China Intelligent Lighting and Electronics, Inc. Announces Results for the Second Quarter of Fiscal Year 2010
Second quarter total revenue increased by 34.1% year-over-year; Second quarter net income increased by 26.7% year-over-year
HUIZHOU, China, Aug. 13 /PRNewswire-Asia-FirstCall/ -- China Intelligent Lighting and Electronics, Inc. ("China Intelligent" or "the Company") (NYSE Amex: CIL; CUSIP No: 16890G202), a leading provider of lighting solutions that engages in the design, manufacture, sales and marketing of high-quality LED and other lighting products, today announced its unaudited financial results for the second quarter ended June 30, 2010.
Second Quarter 2010 Financial Highlights
-- Total revenue increased by 34.1% year-over-year to $18.5 million from
$13.8 million in the second quarter of 2009.
-- Gross profit increased by 34.3% year-over-year to $4.3 million from
$3.2 million in the second quarter of 2009.
-- Operating income was $2.3 million, as compared to an operating income
of $1.8 million in the second quarter of 2009.
-- Net income attributable to the equity shareholders of China Intelligent
was $1.9 million, compared to a net income attributable to the equity
shareholders of China Intelligent of $1.5 million in the second quarter
of 2009.
-- Diluted net earnings per share were $0.18, based on 10,602,684
weighted-average shares outstanding, compared to diluted earnings per
share of $0.22, based on 7,097,748 weighted-average shares outstanding,
in the second quarter of 2009.
Ms. Li Xuemei, Chairman and Chief Executive Officer of China Intelligent, said, "Our second quarter results reflect successful execution of our initiatives to expand our domestic sales distribution and build market appreciation for our product offering. Following our exhibition at the Guangzhou International Lighting Exhibition, we signed agreements with 10 additional distributors. We are also benefiting from trends in the domestic manufacturing industry. New construction projects are arising as manufacturers in China shift production to inner regions of the country to lower their labor costs, driving demand for our lighting products.
"We are proud to have successfully completed our IPO in June 2010, and we plan to use the proceeds from the offering to invest in research and development for new LED technologies as we expand our product offering, and to build our manufacturing and production capabilities so that we can leverage the opportunities provided by the rapidly-growing LED lighting market."
Second Quarter Unaudited Financial Results
Revenue
Total revenue for the second quarter 2010 increased year-over-year by $4.7 million, or 34.1%, to $18.5 million. The increase in revenue is mainly attributable to the increase in household lighting product sales, which was a result of the Company's market expansion and sales volume growth. Further contributing factors are the growth of the lighting industry, increased brand and product recognition following the recently completed IPO and participation in the lighting tradeshow in GuangZhou, and the expansion of the Company's manufacturing capacity and sales channels.
Cost of Goods Sold and Gross Margin
Cost of goods sold in the second quarter of 2010 increased year-over-year by $3.7 million, or 34.9%, to $14.3 million, primarily due to overall sales growth. Gross profit for the three months ended June 30, 2010 was $4.3 million, compared to $3.2 million for the comparable period in 2009. Gross margin for the second quarter of 2010 was 23.0%, roughly in line with a gross margin of 23.1% in the second quarter of 2009.
Operating Expenses
Research and development ("R&D") expenses for the second quarter 2010 increased year-over-year by $0.2 million, or 81.5%, to $0.5 million, primarily due to an increased investment in LED technology research. As a percentage of total revenues, second quarter of 2010 R&D expenses increased to 2.5% from 1.9% in the second quarter 2009 for the aforementioned reason.
Selling expenses for the second quarter 2010 increased year-over-year by $0.1 million, or 11.4%, to $0.7 million, primarily as a result of overall sales increase. As a percentage of revenues, second quarter of 2010 selling expenses decreased to 4.0% from 4.9% in the second quarter 2009.
General and administrative ("G&A") expenses for the second quarter 2010 increased year-over-year by $0.3 million, or 72.8%, to $0.8 million. The increase was primarily driven by the professional fees and expenses related to the IPO closed in June 2010, which amounted to roughly $0.4 million in the second quarter. As a result, as a percentage of revenues, second quarter of 2010 G&A expenses increased to 4.1% from 3.2% in the second quarter of 2009.
Accordingly, overall operating expenses for the second quarter 2010 increased year-over-year by $0.6 million, or 44.5%, to $2.0 million.
