China Linen Textile Industry, Ltd. Announces $17.6 million in Revenue and $0.20 in EPS for the First Half of 2010
LANXI COUNTY, China,
Textile Industry, Ltd. (OTC Bulletin Board: CTXIF) (“China Linen” or the
“Company”), a China-based company engaged in the production and sale of linen
yarn and various types of linen fabric, today announced its first and second
quarter 2010 financial results.
-- Six-month 2010 revenue increased 26.9% to 17.6 million over the same
period in 2009.
-- Six-month net income increased 50.3% to $4.0 million with EPS of $0.20
vs. $0.13 during the same period in 2009.
-- Reiterates 2010 revenue guidance of $38.1 million and 2010 net income
guidance of $9.3 million, representing anticipated year-over-year
growth of approximately 29.6% and 63.2%, respectively.
SUMMARY FINANCIALS
First Quarter 2010 Results (unaudited)
Q1 2010 Q1 2009 CHANGE
Net Sales $8.8 million $5.5 million +58.7%
Gross Profit $2.7 million $1.1 million +139.0%
Net Income $2.1 million $1.1 million +89.8%
EPS (Diluted) $0.10 $0.06 +89.1%
Second Quarter 2010 Results (unaudited)
Q2 2010 Q2 2009 CHANGE
Net Sales $8.8 million $8.3 million +5.7%
Gross Profit $2.7 million $2.5 million +7.4%
Net Income $1.9 million $1.6 million +22.5%
EPS (Diluted) $0.10 $0.08 +21.8%
Six-Month 2010 Results (unaudited)
6-Month 2010 6-Month 2009 CHANGE
Net Sales $17.6 million $13.9 million +26.9%
Gross Profit $5.4 million $3.7 million +48.3%
Net Income $4.0 million $2.7 million +50.3%
EPS (Diluted) $0.20 $0.13 +49.6%
First Quarter Ended
Revenue for the first quarter of 2010 increased 58.7% to approximately
increase was primarily due to increased marketing efforts which resulted in an
increase in sales of linen fabric of
focused on linen fabric which generated 100% of revenue during the first
quarter of 2010, while linen fabric contributed 90.0% of revenue in the first
quarter of 2009 with 10% revenue generated from subcontracting linen fabric
and linen yarn to fully utilize the Company’s production capacity.
Cost of goods sold for the three months ended
approximately
79.5% of revenue for the three months ended
the first quarter of 2010 was
compared to
first quarter of 2009. The increase in gross profit was due to the increased
sales volumes of higher margin linen fabric in the first quarter of 2010.
Operating expenses for the three months ended
approximately
in 2009. The increase was primarily due to the increased expenses in
connection with its public company compliance efforts.
Operating income for the first quarter of 2010 totaled approximately
million
2009. Operating margins were 24.8% and 14.8% for the first quarter of 2010 and
2009, respectively. The improvement in our operating margin was due to
increased revenue and improved expense management.
Other income totaled
compared to
of
decrease of
the first quarter of 2010, as compared to the same period in 2009.
Net income was approximately
an 89.8% increase from
The increase in net income was primarily attributable to an increase of
per share increased 89.1% to
diluted common shares outstanding, respectively. The increase in diluted
earnings per share was attributable to an increase of
as compared to the same period in 2009.
Second Quarter Ended
Revenue for the second quarter of 2010 increased 5.7% to
compared to
from an increase in sales of linen fabric of
sales of our linen fabric can be attributed to our increased efforts in
marketing such fabric. For the second quarter of 2010, the sales of linen
fabric increased
period in 2009.
For the three months ended
million
profit was
second quarter of 2009. Second quarter 2010 gross margins were 30.8% compared
to 30.3% in the second quarter of 2009.
Operating expenses for the second quarter of 2010 were approximately
million
administrative expenses were higher in the second quarter of 2010 mainly due
to costs associated with being a public company. Operating income for the
second quarter of 2010 totaled
of 26.0% and 29.0%, respectively.
Net income for the second quarter of 2010 increased 22.5% to
compared to second quarter 2009 net income of
net income was primarily attributable to an increase of
compared to the same period in 2009. Diluted earnings per share increased
21.8% to
quarter of 2009, based upon 20.2 million and 20.1 million diluted common
shares outstanding, respectively.
“We are pleased to report strong revenue and earnings growth during the
first half of the year, which resulted from our increased marketing efforts,
higher average selling prices for linen fabric, and the strong demand for our
linen fabric in both domestic and international markets,” stated Mr. Gao Ren,
Chairman and President of
from domestic and international customers this year due to the recovery of the
global economy and the increasing awareness of the benefits of natural
textiles, such as linen, among consumers.”
