InfoSmart Group Reports Record Financial Results of $105 Million in Revenue for the Full Year of Fiscal 2007 Full Year Revenue Increases 287% to $105 Million; Full Year Net Income Increases 862%
SOURCE:
Infosmart Group, Inc.
2008-04-02 04:00:00
InfoSmart Group Reports Record Financial Results of $105 Million in Revenue for the Full Year of Fiscal 2007
Full Year Revenue Increases 287% to $105 Million; Full Year Net Income Increases 862%
HONG KONG–( EMWNews – April 2, 2008) – InfoSmart Group, Inc. (“InfoSmart” or the
“Company”) (
(“DVDR”) manufacturer in Hong Kong and Brazil, today announced financial
results for the fourth quarter and fiscal year ended December 31, 2007.
Full Year 2007 Financial Results
Revenue for the year ended December 31, 2007 increased 287% to $105 million
compared to $27.1 million for the period ended December 31, 2006. The
increase in revenue was mainly due to the effect of new market sales
generated in Brazil and a substantial increase in sales in Australia, Asia
and North America. The trading of Compact Flash and SD-RAM products
through the Company’s distribution channel in Asia also contributed to
revenue growth.
Cost of sales for the year ended December 31, 2007 totaled $90.2 million,
an increase of 361% compared to $19.6 million for the same period in 2006.
The increase in the cost of sales was in line with the increase in the
Company’s net sales.
Gross profit for 2007 totaled $14.8 million, an increase of 96% compared to
$7.5 million in 2006. This increase in gross profit was primarily due to
the increase in volume of sales as well as the substantial increase in
sales in the higher margin markets such as Brazil and Asia. The rapid
development of the Compact Flash and SD-RAM market in Asia also contributed
to this increase in gross profit. Gross profit margin for 2007 was 14%
compared to 28% in 2006 primarily because of the increase in sales in
higher margin markets, which was offset by a slight decrease of sales
prices in other markets in 2007.
Income from operations for the period ended December 31, 2007 increased to
$9.1 million compared to $4.8 million for the period ended December 31,
2006. Income before income taxes for 2007 increased 404% to $10.2 million
compared to $2 million for 2006.
Net income for the period ended December 31, 2007 totaled 10.2 million or
$0.07 per share, an increase of 862% compared to $1.1 million or a loss of
$0.01 per share. The net income margin was 9.7% and 3.9% in the same
comparable periods in 2007 and 2006, respectively. The increase in net
income was in line with the increase in gross profit, which was offset by a
slight increase in selling and distribution costs and corresponding
increase in administrative cost. Diluted EPS for the fiscal year ended
December 31, 2007 were $0.0725 compared to $0.017 for 2006. The weighted
average numbers of shares outstanding to calculate the diluted earnings per
share were 140.6 million and 119.2 million, respectively.
“We are very pleased with our top and bottom line growth for the fourth
quarter and 2007 fiscal year end,” stated, Mr. Parker Seto, President and
CEO of InfoSmart. “During the year, our growth was fueled by several
factors including the successful integration of our Brazilian operations.
In the fourth quarter, we recognized a full contribution from our 20
manufacturing lines. Additionally, our financial results received a
positive contribution from the tax incentive program granted by the State
of Bahia to our Brazilian subsidiary, Discobras. This agreement, which
lasts through 2016, gives us a reduction in the Value Added Tax, an
exemption in ICMS taxes on raw materials imported for production in Brazil
and eliminates tariffs, which equal 70 to 100 percent of the cost of
imported discs.” Mr. Seto continued, “Lastly, we increased the amount of
trading of our Compact Flash and SD-RAM products. Although trading has
lower margins compared to our other business segments, we have the ability
to generate meaningful revenue and income by doing so through our
established distribution channel with minimal risk.”
Fourth Quarter 2007 Financial Results
Revenue for the fourth quarter ended December 31, 2007 increased 646% to
$52 million compared to $7 million for the period ended December 31, 2006.
Cost of sales for the fourth quarter of 2007 totaled $48.7 million, an
increase of 859% compared to $5.1 million for the fourth quarter of 2006.
