omniture

Asian Financial Announces Third Quarter 2007 Results

Asian Financial, Inc.
2007-05-22 10:43 782

BEIJING, China, May 22 /Xinhua-PRNewswire/ -- Asian Financial, Inc.

("Asian Financial", "Company"), a leading provider of offset printing

equipment and solutions in China through its wholly-owned operating subsidiary,

Duoyuan Digital Printing Technology Industry (China) Co., Ltd. ("Duoyuan"),

today released financial results for the quarter ended March 31, 2007.

Third Quarter Results

Revenue for the third quarter of fiscal 2007 increased 35.0% to $9.6

million from $7.1 million in the third quarter of fiscal 2006. The increase in

revenue was driven by continued growth in sales of multicolor offset presses,

driven by strong demand. Sequentially, revenue was down 55.0% from $21.4

million in the three months ended December 31, 2006 due to seasonality in the

company's business. The January-March quarter is traditionally the seasonally

slowest quarter of the year, as business activities stopped or slowed during

the Chinese New Year period.

Gross profit for the third quarter of fiscal 2007 was $4.0 million, up

19.4% from $3.4 million in the same period a year ago. Gross margin was 41.7%

in the third quarter of fiscal 2007, compared to 47.2% in the same quarter

last year. The decline in gross margin was primarily due to higher labor costs

associated with an increase in the number of skilled workers needed to

manufacture and sell large-format printing presses.

Selling, general and administrative ("SG&A") expenses were $1.8 million,

down 20.6% from $2.3 million in the third quarter of 2006. SG&A expenses in

the prior year period include costs related to the build out of the company's

multicolor press distribution network which was completed in fiscal 2006.

Operating income was $2.2 million in the third quarter of fiscal 2007, up

from $1.1 million in the same period a year ago. Net income was $0.9 million,

down 44.4% from $1.6 million in the third quarter of fiscal 2006. Net income

in the current quarter includes $1.2 million in pre-tax liquidated damage

expenses associated with the delay in filing the registration statement for

the shares issued in its November 2, 2006 private placement, as well as

penalties associated with the failure to settle the outstanding balance of

related party transactions. Earnings per basic and diluted share were $0.02,

compared to $0.03 in the same quarter last year.

"Despite a slow quarter due to the long Chinese New Year holiday, we still

saw strong year-over-year growth in our top line, driven by strong demand in

the large-format multicolor offset press market," commented Mr. Wenhua Guo,

Chief Executive Officer of Asian Financial. "We are currently shifting our

product line away from small format single-color presses to higher-margin,

technologically advanced large format multicolor presses. Although our

profitability in the third quarter was impacted by expenses associated with

our private placement financing effort, we believe our strategies will

ultimately improve our competitive position and allow us to take advantage of

the rapid growth in China's printing industry."

Nine Months Results

Revenues for the first nine months of fiscal 2007 were $48.6 million, up

65.3% from $29.4 million in the first nine months of fiscal 2006. Gross

profit for the same period was $21.5 million, up 53.1% from $14.1 million in

the first nine months of fiscal 2006. Gross margin was 44.3%, compared to

47.9% in the first nine months of fiscal 2006. Operating income for the first

nine months of fiscal 2007 was $13.7 million, up 44.5% from $9.5 million in

the same period last year. Net income was $10.9 million in the first nine

months of fiscal 2007, up 13.8% from net income of $9.6 million in the

comparable period a year ago. Earnings per basic and diluted share were

$0.19, compared to $0.19 in the same period last year.

Financial Condition

As of March 31, 2007, the Company had $3.4 million in cash and cash

equivalents, total liabilities of $15.0 million and working capital of $30.8

million. Shareholders' equity stood at $55.7 million compared to $22.1 million

as of June 30, 2006.

Business Outlook

Demand for commercial printing equipment in China has risen at an average

rate of 24% per annum from 2001 to 2005, driven by strong growth in all forms

of printed media. The total output value of Chinese printing services was

$39.0 billion in 2005, and industry estimates call for this figure to nearly

double to $62.0 billion by 2010.