Six Months Ended
For the six months ended
26.9% to
resulting from an increase in sales of linen fabric of
The increase in sales of our linen fabric can be attributed to our increased
efforts in marketing such fabric. Gross profit was approximately
for the first six months of 2010, representing an increase of 48.3% from the
first six months of 2009. Gross margins improved 440 basis points to 30.8% for
the first six months of 2010 compared to the year ago period
Income from operations was
representing an increase of 38.1% over the first six months of 2009. Operating
margins were 25.4% for the first six months of 2010, compared to 23.3% for the
first six months of 2009. The improvement of operating margin was due to
increased revenue and improved expense management.
Net income was
increase of approximately 50.3% from the same period in 2009. The increase in
net income was primarily attributable to an increase of
as compared to the same period in 2009. Fully diluted earnings per share
increased 49.6% to
for the first six months of 2009, based up on 20.2 million and 20.1 million
fully diluted shares outstanding, respectively.
Balance Sheet and Cash Flow
Cash and cash equivalents totaled
to
approximately
million
months of 2010 were at 113 days, compared to 136 days for the same period in
2009. The decrease was primarily due to increased efforts in collecting the
outstanding payment. The Company had a current ratio of 2.3 to 1 and
stockholders’ equity of
versus total liabilities of
For the first six months of 2010, the Company generated
cash from operations versus
“Our enhanced international market expansion is anticipated to introduce
more customers and orders to generate incremental revenues for the balance of
2010. The addition of new production capacity from the lease agreement signed
in
financial performance. Combined with our increased marketing efforts, higher
average selling prices for linen fabric, and the strong demand for our linen
fabric in both domestic and international markets, these expansion efforts
give us confidence in meeting our 2010 revenue and earnings guidance.”
About China Linen Textile Industry, Ltd.
China Linen Textile Industry, Ltd. ( http://www.chinalinen.cc/ ) is
principally engaged in the production and sale of linen yarn and various types
of linen fabric. The Company is also involved in consultation and R&D related
to linen technology and linen products. The Company carries on all of its
business activities through its subsidiary, Heilongjiang Lanxi Sunrise Linen
Textile Industry Co., Ltd. (“Lanxi Sunrise”), established in
located in Lanxi County, the “Homeland of Flax in China,” near
China. Lanxi Sunrise has one yarn-spinning factory and two fabric weaving
factories in its 28,000 square meters of building area with a staff of 1,500
and 310 sets of world-class, advanced production machinery. Annual production
capacity totals approximately 1,600 tons with 50 different types of yarn and 8
million meters of fabric with 110 types. Approximately 55 percent of its
products are exported to more than 10 countries.
Forward-looking Statements
The above news release contains forward-looking statements. The statements
contained in this document that are not statements of historical fact,
including but not limited to, statements identified by the use of terms such
as “anticipate,” “appear,” “believe,” “could,” “estimate,” “expect,” “hope,”
“indicate,” “intend,” “likely,” “may,” “might,” “plan,” “potential,”
“project,” “seek,” “should,” “will,” “would,” and other variations or negative
expressions of these terms, including statements related to expected market
trends and the Company’s performance, are all “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995 and
involve a number of risks and uncertainties. These statements are based on
assumptions that management believes are reasonable based on currently
available information, and include statements regarding the intent, belief or
current expectations of the Company and its management. Prospective investors
are cautioned that any such forward-looking statements are not guarantees of
future performances, and are subject to a wide range of external factors,
uncertainties, business risks, and other risks identified in filings made by
the company with the Securities and Exchange Commission. Actual results may
differ materially from those indicated by such forward-looking statements. The
Company expressly disclaims any obligation or undertaking to update or revise
any forward-looking statement contained herein to reflect any change in the
company’s expectations with regard thereto or any change in events, conditions
or circumstances upon which any statement is based.
For further information, contact:
China Linen Textile Industry, Ltd.
Mr. James Shaofeng Qi, CFO
Tel: +86-139-1093-4932
Mr. Xiao Weixing, IR Manager
Tel: +86-137-9600-2690
Email: xiaoweixing@chinalinen.cc
HC International, Inc.
