Sutor Technology Group Limited Announces First Quarter Financial Results of Fiscal Year 2010
First Fiscal Quarter 2010 Financial Results: -- Total revenue was US$123.8 million for the three months ended September 30 2009, a decrease of US$6.3 million, or 4.8% over the same period last year. -- Gross margin was 3.6% for the first fiscal quarter of 2010, compared to 11.4% for the same period last year. -- Net income was US$0.5 million for the first fiscal quarter of 2010, a decrease of US$10.4 million, or 95.4%, from US$10.9 million for the same period of last year. -- Fully-diluted earnings per common share for the first fiscal quarter of 2010 were US$0.01, compared to US$0.29 for the same time last year.
"In addition, we recently announced the acquisition of Ningbo Zhehua Heavy Steel Pipe Manufacturing Co. This new business line will help to diversify our company's product portfolio and expand our vertically integrated business model. We also believe this acquisition will be beneficial to both our revenue and income during the fiscal year. In October, the Company experienced an increase in orders and firming of average sales price. In addition, with the increase in orders, the Company was able to begin elimination of some very low margin products while maintaining overall volume. The Company therefore expects to see improving margins and net income beginning with the second quarter 2009.
First Fiscal Quarter 2010 Financial Results:
As a result of the acquisition of Ningbo Zhehua Heavy Steel Pipe
Manufacturing Co., Ltd. ("Ningbo Zhehua") from Shanghai Huaye Iron & Steel
Group Co., Ltd. in
Revenues. Revenues were
Gross Profit. Gross profit was
Selling expenses. Selling expenses were
General and administrative expenses. General and administrative expenses
Income from Operations. Income from operations was
Net Income. Net income was
Functional Currency and Translating Press Release
The functional currency of the Company is the Chinese Yuan Renminbi
("RMB"); however, the accompanying financial information are expressed in
About Sutor Technology Group Limited
Sutor (Nasdaq: SUTR) is one of a leading private manufacturer of fine finished steel products and welded steel pipes used by steel fabricators and infrastructure projects. Sutor utilizes a variety of processes and technological methodologies to convert steel manufactured by third parties into fine finished steel products and welded steel pipes including hot-dipped galvanized steel, pre-painted galvanized steel, acid-pickled steel, cold-rolled steel, longitudinally welded steel pipes and spiral welded steel pipes. To learn more about the Company, please visit http://www.sutorcn.com .
This press release includes certain statements that are not descriptions
of historical facts, but are forward-looking statements. Such statements
include, among others, those concerning our expected financial performance and
strategic and operational plans, our future operating results, our
expectations regarding the market for our steel finishing fabrication products,
our expectations regarding the continued growth of the steel market, as well
as all assumptions, expectations, predictions, intentions or beliefs about our
relative strength and about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance and that a
number of risks and uncertainties, including developments in the world economy
and in our industry, could cause our actual results to differ materially from
those anticipated, expressed or implied in the forward-looking statements.
These risks and uncertainties include, but not limited to, the factors
mentioned in the "Risk Factors" section of our Annual Report on Form 10-K for
the year ended
--FINANCIAL TABLES FOLLOW-- SUTOR TECHNOLOGY GROUP LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED PRO-FORMA STATEMENT OF STOCKHOLDERS' EQUITY AND CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Pro-Forma Statement of Stockholders' Equity September 30, September 30, June 30, 2009 2009 2009 (Note 1) ASSETS Current Assets: Cash and cash equivalents $13,518,156 $10,653,438 Restricted cash 55,194,783 64,811,741 Trade accounts receivable, net of allowance for doubtful accounts of 384,887 and $816,268, respectively 6,194,651 12,107,602 Other receivables 310,852 463,916 Advances to suppliers, related parties 105,279,904 76,391,552 Advances to suppliers, net of allowance of $1,035,518 and $898,762, respectively 11,802,447 25,039,763 Inventory 38,302,420 44,163,502 Notes receivable 131,625 178,237 Deferred taxes 358,750 397,998 Total Current Assets 231,093,588 234,207,749 Property and Equipment, net of