HARBIN, China, November 15, 2011 /PRNewswire-Asia/ -- China Linen Textile Industry, Ltd. (OTCBB: CTXIF) ("China Linen" or the "Company"), one of China's leading linen fabric and linen yarn producers and exporters, today announced financial results for the third quarter ended September 30, 2011.
SUMMARY FINANCIALS
Three Months Ended September 30, 2011 and 2010 | ||||
Q3 2011 | Q3 2010 | CHANGE | ||
Net Sales | $16.2 million | $14.0 million | +15.2% | |
Gross Profit | $5.5 million | $4.4 million | +25.5% | |
Net Income | $3.1 million | $2.8 million | +8.2% | |
EPS (Diluted) | $0.45 | $0.49 | ||
Diluted Shares Outstanding | 7.2 million | 5.8 million | ||
Mr. Gao Ren, Chairman and CEO of China Linen, said: "I am pleased to report that the third quarter of this year was marked by continued growth in revenue and net income despite our strong performance in the same period last year. For the first nine months, we expanded our sales and distribution channels for our linen fabric and yarn. While linen fabric sales increased 21.7%, we were able to expand the sales of linen yarn by 598.9%, which helps to drive both top and bottom line expansion. During the first nine months, we moved closer to our objective of becoming a more fully integrated linen producer by bleaching our own products and introducing high margin color yarn products. International sales remained robust, accounting for 58% of revenues as global fashion industry increasingly utilized pure linen and blended linen products."
Three Months Ended September 30, 2011 Financial Results
Revenue for the three months ended September 30, 2011 totaled $16.2 million, up approximately 15.2% from $14.0 million for the three months ended September 30, 2010. The increase in revenue was primarily attributable to increased sales volume of linen yarn due to higher demand from new customers. Gross profit for the third quarter of 2011 was $5.5 million, up 25.5% from $4.4 million as compared to the third quarter of 2010. The increase in gross profit was primarily driven by sales growth. Gross margin for the three months ended September 30, 2011 was 34.3%, an increase of 280 basis points as compared to 31.5% for the three months ended September 30, 2010, mainly due to increase in sales price and the ability to efficiently control production costs.
Operating expenses increased 50.5% to $1.1 million in the three months ended September 30, 2011 as compared to $0.7 million in the same period of 2010, mainly due to increase in sales expenses, research and development costs, and depreciation in connection with increase in fixed assets.
Operating income increased 20.5% to $4.4 million for the third quarter of 2011 as compared to $3.7 million in the same period of 2010, while operating margin increased 119 basis points to 27.4%.
Net income was $3.1 million for the three months ended September 30, 2011 as compared to $2.8 million for the three months ended September 30, 2010, representing an increase of approximately 8.2%. Diluted earnings per share was $0.45 based on approximate 7.2 million diluted shares outstanding, compared to $0.49 in the same period of 2010 based on approximate 5.8 million diluted shares outstanding.
Nine Months Ended September 30, 2011 Financial Results
Nine Months Ended September 30, 2011 and 2010 | ||||
Nine Months 2011 | Nine Months 2010 | CHANGE | ||
Net Sales | $48.1 million | $31.6 million | +52.0% | |
Gross Profit | $17.1 million | $9.8 million | +73.8% | |
Net Income | $9.7 million | $6.9 million | +41.7% | |
EPS (Diluted) | $1.42 | $1.19 | ||
Diluted Shares Outstanding | 7.2 million | 5.8 million | ||
Revenue for the nine months ended September 30, 2011 totaled $48.1 million, an increase of approximately 52% from $31.6 million for the nine months ended September 30, 2010. The increase in revenue was primarily attributable to increased sales volume of both linen fabric and linen yarn due to increased distribution channels, and increased sales prices. Gross profit for the nine months ended September 30, 2011 was $17.1 million, up 73.8% from $9.8 million as compared to the first nine months of 2010. Gross margin for the nine months ended September 30, 2011 was 35.6 %, an increase of 450 basis points as compared to 31.1% for the nine months ended September 30, 2010, primarily attributable to sales price increases and the ability to efficiently control production costs.
