DALIAN CITY, China, May 13,
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 third quarter of fiscal 2011 and nine
months ended March 31, 2011.
Financial Highlights (year-over-year):
- Revenue increased 40.8% to $9.4
million for the third quarter of fiscal 2011 and 108.3% to
$40.2 million for the nine months
ended March 31, 2011
- Gross profit increased 46.4% to $2.5
million for the third quarter of fiscal 2011 and 104.6% to
$10.7 million for the nine months
ended March 31, 2011
- Net income increased 24.1% to $0.8
million, or $0.03 per share,
for the third quarter of fiscal 2011 and 111.4% to $4.9 million, or $0.17 per share for the nine months ended
March 31, 2011
Mr. Hongbo Cao, Chairman and CEO,
commented, "With China's large and increasing demand for cable and
wire products, we are rapidly gaining domestic market share as
evidenced by a 41% increase in year-over-year sales this quarter.
In order to accommodate this growing demand, we recently
added new production facilities, which significantly expand our
capacity. We are currently operating at just 60% of total
capacity, which should allow us to gain operating leverage and
significantly increase our profitability as we continue to
grow."
"In addition to our traditional cable, we are focusing on
growing our high margin specialty cable products. We have a
very strong R&D team and continue to introduce new products to
the market based on our customers' needs. We now have 7
approved patents and 25 pending patents. In particular, our
carbon fiber and other specialty cables incorporate unique
technology that makes them lighter with better electrical
conductivity. We will continue to strengthen our research team and
develop new hi-tech cables. We believe this approach will help
further differentiate us from competitors and enable us to capture
additional market share in China."
"Looking ahead, we have aggressive sales and marketing
initiatives underway. Demand within China is driven by increased construction and
infrastructure development. We are adding new sales reps and
sales offices across China.
We are also expanding into new domestic markets such as
submarine and 'new energy' cables."
Revenue for the third quarter ended March
31, 2011 was $9.4 million,
compared to $6.7 million for the
third quarter ended March 31, 2010.
Gross profit was $2.5 million for the
three months ended March 31, 2011, as
compared to $1.7 million for the
three months ended March 31, 2010.
Operating income was $1.4 million for
the three months ended March 31,
2011, as compared to $1.0
million for the three months ended March 31, 2010. Net income for the three
months ended March 31, 2011 was
$0.8 million, or $0.03 per diluted share, compared to net income
of $0.6 million, or $0.02 per diluted share, for the same period the
previous year.
Revenue for the nine months ended March
31, 2011 was $40.2 million,
compared to $19.3 million for the
nine months ended March 31, 2010.
Gross profit was $10.7 million
for the nine months ended March 31,
2011, as compared to $5.2
million for the nine months ended March 31, 2010. Operating income was $7.3 million for the nine months ended
March 31, 2011, as compared to
$3.4 million for the nine months
ended March 31, 2010. Net
income for the nine months ended March 31,
2011 was $4.9 million, or
$0.17 per diluted share, compared to
net income of $2.3 million, or
$0.08 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
|
|
|
March 31,
|
June
30,
|
|
|
2011
|
2010
|
|
Assets
|
(Unaudited)
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$
446,658
|
$ 1,319,173
|
|
Restricted
cash
|
1,991,245
|
1,181,095
|
|
Accounts receivable, net
of allowance for doubtful accounts of
$86,349
|
16,279,594
|
9,292,310
|
|
and $83,295
at March 31, 2011, and June
30, 2010, respectively
|
|
|
|
Inventory
|
5,799,198
|
2,543,789
|
|
Trade notes
receivable
|
669,290
|
-
|
|
Loans to unrelated
parties
|
5,668,683
|
1,054,090
|
|
Bank loan security
deposits
|
1,210,911
|
1,031,100
|
|
Advance payments
for inventory
|
1,132,694
|
399,868
|
|
Due from related
party
|
-
|
472,838
|
|
Other current
assets
|
1,037,503
|
521,739
|
|
Total current
assets
|
34,235,776
|
17,816,002
|
|
|