accumulated depreciation of $20,643,782 and $18,799,763, respectively 75,573,561 77,242,707 Intangible Assets, net of accumulated amortization of $362,474 and $345,130, respectively 3,033,727 3,047,498 TOTAL ASSETS $309,700,876 $314,497,954 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $12,610,520 $16,077,413 Advances from customers 15,306,133 18,805,901 Other payables and accrued expenses 3,949,801 3,950,327 Short-term notes payable 105,629,796 104,338,736 Short-term notes payable - Related Parties 10,102,311 9,900,727 Total Current Liabilities 147,598,561 153,073,104 Long-Term Notes Payable 2,859,995 2,859,995 Long-Term Notes Payable - Related Parties 249,996 249,996 Total Liabilities 150,708,552 156,183,095 Stockholders' Equity Undesignated preferred stock - $0.001 par value; 1,000,000 shares authorized; no shares outstanding -- -- Common stock - $0.001 par value; 500,000,000 shares authorized; 37,955,602 shares outstanding 37,955 37,955 37,955 Additional paid-in capital 35,633,307 42,233,307 42,233,307 Statutory reserves 12,601,921 12,601,921 12,601,921 Retained earnings 85,366,456 85,366,456 84,865,780 Accumulated other comprehensive income 18,752,685 18,752,685 18,575,896 Total Stockholders' Equity 152,392,324 158,992,324 158,314,859 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $309,700,876 $314,497,954 $-- $-- SUTOR TECHNOLOGY GROUP LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) For the Three Months Ended September 30, 2009 2008 Revenue: Revenue $56,804,565 $92,837,484 Revenue from related parties 67,003,757 37,219,878 123,808,322 130,057,362 Cost of Revenue Other cost of revenue 63,642,535 51,153,046 Purchases from related parties 55,757,299 64,123,469 119,399,834 115,276,515 Gross Profit 4,408,488 14,780,847 Operating Expenses: Selling expense 1,604,096 736,165 General and administrative expense 1,294,215 664,296 Total Operating Expenses 2,898,311 1,400,461 Income from Operations 1,510,177 13,380,386 Other Income (Expense): Interest income 480,572 492,350 Other income 319,803 55,572 Interest expense (1,346,898) (1,531,046) Other expense (239,589) (131,863) Total Other Income (Expense) (786,112) (1,114,987) Income Before Taxes and Minority Interest 724,065 12,265,399 Provision for income taxes (223,389) (1,403,097) Net Income $500,676 $10,862,302 Basic and Diluted Earnings per Common Share $0.01 $0.29 Basic and Diluted Weighted Average Shares 37,955,602 37,955,602 Net Income $500,676 $10,862,302 Foreign currency translation adjustment 176,789 374,980 Comprehensive Income $677,465 $11,237,282 SUTOR TECHNOLOGY GROUP LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Three Months Ended September 30, 2009 2008 Cash Flows from Operating Activities: Net income $500,676 $10,862,302 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 1,840,352 1,229,998 Deferred income taxes 39,646 165,215 Gain on sale of assets -- (161,346) Changes in current assets and liabilities: Trade accounts receivable, net 5,922,669 (4,089,870) Other receivables, net 153,474 (338,219) Advances to suppliers 13,256,897 17,726,151 Inventories 5,904,564 (33,686,006) Accounts payable (3,482,040) (3,137,292) Advances from customers (3,517,770) (5,105,367) Other payables and accrued expenses (3,935) 1,107,471 Advances to suppliers - related parties (28,793,173) 61,008,281 Net Cash Provided by (Used in) Operating Activities (8,178,640) 45,581,318 Cash Flows from Investing Activities: Changes in notes receivable 46,776 185,322 Purchase of property and equipment, net of value added tax refunds received (73,792) (4,096,689) Proceeds from sale of assets -- 782,493 Net change in restricted cash 9,680,250 9,828,144 Net Cash Provided by Investing Activities 9,653,234 6,699,270 Cash Flows from Financing Activities: Proceeds from issuance of notes payable 61,432,374 20,525,557 Payments on notes payable (60,250,220) (74,239,886) Proceeds from issuance of notes payable - related parties 199,932 4,060,737 Net Cash Provided by (Used in) Financing Activities 1,382,086 (49,653,592) Effect of Exchange Rate Changes on Cash 8,038 29,449 Net Change in Cash 2,864,718 2,656,445 Cash and Cash Equivalents at Beginning of Year 10,653,438 12,494,339 Cash and Cash Equivalents at End of Year $13,518,156 $15,150,784 Supplemental Cash Flow Information Cash paid during the period for interest $1,023,281 $1,253,855 Cash paid during the period for taxes $91,327 $1,080,491 For more information, please contact: Company Contact (PRC): Mr. Jason. Wang Tel: +86-512-5268-0988 Email: email@example.com
SOURCE Sutor Technology Group Limited
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