Orsus Xelent Technologies, Inc. (NYSE Amex:
ORS), a China-based designer and manufacturer of award-winning
mobile phones for the Asian market, today announced 2009 year end
results.
In line with expectations, full year sales in 2009 of
$77,392,000, were 28.23% lower than sales last year of
$107,827,000. The Company noted while industry wide cell phone
sales in China were up approximately 7% during the year, reflecting
continuing consumer cautiousness in the recently restructured
industry environment, industry wide sales of GSM phones -- which
constitute the majority of the phones sold by Orsus during the year
-- were down approximately 15%. At the same time, while CDMA phone
sales in 2009 grew to about 17.5% of the total China market,
customized phone sales by Orsus in 2009 continued to be limited and
China's 3G market has developed more slowly than anticipated.
Operating in the highly competitive low end of the market --
primarily outside of major cities -- Orsus produced 0.87 million
phone units in 2009 and achieved gross profit of approximately $9.4
million. This was approximately 35% lower than 2008 gross profit,
as gross margins in 2009 declined to 12.17% from 13.47% a year
earlier. Before year end 2009, the Company also determined it was
appropriate to create a non-cash provision for bad debt of
$13,851,000. This resulted in a $6,368,000 net loss for the year,
compared with a net profit in 2008 of $11.3 million.
Mr. Guoji Liu, CEO of the Company, commented, "While we were not
pleased with these results, the shift in our business plan to
return to selling in our traditional channels permitted us in
prevailing conditions to stay competitive with a full line of new,
low cost, full featured phones in China's second and third tier
cities. At the same time, we have been continuing to prepare for a
long awaited improvement in the still relatively weak 3G market,
where we believe higher margin products we are developing will have
an opportunity to compete. Meanwhile, we have maintained gross
margins above 12%, reflecting the relative stability of what is now
our primary market."
Looking Ahead
The Company believes there will be a moderate upswing in the
marketplace in 2010 spurred primarily by new 3G technology that
will begin to rebuild consumer demand. Further, it believes that
Orsus will benefit from this with the anticipated introduction to
the market in the second half of 2010 of its own line of 3G
products. Toward this end, the Company said it has built strong
relationships with the major domestic telecommunications carriers,
and also has continued to negotiate with several parties to prepare
for the launch of 3G services, including Spreadtrum Communication
(Shanghai) Inc. ("SCI") and several 3G chipset and solution
providers.
Mr. Liu stated, "The 3G market is virtually wide open and not
many other 3G products have been developed as yet. When our phones
are developed, we firmly believe we can secure our share of the
market."
He added, "With our decision to write down bad debts, when this
is taken away from accounts receivable, our financial position is
more manageable. In January 2010, we signed a new accounts
receivable guarantee contract (more fully described in the
Company's 10-K filed with the U.S. Securities and Exchange
Commission on April 15, 2010). Over the course of the year, we
anticipate building a stronger financial position through careful
monitoring of receivables, possible financing to make targeted
acquisitions and a continuing focus on cost management. We believe
this will position us better to achieve our sales and earnings
targets."
About Orsus Xelent Technologies, Inc.
Incorporated in the State of Delaware and headquartered in
Beijing, China, Orsus Xelent Technologies, Inc. is an emerging
designer and manufacturer of award-winning mobile phones for the
Asian market, primarily the People's Republic of China ("PRC"). The
Company's business encompasses the design of mobile phones, related
digital circuits, and software development, and it is a recognized
pioneer in mobile phone integration technology. It introduced the
region's first wristwatch-style cellular phone, and it continues to
break new ground with state-of-the-art phones that include advanced
features such as fingerprint recognition and touch-screen displays.
The Company also is focused on developing and marketing, under its
Proxlink trademark, special application mobile phones for
specialized users in a wide variety of professions in business and
government. Since the Company's launch in 2004, it has established
"Orsus" as a popular brand and achieved a significant share of the
world's largest mobile phone market. It maintains more than 179
service call centers across the PRC, with additional offices in
Shanghai, Hong Kong, Shenzhen, and Tianjin. For more information,
please visit the Company's web site: www.orsus-xelent.com. A copy
of the Company's annual report on Form 10-K is available from the
SEC website (www.sec.gov) and will be posted on the Company's
website.
Information Regarding Forward-Looking
Statements
Except for historical information contained herein, the
statements in this Press Release are forward-looking statements
that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which
may cause our actual results in future periods to differ materially
from forecasted results. These risks and uncertainties include,
among other things, product demand, market competition, and risks
inherent in our operations. These and other risks are described in
our filings with the Securities and Exchange Commission.
SEE ATTACHED TABLE
ORSUS XELENT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except number of shares and per share data)
Year ended December 31,
---------------------------
2009 2008
----------- -----------
Net sales $ 77,392 $ 107,827
Cost of sales 67,970 93,298
----------- -----------
Gross profit 9,422 14,529
----------- -----------
Operating expenses:
Selling expenses 350 486
General and administrative expenses 831 2,151
Research and development expenses 54 429
Depreciation and amortization 64 97
Loss from write-off trade deposits 11,937 -
Allowance for doubtful accounts 1,914 -
----------- -----------
(Loss)/income from operations (5,728) 11,366
Other income/(expenses)
Interest expense (912) (982)
Other (expenses)/income, net (2,911) 2,785
----------- -----------
(Loss)/income before income tax expense (9,551) 13,169
Income tax (expenses)/benefit
Current taxes expense (910) (1,873)
Deferred taxes benefit 4,093 -
----------- -----------
Net (loss)/income (6,368) 11,296
Other comprehensive income
Foreign currency translation adjustment 243 2,483
----------- -----------
Comprehensive (loss)/income $ (6,125) $ 13,779
=========== ===========
Earnings/(loss) per share:
Basic and diluted $ (0.21) $ 0.38
=========== ===========
Weighted average number of common shares
outstanding - basic and diluted 29,756,000 29,756,000
=========== ===========
Contacts: PRC: Orsus Xelent Technologies, Inc. Guoji Liu CEO
Tel: 010-85653777 Fax: 010-85653666 US: Ken Donenfeld Tel:
212-425-5700 Fax: 646-381-9727
Orsus Xelent Technolgies New Common Stock (AMEX:ORS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Orsus Xelent Technolgies New Common Stock (AMEX:ORS)
Historical Stock Chart
From Jul 2023 to Jul 2024
