Asia Time Reports 2008 First Quarter Financial Results

  
    
  
  
    
      Asia Time Corporation (Amex: TYM)(“Asia 
      Time”) today announced financial results 
      for the first quarter ended March 31, 2008.
    
    
      Financial Highlights
    
    
      
        Revenue growth of 74.4% year-over-year to $36.8 million compared with 
        $21.1 million for the first quarter of 2007
      
      
        63% increase in watch movements segment sales; and complete watch 
        segment sales more than doubled year-over-year
      
      
        Net income of $2.4 million, or $0.08 per diluted share, compared to 
        first quarter 2007 net loss of $193,000, or $0.01 per diluted share
      
    
    
      “First quarter 2008 was another successful 
      growth period for Asia Time, driven by year-over-year growth of 63% in 
      watch movements and more than double the sales of completed watches,” 
      said Kwong Kai Shun, Chairman and CEO of Asia Time. “Our 
      strategy for growth this year involves leveraging our position as a 
      major upstream supplier to expand our core quartz movement business into 
      proprietary branded quartz movements and to produce mechanical movements 
      and completed watches. We are also pursuing opportunities to enter the 
      Chinese retail market through potential strategic partnerships or 
      alliances. We remain on track for our targeted growth of 30% in both 
      revenue and net earnings for 2008.”
    
    
      2008 First Quarter Financial Results
    
    
      Net sales for the first quarter ended March 31, 2008 increased 74.4% to 
      $36.8 million, compared with $21.1 million for the first quarter ended 
      March 31, 2007.
    
    
      First quarter gross profit increased 76.4% to $5.7 million, compared 
      with $3.2 million for the first quarter of 2007. Gross margin was 15.4% 
      for the first quarter of 2008, compared to 15.2% for the first quarter 
      of 2007. The increase in gross margin was primarily attributable to an 
      increase in sales of high-end products and improved economies of scale. 
      Sales of watch movements increased 63.0% to $31.3 million for the first 
      quarter of 2008 from $19.2 million for the first quarter of 2007. Sales 
      of completed watches increased to $5.5 million for the first quarter of 
      2008 from $1.9 million for the first quarter of 2007.
    
    
      Administrative and other operating expenses totaled $1.6 million for the 
      first quarter of 2008 compared with $2.0 million for the first quarter 
      of 2007. The 2007 period includes a one-time recognition of $1.6 million 
      of stock-based compensation pursuant escrow shares provided to Asia Time’s 
      CEO, Kwong Kai Shun related to the January 2007 private. There is no 
      such expense in the comparable 2008 period. Administrative and other 
      operating expenses in the first quarter of 2008 includes a stock-based 
      business consulting fee of $700,000 and an increase in professional fees 
      related to reporting requirements as a public company and additional 
      employees and upgraded staff benefits.
    
    
      Income taxes for the first quarter of 2008 were $812,000, or 2.2% of net 
      sales, compared with $403,000, or 1.9% of net sales, for the first 
      quarter of 2007. There were no significant changes in taxation rates and 
      deferred taxation during the comparable periods.
    
    
      Net income for the first quarter of 2008 was $2.4 million, or $0.08 per 
      diluted share, based on 28.9 million weighted average shares 
      outstanding. This compares with first quarter 2007 net loss of $193,000, 
      or $0.01 per diluted share, based on 23.8 million weighted average 
      shares outstanding. First quarter 2007 net loss included $736,000 in 
      non-recurring reverse merger-related fees and costs.
    
    
      Balance Sheet and Financing
    
    
      At March 31, 2008, Asia Time’s cash and cash 
      equivalents totaled $1.4 million and total assets were $57.9 million. 
      Working capital totaled $28.4 million.
    
    
      The Company completed a public offering of its common stock on February 
      15, 2008, consisting of 963,700 shares of common stock at a price of 
      $3.50 per share, including exercise of the over-allotment option.
    
    
      Financial Targets
    
    
      Asia Time reiterated its financial targets and expansion strategies:
    
    
      
        Target 30% growth in both revenue and net earnings for 2008 and 2009;
      
      
        Increase focus on the complete watch market in China;
      
      
        Expand sales force in China to reach the Eastern and Northern regions; 
        and
      
      
        Pursue strategic acquisitions of China-based facilities for low-cost, 
        in-house manufacturing capabilities.
      
    
    
      Investment Community Conference Presentation
    
    
      Michael Mak, Asia Time’s Director and 
      Corporate Secretary will make an investment community conference 
      presentation on Tuesday, May 20, 2008, at 2:45 p.m. Eastern time at the 
      Brean Murray, Carret & Co. All-Cap All-China Conference. The conference 
      will be held at The Waldorf=Astoria in New York City.
    
    
      A live audio webcast and slide presentation will be available via the 
      Internet by visiting the Investor Relations section of the Asia Time’s 
      site at www.asiatimecorp.com. 
      An archived presentation will be available on the Web site for 90 days.
    