"In the coming months, we will continue to invest in R&D to further

enhance our product lines and upgrade our production capabilities. We have

very clear strategies to develop each of our main businesses including large-

format offset presses and digital printing. Our long-term goals are to expand

market share in each of our business segments and improve our product mix

while maintaining our cost advantages over international competitors," Mr. Guo

said. "We look forward to continued strong growth in our top and bottom

lines."

About Asian Financial, Inc.

Asian Financial, Inc., through its wholly-owned subsidiaries, is engaged

in the business of manufacturing and marketing commercial offset printers and

related solutions in the People's Republic of China ("PRC"). The Company

combines technical innovation with PRC cost advantages to offer a broad range

of offset printing equipment at price discount as compared to Western models.

Asian Financial, Inc. has manufacturing and R&D facilities in Langfang in

Hebei Province and Shaoyang in Hunan Province and has a distribution and

service network in approximately 100 cities in China. Headquartered in

Beijing, the Company is the largest non-government owned major offset printing

equipment and printing solutions provider 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. The forward-looking statements such as the Company's continual

investment in R&D to further enhance its product range and in upgrading and

expanding its production line so that it can maintain its competitive

advantages through improved efficiency and higher product precision are based

upon management's beliefs, assumptions and expectations of the Company's

future operations and economic performance, taking into account the

information currently available. These statements are not statements of

historical fact. Forward-looking statements involve risks and uncertainties

that may cause actual results, performance or financial condition to be

materially different from the expectations of future results, performance or

financial condition expressed or implied in any forward-looking statements.

Such risks include, but are not limited to, competition in the offset printing

market, declines in demand for the Company's products, rising raw materials

costs, changes to management or key personnel, risks associated with

conducting business in China, the Company's ability to expand into markets

outside of China and other risks detailed in the Company's filings with the

Securities and Exchange Commission. The Company undertakes no obligation to

publicly update or revise any forward-looking statements, whether as a result

of new information, future events or otherwise. Although the Company believes

that the expectations expressed in these forward looking statements are

reasonable, they cannot assure you that their expectations will turn out to be

correct, and investors are cautioned that actual results may differ materially

from the anticipated results.

- Financial Tables Follow -

ASIAN FINANCIAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2007 AND 2006

(UNAUDITED)

Three months ended Nine months ended

March 31, March 31,

2007 2006 2007 2006

Revenues $ 9,646,697 $ 7,144,395 $ 48,604,680 $ 29,406,399

Cost Of Sales 5,621,102 3,772,596 27,064,874 15,334,268

Gross Profit 4,025,595 3,371,799 21,539,806 14,072,131

Selling, General

And Administrative

Expenses 1,833,617 2,309,900 7,879,893 4,621,589

Income From

Operations 2,191,978 1,061,899 13,659,913 9,450,542

Liquidated Damage

Expense 1,177,460 1,177,460

Other Income

(Expense), Net 46,020 669,635 (289,365) 388,573

Income Before

Minority Interest

And Provision For

Income

Taxes 1,060,538 1,731,534 12,193,088 9,839,115

Minority Interest 26,453 18,241 201,045 148,815

Income Before

Provision For

Income Taxes 1,034,085 1,713,293 11,992,043 9,690,300

Provision For

Income Taxes 139,434 104,417 1,078,912 104,417

Net Income 894,651 1,608,876 10,913,131 9,585,883

Other Comprehensive

Income Foreign Currency

Translation

Gain (Loss) 564,752 110,810 1,256,006 364,233

Comprehensive

Income $ 1,459,403 $ 1,719,686 $ 12,169,137 $ 9,950,116

Basic & Diluted

Weighted

Average Number Of

Shares 57,668,602 50,600,462 57,668,602 50,600,462

Basic & Diluted

Earning Per

Share $ 0.02 $ 0.03 $ 0.19 $ 0.19

ASIAN FINANCIAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2007 AND JUNE 30, 2006