|
|
|
Property and equipment,
net
|
32,250,107
|
31,618,074
|
|
|
|
|
|
Other assets:
|
|
|
|
Intangibles,
net
|
15,255,499
|
15,669,375
|
|
Advance payments for
property and equipment
|
274,690
|
293,605
|
|
Advance payments
– Research &
Development
|
2,165,286
|
2,088,714
|
|
Total other assets
|
17,695,475
|
18,051,694
|
|
|
|
|
|
Total assets
|
$84,181,358
|
$67,485,770
|
|
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$ 2,827,356
|
$ 3,119,646
|
|
Short-term bank
loans
|
11,437,230
|
6,039,300
|
|
Current portion of
long-term bank loans
|
763,500
|
294,600
|
|
Loans
from unrelated
parties
|
1,591,600
|
370,000
|
|
Advances from
customers
|
2,460,833
|
533,806
|
|
Income taxes
payable
|
3,502,071
|
1,655,747
|
|
Other current
liabilities
|
1,185,812
|
969,787
|
|
Total current
liabilities
|
23,768,402
|
12,982,886
|
|
|
|
|
|
Long-term bank
loan
|
14,201,100
|
14,435,400
|
|
|
|
|
|
Total liabilities
|
37,969,502
|
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
|
18,818,441
|
13,810,157
|
|
Accumulated
other comprehensive income
|
3,727,290
|
2,166,533
|
|
Total stockholders'
equity
|
45,594,683
|
39,025,642
|
|
|
|
|
|
Noncontrolling
interest
|
617,173
|
1,041,842
|
|
|
|
|
|
Total equity
|
46,211,856
|
40,067,484
|
|
|
|
|
|
Total liabilities and
equity
|
$84,181,358
|
$67,485,770
|
|
|
|
|
|
|
Consolidated Statements of Operations
(Unaudited)
|
|
|
For the
Three Months Ended
|
For
the Nine Months
Ended
|
|
|
March 31,
|
March 31,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
|
|
|
|
Sales
|
$9,443,346
|
$ 6,708,410
|
$40,245,320
|
$19,318,113
|
|
|
|
|
|
|
|
Cost of
sales
|
6,945,831
|
5,002,973
|
29,570,863
|
14,101,070
|
|
|
|
|
|
|
|
Gross
profit
|
2,497,515
|
1,705,437
|
10,674,457
|
5,217,043
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
146,144
|
11,300
|
334,393
|
48,001
|
|
General and
administrative expenses
|
983,787
|
731,346
|
2,999,048
|
1,761,895
|
|
Total operating
expenses
|
1,129,931
|
742,646
|
3,333,441
|
1,809,896
|
|
|
|
|
|
|
|
Income from
operations
|
1,367,584
|
962,791
|
7,341,016
|
3,407,147
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
Government subsidy
income
|
84,352
|
331,138
|
251,834
|
685,796
|
|
Interest income
|
1,585
|
2,113
|
11,532
|
5,841
|
|
Interest
expense
|
(434,063)
|
(361,680)
|
(1,159,430)
|
(502,912)
|
|
Other income
(expenses)
|
(19,152)
|
2,930
|
(45,334)
|
(394,511)
|
|
Total other income
(expenses)
|
(367,278)
|
(25,499)
|
(941,398)
|
(205,786)
|
|
|
|
|
|
|
|
Income from
continuing operations before
provision for
income tax
|
1,000,306
|
937,292
|
6,399,618
|
3,201,361
|
|
|
|
|
|
|
|
Provision for income
tax
|
364,396
|
306,698
|
1,786,426
|
892,421
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
635,910
|
630,594
|
4,613,192
|
2,308,940
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
Income from operations of
discontinued subsidiary (including gain on disposal of $99,148 in
2011)
|
171,644
|
-
|
292,146
|
-
|
|
Provision for income
tax
|
24,787
|
-
|
24,787
|
-
|
|
Income from
discontinued operations, net of tax
|
146,857
|
-
|
267,359
|
-
|
|
|
|
|
|
|
|
Net income
|
782,767
|
630,594
|
4,880,551
|
2,308,940
|
|
|
|
|
|
|
|
Less: net loss
attributable to noncontrolling
|
|
|
|
|
|
interest
|
(24,547)
|
(61,016)
|
(127,732)
|
(67,137)
|
|
|
|
|
|
|
|
Net income
attributable to BEFUT
|
$
807,314
|
$
691,610
|
$5,008,283
|
$2,376,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations (continued)
(Unaudited)
|
|
|
For the
Three Months Ended
|
For
the Nine Months
Ended
|
|
|
March 31,
|
March 31,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Amounts attributable to BEFUT
common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
$ 686,318
|
$ 691,610
|
$4,766,785
|
$2,376,077
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
Income from operations of
discontinued subsidiary (including gain on disposal of $99,148 in
2011)
|
145,783
|
-
|
266,285
|
-
|
|
Provision for income
tax
|
24,787
|
-
|
24,787
|
-
|
|
Income from
discontinued operations, net of tax
|
120,996
|
-
|
241,498
|
-
|
|
|
|
|
|
|
|
Net
income
|
$
807,314
|
$
691,610
|
$5,008,283
|
$2,376,077
|
|
|
|
|
|
|
|
Earnings per
share—Basic:
|