Scott Powell, Vice-President
Tel: +1-917-721-9480
Email: scott.powell@hcinternational.net
Web: http://www.hcinternational.net
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2010 and December 31, 2009
(Stated in US Dollars)
March 31, December 31,
2010 2009
Unaudited Audited
$ $
ASSETS
Current assets
Cash 6,986,300 2,320,656
Bank checks and commercial paper -- 1,921,610
Accounts receivable, net 10,541,195 8,762,516
Inventory 5,393,878 4,862,855
Prepaid expenses 2,661,413 2,183,219
Other receivables 167,083 100,165
Due from related parties 1,447,715 2,576,579
Governmental subsidy receivable 542,535 1,449,331
Deferred tax assets 245,660 228,794
Total current assets 27,985,779 24,405,725
Non-current assets
Property, plant and equipment, net 9,055,240 9,195,907
Land use right, net 406,000 408,134
Governmental subsidy receivable,
non-current 3,070,395 1,882,593
Deferred tax assets, non-current 235,732 238,600
TOTAL ASSETS 40,753,146 36,130,959
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank loans 5,428,324 4,048,583
Accounts payable 4,154,612 2,565,188
Accrued expenses and other payables 1,422,801 1,101,571
Taxes payable 1,998,172 3,729,506
Deferred revenue 474,628 423,153
Deferred governmental subsidy 89,009 88,995
Due to related parties 747,173 74,888
Deferred tax liabilities 369,240 362,333
Total current liabilities 14,683,959 12,394,217
Non-current liabilities
Deferred governmental subsidy,
non-current 1,939,237 1,792,482
Deferred tax liabilities, non-current 529,238 470,648
TOTAL LIABILITIES 17,152,434 14,657,347
STOCKHOLDER'S EQUITY
Common stock
$0.002 par value, 500,000,000 shares
authorized; 20,215,003 shares and
20,200,003 issued outstanding as
of March 31, 2010 and December 31,
2009 42,304 42,274
Additional paid-in capital 3,119,586 3,093,816
Statutory reserves 1,593,559 1,593,559
Retained earnings 17,157,712 15,060,004
Accumulated other comprehensive
income 1,687,551 1,683,959
TOTAL STOCKHOLDER'S EQUITY 23,600,712 21,473,612
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 40,753,146 36,130,959
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31, 2010 and 2009
(Stated in US Dollars)
Three months ended
March 31,
2010 2009
$ $
Revenues
Net sales 8,787,093 5,537,069
Costs of goods sold 6,073,682 4,401,836
Gross profit 2,713,411 1,135,233
Operating expenses
Selling expenses 140,207 123,563
General and administrative expenses 394,494 192,459
Total operating expenses 534,701 316,022
Operating income 2,178,710 819,211
Other income (expense)
Interest income 51,952 63,017
Interest expense (81,274) (98,885)
Government subsidies 532,723 692,019
Other income/(expense) 22,251 (4,077)
Total other income 525,652 652,074
Income before tax 2,704,362 1,471,285
Income tax 606,654 366,033
Net income 2,097,708 1,105,252
Other comprehensive income
Effects of foreign currency
conversion 3,592 9,253
Comprehensive income 2,101,300 1,114,505
Basic and diluted earnings per share 0.104 0.055
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 2010 and 2009
(Stated in US Dollars)
Three months ended
March 31,
2010 2009
Cash Flows from Operating Activities
Net income $2,097,708 $1,105,252
Adjustments to reconcile net income to net
cash provided by operating activities:
Fair value of common stock expensed for
services 25,800 --
Impairment loss on property, plant and
equipment -- 4,077
Depreciation 148,792 110,526
Amortization 2,201 2,197
Deferred income taxes 51,441 52,657
Changes in:
Bank checks and commercial paper 1,920,220 263,620
Accounts receivable (1,784,242) (2,709,528)
Inventory (534,144) 2,323,903
Prepaid expenses (479,513) (1,457,282)
Other receivables (66,978) (330,772)
Governmental subsidy, net (135,170) (171,205)
Accounts payable 1,590,974 285,970
Accrued expenses and other payables 321,973 375,057
Taxes payable (1,728,784) (118,675)
Deferred revenue 22,551 120,684
Due to/from related parties 1,828,586 1,479,807
Net cash provided by operating activities $3,281,415 $1,336,288
Cash Flows from Investing Activities
Purchase of property, plant and equipment $(6,652) $(77,636)
Net cash used in investing activities $(6,652) $(77,636)
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2010 and December 31, 2009
(Stated in US Dollars)
June 30, December 31,
2010 2009
