FuQi International, Inc. News
FUQI International, Inc. Reports First Quarter 2008 Financial Results
Revenues for the first quarter of 2008 increased 177% to
Gross profit in the first quarter of 2008 increased 175% to
Gross profit margin for the first quarter increased slightly to 11.36% in the first quarter of 2008, up from 11.32% in the same period of the prior year. This increase was primarily due to higher selling prices, as well as increased design and processing fees.
Operating expenses in the first quarter of 2008 increased to
Net Income for the first quarter of 2008 increased 237% to
At the end of the first quarter, the Company had cash of
Mr. Yu Kwai Chong, Chairman of Fuqi International commented, ''We are pleased with our results for the first quarter, which exceeded our expectations. We continue to see increasing demand for our products, and larger orders from our existing customers. We will continue to build the necessary foundation so that we are ready to meet our customers' expectations, and we remain committed to our goal of building the leading provider of luxury jewelry products in
2008 Financial Outlook
For the full year 2008, the Company is increasing its wholesale revenue, net income and diluted earnings per share estimates. It now expects total wholesale revenue of approximately
For the second quarter, the Company anticipates total wholesale revenue of approximately
Mr. Chong continued, ''We are excited about the opportunities we see ahead of us, especially in light of our pending acquisition of Temix, which is expected to begin contributing to Fuqi revenues in the third quarter, once we have all necessary government approvals. Temix will allow us to quickly ramp up our retail strategy, by bringing 45 counters and 5 stores on board. Our strong capital position has given us the opportunity to expand into the retail markets through the Temix acquisition, and we will continue to manage our balance sheet to optimize opportunities and value for the business. We have ramped up the necessary inventory to enable us to quickly meet customer demand, which continues to grow, and we are committed to maintaining the right balance sheet for our business.''
Mr. Chong concluded, ''Understanding that the second quarter tends to be our seasonally mildest quarter, we remain very encouraged by the growth trajectory we are seeing. We believe that through our rational balance sheet, our strong management team and now the addition of Temix, we have put in place the infrastructure that will help to make Fuqi the leading wholesale and retail company in our market.''
Conference Call
The Company will conduct a conference call to discuss the first quarter 2008 results today,
About FUQI International, Inc.
Based in
Safe Harbor Statement
The statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the vulnerability of the Company's business to a general economic downturn in
(Financial Tables on Next Page) Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) Three Months Ended March 31, 2008 2007 Net sales $ 77,566,359 $ 27,960,269 Cost of sales 68,754,984 24,796,149 Gross profit 8,811,375 3,164,120 Operating expenses: Selling and marketing 397,396 193,757 General and administrative 1,509,177 421,512 Total operating expenses 1,906,573 615,269 Income from operations 6,904,802 2,548,851 Other income (expenses): Interest expense (363,220) (247,167) Interest income 8,959 — Change of fair value of inventory loan payable — (41,161) Gain from derivative instrument 840,522 — Miscellaneous 126,782 — Total other income (expenses) 613,043 (288,328) Income before provision for income taxes 7,517,845 2,260,523 Provision for income taxes 1,122,772 377,319 Net income 6,395,073 1,883,204 Other comprehensive income - foreign currency translation adjustments 3,966,733 110,060 Comprehensive income $ 10,361,806 $ 1,993,264 Earnings per share - basic $ 0.31 $ 0.15 Earnings per share - diluted $ 0.31 $ 0.12 Weighted average number of common shares - Basic 20,924,843 12,257,624 Weighted average number of common shares - Diluted 20,924,843 15,729,008 Condensed Consolidated Balance Sheets March 31, December 31, 2008 2007 (Unaudited) ASSETS Current assets: Cash $ 28,856,716 $ 63,293,653 Restricted cash — 410,700 Accounts receivable, net of allowance for doubtful accounts of$729,000 and $470,000 for 2008 and 2007 29,469,886 23,864,141 Refundable value added taxes 7,694,254 2,094,946 Inventories 64,150,655 29,639,236 Prepaid expenses and other current assets 1,563,868 1,700,432 Deferred taxes 1,893,774 79,402 Total current assets 133,629,153 121,082,510 Property, equipment, and improvements, net 1,779,011 1,495,861 Deposits 101,681 97,706 Other assets 38,941 38,513 $ 135,548,786 $ 122,714,590 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 14,247,044 $ 15,743,504 Line of Credit 1,424,704 1,369,000 Accounts payable and accrued liabilities 1,217,277 662,662 Accrued business tax 176,391 498,792 Customer deposits 7,678,672 5,278,534 Income tax payable 3,034,686 1,902,443 Total current liabilities 27,778,774 25,454,935 STOCKHOLDERS' EQUITY Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding — — Common stock, $0.001 par value, 100,000,000 shares authorized and 20,924,843 shares issued and outstanding for 2008 and 2007 20,925 20,925 Additional paid in capital 77,597,906 77,449,355 Accumulated foreign currency translation adjustments 6,951,768 2,985,035 Retained earnings 23,199,413 16,804,340 Total stockholders' equity 107,770,012 97,259,655 $ 135,548,786 $ 122,714,590 Condensed Consolidated Statements of Cash Flows (Unaudited) Increase (Decrease) in Cash Three Months Ended March 31, 2008 2007 Cash flows provided by operating activities: Net income $ 6,395,073 $ 1,883,204 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 104,232 79,417 Change of fair value of inventory loan payable — 41,161 Bad debt 237,928 39,995 Stock based compensation expense 148,551 — Changes in operating assets and liabilities: Accounts receivable (4,817,841) 49,256 Refundable value added taxes (5,448,855) (1,248,343) Inventories (32,911,543) (8,396,043) Prepaid expenses and other current assets 194,923 76,057 Deposits related to borrowings on notes payable — 642,276 Deferred taxes (1,789,723) (12,173) Other assets 1,126 1,031 Accounts payable, accrued expenses, accrued business tax, and accrued estimated penalties (285,464) 221,495 Customer deposits 2,158,525 1,606,579 Inventory loan payable — 662,446 Income tax payable 1,043,382 344,426 Net cash used for operating activities (34,969,686) (4,009,216) Cash flows provided by (used for) investing activities: Purchase of property, equipment and improvements (81,722) (7,638) Decrease (Increase) in restricted cash 422,357 (387,047) Net cash provided by (used for) investing activities 340,635 (394,685) Cash flows provided by (used for) financing activities: (Repayments to)Proceeds from short-term borrowing $ (2,111,784) $ 1,935,234 Proceeds from loans borrowed from stockholder — 202,272 Repayments to loans payable to stockholder — (508,249) Net cash (used for) provided by financing activities (2,111,784) 1,629,257 Effect of exchange rate changes on cash 2,303,898 122,789 Net decrease in cash (34,436,937) (2,651,855) Cash, beginning of the period 63,293,653 13,354,981 Cash, end of the period $ 28,856,716 $ 10,703,126 Supplemental disclosure of cash flow information: Interest paid $ 296,120 $ 231,172 Income taxes paid $ 1,869,312 $ 45,067 Non-cash disclosure: Non monetary exchanges related to certain retail sales $ 231,472 $ —
SOURCE FUQI International, Inc.
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