BEIJING, May 15 /Xinhua-PRNewswire/ -- NextMart, Inc.
(OTC Bulletin Board: NXMR), a Chinese direct sales company, today reported its second quarter fiscal 2008 financial results.
For the fiscal quarter ended March 31, 2008, NextMart reported gross revenue of US$1,412,273. After costs of goods sold of US$1,212,818, NextMart reported gross profit for the quarter of US$199,455. After all sales, marketing and other administrative expenses, particularly non-cash expenses of US$379,863 that included depreciation and amortization related expenses of US$239,016 and other non-cash charges of US$140,847, the Company reported an operating loss of US$586,664. After taking into account other income, one-time gains, tax expenses and currency translations, the Company reported a comprehensive net loss of US$737.937 or a loss of US$0.01 per outstanding share.
For the six months ended March 31, 2008, NextMart reported gross revenue of US$2,808,610. After costs of goods sold of US$2,296,248, NextMart reported gross profit for the quarter of US$512,362. After all sales, marketing and other administrative expenses, particularly non-cash expenses of US$681,055 that included depreciation and amortization related expenses of US$474,667 and other non-cash charges of US$206,388, the Company reported an operating loss of US$845,537. After taking into account other income, one-time gains, tax expenses and currency translations, the Company reported a comprehensive net loss of US$1,081,364 or a loss of US$0.01 per outstanding share.
For more detailed information on the Company’s results of operations, please refer to the Company’s Form 10-QSB filing for the period ended March 31, 2008 which can be found at http://www.sec.gov .
The Company’s loss for the quarter ended March 31, 2008 was due primarily to a drop in sales in the Company’s core OEM apparel business. This drop in sales resulted from (a) Reduced orders from the Company’s key client in the U.S. due to international market conditions; (b) A continually appreciating Chinese yuan, which makes Chinese exports more expensive to foreign buyers; and (c) Insufficient capital to expand the Company’s domestic sales operations due the inability to raise financing under the current share price of the Company.
As a result of these ongoing challenges, NextMart has announced that it will not be able to meet its previously-disclosed earnings guidance of US$4-6 million for the fiscal year ending September 30, 2008. This earnings guidance was disclosed by the Company on Form 8-K filed with the SEC on October 20, 2007.
NextMart plans to provide an update on its business plans for Q3 and Q4 fiscal 2008 and fiscal 2009 in the Company’s next press release.
This press release includes statements that may constitute ‘forward-looking’ statements, usually containing the word ‘believe,’ ‘estimate,’ ‘project,’ ‘expect,’ ‘plan,’ ‘anticipate’ or similar expressions. Forward- looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of NextMart’s product and services in the marketplace, competitive factors and changes in regulatory environments. These and other risks relating to NextMart’s business are set forth in NextMart’s Annual Report on Form 10-KSB for the period ended September 30, 2007 filed with the Securities and Exchange Commission on December 31, 2007, and other reports filed from time to time with the Securities and Exchange Commission. By making these forward-looking statements, NextMart disclaims any obligation to update these statements for revisions or changes after the date of this release.