A S S E T S

March 31, June 30,

2007 2006

(Unaudited)

CURRENT ASSETS:

Cash $ 3,360,387 $ 3,739,711

Restricted cash 4,000,000 -

Accounts receivable, net of allowance

of $165,211 and $159,725 19,289,830 11,231,897

Inventories 18,559,546 16,727,833

Other receivables 123,434 130,914

Other receivables-related parties 363,934 892,552

Other assets 12,591 -

Advances on inventory purchases 24,125 2,183,483

45,733,847 34,906,390

PLANT AND EQUIPMENT, net 22,049,140 12,065,863

OTHER ASSETS:

Intangible assets, net 3,641,677 3,572,106

Other non-current assets - -

3,641,677 3,572,106

$ 71,424,664 $ 50,544,359

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 $ 12,691,000 $ 12,269,600

Accounts payable 1,097,810 13,137,939

Accrued liabilities 493,794 752,666

Other payables 168,448 522,167

Other payables - related parties 291,155 796,753

Customer deposits - 18,830

Taxes payable (236,814) 463,805

Liquidated damages payable 471,712 -

14,977,105 27,961,760

MINORITY INTEREST 749,826 527,246

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;

67,047,481 and 50,600,462

shares issued and outstanding at

March 31, 2007 and June 30, 2006 67,047 50,600

Additional paid-in capital 27,416,097 5,959,301

Statutory reserves 3,079,744 3,079,744

Retained earnings 23,452,982 12,539,851

Accumulated other comprehensive income 1,681,863 425,857

55,697,733 22,055,353

$ 71,424,664 $ 50,544,359

ASIAN FINANCIAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2007 AND 2006

(UNAUDITED)

2007 2006

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 10,913,131 $ 9,585,883

Adjustments to reconcile net income

to cash provided by (used in)

operating activities:

Minority interest 201,045 148,815

Depreciation 518,434 461,397

Amortization 52,224 50,735

Bad debt expense 87,478 -

(Increase) decrease in assets:

Restricted cash - -

Accounts receivable (7,631,089) (6,300,758)

Inventories (1,236,128) 3,697,358

Other receivables 15,666

Other receivables - related

parties 549,900 (1,193,952)

Advances on inventory purchases 2,196,909 (9,395)

Other assets (16,270) (12,351)

Other non-current assets 223,631 -

Increase (decrease) in liabilities:

Accounts payable (12,282,037) (1,751,311)

Customer deposits (19,150) -

Other payables (363,455) 128,770

Other payables - related parties (524,032) -

Accrued liabilities (281,922) 96,668

Taxes payable (704,541) 328,406

Liquidated damages payable 471,712 -

Net cash (used in) provided

by operating activities (7,828,494) 5,230,265

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of equipment (8,855,767) -

Purchase of land use right - -

Payments for construction in

progress (1,208,413) (1,578,107)

Payments on business acquisition - -

Net cash used in investing

activities (10,064,180) (1,578,107)

CASH FLOWS FROM FINANCING ACTIVITIES:

Capital insertion 0 -

Proceeds from private placement 17,473,243 -

Payment of other payable - related

parties - (1,556,672)

Net cash provided by (used

in) investing activities 17,473,243 (1,556,672)

EFFECT OF EXCHANGE RATE CHANGES ON

CASH 40,107 41,838

INCREASE IN CASH (379,324) 2,137,324

CASH, beginning of period 3,739,711 294,434

CASH, end of period $ 3,360,387 $ 2,431,758

Contact Information:

CCG Elite

Crocker Coulson, President

Elaine Ketchmere, VP Financial Writing

Tel: +1-310-231-8600

Email:crocker.coulson@ccgir.com

elaine.ketchmere@ccgir.com

Asian Financial, Inc.

Fiona Feng, CEO Assistant

Tel: +86-10-6021-2047

Email: fionaicey@vip.sina.com

Source: Asian Financial, Inc.
Keywords: Food/Beverages
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