Company Reaffirms Full-Year 2010 Financial Guidance
DANYANG, China,Dec. 14, 2010 /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 it has received copper anode supply orders and volume demand indications from one of China's leading metals conglomerates. The Company began shipping product to this customer in the fourth quarter of 2010, and expects to supply 1,000 – 2,000 tons of copper anode per month in 2011, with specific quantities determined based upon available capacity.
In 2010 to date, Lihua has shipped 11,000 tons of copper anode, and expects full-year copper anode shipments to total approximately 12,500 tons. Including demand from this customer, Lihua now has 2011 copper anode supply contracts and volume demand indications totaling 122,000 – 134,000 metric tons. Upon completion of the two new smelters in the second half of 2011, Lihua expects annual copper anode production capacity to be 75,000 metric tons.
In order to meet the growing customer demand, Lihua recently broke ground on its second copper recycling facility, being built on 30 acres of land adjacent to the Company's existing copper recycling facility in Danyang, China. Based on the Company's construction plans, the facility will initially house two smelters, doubling Lihua's annual refined copper production capacity to 100,000 tons. The new facility is expected to commence operation in the second half of 2011.
"This new order reinforces our belief in the sizeable growth opportunity for copper anode and other refined copper products in the Chinese market," said Jianhua Zhu, chairman and CEO of Lihua. "Customer demand is robust and continues to grow, and we are working to add capacity as quickly as possible in order to more effectively address the needs of customers in a growing number of end markets, as our near-term growth is limited only by our current manufacturing capacity constraints. Copper anode continues to demonstrate its importance to our business, not only by gaining Lihua access to new end markets, but by providing us with incremental gross profit, as we receive payment from customers based on precious metals content in the anode product they receive."
Mr. Zhu added, "The home appliance market, which is one of China's primary consumers of copper products, is generating triple-digit year-over-year growth, driven by the government's 'Home Appliances to the Countryside' program. According to Ministry of Commerce statistics, home appliance sales in the first 11 months of 2010 totaled RMB 150.4 billion, which represents an increase of 180 percent year-over-year. We are seeing demand not only from the appliance manufacturers, but further upstream from components manufacturers as well, and we believe this demand will remain strong heading into 2011. We remain confident in our ability to meet our full-year 2010 guidance, which calls for significant growth in both gross profit and non-GAAP net income and expect this strength to continue into the new-year."
2010 Financial Guidance and Outlook
Lihua is reaffirming its full year 2010 financial guidance, based on the Company's outlook for the remainder of 2010, including the incremental benefit of precious metals content in copper anode to the Company's gross profit. Lihua expects to increase its gross profit by 57-66% over 2009 to $57.0 to $60.0 million and grow its non-GAAP net income by 48-57% to $38.1 to $40.3 million.
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 pure copper products. Current product offerings include CCA and copper wire, copper rod and copper anode. Except for CCA wire, all other products are produced from recycled scrap copper. Lihua'se 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.
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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
Lihua International, Inc.
Daphne Huang
EVP of Corporate Finance and Director of Investor Relations
(516) 717-9939
Daphne_huang@lihuaintl.com
