BEIJING, China. Oct. 24 /Xinhua-PRNewswire-FirstCall/ -- Qiao Xing Mobile Communication Co., Ltd. ("Qiao Xing Mobile" or the "Company") (NYSE: QXM), one of China's leading domestic manufacturers of mobile handsets operating its business primarily through its subsidiary, CEC Telecom Co., Ltd. ("CECT"), today announced its unaudited results for the quarter ended June 30, 2008.
The Company previously only released its operating results for the second quarter because a third party valuation was being conducted for the purposes of accounting for the $70 million convertible notes issued in May 2008. The valuation was just completed and the Company is reporting its unaudited financial results for the second quarter of 2008.
Net income before extraordinary item for the second quarter was RMB133.4 million (US$19.4 million)(1). This represents a 25.4% decrease from the second quarter of 2007 and a 25.5% increase from the first quarter of 2008.
Basic and diluted earnings per share for the second quarter of 2008 were RMB2.46 (US$0.36) and RMB0.82 (US$0.12), respectively.
Mr. Wu Zhiyang, Chairman of Qiao Xing Mobile, said, "We remain very positive about our third quarter operating results and expect to meet our targeted operating income."
(1) This announcement contains translations of certain Renminbi (RMB)
amounts into United States dollars (US$) at specified rates solely for
the convenience of the reader. Unless otherwise noted, all
translations from RMB to US$ were made at a rate of RMB6.8591 to
US$1.00, the effective noon buying rate as of June 30, 2008 in The
City of New York for cable transfers of RMB as certified for customs
purposes by the Federal Reserve Bank of New York. No representation is
made that the RMB amounts referred to in this announcement could have
been or could be converted into U.S. dollars at any particular rate or
at all.
About Qiao Xing Mobile Communication Co., Ltd.
Qiao Xing Mobile Communication Co., Ltd. is one of the leading domestic manufacturers of mobile handsets in China in terms of unit sales volume. The Company manufactures and sells mobile handsets based primarily on Global System for Mobile Communications, or GSM, global cellular technologies. It operates its business primarily through CEC Telecom Co., Ltd., or CECT, its 96.6%-owned subsidiary in China. Through its manufacturing facility in Huizhou, Guangdong Province, China, and two research and development centers in Huizhou and Beijing, the Company develops, produces and markets a wide range of mobile handsets, with increasing focus on differentiated products that generally generate higher profit margins. For more information, please visit http://www.qxmc.com .
Safe Harbor Statement
This press release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "intend," "is /are likely to," "may," "plan," "potential," "will" or other similar expressions. Statements that are not historical facts, including statements about Qiao Xing Mobile's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. Qiao Xing Mobile does not undertake any obligation to update any forward-looking statement, except as required under applicable laws. All information provided in this press release is as of October 24, 2008, and Qiao Xing Mobile undertakes no duty to update such information, except as required under applicable law.
For further information, please contact:
Tao Ma
Qiao Xing Mobile Communication Co., Ltd.
Tel: +86-10-8219-3706
Email: matao@qxmc.com
Qiao Xing Mobile Communication Co., Ltd. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(amounts in thousands)
December 31, 2007 June 30, 2008
RMB RMB
Assets
Cash 2,729,982 2,787,582
Restricted cash 94,384 120,100
Accounts receivable, net 418,564 490,159
Bills receivable - 23,400
Inventories 177,279 151,096
Prepayments to suppliers 155,993 486,837
Prepaid expenses and other 19,295 11,209
current assets
Deferred income taxes 5,685 5,366
Total current assets 3,601,182 4,075,749
Property, machinery and
equipment, net 175,469 183,387
Land use rights 36,106 35,706
Equity investment 7,803 7,803
Goodwill 112,814 112,814
Other intangible assets, net 60,728 53,348
Deferred debt issuance
costs, net - 49,606
Total assets 3,994,102 4,518,413
Liabilities, minority interests
and shareholders' equity
Short-term borrowings 983,904 1,192,728
Accounts payable 107,990 75,609
Prepayments from customers 4,585 10,512
Accrued liabilities 41,401 53,036
Amounts due to related parties 4,532 29,358
Other payables and current 58,630 22,510
liabilities
Embedded derivative liability - 185,573
Income taxes payable 38,722 25,520
Total current liabilities 1,239,764 1,594,846
Convertible notes - 166,956
Deferred income taxes 5,561 4,680
Total liabilities 1,245,325 1,766,482
Minority interests 78,235 84,216
Shareholders' equity 2,670,542 2,667,715
Total liabilities,
minority interests and
shareholders' equity 3,994,102 4,518,413
Qiao Xing Mobile Communication Co., Ltd. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(amounts in thousands, expect share and per share data)
Three months ended
Note June 30, 2007 March 31, 2008 June 30, 2008
RMB RMB RMB
(Restated)(1)
Revenues 844,146 604,455 383,689
Cost of goods sold (561,290) (414,583) (250,666)
Gross profit 282,856 189,872 133,023
Selling and
distribution
Expenses (17,700) (16,761) (33,153)
General and
administrative
expenses (21,261) (11,232) (12,680)
Research and
development
expenses (6,951) (5,685) (7,963)
Amortization of
intangible assets (6,350) (4,222) (3,158)
Operating income 230,594 151,972 76,069
Foreign exchange
gain (loss), net 2,228 4,367 (2,502)
Interest income 5,063 6,589 6,589
Interest expense (10,448) (13,725) (35,635)
Gain on
remeasurement
of embedded
derivatives - - 113,730
Other income
(loss), net 113 291 (3,975)
Income before income
tax expense, minority
interests and
extraordinary items 227,550 149,494 154,276
Income tax expense (35,323) (39,076) (19,005)
Income before
minority interests
and extraordinary
item 192,227 110,418 135,271
Minority interests (13,489) (4,118) (1,863)
Net income before
extraordinary item 178,738 106,300 133,408
Extraordinary item -
gain on acquisition
of additional equity
interest in CECT 28,689 - -
Net income 207,427 106,300 133,408
Basic earnings per
Share (2)
- Before
extraordinary item 3.72 2.00 2.46
- Extraordinary item 0.60 - -
- After
extraordinary item 4.32 2.00 2.46
Diluted earnings per
Share: (2)
- Before
extraordinary item 3.72 2.00 0.82
- Extraordinary item 0.60 - -
- After
extraordinary item 4.32 2.00 0.82
Weighted average
number of shares
outstanding: (2)
- Basic 47,967,000 53,028,000 49,467,000
- Diluted 47,967,000 53,028,000 54,333,000
Qiao Xing Mobile Communication Co., Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(1) As previously announced, the financial statements of the Company
for the three months ended June 30, 2007 have been revised to
correct an immaterial error that resulted from a change in the
functional currency of the Company from Renminbi to United
States dollar. With the completion of the Company's listing on
the NYSE on May 3, 2007, substantially all of its cash and
financings are now denominated in United States dollars. Due to
this significant change in the Company's economic facts and
circumstances, management concluded that the Company's
functional currency should be changed from Renminbi to United
States dollars, effective May 3, 2007. The functional currency
of all other companies in the Group continues to be Renminbi. The
change in functional currency has resulted in an increase in the
previously reported consolidated net income for the three months
ended June 30, 2007 by approximately RMB9.4 million.
(2) Basic and diluted earnings per share data reflects on a
retroactive basis a 40-for-one share split that became effective on
April 13, 2007.
(3) The accompanying unaudited condensed consolidated financial
statements do not fully comply with U.S. GAAP due to the
omission of certain required disclosures.
