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China Linen Textile's Q3 revenues up
16
Nov '11
China Linen Textile Industry, Ltd one of China's leading linen fabric and linen yarn producers and exporters, announced financial results for the third quarter ended September 30, 2011.

Mr. Gao Ren, Chairman and CEO of China Linen, said: "I am pleased to report that the third quarter of this year was marked by continued growth in revenue and net income despite our strong performance in the same period last year. For the first nine months, we expanded our sales and distribution channels for our linen fabric and yarn. While linen fabric sales increased 21.7%, we were able to expand the sales of linen yarn by 598.9%, which helps to drive both top and bottom line expansion.

During the first nine months, we moved closer to our objective of becoming a more fully integrated linen producer by bleaching our own products and introducing high margin color yarn products. International sales remained robust, accounting for 58% of revenues as global fashion industry increasingly utilized pure linen and blended linen products."

Three Months Ended September 30, 2011 Financial Results
Revenue for the three months ended September 30, 2011 totaled $16.2 million, up approximately 15.2% from $14.0 million for the three months ended September 30, 2010. The increase in revenue was primarily attributable to increased sales volume of linen yarn due to higher demand from new customers.

Gross profit for the third quarter of 2011 was $5.5 million, up 25.5% from $4.4 million as compared to the third quarter of 2010. The increase in gross profit was primarily driven by sales growth. Gross margin for the three months ended September 30, 2011 was 34.3%, an increase of 280 basis points as compared to 31.5% for the three months ended September 30, 2010, mainly due to increase in sales price and the ability to efficiently control production costs.

Operating expenses increased 50.5% to $1.1 million in the three months ended September 30, 2011 as compared to $0.7 million in the same period of 2010, mainly due to increase in sales expenses, research and development costs, and depreciation in connection with increase in fixed assets.

Operating income increased 20.5% to $4.4 million for the third quarter of 2011 as compared to $3.7 million in the same period of 2010, while operating margin increased 119 basis points to 27.4%.

Net income was $3.1 million for the three months ended September 30, 2011 as compared to $2.8 million for the three months ended September 30, 2010, representing an increase of approximately 8.2%. Diluted earnings per share was $0.45 based on approximate 7.2 million diluted shares outstanding, compared to $0.49 in the same period of 2010 based on approximate 5.8 million diluted shares outstanding.

Revenue for the nine months ended September 30, 2011 totaled $48.1 million, an increase of approximately 52% from $31.6 million for the nine months ended September 30, 2010. The increase in revenue was primarily attributable to increased sales volume of both linen fabric and linen yarn due to increased distribution channels, and increased sales prices.


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