BEIJING, Sept. 26 /Xinhua-PRNewswire/ -- Asian Financial, Inc. ("Asian Financial", "Company"), a leading offset printing equipment provider in China, through its wholly-owned operating subsidiary, Duoyuan Digital Printing Technology Industry (China) Co., Ltd. ("Duoyuan"), reported financial results for fiscal year 2008 ended June 30, 2008.
Fiscal Year 2008 Highlights
-- Revenue equaled $89.6 million, up 32.2% from $67.8 million for the same
period prior year
-- Gross profit was $45.2 million, up 50.0% from $30.1 million for the
same period prior year
-- Gross margin was 50.4%, compared to 44.4% for the same period prior
year
-- Operating income was $30.3 million, up 59.0% from $19.1 million for the
same period prior year
-- Net income was $26.5 million, or $1.06 per basic and diluted share, up
89.3% from $14.0 million, or $0.61 per basic and diluted share for the
same period prior year
-- Net margin was 29.5%, compared to 20.6% for the same period prior year
"Our fourth quarter closed a successful year for us in terms of both growth and product segmentation. Our large-format multicolor presses made a larger contribution to our product mix this year, and were the main driver of growth in both revenue and net income," said Mr. Wenhua Guo, Chairman and Chief Executive Officer of Asian Financial "During the fourth quarter, we continued evaluating key technologies in advance of our entry in the corrugated packing equipment manufacturing business, completed land improvement and installed utility infrastructure for a new corrugated packing equipment facility."
Fiscal Year 2008 Results
For the twelve months ended June 30, 2008 revenue was $89.6 million, up 32.2% from $67.8 million for the same period prior year. The sale of
large-format multicolor presses contributed to 51.1% of the Company's total net revenue in fiscal 2008 compared to 45.8% in fiscal 2007. Small-format multicolor presses contributed to 28.6% of revenue for the period, compared to 25.6% in fiscal 2007.
Gross profit was $45.2 million, up 50.0% from $30.1 million for the same period last year. Gross margin was 50.4%, up from a gross margin of 44.4% in the year ago period.
Total operating expenses for fiscal year 2008 totaled $14.9 million, up 34.4% from $11.1 million in fiscal year 2007. Selling expenses amounted to $13.2 million, up 31.6% from the previous year, while research and development expenses amounted to $1.7 million in fiscal year 2008, up 61.0% from $1.0 million in fiscal year 2007. The increase in research and development expenses was due to many products being in their final and most cost-intensive stage of development. Operating expenses accounted for 16.6% of revenue in fiscal year 2008, compared to 16.3% for the same period prior year.
Operating income was $30.3 million, up 59.0% from $19.1 million for the same period prior year, and operating margin was 33.8%, compared to 28.1% for the same period prior year. During fiscal 2008, the Company booked a net gain of $0.2 million related to the settlement of liquidated damages, compared to $2.1 million in liquidated damage expenses in fiscal 2007. Net income increased 89.3% to $26.5 million, or $1.06 per basic and diluted share, from $14.0 million, or $0.61 per basic and diluted share, in fiscal 2007.
Financial Condition
As of June 30, 2008, cash and cash equivalents were $14.2 million, up from $7.8 million at the end of fiscal year 2007. At the end of the fiscal year 2008, the Company had working capital of $55.6 million, a current ratio of 4.4:1, outstanding lines of credit of $11.4 million and total shareholders' equity of $93.8 million. In fiscal 2008, the Company has incurred capital expenditures of $10.5 million, which were used to upgrade the Company's production facility in Hunan and preliminary expenses related to Company's planned corrugated packaging equipment manufacturing facility in Langfang.
Business Outlook
The Company believes that the growing Chinese economy will stimulate growth in logistics, leading to increased demand for packaging. As a result, the Company has decided to expand its business by entering the corrugated packaging equipment manufacturing market. The Company has completed land improvement and installed utility infrastructure for a new factory near its Langfang facility.
"Manufacturing corrugated packaging equipment will allow us to expand our product offering to include equipment that provides greater efficiency and energy savings to our customers," said Mr. Wenhua Guo. "We plan to continue utilizing our strong research and development capabilities to create a more sophisticated product mix. In addition, we will further improve the performance of our large-format multicolor presses, which we believe will enable us to better compete with domestic and international competitors."
About Asian Financial, Inc.
Asian Financial, Inc., through its wholly-owned subsidiaries, is engaged in the business of manufacturing commercial offset printing presses in the People's Republic of China ("PRC"). The Company combines technical innovation and international quality standards to offer a broad range of printing equipment and solutions. Asian Financial, Inc. has manufacturing and R&D facilities in Langfang, Hebei Province and Shaoyang, Hunan Province in addition to a distribution and service network in approximately 100 cities in China. Headquartered in Beijing, the Company is one of the largest non-government owned major offset printing equipment and solutions providers in China.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. Generally, the words "believes," "anticipates," "may," "will," "should," "expect," "intend," "estimate," "continue," and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements which include, but are not limited to, statements concerning the Company's expectations regarding its working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such statements are subject to certain risks and uncertainties, including the matters set forth in its Annual Report or other reports or documents the Company files with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to update these forward-looking statements. In addition, the forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from those expressed in or implied by the forward-looking statements contained herein. Please refer to risk factors that are mentioned in the Company's Form 10-K filing of September 26, 2008.