Gross profit for the fourth quarter of 2007 increased 75% to $3.3 million
compared to $1.9 million for the same period in 2006. Gross profit margin
for the fourth quarter of 2007 was 6% compared to 27% for the fourth
quarter of 2006.
Net income for the fourth quarter ended December 31, 2007 increased 423% to
$2.6 million compared to $488,502. Diluted earnings per share (EPS) in the
fourth quarter of 2007 were $0.02, versus earnings per share $0.004 in
fourth quarter of 2006. The weighted average share counts used to calculate
diluted EPS for the fourth quarter of 2007 and 2006 were 140.6 million and
119.2 million, respectively.
Balance Sheet
The Company reported $76.6 million in total assets and $46.1 million in
total liabilities resulting in shareholders’ equity of $28.8 million for
the year ended December 31, 2007 compared to $16.6 million in shareholders’
equity in 2006. The Company’s current ratio improved to 1.1 to1 at December
31, 2007, versus .5 to 1 a year earlier. Cash and cash equivalents as of
December 31, 2007 totaled $1 million. InfoSmart’s stockholders’ equity
improved to $28.8 million or $.21 per share at December 31, 2007 versus
$16.6 million at December 31, 2006.
Mr. Andrew Chang, Chairman of InfoSmart Group, commented, “Looking forward
into 2008, our main focus will be to continue to take advantage of the
various tax incentives in Brazil while leveraging our current distribution
channels by expanding our production capacity and product portfolio.” Mr.
Chang continued, “Recently, we have made an aggressive push into the
Blu-ray Disc market by purchasing from the one of the two vertically
integrated optical disc equipment makers worldwide, Anwell Technologies.
Initially, Anwell Technologies Blu-ray Disc replication system will be
installed in our Hong Kong plant, which makes it the first Blu-ray Line in
commercial use in China and Hong Kong. We are pleased with the progress we
have experienced thus far and look forward to continuing our growth in the
future.”
About InfoSmart Group, Inc.
InfoSmart operates state-of-the-art DVDR and storage media production
facilities in Hong Kong and Brazil and is preparing to manufacture Flash
memory. InfoSmart has production flexibility to upgrade its manufacturing
capacity to include production of High-Density (HD) and now Blu-Ray disks.
In addition, the Company is one of the largest manufacturers of DVDR discs
in Brazil and all of South America. Flash memory devices will be the
storage media of choice for years to come, whether the Company is able to
manufacture Blu-ray DVD for mature markets or traditional DVDR for
developing markets. No other storage media available rivals the combination
of high capacity, low cost and exceptional portability of InfoSmart’s
current product mix.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements, as defined in
the Securities Reform Act of 1995 (the “Reform Act”). The safe harbor for
forward-looking statements provided to companies by the Reform Act does not
apply to InfoSmart Group, Inc. (the “Company”). However, actual events or
results may differ from the Company’s expectations on a negative or
positive basis and are subject to a number of known and unknown risks and
uncertainties including, but not limited to, competition with larger
companies, development of and demand for a new technology, risks associated
with a startup company, risks associated with international transactions,
general economic conditions, availability of funds for capital expenditure
by customers, availability of timely financing, cash flow, timely delivery
by suppliers, ability to produce our DVDRs and their components, ability to
maintain quality control, collection-related risks from international
transactions, or the Company’s ability to manage growth. Other risk factors
attributable to the Company’s business may affect the actual results
achieved by the Company including those that are found in the Company’s
Annual Report on Form 10-KBS filed with the SEC on April 2, 2007, and
subsequent Quarterly Reports on Form 10-QSB and subsequent Current Reports
filed on Form 8-K that will be included with or prior to the filing of the
Company’s next Quarterly or Annual Report.