Income tax
Income tax expense for the second quarter 2010 was $0.3 million, compared to $0.3 million in the second quarter 2009.
Operating Income and Net Income
Operating income for the second quarter 2010 was $2.3 million, as compared to a second quarter 2009 operating income of $1.8 million.
Net income attributable to the equity shareholders of China Intelligent was $1.9 million in the second quarter 2010, compared to a net income attributable to the equity shareholders of China Intelligent of $1.5 million for the second quarter of 2009. The net income margin was 10.4% for the second quarter 2010 compared to 11.2% for the same period in 2009.
Diluted earnings per share for the second quarter 2010 were $0.18, based on 10,602,684 weighted-average shares outstanding, compared to diluted earnings per share of $0.22, based on 7,097,748 weighted-average shares outstanding, in the second quarter of 2009.
Balance Sheet
Cash and cash equivalents were $11.0 million as of June 30, 2010, compared to $0.5 million as of December 31, 2009, primarily due to the net proceeds of approximately $2.5 million and $7.6 million that the Company raised from the private placements closed in January 2010 and an IPO closed in June 2010, respectively.
Total accounts receivable as of June 30, 2010 was $15.5 million, compared to $13.4 million as of December 31, 2009; the increase is primarily due to the rapid growth of sales and an increased portion of credit sales.
Inventories as of June 30, 2010 were $4.8 million, compared to $3.9 million as of December 31, 2009; the increase is primarily due to increased sales volume.
Business Outlook
Guidance for Third Quarter 2010
Management estimates that revenue for the third quarter of 2010 will be in the range of $19.1 million and $20.1 million and that net income for the third quarter will be in the range of $2.1 million and $2.4 million.
Conference Call and Webcast
China Intelligent senior management will host a conference call at 7:00 am (Pacific) / 10:00 am (Eastern) / 10:00 pm (Beijing/Hong Kong) on Friday, August 13, 2010 to discuss the Company's 2010 second quarter financial results and recent business activity. To access the live teleconference, please dial +1-877-317-6789 (US) or +1-412-317-6789 (International), and enter the passcode 00443574. Please dial in approximately 10 minutes before the scheduled time of the call.
A replay of the conference call will be available from 12:00 pm (Eastern) on Friday, August 13, 2010, by dialing +1-877-870-5176 (US) or +1-858-384-5517 (International) and entering the passcode 00443574.
A listen-only webcast of the conference call will also be available on the investor relations page of China Intelligent's website at: http://www.hyundai-elc.com .
About China Intelligent Lighting and Electronics, Inc.
China Intelligent Lighting and Electronics, Inc. (NYSE Amex: CIL; CUSIP No: 16890G202) is a China-based company that provides a full range of lighting solutions, including the design, manufacture, sales and marketing of high-quality LED and other lighting products for the household, commercial and outdoor lighting industries in China and internationally. The Company currently offers over 1,000 products that include LEDs, long life fluorescent lights, ceiling lights, metal halide lights, super electric transformers, grille spot lights, down lights, and recessed and framed lighting.
