BEFUT Announces 77.9% Increase in Revenue and 113.9% Increase in Net Income for Fiscal 2011

Sep 28, 2011, 07:00 ET from BEFUT International Co., Ltd.

DALIAN CITY, China, Sept. 28, 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 fiscal year ended June 30, 2011.

Financial Highlights

  • Revenue increased 77.9% to $55.6 million for fiscal 2011 compared to $31.3 million for 2010
  • Gross profit increased 79.7% to $14.9 million for fiscal 2011 compared to $8.3 million for fiscal 2010
  • Net income increased 113.9% to $9.4 million, or $0.33 per share, for fiscal 2011 compared to $4.4 million, or $0.15 per share, for fiscal 2010

Mr. Hongbo Cao, Chairman and CEO, commented, "We are pleased to report strong growth in revenue and net income for fiscal 2011. Our product strategy, marketing strategy and strong R&D have been key drivers to our success. We continue to grow our traditional cable business, but are particularly focused on increasing sales of our higher margin products such as carbon fiber composite cable, submarine cable and certain "new energy" cables, including cable for wind and solar energy.  We have been awarded a number of new patents and now have 17 approved patents and 45 pending, which provide us an important competitive advantage."

Mr. Cao continued, "We have established a first class customer base encompassing many of the largest conglomerates in China—spanning ship building, nuclear power, mining, petrochemical and other industries. Given our proven track record, established brand and premier customer base, we look forward to expanding our sales by aggressively adding new sales reps and new sales offices across China, in addition to new initiatives underway to grow our international sales."  

Mr. Cao concluded, "In April 2011, we began construction on the second phase of our new Changxing Island facility, which we expect to complete in 2012. We plan to add nearly 90,000 square meters of additional floor space with production capacity of approximately 6,700 km of cable per year, which would allow a maximum output of approximately $235 million upon completion. We look forward to leveraging this capacity to satisfy the growing demand from our customers.  We believe we have the customer base, technological, manufacturing and research and development capabilities to take advantage of the growing domestic and international cable and wire markets in the coming years."

Revenue for the fourth quarter ended June 30, 2011 was $15.4 million, compared to $11.9 million for the fourth quarter ended June 30, 2010. 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 $4.2 million for the three months ended June 30, 2011, as compared to $3.1 million for the three months ended June 30, 2010. Operating income was $1.7 million for the three months ended June 30, 2011, as compared to $0.9 million for the three months ended June 30, 2010.  Net income for the three months ended December 31, 2010 was $4.5 million, or $0.07 per diluted share, compared to net income of $2.1 million, or $0.03 per diluted share, for the same period last year.  

Revenue for the twelve months ended June 30, 2011 was $55.6 million, compared to $31.3 million for the twelve months ended June 30, 2010.  Gross profit was $14.9 million for the twelve months ended June 30, 2011, as compared to $8.3 million for the twelve months ended June 30, 2010. Operating income was $9.0 million for the twelve months ended June 30, 2011, as compared to $4.3 million for the twelve months ended June 30, 2010.  Net income for the twelve months ended June 30, 2011 was $9.4 million, or $0.33 per diluted share, compared to net income of $4.4 million, or $0.15 per diluted share, for the same period last 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.

Contact:

Crescendo Communications, LLC

David Waldman, Vivian Huo or Klea Theoharis

Tel: (212) 671-1020

E-mail: bfti@crescendo-ir.com



(tables follow)

Consolidated Balance Sheets








Assets

June 30, 2011


June 30, 2010

Current assets:




   Cash and cash equivalents

$2,724,146


$1,319,173

   Restricted cash

3,565,859


1,181,095

   Accounts receivable, net of allowance for doubtful accounts of $87,480

18,166,580


9,292,310

     and $83,295 at June 30, 2011 and 2010, respectively




   Due from factor

108,545


-

   Inventory

4,607,431


2,543,789

   Trade notes receivable

1,343,309


-

   Loans to unrelated parties

4,495,767


1,054,090

   Bank loan security deposits

1,226,771


1,031,100

   Advance payments for inventory

2,024,943


399,868

   Due from related party

-


472,838

   Prepaid VAT taxes

200,006


-

   Other current assets

1,729,758


521,739

       Total current assets

40,193,115


17,816,002





Property and equipment, net

36,449,318


31,618,074





Other assets:




