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FUQI gross margin fall in Q4 2007
22 Feb '08
4 min read
Total non-cash compensation in the quarter was approximately $900,000, and the reversal of the previous year's tax provision was approximately $4.2 million. Excluding the effect of non-cash compensation and reversal of the previous year's tax provision, net income margin is expected to be approximately 6.5%- 7.1% and adjusted diluted earnings per share is expected to be in the range of $0.19-$0.21.
This exceeds prior 4Q07 diluted EPS guidance of $0.14-$0.18. Management is providing a non-GAAP measure in order to enhance investors' and other readers' understanding and assessment of the Company's financial performance.
Mr. Yu Kwai Chong, Chairman of Fuqi International commented, "We are pleased with the traction we are seeing in our revenue growth, and expect this strength to continue, especially as we begin to penetrate the retail market.
We are on track to complete our previously announced acquisition of Temix by the end of the first quarter, and look forward to Temix's contribution to our retail business, as we continue to take steps to build awareness of the Fuqi brand name among wholesale customers and consumers. We remain focused on our goal of becoming the leading provider of luxury jewelry products in China."
Mr. Chong continued, "Our utilization of the new hedging tools offered by the Shanghai Futures Exchange and through certain Hong Kong-based financial institutions should help us to mitigate the effects of price volatility of our raw materials going forward.
Additionally, we believe our current efficient operating strategy, combined with our pending acquisition of Temix's license to buy diamonds on the Shanghai Diamond Exchange China's only legal, government-owned diamond supplier will enable us to sustain long term wholesale gross margins in the 10.5% range, in line with our historical average, with additional gross margin upside as our branded retail business becomes more meaningful to overall sales.
We will provide a more detailed outlook when we report our comprehensive results for the fourth quarter and full year 2007 near the end of March, 2008."
This exceeds prior 4Q07 diluted EPS guidance of $0.14-$0.18. Management is providing a non-GAAP measure in order to enhance investors' and other readers' understanding and assessment of the Company's financial performance.
Mr. Yu Kwai Chong, Chairman of Fuqi International commented, "We are pleased with the traction we are seeing in our revenue growth, and expect this strength to continue, especially as we begin to penetrate the retail market.
We are on track to complete our previously announced acquisition of Temix by the end of the first quarter, and look forward to Temix's contribution to our retail business, as we continue to take steps to build awareness of the Fuqi brand name among wholesale customers and consumers. We remain focused on our goal of becoming the leading provider of luxury jewelry products in China."
Mr. Chong continued, "Our utilization of the new hedging tools offered by the Shanghai Futures Exchange and through certain Hong Kong-based financial institutions should help us to mitigate the effects of price volatility of our raw materials going forward.
Additionally, we believe our current efficient operating strategy, combined with our pending acquisition of Temix's license to buy diamonds on the Shanghai Diamond Exchange China's only legal, government-owned diamond supplier will enable us to sustain long term wholesale gross margins in the 10.5% range, in line with our historical average, with additional gross margin upside as our branded retail business becomes more meaningful to overall sales.
We will provide a more detailed outlook when we report our comprehensive results for the fourth quarter and full year 2007 near the end of March, 2008."
FUQI International Inc
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