DONGBANG TOWN, China, May 22 /Xinhua-PRNewswire-FirstCall/ -– Sutor Technology Group Limited (OTC Bulletin Board: SUOT) (“Sutor”) today announced financial results for the third quarter of the Company’s 2007 fiscal year, ended March 31, 2007.
Year to year comparison
For the three months ended March 31, 2007, the Company reported revenue of $71.3 million, an increase of 107.6% compared to the $34.3 million reported for the same period last year. Gross profits for the three months ended were $7.2 million, or 10.2% of sales, compared to gross profit of $2.5 million, or 7.2% of sales, for the same quarter last year. Total operating expenses for the three months ended March 31, 2007 were $1.7 million, or 2.4% of sales, compared to $0.8 million, or 2.5% of sales, for the same period last year. Net income for the three months ended March 31, 2007 was $4.4 million, or $.12 per fully diluted common share outstanding (based on 40.0 million weighted average shares), an increase of 250.5% compared to net income of $1.3 million, or $.04 per common share outstanding (based on 30.4 million weighted average shares) in the same period a year ago.
Nine month to nine month comparison
For the first nine months of fiscal year 2007, revenues increased 68.3% to $211.3 million from $125.6 million for the same period last year. Gross profit was $18.9 million, or 8.9% of sales compared to $10.2 million or 8.1% of sales during the first nine months of fiscal year 2007. Total operating expenses were $4.8 million, or 2.3% of sales, compared to $2.0 million or 1.6% of sales, for the first nine months of fiscal year 2007. Net income increased to $11.9 million or 59.3% for the nine month period ended March 31, 2007 as compared to approximately $7.5 million for the same period of the prior year. Earnings per share for the first nine months of fiscal year 2007 were $.36 based on 33.5 million weighted average diluted common shares outstanding compared to $.26 for the first nine months of fiscal year 2006 based on 29.0 million weighted average diluted common shares outstanding.
Balance sheet items
The Company’s cash and cash equivalents balances as of March 31, 2006 were $11.4 million, compared to cash equivalents of $6.5 million as of June 30, 2006. As of March 31, 2007, the company had working capital of $30.5 million. Stockholders’ equity increased 48.5% to $78.3 million, compared to $52.7 million as of June 30, 2006.
Sutor manufactures and sells steel finishing fabrication products through its wholly owned subsidiaries Changshu Huaye Steel Strip Co., Ltd. and Jiangsu Cold-Rolled Technology Co., Ltd. Its products are typically used in the construction industry, widely applied in manufacturing of electrical household appliance parts and out casings, electronics, infrastructure and large industrial equipment. Sutor is in the process of investing a total of about $49 million to complete its vertical integration strategy and expand its galvanizing production capacity.
Forward-looking Statements
This release contains certain “forward-looking statements” relating to the business of Sutor and its subsidiary companies, which can be identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including all business uncertainties relating to product development, marketing, concentration in a single customer, raw material costs, market acceptance, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. Sutor is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
