DANYANG, China, February 14, 2012 /PRNewswire-Asia/ -- Lihua International, Inc. (NASDAQ: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum ("CCA") wire, today announced that its Chairman and CEO, Mr. Jianhua Zhu, has provided the following statement regarding the Company's recent achievements and 2012 strategy:
To our Shareholders, Partners and Friends:
2011 was a year of positioning and progress, during which Lihua achieved tremendous growth financially, operationally and strategically. We achieved significant top and bottom line growth as our copper anode and wire products continued to gain momentum through robust customer demand. Although we faced certain obstacles that impeded our growth in the fourth quarter of the year, we took proactive steps to address these challenges and entered 2012 in what we believe is an ideal position for growth and success over the longer-term. I would like to take this opportunity to review some of our 2011 highlights and share with you the reasons for our enthusiasm in 2012.
Strong Top Line Growth Driven by Copper Anode:
During the first nine months of 2011, Lihua achieved record revenue of $459.5 million, an increase of 95.5% year-over-year, compared with revenue of $235.1 million in the first nine months of 2010. Copper anode continued to be our primary growth driver, with sales reaching $217.9 million or more than 47% of total revenue, compared with sales of $35.7 million in the first nine months of 2010. Since launching the product in the third quarter of 2010, we have built copper anode into a sizable business, and with our new copper recycling facility nearing volume production, we are poised to capture even greater share of this large and growing market.
Update on New Facility Construction and Operation:
As we have discussed previously, we began construction on our new manufacturing facility in late 2010, in an effort to increase Lihua's share of the burgeoning pure copper market. While our construction crews worked tirelessly throughout 2011, severe weather in the summer months forced us to suspend construction, while subsequent equipment installation delays pushed the opening of the new facility into the New Year. The two 25,000 ton smelters have been constructed and installed, and the connection of the smelters to our new state-of-the-art environmental and recycling systems is being completed. The final step required before we can ramp production to the designed capacity of 50,000 tons per year is the connection of the facility to a newly constructed electrical grid, which will provide direct power to the plant and manufacturing equipment. We have begun making these connections and expect to complete this process by the end of April, once the ground has thawed, barring any unexpectedly heavy rainfall in the early spring. We are confident that this additional capacity will have an immediate positive impact on our business, allowing us to more effectively address customer demand. Photos of the construction progress are available on our website at http://www.lihuaintl.com/About_Us/Our_Facility.html.
In addition, we are working to develop the rest of the 30-acre site through the construction of additional factory buildings, warehouse capacity and administrative facilities. We expect to complete the build-out of the entire site by end of 2012, and believe that the development of these assets will give us the operational flexibility needed to further expand our product portfolio and improve our competitive position ahead of the next phase of copper growth.
Expanded R&D Cooperation with Partners to Introduce New Products
During 2011, we formed partnerships with Beijing Modern Research Institute of Recycling Economy and Shanghai Electric Cable Research Institute to expand our R&D capabilities. In addition to introducing new products and enhancing our existing products, we have worked closely with Shanghai Electric Cable Research Institute to establish industry standards for new, value-added power transmission products. We have completed preliminary testing for several such products and have submitted patent applications to the PRC government, ahead of launching production in the next 12 to 18 months. We have placed initial orders for production equipment from our trusted suppliers, and expect to begin building out the production lines later this year.
Returning Cash to Shareholders
We are continuously looking to increase shareholder value and undertook two important initiatives in 2011 to do just that, returning cash to shareholders through special cash dividends and the repurchase of our common stock.
Dividend
In November 2011, our Board of Directors approved the issuance of two special dividends to Lihua shareholders, with the per share amount of each special dividend calculated on an annualized method, based on 5% of our full-year GAAP net income of $38.5 million for the twelve months ended December 31, 2010. The first dividend was paid on January 13, 2012 to Lihua shareholders of record on December 31, 2011, and the second dividend is payable on April 13, 2012 to Lihua shareholders of record on March 31, 2012.
Share Repurchase Activity
During 2011, Lihua repurchased approximately 264,000 shares of its common stock at an average price of $8.05 per share, for a total consideration of approximately $2.1 million, under the 12-month share buyback program authorized by its Board of Directors at the beginning of 2011.
Our business remained strong throughout 2011 and our outlook for the year ahead is extremely positive. Although we have had to overcome several minor setbacks over the last several months, we remain well positioned for the longer-term through the continued expansion and diversification of our business. We serve end markets with virtually limitless potential in China, and we are confident that our efforts to date will bear fruit in 2012 and well into the future. I thank our shareholders for their continued support of Lihua, and look forward to sharing our future accomplishments with the investment community as we continue to progress toward the execution of our growth strategy.
Sincerely,
Jianhua Zhu
Chairman and CEO
About Lihua International, Inc.
Lihua, through its two wholly owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design and manufacture lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include CCA and refined copper products. Current product offerings include CCA and pure copper wire, copper rod and copper anode. Except for CCA wire, all other products are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in a wide variety of industries including the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com.
To be added to the Company's email distribution for future news releases, please send your request to lihua@tpg-ir.com.
Safe Harbor Statement
This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.
Please note that information in this press release reflects management views as of the date of issuance.
Contact:
The Piacente Group, Inc.
Investor Relations
Brandi Floberg or Lee Roth
(212) 481-2050
lihua@tpg-ir.com