HUIZHOU, Guangdong, China, Oct. 26 /Xinhua-PRNewswire-FirstCall/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING) today reports its financial results for the second quarter of 2007.
Highlights of the financial performance in the second quarter of 2007 of the Company are as follows:
2007 second 2007 second
quarter quarter
Un-audited Un-audited
Rmb ‘000 USD ‘000
Net sales 987,370 129,712
Gross profit 304,582 40,013
Income from operations 223,078 29,306
Income before income tax and
minority interests 959,960 126,111
Net income after
extraordinary gain 887,029 116,530
Basic earnings per share of
common stock after
extraordinary gain RMB 25.15 USD 3.30
Income before income tax and minority interests of Rmb 960.0 million (USD 126.1) was arrived at after charging operating and non-operating expenses. Included in operating expenses were non-cash charges relating to share-based compensation and amortization of acquired intangible assets. Included in non-operating expenses were non-cash charges relating to convertible notes and non-cash gains relating to the acquisition and disposals of subsidiaries. In management’s opinion, these gains and charges, which are listed in chart below with their amounts, may not be indicative of the Company’s core business operating results.
Account 2007 second 2007 second
classification quarter quarter
Un-audited Un-audited
Rmb ‘000 USD’000
Net gain on
conversion
of XING
convertible
notes by note
holders to
shares of a
subsidiary Non-operating income 339,000 44,535
Gain on deemed
disposal of a
subsidiary
through IPO Non-operating income 394,744 51,858
Share-based
compensation
expenses Operating expenses (15,600) (2,100)
Amortization
of acquired
intangible
assets Operating expenses (6,350) (834)
Non-cash interest
expenses Non-operating expenses (43,594) (5,727)
Gain on
re-measurement
of embedded
derivatives Non-operating expenses 62,327 8,188
Extraordinary gain
on acquisition
of minority
interests in a
sub-subsidiary
by a subsidiary Extraordinary gain 17,586 2,310
Had the above non-cash gains and charges been excluded, income before income tax and minority interests for the second quarter of 2007 would have been Rmb 211.8 million (USD 27.9 million).
Mr. Wu Rui Lin, Chairman of XING, said, “Looking into the second half of the year, I feel confident that our business will even be better than the first half, with the mobile phone business segment, which consists of the CECT-branded and the COSUN-branded handsets, driving the growth and the profitability of the Company.
Condensed Consolidated Income Statement for the Second Quarter of 2007
2007 second 2007 second
quarter quarter
Un-audited Un-audited
Rmb ‘000 USD ‘000
Net sales 987,370 129,712
Cost of goods sold -682,788 -89,699
Gross profit 304,582 40,013
Gross margin 30.8% 30.8%
Operating expenses -81,504 -10,707
Income from operations 223,078 29,306
Operating margin 22.6% 22.6%
Non-operating income less
expenses 736,882 96,805
Income before income tax and
minority interests 959,960 126,111
Income tax expense -35,231 -4,628
Income before minority
interests 924,728 121,483
Minority interests -55,285 -7,263
Net income before
extraordinary gain 869,443 114,220
Extraordinary gain 17,586 2,310
Net income after
extraordinary gain 887,029 116,530
Distributed and
undistributed
earnings before
extraordinary gain
Distributed earnings before
extraordinary gain -- --
Undistributed earnings
before extraordinary gain 869,443 114,220
Total earnings before
extraordinary gain 869,443 114,220
Allocation of undistributed
earnings before extraordinary gain
Participatory convertible notes 138,600 18,208
Common stock 730,843 96,012
Total undistributed earnings
before extraordinary gain 869,443 114,220
Basic earnings per share of
participatory convertible notes
before extraordinary gain
Distributed earnings -- --
Undistributed earnings RMB 24.65 USD 3.24
Total basic earnings per
share of participatory convertible
notes before extraordinary gain RMB 24.65 USD 3.24
Basic earnings per share of
common stock before
extraordinary gain
Distributed earnings -- --
Undistributed earnings RMB 24.65 USD 3.24
Total basic earnings per
share of common stock before
extraordinary gain RMB 24.65 USD 3.24
Distributed and
undistributed earnings
after extraordinary
gain
Distributed earnings -- --
Undistributed earnings 887,029 116,530
Total earnings after
extraordinary gain 887,029 116,530
Allocation of undistributed
earnings after extraordinary gain
Common stock 745,626 97,954
Participatory convertible notes 141,403 18,576
Total undistributed earnings
after extraordinary gain 887,029 116,530
Basic earnings per share of
participatory convertible
notes after extraordinary gain
Distributed earnings -- --
Undistributed earnings RMB 25.15 USD 3.30
Total basic earnings per
share of participatory
convertible notes after
extraordinary gain RMB 25.15 USD 3.30
Basic earnings per share of
common stock after
extraordinary gain
Distributed earnings -- --
Undistributed earnings RMB 25.15 USD 3.30
Total basic earnings per
share of common stock after
extraordinary gain RMB 25.15 USD 3.30
Diluted earnings per share
of common stock
Before extraordinary gain N/A N/A
Extraordinary gain N/A N/A
After extraordinary gain N/A N/A
Weighted average number of
shares outstanding -- basic 29,648,000 29,648,000
Weighted average number of
shares outstanding -- diluted N/A N/A
About Qiao Xing Universal Telephone, Inc.
Qiao Xing Universal Telephone, Inc. is one of China’s largest manufacturers and distributor of telecommunications products in China. QXUT’s product portfolio includes telecommunications terminals and related products, including fixed wireless phones, VoIP telephones, mobile handsets, PDAs and consumer electronic products, including MP3 players, cash registers and set- top-box products. The Company primarily conducts its business through its operating subsidiaries CEC Telecom Co., Ltd (CECT), and Huizhou Qiao Xing Communication Industry Co., Ltd (HZQXCI), a company engaged in R&D and distribution of indoor telephone sets and economy mobile phones under the COSUN brand. The Company Group has built a strong distribution network comprised of more than 5,000 retail stores throughout China and has established partnerships with major retailers in Europe, North America and Latin America, including Bellsouth and Wal-Mart. For more details, please visit http://www.cosun-xing.com .
Safe Harbor Statement
This announcement contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "intend," "is /are likely to," "may," "plan," "potential," "will" or other similar expressions. Statements that are not historical facts, including statements about Qiao Xing Universal’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward- looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. Qiao Xing Universal does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of October 26, 2007, and Qiao Xing Universal undertakes no duty to update such information, except as required under applicable law.
For further information, please contact:
Rick Xiao
Tel: +86-752-282-0268
Email: rickxiao@qiaoxing.com