DALIAN CITY, China, Feb. 15,
2011 /PRNewswire-Asia-FirstCall/ -- BEFUT International Co.,
Ltd. (the "Company" or "BEFUT") (OTC Bulletin Board: BFTI), a
developer, manufacturer and distributor of wire and cable products
in China, today announced its
financial results for the second quarter of fiscal 2011 and six
months ended December 31, 2010.
Financial Highlights (year-over-year):
- Revenue increased 109% to $14.9
million the second quarter of fiscal 2011 and 144% to
$30.8 million for the six months
ended December 31, 2010
- Gross profit increased 107% for the second quarter of fiscal
2011 and 133% for the six months ended December 31, 2010
- Net income increased 93% to $1.9
million, or $0.07 per share,
for the second quarter of fiscal 2011 and 144% to $4.2 million, or $0.14 per share for the six months ended
December 31, 2010
Mr. Hongbo Cao, Chairman and CEO,
commented, "Our focus on developing the most advanced products in
the cable and wire industry combined with our reputation for
quality and extensive sales network across China is proving to be a winning formula for
the Company. For the second quarter of fiscal 2011 revenue
grew 109% to $14.9 million and net
income increased 93% to $1.9 million.
We experienced increased demand across all of our product
lines and our customer base now includes some of the largest
conglomerates in China.
Additionally, we benefited from our recent decision to
relocate our production facilities to Dalian's Changxing Island Harbor Industrial
Zone, which currently has a total production capacity of 2,400 km
of cable per year—three times the amount of cable we were able to
produce at our old manufacturing facility. We plan to further
increase our production capacity to approximately 4,000 km of cable
in the coming years to accommodate the growing demand for our
products."
Mr. Cao continued, "In July 2010,
we acquired Dalian Yuansheng Technology Co., Ltd., which enables us
to develop and manufacture carbon fiber composite cable and other
specialty cable for upgrading China's power grid. As compared to pure
metal cable, carbon fiber composite cable is lighter, has better
electrical conductivity and can better withstand increased external
pressure caused by natural disasters. As a result, we plan to
make carbon fiber cable a key focus for the Company over the next
few years.
"As we look ahead, we see substantial opportunities to grow our
business. Key elements of our growth strategy include new
product introductions, entering new markets, broadening of our
customer base and further expansion of our manufacturing
facilities. These initiatives are currently underway.
We are particularly excited about new products in our
pipeline, such as specialty cables for wind and solar applications.
We are also conducting R&D with the National Nuclear
Industry Research Institute to develop technology that will boost
the overall technical level of nuclear cables used in China."
Revenue for the second quarter ended December 31, 2010 was $14.9 million, compared to $7.1 million for the second quarter ended
December 31, 2009. 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 $3.9 million
for the three months ended December 31,
2010, as compared to $1.9
million for the three months ended December 31, 2009. Operating income was
$2.7 million for the three months
ended December 31, 2010, as compared
to $1.4 million for the three months
ended December 31, 2009. Net
income for the three months ended December
31, 2010 was $1.9 million, or
$0.07 per diluted share, compared to
net income of $1.0 million, or
$0.03 per diluted share, for the same
period the previous year.
Revenue for the six months ended December
31, 2010 was $30.8 million,
compared to $12.6 million for the six
months ended December 31, 2009.
Gross profit was $8.2 million
for the six months ended December 31,
2010, as compared to $3.5
million for the six months ended December 31, 2009. Operating income was
$5.9 million for the six months ended
December 31, 2010, as compared to
$2.4 million for the six months ended
December 31, 2009. Net income
for the six months ended December 31,
2010 was $4.2 million, or
$0.14 per diluted share, compared to
net income of $1.7 million, or
$0.06 per diluted share, for the same
period the previous 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.