FINANCIAL TABLES TO FOLLOW:
ASIAN FINANCIAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
2008 2007
REVENUES $89,627,677 $67,811,867
COST OF SALES 44,461,903 37,693,679
GROSS PROFIT 45,165,774 30,118,188
RESEARCH AND DEVELOPMENT EXPENSES 1,683,304 1,045,543
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 13,177,154 10,011,315
INCOME FROM OPERATIONS 30,305,316 19,061,330
LIQUIDATED DAMAGES, net of settlement 235,492 (2,119,428)
CHANGE IN FAIR VALUE OF DERIVATIVE
INSTRUMENTS 73,112 --
OTHER INCOME (EXPENSE), net (535,056) (915,228)
INCOME BEFORE MINORITY INTEREST AND
PROVISION FOR INCOME TAXES 30,078,864 16,026,674
MINORITY INTEREST 381,633 240,584
INCOME BEFORE PROVISION FOR INCOME TAXES 29,697,231 15,786,090
PROVISION FOR INCOME TAXES 3,237,707 1,806,943
NET INCOME 26,459,524 13,979,147
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 8,199,861 1,834,313
COMPREHENSIVE INCOME $34,659,385 $15,813,460
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES 25,000,050 23,041,021
BASIC AND DILUTED EARNING PER SHARE $1.06 $0.61
ASIAN FINANCIAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2008 AND 2007
A S S E T S
2008 2007
CURRENT ASSETS:
Cash $14,199,700 $7,816,361
Restricted cash -- 2,097,490
Accounts receivable, net of
allowance for doubtful accounts of
$1,178,328 and $498,648 as of June
30, 2008 and 2007, respectively 33,184,833 21,170,423
Inventories 23,950,551 20,074,605
Other receivables 20,834 68,160
Deferred expense 661,250 --
Other assets 40,331
Total current assets 72,017,168 51,267,370
PLANT AND EQUIPMENT, net 34,130,651 25,332,554
OTHER ASSETS:
Intangible assets, net 4,003,128 3,679,941
Advances on equipment purchases 2,753,610 --
Total other assets 6,756,738 3,679,941
Total assets $112,904,557 $80,279,865
L I A B I L I T I E S A N D
S H A R E H O L D E R S' E Q U I T Y
CURRENT LIABILITIES:
Lines of credit $11,380,200 $12,887,000
Accounts payable 1,489,255 2,572,061
Accrued liabilities 1,749,129 1,107,591
Other payables 108,983 198,000
Other payables - related parties -- 369,564
Taxes payable 1,702,986 1,078,503
Liquidated damages payable -- 2,119,428
Total current liabilities 16,430,553 20,332,147
DERIVATIVE INSTRUMENT LIABILITIES 1,374,824 --
MINORITY INTEREST 1,292,843 800,766
COMMITMENTS AND CONTINGENT LIABILITIES -- --
SHAREHOLDERS' EQUITY:
Preferred stock; $0.001 par value;
1,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock; $0.001 par value;
100,000,000 shares authorized;
25,000,050 shares issued and
outstanding 25,000 25,000
Additional paid-in capital 27,263,040 27,263,040
Statutory reserves 6,000,090 3,282,601
Retained earnings 50,058,176 26,316,141
Accumulated other comprehensive
income 10,460,031 2,260,170
Total shareholders' equity 93,806,337 59,146,952
Total liabilities and
shareholders' equity $112,904,557 $80,279,865
ASIAN FINANCIAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
2008 2007
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $26,459,524 $13,979,147
Adjustments to reconcile net income
to cash provided by (used in)
operating activities:
Minority interest 381,633 240,584
Depreciation 2,239,063 882,842
Amortization 75,297 70,047
Loss on fixed assets disposal 1,458 --
Bad debt expense 589,901 322,305
Change in fair value of derivative
instruments (73,112) --
Liquidated damages penalty 706,476 2,119,428
Gain from settlement of liquidated
damages (941,968) --
Change in operating assets and
liabilities
Accounts receivable (9,659,307) (9,452,582)
Inventories (1,858,337) (2,440,076)
Other receivables 51,706 71,457
Other receivables - related parties -- 913,154
Deferred expense (661,250) --
Other assets 42,230 (43,198)
Accounts payable (1,287,681) (10,935,839)
Customer deposits -- (19,265)
Other payables (104,471) (341,354)
Other payables - related parties (386,960) (455,164)
Accrued liabilities 538,634 312,551
Taxes payable 477,886 576,025
Net cash provided by (used
in) operating activities 16,590,722 (4,199,938)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (7,925,596) (13,314,596)
Advances on equipment purchases (2,598,661) 2,233,885
Net cash used in investing
activities (10,524,257) (11,080,711)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from private placement -- 21,278,139
Proceeds from lines of credit 10,739,820 15,050,400
Payments for lines of credit (13,493,620) (15,060,400)
Payments for liquidated damages
payable (436,000) --
Restricted cash 2,097,490 (2,097,490)
Net cash (used in) provided
by financing activities (1,092,310) 19,170,649
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,409,184 186,650
INCREASE IN CASH 6,383,339 4,076,650
CASH, beginning of year 7,816,361 3,739,711
CASH, end of year $14,199,700 $7,816,361
For more information, please contact:
Asian Financial Inc.
Fiona Feng, Assistant to CEO
Tel: +86-10-6021-2222
Email: fengyuming@duoyuan.com
CCG Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
