FOGANG, China, Aug. 15 /Xinhua-PRNewswire-FirstCall/ -- China Bottles Inc. (“The Company”) (OTC Bulletin Board: CBTT), a leading plastic packaging solution company and plastic bottle production equipment company in the People’s Republic of China (“PRC”), today announced financial results for the second quarter ended June 30, 2008.
Second Quarter 2008 Highlights
-- Revenue reached $ 24.6 million, an increase of 79.5% from the first
quarter of 2008
-- Gross profit was $8.0 million, or 32.5% of revenue, up 97% from $4.1
million in the first quarter of 2008
-- Operating income was $6.5 million, an increase of 149.4% from the first
quarter of 2008
-- Net income was $4.9 million with a fully diluted EPS of $0.07 up 70.9%
from $2.8 million in the first quarter of 2008
“We are pleased that our increased business activities were positively reflected in our quarterly results,” stated Mr. Chonghui Zhao, CEO of China Bottles. “Our revenue for the second quarter was almost double the figure from our first quarter, while net income showed significant growth as well. We attribute these results to strong demand in the bottling and bottle equipment market as well as our expansion into pharmaceutical packaging. These areas have led to a steady stream of new contracts from both domestic and overseas clients.”
Second Quarter 2008 Results
Revenue was $24.6 million for the second quarter ended June 30, 2008. This was primarily due to the expanding demand in the blow molding equipment and the molds divisions. Revenue increased 79.5% from $13.7 million in the first quarter of 2008.
Gross profit was $8.0 million for the three months ended June 30, 2008. Gross profit as a percentage of net revenue was 32.5% in the second quarter of 2008. In the first quarter of 2008, gross profit was $4.1 million, or 29.6% of net revenue.
Sales and marketing expense, including distribution expense, was $0.5 million for the three months ended June 30, 2008. This expense was primarily attributable to an increased participation in tradeshow exhibitions and higher traveling expenses for marketing and sales personnel.
General and administrative expenses were $1.0 million for the three months ended June 30, 2008. The largest components were staff and travel-related expenses, which accounted for 50.7% of total general and administrative expenses during the quarter.
Operating income was $6.4 million for the three months ended June 30, 2008, or 26.2% of revenue. Operating income increased 149.4% from $2.6 million in the first quarter of 2008.
Net income for the three months ended June 30, 2008 was $4.9 million, or $0.07 per basic and fully diluted share. The Company’s net margin for the second quarter ended of 2008 was 19.7%. Net income increased 70.9% from $2.8 million in the first quarter of 2008.
Six Month Results
For the first half of 2008, sales revenue was $38.4 million. Cost of goods sold for the six months ended June 30, 2008 was $26.3 million. Gross profit was $12.1 million for the six months ended June 30, 2008 while gross profit as a percentage of net revenues was 31.5% in the same period. Income from operations was $9.1 million for the six months ended June 30, 2008 with an operating margin of 23.6%. Net income for the first half of 2008 was $7.7million, or $0.12 per fully diluted share.
Financial Condition
As of June 30, 2008, cash and cash equivalents totaled $0.9.million, accounts receivable equaled $15.3 million, and inventory was valued at $8.0 million. The Company had working capital of $11.0 million with total liabilities of $18.7million and stockholders’ equity of $15.3 million. Net cash provided by operations was $2.9 million for the six months ended June 30, 2008.
Recent Events
In July, the Company announced that its June contracts amounted to approximately $3.3 million from both domestic and overseas clients, up threefold over the aggregate value of contracts signed in June 2007. Of the new contract won, 56% were signed with overseas clients and were comprised primarily of mold and bottle blowing machine orders from Australia, Cambodia, Sri Lanka, Kyrgyzstan, Senegal and Algeria. Aside from Australia, all of these countries represent new markets for China Bottles. The remaining contracts were from domestic clients and were dominated by orders for polypropylene bottle blowing machines and molds for the production of pharmaceutical packaging.
Business Outlook
“In the second half of 2008, we plan to participate in more industry exhibitions to broaden our customer base and increase brand awareness,” stated Mr. Chonghui Zhao. “In addition, we plan to continue enhancing our sales and service departments to increase our client retention rate among both domestic and overseas clients. As a result of the increase in the price of raw materials in the first half of 2008, we intend to focus on higher-end products in order to maintain a gross margin of roughly 30 percent.”
About China Bottles Inc.
China Bottles Inc. (‘the Company’), headquartered in Qingyuan, Guangdong province in PRC China, has been a leading manufacturer of polyethylene terephthalate (PET) and polypropylene (PP) blow molding packaging equipment and molds in China for fifteen years. The Company also has significant expertise in the production of beverage bottles and pharmaceutical packaging. China Bottles produces, markets and sells a full range of packaging production equipment including high speed injection and blow molding machines for production of PET/PP bottles and molds which shape and form the bottles. The Company also produces bottles that are primarily made of PET/PP which is a plastic resin that is a recyclable, durable plastic with strong resistance to heat, moisture and diluted acid.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains certain ‘forward-looking statements,’ as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management’s current expectations. Such factors include, but are not limited to the company’s ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the People’s Republic of China, compliance requirement of law and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed in the company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. 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.