Year ended December 31
2007 2006 2005
----------- ----------- -----------
Net sales 104,969,899 27,102,441 24,577,206
Cost of sales (90,186,253) (19,570,525) (17,911,674)
----------- ----------- -----------
Gross profit 14,783,646 7,531,916 6,665,532
Administrative expenses (4,416,087) (1,997,379) (816,553)
Depreciation - note 11 (743,743) (223,893) (214,534)
Selling and distributing costs (499,716) (475,781) (641,096)
Income from operations 9,124,100 4,834,863 4,993,349
Professional expenses related to
Restructuring and Share Exchange
- note 5 - (2,753,390) (320,892)
Reversal of commission payable - - 718,250
Other income - note 6 1,710,408 449,985 302,903
Interest expenses (662,059) (511,322) (520,827)
----------- ----------- -----------
Income before income taxes 10,172,449 2,020,136 5,172,783
Income taxes - note 7 52,506 (955,592) (958,022)
Minority Interests - PL 12,250 - -
----------- ----------- -----------
Net income 10,237,205 1,064,544 4,214,761
Series B preferred dividends (453,764) (202,069) -
Series B preferred deemed dividend -
note 17 - (2,297,157) -
----------- ----------- -----------
Net income (loss) applicable to
common shareholders 9,783,441 (1,434,682) 4,214,761
=========== =========== ===========
Other comprehensive income
Foreign currency translation
adjustments 1,497,766 (12,421) 28,028
----------- ----------- -----------
Total comprehensive income 11,281,207 (1,447,103) 4,242,789
=========== =========== ===========
Earning / (loss) per share
- basic and dilutive - note 8 0.07 (0.01) 0.04
=========== =========== ===========
Weighted average shares outstanding
- basic - note 8 140,025,108 119,188,957 110,236,841
=========== =========== ===========
- dilutive - note 8 140,622,119 119,188,957 110,236,841
=========== =========== ===========
As of December 31
2007 2006
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 1,023,440 $ 206,258
Restricted cash - note 4 - 552,193
Trade receivables (net of allowance for doubtful
accounts of $Nil for 2007 and 2006) 38,725,882 6,171,366
Prepaid expenses and other receivables - note 9 544,345 269,477
Provision for tax 13,847 -
Inventories - note 10 3,396,194 1,058,039
------------ ------------
Total current assets 43,703,708 8,257,333
Deferred tax assets - note 7 - 459,823
Plant and equipment, net - note 11 31,093,668 33,911,540
Intangible assets 1,810,655 2,092,809
------------ ------------
TOTAL ASSETS 76,608,031 $ 44,721,505
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES
Current liabilities
Trade payables $ 25,809,022 $ 2,926,078
Other payables and accrued liabilities -
note 12 1,672,468 8,756,675
Income tax payable 696,946 363,645
Current portion of bank borrowings - note 13 6,762,553 3,503,654
Finance lease payable 34,570 -
Current portion of other loans - note 14 5,065,639 1,268,044
------------ ------------
Total current liabilities 40,041,198 16,818,096
Non-current portion of bank borrowings - note 13 2,092,949 2,893,927
Non-current portion of other loans - note 14 717,423 1,884,202
Advance from a related party - note 15 929,634 927,991
Deferred tax liabilities - note 7 2,305,729 3,001,360
------------ ------------
TOTAL LIABILITIES 46,086,933 $ 25,525,576
COMMITMENTS AND CONTINGENCIES - note 17
Series B Redeemable Convertible Preferred Stock:
No par value - note 18
Authorized 1,800,000 shares; Issued and
Outstanding:
2007 - 597,011 shares and 2006 - 911,974.54
shares 1,690,222 2,581,926
STOCKHOLDERS EQUITY
Common stock: No par value
Authorized: 300,000,000 shares; Issued and
outstanding:
2007 - 144,248,709 shares and 2006 -
135,801,426.44 shares - note 18 2,412,605 1,520,901
Preferred stock: No par value
Authorized 7,000,000 shares; Issued and
outstanding:
2007 and 2006 - Nil share - -
Series A Convertible Preferred Stock: No par
value
Authorized 1,200,000 shares; Issued and
outstanding
2007 and 2006 - Nil share - -
Additional paid-in-capital - note 18 8,118,664 8,118,664
Accumulated other comprehensive income 1,517,003 19,237
Retained earnings 16,738,643 6,955,201
------------ ------------
TOTAL STOCKHOLDERS EQUITY 28,786,915 16,614,003
Minority interest 43,961 -
------------ ------------
28,830,876 16,614,003
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 76,608,031 $ 44,721,505
============ ============
| Contact: Investor Relations HC International, Inc. Alan Sheinwald Tel: (914) 669-0222 Email: [email protected] |
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