Orsus Xelent Exceeds Forecast With a 32% Advance in 2007 Revenues to a Record $89.9 Million; Also Reports Full Year Net Income Increased 44% to $9.7 Million Company Says Gains Were Fueled by Str

SOURCE:

Orsus Xelent Technologies, Inc.

2008-04-01 08:00:00

Orsus Xelent Exceeds Forecast With a 32% Advance in 2007 Revenues to a Record $89.9 Million; Also Reports Full Year Net Income Increased 44% to $9.7 Million

Company Says Gains Were Fueled by Str

NEW YORK, NY–( EMWNews – April 1, 2008) – Orsus Xelent Technologies, Inc. (AMEX: ORS), a

designer and manufacturer of award-winning mobile phones for the Asian

market, today announced that, exceeding its forecast, revenues in the year

ended December 31, 2007, grew 32.03% to $89,923,000 from $68,108,000 in

2006.

The Company also reported a 44.14% increase in net income for the period,

saying it grew from $6,718,000 in 2006, or $0.23 per share, to $9,683,000

or $0.33 per share in 2007.

The 2007 full year results, according to the Company, were bolstered by

record fourth quarter results. Mr. Xavier Wang, president and CEO of Orsus

Xelent, commented, “Given some of the uncertainties in the market in the

fourth quarter, related to the anticipated shifts in 2008 in the Chinese

telecommunications industry, I think our performance was especially

notable. Our team showed that it could move very nimbly from a focus on

sales of operator-tailored, special application mobile phones in the first

half of the year, to the sale of traditional GSM handsets in the second

half and fourth quarter of the year, while also maintaining a strong focus

on cost containment.”

Reflecting this, the Company said that its record fourth quarter revenues

were led by the sales of mid-level and high-level GSM phones, which met the

high demand in the market and accounted for most of the sales in the

period.

The Company added that its success in containing costs was a consequence of

several key steps it took during the year. In particular, it noted that its

shift to outsourced R&D helped synchronize its product development with

consumer preferences and permitted it to shorten the industrial cycle for

its products. It also transferred after sale servicing to its OEM

manufacturers which had a further positive effect on cost reduction. It

also focused on streamlining its human resources, eliminating redundancies

that existed at the Company.

“Looking ahead,” Mr.Wang stated, “we are intent on pursuing and fulfilling

the next key step in our development, which is to become more independent

in manufacturing our own product and accessories, and perhaps to take on

some outside OEM for other brands.”

In this regard, the Company said that it is continuing efforts to close the

acquisition of “Lemon Times” and expects to do so in the first half of

2008. As described in previous announcements, the acquisition is expected

to provide the Company with significant manufacturing and R&D capability.

Mr. Wang continued, “I think we accomplished a lot in 2007, demonstrating

that we have a young, but very strong team that knows the market in which

we operate. As we aim to add our own manufacturing capability, our focus

also will continue to be on building brand awareness, profitability and

competitiveness. In 2008, we expect to see stable growth development driven

by our acquisition plans, the new generation technologies, and further

penetration and utilization of the traditional sales channels for Orsus

Products.”

He concluded, “Be assured we remain optimistic about our outlook and the

continuing success of our Company and, within the next few weeks, intend to

provide more detailed thoughts regarding anticipated developments and the

outlook for the year.”

About Orsus Xelent Technologies, Inc.

