China Linen registers record revenue & earnings for Q3
China Linen Textile Industry Ltd, one of China's leading linen fabric and yarn producers, marketers and exporters, announced record third quarter 2010 financial results.
• Q3 2010 revenue increased 109.3% YOY to 14.0 million.
• Q3 2010 net income increased 74.9% YOY to $2.8 million.
• Q3 2010 EPS of $0.14 vs. $0.08 for the same period in 2009.
• Raises full year 2010 guidance on revenues from $38.1 million to $44.0 million, maintains net income guidance of $9.3 million, raises EPS guidance from $0.39 to $0.46 based on 20,215,003 weighted average number of shares outstanding.
In the third quarter, the Company announced new independent director on August 30; announced Jodie Wehner as Chief Financial Officer on September 1; and signed contracts with three new customers in India and Turkey to supply 650 tons of linen yarn.
Third Quarter Ended September 30, 2010 Financial Results
Revenue for the third quarter of 2010 increased 109.3% to $14.0 million, compared to $6.7 million for the third quarter of 2009. Growth was driven by strong market demand, increased market and sales efforts, increased production capacity and higher average selling price. Sales of linen fabric sales increased 110.9% year-over-year to $12.5 million, which represented 89.0% of sales for the period. Sales of linen yarn increased significantly from $0.2 million a year ago to $1.5 million in the third quarter. Sales from new customers contributed to approximately 45% of total revenue in the third quarter of 2010.
Gross profit for the third quarter of 2010 was $4.4 million, a 114.9% increase from $2.1 million in the third quarter of 2009. Gross margin was 31.5% compared to 30.7% in the third quarter of 2009.
Operating expenses for the third quarter of 2010 were approximately $0.7 million, compared to $0.2 million for the same period a year ago. The increase was primarily due to increased selling expenses and increased expenses in connection with its public company compliance efforts. Operating income for the third quarter of 2010 increased 98.2% to $3.7 million compared to operating income of $1.9 million in the third quarter of 2009.
Net income for the third quarter of 2010 increased 74.9% to $2.8 million, compared to $1.6 million for the third quarter of 2009. Diluted earnings per share increased 74.1% to $0.14 compared to $0.08 for the third quarter of 2009, based upon 20.2 million and 20.1 million weighted average number of shares outstanding, respectively.
"We are pleased to report record revenue and earnings for the third quarter of 2010, which were a direct result of our expanded sales efforts for our broad line of linen fabrics, increased linen yarn distribution channels, and our fixed asset lease agreement with Lanxi Tianxianfang Linen Company, Ltd. which significantly expanded our production capacity," stated Mr. Gao Ren, Chairman and President of China Linen. "Our recent acquisitionof Lanxi Tianxianfang is an important milestone in our goal to become a vertically integrated producer and the benefits of this relationship were evidenced in our recent operating and financial results to further improve our financial and operational performance."