Exceed Company Ltd, the owner and operator of "Xidelong" brand and one of the leading domestic sportswear brands in China, released its financial results for 2011.
Financial Highlights – Full Year ended December 31, 2011 • Revenue was RMB3,288.6 million (US$522.5 million), representing a 21.8% year-over-year increase. • Gross profit was RMB992.3 million (US$157.7 million), representing a 17.9% year-over-year increase. Gross margin decreased from 31.2% for 2010 to 30.2% for 2011. • Operating profit was RMB498.2 million (US$79.2 million), representing a 21.6% year-over-year increase. • Net profit was RMB470.1 million (US$74.7 million), representing a 33.1% year-over-year increase.
Mr. Shuipan Lin, Exceed's founder, Chairman and CEO, commented, "We are pleased to report healthy results for the full year 2011, with over 20% growth in revenue and 30% growth in net income. Our results were supported by our ongoing marketing and branding efforts which have promoted our brand image and allowed us to further penetrate the domestic sportswear market in China.
“Our key target audience, younger generations in China's developing second and third-tier cities continue to identify with our 'happy lifestyle' branding theme. In addition, our involvement in the nationwide 'Fitness for All Campaign 2011' was recently recognized with an Outstanding Contribution Award from China's General Administration of Sport, the government agency responsible for sports in China, which further enhanced our brand image.
“By continuing to improve the awareness and acceptance of a 'Sports Lifestyle,' Exceed is helping to educate a whole new generation of Chinese youth about the benefits of leading a healthy and active life.
"In addition to our ongoing marketing and branding efforts, we have made progress on our operational plan to maximize our growth potential in the evolving PRC domestic sportswear market. As recently announced, we have sought to improve our internal manufacturing capacity, thereby increasing our bargaining power, providing more stability to our supply chain, which, in turn, we believe will positively affect our gross profit margin.
“A significant part of our new operational plan is to purchase a 400,000 square meter parcel of land in Ruichang City, Jiangxi Province, where we plan to establish a new operating subsidiary and construct a new production facility upon this parcel of land. Upon completion of the construction of our new production facility in Ruichang City by the end of 2013, we expect that our annual production capacity for our footwear products will increase to approximately 30.0 million pairs while also gaining certain internal apparel production capabilities.
"The filing of our annual results was rescheduled to allow us sufficient time to properly assess the accounting treatment of certain escrow shares and earn-out shares. To reflect the revision to our method of accounting in relation to our conditional obligations in relation to release and issue these escrow shares and earn-out shares, we subsequently restated results for 2009 and 2010.
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