   Advance payments for property and equipment

771,414


293,605

   Advance payments – Research & Development

1,048,866


2,088,714

   Intangibles, net

15,119,699


15,669,375

       Total other assets

16,939,979


18,051,694





       Total assets

$93,582,412


$67,485,770





Liabilities




Current liabilities:




   Accounts payable and accrued expenses

$4,617,422


$3,119,646

   Short-term bank loans

11,587,030


6,039,300

   Current portion of long-term bank loan

1,082,900


294,600

   Loans from unrelated party

3,364,992


370,000

   Advances from customers

3,273,647


533,806

   Income taxes payable

322,299


1,655,747

   Trade notes payable

3,094,000


-

   Other current liabilities

1,039,231


969,787

       Total current liabilities

28,381,521


12,982,886

Long-term bank loan

13,768,300


14,435,400





       Total liabilities

42,149,821


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




     June 30, 2011 and 2010, respectively




   Additional paid-in capital

21,838,047


21,838,047

   Statutory reserves

1,215,273


1,181,189

   Retained earnings

23,378,099


13,810,157

   Accumulated other comprehensive income

4,390,669


2,166,533

       Total stockholders' equity

50,851,804


39,025,642





Noncontrolling interest

580,787


1,041,842





       Total equity

51,432,591


40,067,484





       Total liabilities and equity

$93,582,412


$67,485,770



Consolidated Statements of Operations


For the Years Ended June 30,


2011


2010





Sales

$55,597,912


$31,258,662





Cost of sales

40,680,706


22,956,708





Gross profit

14,917,206


8,301,954





Operating expenses




   Selling expenses

439,750


80,090

   General and administrative expenses

5,481,562


3,881,655

       Total operating expenses

5,921,312


3,961,745





Income from operations

8,995,894


4,340,209





Other income (expenses):




   Government subsidy income

2,076,750


705,602

   Interest income

15,233


110,608

   Interest expense

(2,028,033)


(397,700)

   Other income (expenses), net

749,134


545,008

       Total other income

813,084


963,518





Income before provision for income taxes

9,808,978


5,303,727





Provision for income taxes

672,337


907,083





Income from continuing operations, net of taxes

9,136,641


4,396,644





Discontinued operations:




   Income from operations of discontinued subsidiary (Including gain on disposal of $99,989 in 2011)

292,146


-

   Provision for income taxes

24,787


-

Income from discontinued operations, net of taxes

267,359


-





Net income

9,404,000


4,396,644





Less: net loss attributable to noncontrolling interest

(198,026)


(115,532)





Net income attributable to BEFUT

$9,602,026


$4,512,176





Amounts attributable to BEFUT common shareholders:








Income from continuing operations, net of taxes

$9,334,667


$4,512,176





Discontinued operations:




   Income from operations of discontinued subsidiary (including gain on disposal of $99,989 in 2011)

292,146


-

   Provision for income tax

24,787


-

   Income from discontinued operations, net of taxes

267,359


-





Net income

$9,602,026


$4,512,176





Earnings per share—Basic:




   Income from continuing operations

$0.32


$0.15

   Discontinued operations

$0.01


$0.00

   Net income

$0.33


$0.15





Earnings per share—Diluted:




   Income from continuing operations

$0.32


$0.15

   Discontinued operations

$0.01


$0.00

   Net income

$0.33


$0.15





Weighted average number of common shares




 outstanding:




   Basic

29,715,640


29,545,797

   Diluted

29,761,290


30,110,241







SOURCE BEFUT International Co., Ltd.