171,644 | - | 292,146 | - | |
Provision for income tax | 24,787 | - | 24,787 | - | |
Income from discontinued operations, net of tax | 146,857 | - | 267,359 | - | |
Net income | 782,767 | 630,594 | 4,880,551 | 2,308,940 | |
Less: net loss attributable to noncontrolling | |||||
interest | (24,547) | (61,016) | (127,732) | (67,137) | |
Net income attributable to BEFUT | $ 807,314 | $ 691,610 | $5,008,283 | $2,376,077 | |
Consolidated Statements of Operations (continued)
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | ||||
March 31, | March 31, | ||||
2011 | 2010 | 2011 | 2010 | ||
Amounts attributable to BEFUT common shareholders: | |||||
Income from continuing operations, net of tax | $ 686,318 | $ 691,610 | $4,766,785 | $2,376,077 | |
Discontinued operations: | |||||
Income from operations of discontinued subsidiary (including gain on disposal of $99,148 in 2011) | 145,783 | - | 266,285 | - | |
Provision for income tax | 24,787 | - | 24,787 | - | |
Income from discontinued operations, net of tax | 120,996 | - | 241,498 | - | |
Net income | $ 807,314 | $ 691,610 | $5,008,283 | $2,376,077 | |
Earnings per share—Basic: | |||||
Income from continuing operations | $ 0.02 | $ 0.03 | $ 0.16 | $ 0.08 | |
Discontinued operations | $ 0.01 | $ 0.00 | $ 0.01 | $ 0.00 | |
Net income | $ 0.03 | $ 0.03 | $ 0.17 | $ 0.08 | |
Earnings per share—Diluted: | |||||
Income from continuing operations | $ 0.02 | $ 0.02 | $ 0.16 | $ 0.08 | |
Discontinued operations | $ 0.01 | $ 0.00 | $ 0.01 | $ 0.00 | |
Net income | $ 0.03 | $ 0.02 | $ 0.17 | $ 0.08 | |
Weighted average number of common shares | |||||
outstanding: | |||||
Basic | 29,715,640 | 29,512,784 | 29,715,640 | 29,512,784 | |
Diluted | 29,778,814 | 30,155,539 | 29,774,190 | 30,240,336 | |
Statements of Consolidated Comprehensive Income
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | ||||
March 31, | March 31, | ||||
2011 | 2010 | 2011 | 2010 | ||
Net income | $ 782,767 | $ 630,594 | $ 4,880,551 | $ 2,308,940 | |
Other comprehensive income | |||||
Foreign currency translation adjustment | 279,458 | 107 | 1,561,447 | 48,178 | |
Total comprehensive income | 1,062,225 | 630,701 | 6,441,998 | 2,357,118 | |
Less: comprehensive income attributable to noncontrolling interest | (24,414) | (61,004) | (127,042) | (67,124) | |
Comprehensive income attributable to BEFUT | $ 1,086,639 | $ 691,705 | $6,569,040 | $ 2,424,242 | |
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended | |||
March 31, | |||
2011 | 2010 | ||
Cash flows from operating activities: | |||
Net Income | $4,880,551 | $ 2,308,940 | |
Adjustments to reconcile net income to net cash | |||
used in operating activities: | |||
Depreciation and amortization | 2,373,398 | 1,087,427 | |
Changes in current assets and current liabilities: | |||
Accounts receivable | (6,831,456) | (4,510,985) | |
Inventory | (3,113,702) | (743,916) | |
Trade notes receivable | (647,603) | - | |
Advance payments for inventory | (664,108) | (7,726,696) | |
Advance payment - R&D | - | 155,438 | |
Other current assets | (3,327,626) | (815,103) | |
Accounts payable and accrued expenses | (203,318) | 5,871,576 | |
Trade notes payable | - | (1,173,120) | |
Advances from customers | 1,875,604 | 290,209 | |
Income taxes payable | 1,755,806 | 892,421 | |
Other taxes payable | (183,770) | (37,983) | |
Other current liabilities | 587,314 | 59,082 | |
Total adjustments | (8,379,461) | (6,651,650) | |
Net cash provided by (used in) operating activities | (3,498,910) | (4,342,710) | |
Cash flows from investing activities: | |||
Loans to unrelated parties | (4,499,535) | 1,234,288 | |
Due from related party | 481,987 | - | |
Advance payments for property and equipment | 29,183 | (642,672) | |
Additions to property and equipment | (866,358) | (2,016,175) | |
Additions to construction in progress | (40,072) | (2,450,795) | |
Acquisition of intangible assets | (6,004) | (6,453) | |
Gain on disposal of a subsidiary – Dalian Marine, net of cash | 2,465,957 | - | |
Long-term investment | - | 2,933 | |
Net cash used in investing activities | (2,434,842) | (3,878,874) | |
Cash flows from financing activities: | |||
Restricted cash | (754,045) | 586,000 | |
Bank loan security deposits | (139,640) | (681,876) | |
Proceeds (repayment) of short-term bank loans | 5,115,585 | (2,786,160) | |
Convertible notes payable | (370,000) | ||
Loans from unrelated parties | 1,201,200 | 2,708,908 | |
Proceeds (repayment) of long-term bank loans | (300,300) | 9,188,462 | |
Contributed from minority shareholder | - | 777,192 | |
Net cash provided by financing activities | 5,122,800 | 9,422,526 | |
Effect of foreign currency translation on cash | (61,563) | 4,314 | |
Net increase (decrease) in cash and cash equivalents | (872,515) | 1,205,256 | |
Cash and cash equivalents – beginning | 1,319,173 | 210,301 | |
Cash and cash equivalents – ending | $ 446,658 | $ 1,415,557 | |
Contact:
Crescendo Communications, LLC
David Waldman, Vivian Huo or Klea Theoharis
Tel: (212) 671-1020
E-mail: [email protected]
SOURCE BEFUT International Co., Ltd.
Share this article