Incorporated in the State of Delaware and headquartered in Beijing, China,

Orsus Xelent Technologies, Inc. is an emerging designer and manufacturer of

award-winning mobile phones for the Asian market, primarily the People’s

Republic of China (PRC). The Company’s business encompasses the design of

mobile phones, related digital circuits, and software development, and it

is a recognized pioneer in mobile phone integration technology. It

introduced the region’s first wristwatch-style cellular phone, and it

continues to break new ground with state-of-the-art phones that include

advanced features such as finger print recognition and touch-screen

displays. Increasingly, the Company is focused on developing and marketing,

under its Proxlink trademark, special application mobile phones for

specialized users in a wide variety of professions in business and

government. Since the Company’s launch in 2004, it has established “Orsus”

as a popular brand and achieved a significant share of the world’s largest

mobile phone market. It maintains more than 179 service call centers across

the PRC, with additional offices in New York, Shanghai, Hong Kong,

Shenzhen, and Tianjin. For more information, please visit the Company’s web

site: www.orsus-xelent.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this

Press Release are forward-looking statements that are made pursuant to the

safe harbor provisions of the Private Securities Litigation Reform Act of

1995. Forward-looking statements involve known and unknown risks and

uncertainties, which may cause our actual results in future periods to

differ materially from forecasted results. These risks and uncertainties

include, among other things, product demand, market competition, and risks

inherent in our operations. These and other risks are described in our

filings with the Securities and Exchange Commission.


                      Orsus Xelent Technologies, Inc.



                Twelve months ended  Twelve months ended

                  December 31, 2007   December 31, 2006     Comparison

                 ------------------  ------------------  -----------------

                              % of                % of

                   $000     Revenue    $000     Revenue    $000       %

                 ---------- -------  ---------- -------  -------  --------

Operating

 Revenues-Net

 Sales               89,923       -      68,108       -   21,815     32.03%

                 ---------- -------  ---------- -------  -------  --------

Cost of sales        74,174   82.49%     55,226   81.09%  18,948     34.31%

                 ---------- -------  ---------- -------  -------  --------

Sales &

 marketing

 expenses               553    0.61%      1,045    1.53%    (492)  (47.08%)

                 ---------- -------  ---------- -------  -------  --------

General & admin.

 expenses             1,290    1.43%        793    1.16%     497     62.67%

                 ---------- -------  ---------- -------  -------  --------

R&D expenses            340    0.38%        255    0.37%      85     33.33%

                 ---------- -------  ---------- -------  -------  --------

Depreciation            142    0.16%        175    0.26%     (33)  (18.86%)

                 ---------- -------  ---------- -------  -------  --------

Allowance for

 obsolete

 inventories            875    0.97%      1,387    2.04%    (512)  (36.91%)

                 ---------- -------  ---------- -------  -------  --------

Allowance for

 trading deposit

 receivable             923    1.03%        767    1.13%     156     20.34%

                 ---------- -------  ---------- -------  -------  --------

Impairment of

 Fixed Assets            71    0.08%        454    0.67%    (383)  (84.36%)

                 ---------- -------  ---------- -------  -------  --------

Finance cost            989    1.10%        116    0.17%     873    752.59%

                 ---------- -------  ---------- -------  -------  --------

Other net income        765    0.85%         75    0.11%     690    920.00%

                 ---------- -------  ---------- -------  -------  --------

Pre-tax profit       11,331   12.60%      7,965   11.69%   3,366     42.26%

                 ---------- -------  ---------- -------  -------  --------

Income tax            1,648    1.83%      1,247    1.83%     401     32.16%

                 ---------- -------  ---------- -------  -------  --------

Net Income            9,683   10.77%      6,718    9.86%   2,965     44.14%

                 ---------- -------  ---------- -------  -------  --------

Earnings per

 Share

                 ---------- -------  ---------- -------  -------  --------

Basic and

 diluted (US$)         0.33                0.23

                 ---------- -------  ---------- -------  -------  --------

Weighted average

 number of

 shares

 outstanding     29,756,000          29,756,000

                 ---------- -------  ---------- -------  -------  --------

CONTACT:

Orsus Xelent Technologies, Inc.
Xavier Xin Wang
President & CEO

PRC:
Tel 010-85653777
Fax 010-85653666

US:
Investors:
Tel: 212-402-7803
Fax: 212-425-6951

Press:
Tel: 212-425-5700
Fax: 212-425-6951

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