omniture

Qiao Xing Universal Telephone, Inc. Reports its Financial Results for the Second Quarter of 2007



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

Source: Qiao Xing Universal Telephone, Inc.
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