(tables follow)
Consolidated
Balance Sheets
|
|
|
December
31,
|
June
30,
|
|
|
2010
|
2010
|
|
Assets
|
(Unaudited)
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$
761,460
|
$ 1,319,173
|
|
Restricted cash
|
3,494,084
|
1,181,095
|
|
Accounts receivable, net
of allowance for doubtful accounts of $85,783
|
17,292,392
|
9,292,310
|
|
and $83,295 at
December 31, 2010, and June 30, 2010, respectively
|
|
|
|
Inventory
|
5,234,237
|
2,543,789
|
|
Loans to unrelated
parties
|
1,888,835
|
1,054,090
|
|
Bank loan security
deposits
|
1,089,206
|
1,031,100
|
|
Advance
payments
|
1,929,467
|
693,473
|
|
Due from related
party
|
-
|
472,838
|
|
Other current
assets
|
1,227,666
|
521,739
|
|
Total current
assets
|
32,917,347
|
18,109,607
|
|
|
|
|
|
Property and equipment,
net
|
32,394,534
|
31,618,074
|
|
|
|
|
|
Other assets:
|
|
|
|
Intangibles,
net
|
15,485,194
|
15,669,375
|
|
Advance payments –
Research & Development
|
2,151,106
|
2,088,714
|
|
Total other assets
|
17,636,300
|
17,758,089
|
|
|
|
|
|
Total assets
|
$82,948,181
|
$67,485,770
|
|
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$ 2,770,621
|
$ 3,119,646
|
|
Trade notes
payable
|
3,034,000
|
-
|
|
Short-term bank
loans
|
9,086,830
|
6,039,300
|
|
Current portion of
long-term bank loans
|
758,500
|
294,600
|
|
Loans from unrelated
parties
|
2,220,740
|
370,000
|
|
Advances from
customers
|
1,007,947
|
533,806
|
|
Income taxes
payable
|
3,120,515
|
1,655,747
|
|
Other current
liabilities
|
1,334,564
|
969,787
|
|
Total current
liabilities
|
23,333,717
|
12,982,886
|
|
|
|
|
|
Long-term bank
loan
|
14,108,100
|
14,435,400
|
|
|
|
|
|
Total liabilities
|
37,441,817
|
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
|
|
|
|
December 31, 2010 and June 30, 2010, respectively
|
|
|
|
Additional paid-in
capital
|
21,838,047
|
21,838,047
|
|
Statutory
reserves
|
1,181,189
|
1,181,189
|
|
Retained
earnings
|
17,994,979
|
13,810,157
|
|
Accumulated other
comprehensive income
|
3,447,965
|
2,166,533
|
|
Total
stockholders' equity
|
44,491,896
|
39,025,642
|
|
`
|
|
|
|
Noncontrolling
interest
|
1,014,468
|
1,041,842
|
|
|
|
|
|
Total equity
|
45,506,364
|
40,067,484
|
|
|
|
|
|
Total liabilities and
equity
|
$82,948,181
|
$67,485,770
|
|
|
|
|
|
|
Consolidated
Statements of Operations and Other Comprehensive
Income
(Unaudited)
|
|
|
For the
Three Months Ended
|
For the Six
Months Ended
|
|
|
December
31,
|
December
31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Sales
|
$ 14,871,164
|
$ 7,126,044
|
$30,801,975
|
$12,609,703
|
|
|
|
|
|
|
|
Cost of
sales
|
10,954,272
|
5,235,323
|
22,625,032
|
9,098,097
|
|
|
|
|
|
|
|
Gross
profit
|
3,916,892
|
1,890,721
|
8,176,943
|
3,511,606
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
149,643
|
14,828
|
188,250
|
36,701
|
|
General and
administrative expenses
|
1,032,259
|
442,264
|
2,043,879
|
1,030,549
|
|
Total operating
expenses
|
1,181,902
|
457,092
|
2,232,129
|
1,067,250
|
|
|
|
|
|
|
|
Income from
operations
|
2,734,990
|
1,433,629
|
5,944,814
|
2,444,356
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
Government
subsidy
|
180,155
|
304,704
|
316,642
|
354,658
|
|
Interest
expense, net
|
(493,390)
|
(5,195)
|
(879,788)
|
(137,504)
|
|
Other income
(expenses)
|
107,024
|
(403,138)
|
138,145
|
(397,441)
|
|
Total other income
(expenses)
|
(206,211)
|
(103,629)
|
(425,001)
|
(180,287)
|
|
|
|
|
|
|
|
Income before
provision for income tax
|
2,528,779
|
1,330,000
|
5,519,813
|
2,264,069
|
|
|
|
|
|
|
|
Provision for income
tax
|
614,895
|
336,819
|
1,422,030
|
585,723
|
|
|
|
|
|
|
|
Net income
|
1,913,884
|
993,181
|
4,097,783
|
1,678,346
|
|
|
|
|
|
|
|
Less: Net loss attributable to
noncontrolling
|
(22,681)
|
(963)
|
(87,038)
|
(6,121)
|
|
interest
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to BEFUT
|
1,936,565
|
994,144
|
4,184,821
|
1,684,467
|
|
International Co.,
Ltd.
