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China Linen Textile's Q3 revenues up

16 Nov '11
5 min read

Gross profit for the nine months ended September 30, 2011 was $17.1 million, up 73.8% from $9.8 million as compared to the first nine months of 2010. Gross margin for the nine months ended September 30, 2011 was 35.6 %, an increase of 450 basis points as compared to 31.1% for the nine months ended September 30, 2010, primarily attributable to sales price increases and the ability to efficiently control production costs.

Operating expenses increased 101.5% to $3.4 million in the nine months ended September 30, 2011 as compared to $1.7 million in the same period of 2010, mainly due to an increase in sales expenses, research and development costs, and depreciation in connection with the increase in fixed assets.

Operating income increased 68.0% to $13.7 million for the first nine months of 2011 as compared to $8.1 million in the same period of 2010, while operating margins increased 271 basis points to 28.5%.

Net income was $9.7 million for the nine months ended September 30, 2011 as compared to $6.9 million for the nine months ended September 30, 2010, representing an increase of approximately 41.7%. Diluted earnings per share was $1.42, compared to $1.19 in the same period of 2010.

Balance Sheet and Cash Flow
As of September 30, 2011, the Company had cash and cash equivalents of $5.1 million, compared to $4.2 million at December 31, 2010. Accounts receivable balance was approximately $12.1 million on September 30, 2011, compared to approximately $13.3 million on December 31, 2010.

Days sales outstanding (DSO) for the first nine months of 2011 were approximately 73 days, compared to 114 days for the same period in 2010, mainly due to increased collection efforts. Inventory increased from $9.9 million as of December 31, 2010 to $24.8 million as of September 30, 2011, as the Company purchased a significant amount of raw materials to meet increasing demand and to reduce the impact of increasing unit purchase prices in the future.

Working capital as of September 30, 2011 totaled $34.2 million. The Company had total shareholders' equity of $43.7 million at September 30, 2011, with total assets of $63.3 million versus total liabilities of $19.6 million, compared to total shareholders' equity of $32.2 million at December 31, 2010, with total assets of $51.6 million versus total liabilities of $19.5 million. The book value of net assets per diluted share was approximately $6.11 as of September 30, 2011.

For the nine months ended September 30, 2011, the Company generated $3.3 million cash from operations, an increase of 33.0% from $2.5 million in the same period last year.

China Linen Textile Industry, Ltd. 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.

China Linen Textile Industry Ltd

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