Forward-looking Statements
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including our ability to maintain and increase revenues and sales of our products, our ability to develop and market new products, our strategic investments and acquisitions, compliances and changes in the laws of the People's Republic of China (the "PRC") that affect our operations, and vulnerability of our business to general economic downturn, especially in the PRC, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
For more information, please contact:
Investor Relations:
Taylor Rafferty, US
Delia Cannan, Investor Relations
Tel: +1-212-889-4350
Email: [email protected]
Taylor Rafferty, Hong Kong
Ruby Yim, Investor Relations
Tel: +852-3196-3712
Email: [email protected]
-- FINANCIAL TABLES TO FOLLOW --
China Intelligent Lighting and Electronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(In US Dollars)
June 30, December 31,
2010 2009
(unaudited)
Assets
Current Assets
Cash and cash equivalents $ 10,985,929 $ 469,341
Trade receivables, net 15,522,110 13,424,362
VAT refundable 440,914 168,765
Inventories, net 4,813,522 3,923,533
Prepaid expenses and other receivables 3,516 --
Advances to suppliers 1,981,302 2,369,134
Restricted cash 440,619 352,051
Total current assets 34,187,912 20,707,186
Property and equipment, net 3,270,076 3,450,745
Total Assets $ 37,457,988 $ 24,157,931
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable - trade $ 3,061,842 $ 3,579,095
Accrued liabilities and other payable 777,239 1,224,359
Customer deposits 128,330 148,757
Corporate tax payable 314,310 372,275
Short-term loan 1,380,607 938,802
Total current liabilities 5,662,328 6,263,288
Stockholders' Equity
Preferred stock, $0.0001 par value,
10,000,000 shares authorized, 0
shares outstanding at June 30,
2010 and December 31, 2009 -- --
Common stock, $0.0001 par value,
100,000,000 shares authorized,
13,243,704 and 7,097,748 shares issued
and outstanding at June 30, 2010 and
December 31, 2009, respectively 1,324 710
Additional paid-in capital 12,478,997 1,389,163
Accumulated other comprehensive income 725,548 716,048
Statutory reserves 2,201,627 2,201,627
Retained earnings (unrestricted) 16,388,164 13,587,095
Total stockholders' equity 31,795,660 17,894,643
Total Liabilities and Stockholders'
Equity $ 37,457,988 $ 24,157,931
China Intelligent Lighting and Electronics, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In US Dollars)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
Revenue $ 18,525,743 $ 13,786,730 $ 33,382,936 $ 25,774,167
Cost of Goods
Sold (14,256,597) (10,607,920) (25,715,249) (20,057,787)
Gross Profit 4,269,146 3,178,810 7,667,687 5,716,380
General and
administrative
Selling expenses 745,095 669,079 1,371,949 1,220,040
General and
administrative 761,563 440,950 2,095,410 661,392
Research and
development 472,056 259,586 752,782 363,791
Total operating
expenses 1,978,714 1,369,615 4,220,141 2,245,223
Income from
operations 2,290,432 1,809,195 3,447,546 3,471,157
Other income
(expenses):
Interest income 1,623 (1,061) 1,862 --
Interest expense (18,674) (9,530) (30,716) (9,530)
Total other
(expenses)
income (17,051) (10,591) (28,854) (9,530)
Income before
income taxes 2,273,381 1,798,604 3,418,692 3,461,627
Income taxes (343,744) (251,614) (617,623) (455,209)
Net income $ 1,929,637 $ 1,546,990 $ 2,801,069 $ 3,006,418
Earnings per share
- basic $ 0.19 $ 0.22 $ 0.28 $ 0.42
Weighted-average
shares outstanding,
basic 10,327,275 7,097,748 9,918,050 7,097,748
Earnings per share -
diluted $ 0.18 $ 0.22 $ 0.28 $ 0.42
Weighted-average
shares outstanding,
diluted 10,602,684 7,097,748 10,104,222 7,097,748
China Intelligent Lighting and Electronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In US Dollars)
For the Six Months Ended
June 30,
2010 2009
Cash Flows From Operating Activities
Net income $ 2,801,069 $ 3,006,418
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 185,212 176,610
Changes in operating assets and
liabilities:
Account receivable-trade (2,080,792) (4,052,317)
VAT refundable (271,936) 361,019
Advance to suppliers for purchases 390,824 150,873
Inventories, net (885,033) (569,170)
Accounts payable and accrued
liabilities (970,440) 313,410
Customer deposits (20,615) (157,381)
Prepaid expense (3,516) --
Corporate tax payable (58,435) 453,749
Net cash provided by (used in)
operating activities (913,662) (316,789)
Cash Flows From Investing Activities
Purchases of property and equipment (893) (81,421)
Restricted cash, net (88,123) (350,640)
Net cash used in investing activities (89,016) (432,061)
Cash Flows From Financing Activities
Proceeds from loans 1,468,731 1,110,360
Repayments of loans (1,028,112) --
Net proceeds of share issuance 11,090,447 --
Net cash provided by financing
activities 11,531,066 1,110,360
Effect of exchange rate changes on
cash (11,800) (12,340)
Net increase in cash and cash
equivalents 10,516,588 349,170
Cash and cash equivalents, beginning
of period 469,341 264,189
Cash and cash equivalents, end of
period $ 10,985,929 $ 613,359
Supplemental disclosure information:
Income taxes paid $ 664,473 $ --
Interest paid $ 30,716 $ 5,463
SOURCE China Intelligent Lighting and Electronics, Inc.
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