|
|
|
|
|
Income from continuing
operations
|
$
0.02
|
$
0.03
|
$
0.16
|
$
0.08
|
|
Discontinued
operations
|
$
0.01
|
$
0.00
|
$
0.01
|
$
0.00
|
|
Net income
|
$
0.03
|
$
0.03
|
$
0.17
|
$
0.08
|
|
|
|
|
|
|
|
Earnings per
share—Diluted:
|
|
|
|
|
|
Income from continuing
operations
|
$
0.02
|
$
0.02
|
$
0.16
|
$
0.08
|
|
Discontinued
operations
|
$
0.01
|
$
0.00
|
$
0.01
|
$
0.00
|
|
Net income
|
$
0.03
|
$
0.02
|
$
0.17
|
$
0.08
|
|
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
|
|
|
outstanding:
|
|
|
|
|
|
Basic
|
29,715,640
|
29,512,784
|
29,715,640
|
29,512,784
|
|
Diluted
|
29,778,814
|
30,155,539
|
29,774,190
|
30,240,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Consolidated Comprehensive Income
(Unaudited)
|
|
|
For the
Three Months Ended
|
For
the Nine Months
Ended
|
|
|
March 31,
|
March 31,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
|
|
|
|
Net income
|
$ 782,767
|
$ 630,594
|
$ 4,880,551
|
$ 2,308,940
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
Foreign
currency translation
adjustment
|
279,458
|
107
|
1,561,447
|
48,178
|
|
|
|
|
|
|
|
Total
comprehensive
income
|
1,062,225
|
630,701
|
6,441,998
|
2,357,118
|
|
|
|
|
|
|
|
Less: comprehensive income
attributable to noncontrolling interest
|
(24,414)
|
(61,004)
|
(127,042)
|
(67,124)
|
|
|
|
|
|
|
|
Comprehensive income
attributable to BEFUT
|
$
1,086,639
|
$
691,705
|
$6,569,040
|
$
2,424,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
For
the Nine Months
Ended
|
|
|
March 31,
|
|
|
2011
|
2010
|
|
Cash flows from operating
activities:
|
|
|
|
Net Income
|
$4,880,551
|
$ 2,308,940
|
|
Adjustments to reconcile
net income to net cash
|
|
|
|
used
in operating activities:
|
|
|
|
Depreciation
and amortization
|
2,373,398
|
1,087,427
|
|
Changes in current assets
and current liabilities:
|
|
|
|
Accounts
receivable
|
(6,831,456)
|
(4,510,985)
|
|
Inventory
|
(3,113,702)
|
(743,916)
|
|
Trade notes
receivable
|
(647,603)
|
-
|
|
Advance payments
for inventory
|
(664,108)
|
(7,726,696)
|
|
Advance payment -
R&D
|
-
|
155,438
|
|
Other current
assets
|
(3,327,626)
|
(815,103)
|
|
Accounts payable and
accrued expenses
|
(203,318)
|
5,871,576
|
|
Trade notes
payable
|
-
|
(1,173,120)
|
|
Advances from
customers
|
1,875,604
|
290,209
|
|
Income
taxes payable
|
1,755,806
|
892,421
|
|
Other taxes
payable
|
(183,770)
|
(37,983)
|
|
Other current
liabilities
|
587,314
|
59,082
|
|
Total adjustments
|
(8,379,461)
|
(6,651,650)
|
|
|
|
|
|
Net
cash provided by
(used in)
operating
activities
|
(3,498,910)
|
(4,342,710)
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
Loans to unrelated
parties
|
(4,499,535)
|
1,234,288
|
|
Due from related
party
|
481,987
|
-
|
|
Advance
payments for
property and
equipment
|
29,183
|
(642,672)
|
|
Additions to
property and
equipment
|
(866,358)
|
(2,016,175)
|
|
Additions
to construction in
progress
|
(40,072)
|
(2,450,795)
|
|
Acquisition of
intangible assets
|
(6,004)
|
(6,453)
|
|
Gain on disposal of a
subsidiary – Dalian
Marine, net of cash
|
2,465,957
|
-
|
|
Long-term
investment
|
-
|
2,933
|
|
|
|
|
|
Net cash used
in investing
activities
|
(2,434,842)
|
(3,878,874)
|
|
|
|
|
|
Cash flows from
financing
activities:
|
|
|
|
Restricted cash
|
(754,045)
|
586,000
|
|
Bank loan security
deposits
|
(139,640)
|
(681,876)
|
|
Proceeds
(repayment) of short-term bank
loans
|
5,115,585
|
(2,786,160)
|
|
Convertible notes
payable
|
|
(370,000)
|
|
Loans
from unrelated
parties
|
1,201,200
|
2,708,908
|
|
Proceeds
(repayment) of long-term bank
loans
|
(300,300)
|
9,188,462
|
|
Contributed from minority
shareholder
|
-
|
777,192
|
|
|
|
|
|
Net cash
provided
by financing
activities
|
5,122,800
|
9,422,526
|
|
|
|
|
|
Effect of foreign currency
translation on cash
|
(61,563)
|
4,314
|
|
|
|
|
|
Net increase
(decrease) in cash and cash
equivalents
|
(872,515)
|
1,205,256
|
|
|
|
|
|
Cash and cash
equivalents – beginning
|
1,319,173
|
210,301
|
|
|
|
|
|
Cash and cash
equivalents – ending
|
$
446,658
|
$
1,415,557
|
|
|
|
|
|
|
|
|
|
|
Contact:
Crescendo Communications, LLC
David Waldman, Vivian Huo or Klea
Theoharis
Tel: (212) 671-1020
E-mail: bfti@crescendo-ir.com
SOURCE BEFUT International Co., Ltd.