Operating expenses increased 101.5% to $3.4 million in the nine months ended September 30, 2011 as compared to $1.7 million in the same period of 2010, mainly due to an increase in sales expenses, research and development costs, and depreciation in connection with the increase in fixed assets.
Operating income increased 68.0% to $13.7 million for the first nine months of 2011 as compared to $8.1 million in the same period of 2010, while operating margins increased 271 basis points to 28.5%.
Net income was $9.7 million for the nine months ended September 30, 2011 as compared to $6.9 million for the nine months ended September 30, 2010, representing an increase of approximately 41.7%. Diluted earnings per share was $1.42, compared to $1.19 in the same period of 2010.
Balance Sheet and Cash Flow
As of September 30, 2011, the Company had cash and cash equivalents of $5.1 million, compared to $4.2 million at December 31, 2010. Accounts receivable balance was approximately $12.1 million on September 30, 2011, compared to approximately $13.3 million on December 31, 2010. Days sales outstanding (DSO) for the first nine months of 2011 were approximately 73 days, compared to 114 days for the same period in 2010, mainly due to increased collection efforts. Inventory increased from $9.9 million as of December 31, 2010 to $24.8 million as of September 30, 2011, as the Company purchased a significant amount of raw materials to meet increasing demand and to reduce the impact of increasing unit purchase prices in the future.
Working capital as of September 30, 2011 totaled $34.2 million. The Company had total shareholders' equity of $43.7 million at September 30, 2011, with total assets of $63.3 million versus total liabilities of $19.6 million, compared to total shareholders' equity of $32.2 million at December 31, 2010, with total assets of $51.6 million versus total liabilities of $19.5 million. The book value of net assets per diluted share was approximately $6.11 as of September 30, 2011.
For the nine months ended September 30, 2011, the Company generated $3.3 million cash from operations, an increase of 33.0% from $2.5 million in the same period last year.
Conference Call
The Company will host a conference call to discuss its third quarter 2011 financial results on November 15th, 2011 at 4:30 pm ET. Interested participants should call +1-877-941-8416 within the United States, or +1-480-629-9808 if calling internationally. The conference ID is 4486745. It is advisable to dial in approximately 5-10 minutes prior to 4:30 pm ET.
A playback will be available through November 22, 2011. To listen, please call +1-877-870-5176 within the United States or +1-858-384-5517 if calling internationally. Utilize the pass code 4486745 for the replay.
This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on the following link: http://viavid.net/dce.aspx?sid=00008FA5 or at ViaVid's website at http://www.viavid.net.
About China Linen Textile Industry, Ltd.
China Linen Textile Industry, Ltd. (www.chinalinentextile.com) is principally engaged in the production and sale of linen yarn and various types of linen fabric. The Company is also involved in consultation and R&D related to linen technology and linen products. The Company carries on all of its business activities through its subsidiary, Heilongjiang Lanxi Sunrise Linen Textile Industry Co., Ltd. ("Lanxi Sunrise"), established in June 2002 and located in Lanxi County, the "Homeland of Flax in China," near Harbin City in China. Lanxi Sunrise has one yarn-spinning factory, one bleaching factory and two fabric weaving factories in its 35,120 square meters of building area with a staff of 1,400 and 430 sets of world-class, advanced production machinery. Annual production capacity totals approximately 2,220 tons with 50 different types of yarn and 10 million meters of fabric with 110 types. Approximately 50 percent of its products are exported to more than 10 countries.
Forward-looking statements:
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances, and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.
For further information, contact:
China Linen Textile Industry, Ltd.
Jodie Zheng Wehner, CFO
Tel: +1-310-890-8048
Email: jodiewehner@chinalinentextile.com
Buddy Lee, IR manager
Tel: +86-137-9666-3210
Email: byl@chinalinentextile.com