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
Foreign
currency translation
adjustment
|
597,575
|
263
|
1,281,432
|
48,070
|
|
|
|
|
|
|
|
Comprehensive
income
|
$2,534,140
|
$
994,407
|
$5,466,253
|
$
1,732,537
|
|
|
|
|
|
|
|
Basic
earnings per share
|
$
0.07
|
$
0.03
|
$
0.14
|
$
0.06
|
|
Diluted
earnings per share
|
$
0.07
|
$
0.03
|
$
0.14
|
$
0.06
|
|
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
|
|
|
outstanding:
|
|
|
|
|
|
Basic
|
29,715,640
|
29,511,277
|
29,715,640
|
29,511,277
|
|
Diluted
|
29,786,677
|
30,280,532
|
29,771,813
|
30,280,532
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
|
For the Six
Months Ended
|
|
|
December
31,
|
|
|
2010
|
2009
|
|
Cash flows from operating
activities:
|
|
|
|
Net Income
|
$ 4,097,783
|
$ 1,678,346
|
|
Adjustments to reconcile
net income to net cash provided by
|
|
|
|
(used
in) operating activities:
|
|
|
|
Depreciation
and amortization
|
1,583,652
|
718,680
|
|
Changes in current assets
and current liabilities:
|
|
|
|
Accounts
receivable
|
(7,894,969)
|
(53,500)
|
|
Inventory
|
(2,574,960)
|
(1,000,998)
|
|
Advance
payments
|
(1,066,359)
|
(197,666)
|
|
Other current
assets
|
(935,345)
|
(1,032,681)
|
|
Accounts payable and
accrued expenses
|
(176,022)
|
1,637,214
|
|
Trade notes
payable
|
2,983,200
|
(1,173,120)
|
|
Advances
from customers
|
450,523
|
(174,496)
|
|
Income taxes
payable
|
1,391,612
|
585,724
|
|
Other current
liabilities
|
711,714
|
104,016
|
|
Total adjustments
|
(5,526,954)
|
(586,827)
|
|
|
|
|
|
Net cash
provided by (used in)
operating
activities
|
(1,429,171)
|
1,091,519
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
Due from related
party
|
478,809
|
-
|
|
Additions to
property and
equipment
|
(755,610)
|
(1,594,161)
|
|
Additions to
construction in progress
|
(39,808)
|
(2,442,107)
|
|
Advance payment for fixed
assets
|
(104,131)
|
(8,011,520)
|
|
Acquisition of
intangible assets
|
(5,964)
|
(6,452)
|
|
Long-term
investment
|
-
|
2,933
|
|
Loans to unrelated
parties
|
(789,809)
|
1,521,543
|
|
|
|
|
|
Net cash used
in investing
activities
|
(1,216,513)
|
(10,529,764)
|
|
|
|
|
|
Cash flows from
financing
activities:
|
|
|
|
Restricted cash
|
(2,239,572)
|
586,000
|
|
Bank loan security
deposits
|
(26,849)
|
(163,877)
|
|
Loans from unrelated
party
|
1,819,753
|
2,274,251
|
|
Proceeds (repayment) of
short-term bank loans
|
2,844,524
|
(2,786,160)
|
|
Proceeds (repayment) of
long-term bank loans
|
(298,320)
|
14,664,000
|
|
Proceeds from minority
shareholders
|
59,183
|
43,992
|
|
|
|
|
|
Net cash
provided by
financing
activities
|
2,158,719
|
14,618,206
|
|
|
|
|
|
Effect of foreign currency
translation on cash
|
(70,748)
|
(4,369)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash
equivalents
|
(557,713)
|
5,175,592
|
|
|
|
|
|
Cash and cash
equivalents – beginning
|
1,319,173
|
210,301
|
|
|
|
|
|
Cash and cash
equivalents – ending
|
$
761,460
|
$
5,385,893
|
|
|
|
|
|
|
Contact:
|
|
Crescendo Communications,
LLC
|
|
David Waldman, Vivian Huo or
Klea Theoharis
|
|
Tel: (212) 671-1020
|
|
E-mail: bfut@crescendo-ir.com
|
|
|
SOURCE BEFUT International Co., Ltd.