SHANGHAI, China, May 21 /Xinhua-PRNewswire-FirstCall/ -- Linkwell Corporation (Linkwell or the Company) (OTC Bulletin Board: LWLL), a leading developer, manufacturer and distributor of healthcare related disinfectants in China, announced today financial results for first quarter ended March 31, 2008 and provided forward looking statements for 2nd quarter 2008 and the entire year 2008.
Consolidated Balance Sheets
For the 1st quarter ending March 31, 2008, compared to the same time period, 2007, Linkwell's cash position improved slightly to $1,331,003 from $1,222,128 and total assets improved to $10,801,379 from $10,015,481
Net Revenues
Linkwell's net revenues increased $1,887,106, or approximately 66% to $4,732,938 for the three months ended March 31, 2008 as compared to net revenues of $2,845,832 for the same period in 2007. For the first three months of 2008, net revenues for Linkwell's support subsidiary, LiKang International, increased $1,331,483, or approximately 116%, to $2,481,432, to the same period of fiscal 2007.
For the first three months of 2008, net revenues for Linkwell's core subsidiary, LiKang Disinfectant, increased $555,623, or approximately 33%, to $2,251,506, compared to the same period of fiscal 2007. Management believes this increase in demand was due to an increase in sales staff and customer recognition of LiKang Disinfectant's high-quality, competitively priced disinfectant products.
Cost Of Revenues
Cost of revenues includes raw materials and manufacturing costs. For the three months ended March 31, 2008, cost of revenues amounted to $3,502,958 or approximately 74% of net revenues as compared to cost of revenues of $1,853,120 or approximately 65% of net revenues for the same period in fiscal 2007. The increase of the percentage is mainly due to the higher percentage of revenues from the LiKang International, which has higher revenue costs than LiKang Disinfectant.
Cost of revenues for LiKang Disinfectant was $1,127,798, or approximately 50% of net revenues for the three months ended March 31, 2008, as compared to $917,004 or approximately 54% of net revenues for the same time period in 2007. This slight decrease in costs indicates Linkwell's cost control measures are working.
Total operating expenses were $806,240 for the three months ended March 31, 2008; an increase of $289,283, compared to the same time period in 2007. This increase included the following.
-- Selling expenses were $328,428 as compared to $266,785 for the same
period in 2007, an increase of $61,643, or approximate 23%.
-- General and administrative expenses were $477,812 as compared to
$250,172 for the same period in 2007, an increase of $227,640, or
approximate 91%.
-- The Company's non-cash consulting fees decreased $58,040 or
approximately 74%, to $20,168 during the three months ended March 31,
2008 as compared to $78,208 for the same period in 2007.
Business Outlook and Guidance for the Second Quarter 2008
For 2nd quarter 2008, Linkwell will provide guidance only on its primary subsidiary, LiKang Disinfectant Company. The major objectives for LiKang Disinfectant include celebrating its 20th Anniversary; contributing to the fight against enterovirus 71 (EV71), and against disease and infections as a result of the earthquakes in China; providing Disinfectant Professionals Training; conducting the Jifro hand sanitizer tournament; and receipt of orders for An'Erdian for the 2008 Olympics.
In late April, LiKang Disinfectant Company began working with the Chinese government, the Red Cross Society of China and other organizations to defeat the spread of EV71. Currently in China, EV71 is causing hand, foot and mouth disease (HFMD) in children, however, it also has the potential to cause severe neurological disease. The illness usually peaks in June or July.
Right after the earthquakes hit Sichuan China on May 12th, 2008 LiKang Disinfectant began working with the Chinese government, the Red Cross Society of China and other organizations to help control the spread of disease and infections. It was the deadliest and strongest earthquake to hit China since the 1976 Tangshan earthquake, which killed over 240,000 people. This relief and prevention effort is a major undertaking for the Company and it is not currently known what the results will be.
In April, LiKang Disinfectant began training and licensing disinfection teams for the 2008 Beijing Olympics. Once this training is completed, the Company will begin China's national training and licensing program for disinfection and pest control professionals.
Later in 2nd quarter 2008, LiKang Disinfectant plans to host the Jifro hand sanitizer tournament to promote and highlight the efficacy and safety of the Company's Jifro product line. Jifro is trademarked in China and the product line includes a surgical hand scrub, a gel for general disinfectant use, an antimicrobial hand wash and a disinfectant for small children.
Also in 2nd quarter 2008, LiKang Disinfectant expects to begin receiving orders from the Beijing Olympic Committee for its An'erdian product line. An'erdian is trademarked in China and the product line includes An'erdian Skin Disinfectant, An'erdian type 2 skin disinfectant, An'erdian type 3 skin and mucous membrane disinfectant, An'erdian skin disinfectant swab.
Projected Net Revenues for LiKang Disinfectant Company
LiKang Disinfectant Company's projected net revenues for the second quarter ending June 30, 2008, are $2.8 million, or approximately 45% higher than the same period in 2007. Projected net profits for 2nd quarter 2008 of approximately $0.4 million compared to $.46 million or approximately 13% less than 2nd quarter 2007. Profits for the quarter are less as a result of higher costs for raw materials and managements desire to keep product prices down to capture a larger market share.
Guidance for 2008
Linkwell management reaffirms its business outlook and financial guidance for 2008.
About Linkwell Corporation
Linkwell develops, manufactures and distributes disinfectant healthcare products in China through its subsidiary LiKang Disinfectant. Linkwell's disinfectant healthcare products are a nationally recognized domestic Chinese brand in this market segment. Linkwell products include disinfectants in liquid, tablet, powder and aerosol form. Through LiKang, Linkwell has a national marketing and sales presence throughout all 22 provinces, 5 autonomous regions, and 4 special municipalities of China.
For more information, please visit http://www.linkwell.us .
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, the impact of competitive products; pricing and new technology; changes in consumer preferences and tastes; effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact:
Investor Relations
Craig Bird
Segue Ventures LLC
Tel: +1-215-885-4981
Email: chbird@segue.biz