Unaudited Audited
$ $
ASSETS
Current assets
Cash 3,944,211 2,320,656
Bank checks and commercial paper -- 1,921,610
Accounts receivable, net 10,884,145 8,762,516
Inventory 6,794,826 4,862,855
Prepaid expenses 2,691,841 2,183,219
Other receivables 185,605 100,165
Due from related parties 1,976,962 2,576,579
Governmental subsidy receivable 810,937 1,449,331
Deferred tax assets 246,655 228,794
Total current assets 27,535,182 24,405,725
Non-current assets
Property, plant and equipment, net 8,973,345 9,195,907
Land use right, net 405,435 408,134
Governmental subsidy receivable,
non-current 3,082,833 1,882,593
Deferred tax assets, non-current 236,687 238,600
TOTAL ASSETS 40,233,482 36,130,959
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank loans 3,535,339 4,048,583
Accounts payable 3,411,624 2,565,188
Accrued expenses and other payables 1,576,245 1,101,571
Taxes payable 2,351,840 3,729,506
Deferred revenue 812,656 423,153
Deferred governmental subsidy 96,246 88,995
Due to related parties -- 74,888
Deferred tax liabilities 363,859 362,333
Total current liabilities 12,147,809 12,394,217
Non-current liabilities
Deferred governmental subsidy,
non-current 1,983,501 1,792,482
Deferred tax liabilities, non-current 472,631 470,648
TOTAL LIABILITIES 14,603,941 14,657,347
STOCKHOLDER'S EQUITY
Common stock $0.002 par value,
500,000,000 shares authorized;
20,215,003 shares and 20,200,003
shares issued outstanding as of
June 30, 2010 and December 31, 2009 42,304 42,274
Additional paid-in capital 3,119,586 3,093,816
Statutory reserves 1,593,559 1,593,559
Retained earnings 19,085,193 15,060,004
Accumulated other comprehensive income 1,788,899 1,683,959
TOTAL STOCKHOLDER'S EQUITY 25,629,541 21,473,612
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 40,233,482 36,130,959
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended June 30, 2010 and 2009
(Stated in US Dollars)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
$ $ $ $
Revenues
Net sales 8,811,932 8,336,046 17,599,025 13,873,115
Costs of goods sold 6,098,647 5,810,884 12,172,329 10,212,720
Gross profit 2,713,285 2,525,162 5,426,696 3,660,395
Operating expenses
Selling expenses 15,385 59,388 155,592 182,951
General and
administrative
expenses 410,487 50,734 804,981 243,193
Total operating
expenses 425,872 110,122 960,573 426,144
Operating income 2,287,413 2,415,040 4,466,123 3,234,251
Other income (expense)
Interest income 45,066 62,443 97,018 125,460
Interest expense (77,388) (73,000) (158,662) (171,885)
Government subsidies 216,924 (366,603) 749,647 325,416
Other income (expense) 22,266 (86,282) 44,517 (90,359)
Total other income 206,868 (463,442) 732,520 188,632
Income before tax 2,494,281 1,951,598 5,198,643 3,422,883
Income tax 566,800 378,288 1,173,454 744,321
Net income 1,927,481 1,573,310 4,025,189 2,678,562
Other comprehensive
income
Effects of foreign
currency conversion 101,348 25,884 104,940 35,137
Comprehensive income 2,028,829 1,599,194 4,130,129 2,713,699
Basic and diluted
earnings per share 0.095 0.078 0.199 0.133
CHINA LINEN TEXTILE INDUSTRY, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, 2010 and 2009
(Stated in US Dollars)
Six months ended
June 30,
2010 2009
Cash Flows from Operating Activities
Net income $4,025,189 $2,678,562
Adjustments to reconcile net income
to net cash provided by operating
activities:
Fair value of common stock expensed
for services 25,800 --
Impairment loss on property, plant
and equipment
Depreciation 224,152 221,395
Amortization 4,402 4,397
Deferred income taxes 90,379 49,198
Changes in:
Bank checks and commercial paper 1,921,610 37,722
Accounts receivable (2,121,629) (6,673,531)
Inventory (1,931,971) 5,551,550
Prepaid expenses (508,622) (2,200,327)
Other receivables (85,440) (568,788)
Governmental subsidy, net (363,576) 171,526
Accounts payable 846,436 (172,914)
Accrued expenses and other payables 474,674 480,486
Taxes payable (1,377,666) 121,281
Deferred revenue 360,287 181,823
Due to/from related parties 553,945 1,479,484
Net cash provided by operating
activities 2,137,970 1,361,864
Cash Flows from Investing Activities
Purchase of property, plant and
equipment (21,297) (23,053)
Net cash used in investing
activities (21,297) (23,053)
SOURCE China Linen Textile Industry, Ltd.