--FINANCIAL TABLES FOLLOW--
CHINA BOTTLES INC. AND SUBSIDIARIES
(Formerly HUTTON HOLDINGS CORPORATION)
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
REVENUE $ 24,631,687 $ -- $ 38,356,217 $ --
COST OF SALES 16,622,697 -- 26,278,547 --
GROSS MARGIN 8,008,990 -- 12,077,670 --
EXPENSES
Selling and
distributions 480,590 -- 1,159,773 --
General and
administrative 984,060 -- 1,657,519 --
Finance 84,166 -- 209,849 --
TOTAL OPERATING
EXPENSES 1,548,816 -- 3,027,141 --
INCOME FROM
CONTINUING OPERATIONS 6,460,174 -- 9,050,529 --
OTHER INCOME 585,153 -- 1,344,503 --
INCOME BEFORE
PROVISION FOR
INCOME TAXES 7,045,327 -- 10,395,032 --
PROVISION FOR
INCOME TAXES 2,185,098 -- 2,690,205 --
NET INCOME $ 4,860,229 $ -- $ 7,704,827 $ --
OTHER COMPREHENSIVE
INCOME
Gain on Foreign
Exchange Translation 467,179 -- 1,082,797 --
COMPREHENSIVE
INCOME $ 5,327,405 $ -- $ 8,787,624 $ --
NET INCOME PER
SHARE, BASIC &
DILUTED $ 0.071 $ N/A $ 0.117 $ N/A
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING,
BASIC AND
DILUTED 75,000,000 N/A 75,000,000 N/A
CHINA BOTTLES INC. AND SUBSIDIARIES
(Formerly HUTTON HOLDINGS CORPORATION)
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December
2008 31, 2007
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalent $ 853,825 $ 1,375,786
Accounts receivable, net 15,258,885 1,494,539
Inventories 8,044,942 6,737,712
Notes receivable 160,488 --
Prepaid expenses and other
receivables 5,379,905 2,112,535
Total current assets 29,698,045 11,720,572
PROPERTY, PLANT & EQUIPMENT, NET 4,034,798 3,636,505
LAND USE RIGHT, NET OF AMORTIZATION 247,237 229,689
TOTAL ASSETS $ 33,980,080 $ 15,586,766
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
CURRENT LIABILITIES
Bank loans $ 729,491 $ 1,777,389
Accounts payable 3,796,243 1,244,801
Accrued expenses and other payables 8,060,234 904,791
Amount due to a related party 802,440 3,508,083
Customers deposits 3,466,588 650,652
Income tax payable 1,837,667 1,001,257
Total current liabilities 18,692,663 9,086,973
TOTAL LIABILITIES $ 18,692,663 $ 9,086,973
STOCKHOLDERS’ EQUITY
Preferred stock, Par value $0.001;
25,000,000 and 10,000,000 shares
authorized; $0.001 par value; Nil
and 5,000,000 shares issued and
outstanding on June 30, 2008 and
December 31, 2007, respectively $ -- $ 5,000
Common stock, Par value $0.001;
175,000,000 shares and 50,000,000
shares authorized; $0.001 par value;
75,000,000 shares and 50,000,000
shares issued and outstanding on
June 30, 2008 and December 31, 2007,
respectively 75,000 50,000
Additional paid in capital 2,283,657 2,303,657
Retained earnings 11,446,604 3,741,777
Other comprehensive income 1,482,156 399,359
TOTAL STOCKHOLDERS’ EQUITY $ 15,287,417 $ 6,499,793
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $ 33,980,080 $ 15,586,766
CHINA BOTTLES INC. AND SUBSIDIARIES
(Formerly HUTTON HOLDINGS CORPORATION)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30,
2008 2007
Cash Flows From Operating Activities:
Net income $ 7,704,827 $ --
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation 358,806 --
Amortization of land use rights 5,304 --
Changes in operating Assets and
liabilities:
Increase in accounts receivable (13,764,346) --
Increase in notes receivable (160,488)
Increase in inventories (1,307,230) --
Increase in prepaid expenses and other
receivable (3,267,370) --
Increase in accounts payable 2,551,442 --
Increase in accrued expenses and other
payables 7,155,443 --
Increase in customers deposits 2,815,936 --
Increase in taxes payable 836,410 --
Net cash provided from operating
activities 2,928,734 --
Cash Flows From Investing Activities:
Purchase of property, plant and
equipment (757,100) --
Purchase of land use right (11,412) --
Net cash used in investing activities (768,512) --
Cash Flows From Financing Activities:
Decrease in amount due to a related
party (2,705,643) --
Repayment of bank loans (1,047,898) --
Net cash used in financing activities (3,753,541) --
Net decrease in cash (1,593,319) --
Effect of foreign exchange rate
changes 1,071,358 --
Cash at Beginning of Period 1,375,786 --
Cash at the End of Period $ 853,825 $ --
For more information, please contact:
CCG Investor Relations Inc.
Crocker Coulson, President
1325 Avenue of the Americas, Suite 2800 New York, NY 10019
Tel: +1-646-213-1915
Email: Crocker.coulson@ccgir.com
Web: http://www.ccgir.com