    
      About Asia Time Corporation
    
    
      Asia Time is a watch movement and watch distributor headquartered in 
      Hong Kong. The Company distributes watch movement components used in the 
      manufacture and assembly of watches to a wide variety of timepiece 
      manufacturers. Asia Time markets more than 350 products from over 30 
      vendors, including such market leaders as Citizen, Seiko and Ronda. For 
      more information, please visit www.asiatimecorp.com.
    
    
      To be added to the Company’s email 
      distribution for future news releases, please send your request to [e-mail].
    
    
      Forward-Looking Statements
    
    
      This press release contains certain "forward-looking statements," as 
      defined in the United States Private Securities Litigation Reform Act of 
      1995, that involve a number of risks and uncertainties. There can be no 
      assurance that such statements will prove to be accurate and the actual 
      results and future events could differ materially from management's 
      current expectations. Such factors include, but are not limited to, our 
      dependence on a limited number of suppliers, cyclicality of our 
      business, decline in the value of our inventory, significant order 
      cancellations or delays, competitive nature of our industry, 
      vulnerability of our business to general economic downturn, our ability 
      to obtain all necessary government certifications and/or licenses to 
      conduct our business, changes in the laws of the People's Republic of 
      China that affect the Company's operations, development of a public 
      trading market for the Company's securities, cost of complying with 
      current and future governmental regulations and the impact of any 
      changes in the regulations on the Company's operations and other factors 
      detailed from time to time in the Company's filings with the United 
      States Securities and Exchange Commission and other regulatory 
      authorities. The risks included here are not exhaustive. The Company 
      undertakes no obligation to publicly update or revise any 
      forward-looking statements, whether as a result of new information, 
      future events or otherwise.
    
    
      Recent Accounting Restatements in December 2007 and February 2008
    
    
      In December 2007 and February 2008, the Company determined that it had 
      accounting inaccuracies in previously reported financial statements and 
      decided to restate our financial statements for the years ended December 
      31, 2006, 2005, and 2004, the three months ended March 31, 2007, the 
      three months and six months ended June 30, 2007, and the three months 
      and nine months September 30, 2007. The restatements for the foregoing 
      periods related to the correction of errors with respect to the 
      accounting for inventory by adjusting watch movement costing for the 
      effects of vendor incentives from an as received basis to an accrual 
      basis, as we were able to estimate the value of the incentives as 
      inventory is purchased, the accounting for fees and costs related to the 
      January 2007 reverse merger as a charge to operations, and the 
      recognition of stock-based compensation cost related to the Escrow 
      Shares. As a result of these adjustments, various income tax 
      calculations were also revised, which effected net income and also 
      caused reclassifications to cash flows. The Company also corrected 
      average and actual shares outstanding retroactively (and related 
      earnings per share calculations) to reflect the January 2007 reverse 
      merger. The Company also made various changes to footnote disclosures 
      relating to these revisions.
    
    
      
        
          
            ASIA TIME CORPORATION
          
        
      
      
        
          
            (Formerly SRKP 9, Inc.)
          
        
      
      
        
           
        
      
      
        
          
            CONSOLIDATED BALANCE SHEETS
          
        
      
      
        
          
            (Stated in US Dollars)
          
        
      
      
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          As of
        
      
      
        
        
        
        
        
          March 31,
        
        
           
        
        
          December 31,
        
      
      
        
        
        
        
        
          2008
        
        
        
        
          2007
        
      
      
        
        
        
        
        
          (Unaudited)
        
        
        
        
          (Audited)
        
      
      
        
        
        
        
        
          $
        
        
        
        
          $
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          Current Assets :
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          1,359,973
        
        
        
        
          6,258,119
        
      
      
        
          Restricted cash
        
        
        
        
          7,962,355
        
        
        
        
          8,248,879
        
      
      
        
          Accounts receivable
        
        
        
        
          22,526,025
        
        
        
        
          14,341,989
        
      
      
        
          Prepaid expenses and other receivables
        
        
        
        
          8,927,087
        
        
        
        
          7,704,999
        
      
      
        
          Inventories, net
        
        
        
        
          12,057,512
        
        
        
        
          12,370,970
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Assets
        
        
        
        
          52,832,952
        
        
        
        
          48,924,956
        
      
      
        
          Deferred tax assets
        
        
        
        
          29,991
        
        
        
        
          29,929
        
      
      
        
          Property and equipment, net
        
        
        
        
          4,392,962
        
        
        
        
          1,891,709
        
      
      
        
          Leasehold lands
        
        
        
        
          -
        
        
        
        
          -
        
      
      
        
          Held-to-maturity investments
        
        
        
        
          300,848
        
        
        
        
          300,231
        
      
      
        
          Intangible assets
        
        
        
        
          38,088
        
        
        
        
          48,012
        
      
      
        
          Restricted cash
        
        
        
        
          257,003
        
        
        
        
          256,476
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
          57,851,844
        
        
        
        
          51,451,313
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
        
        
      
      
        
          Current Liabilities :
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          195,618
        
        
        
        
          1,310,809
        
      
      
        
          Other payables and accrued liabilities
        
        
        
        
          193,091
        
        
        
        
          132,507
        
      
      
        
          Income taxes payable
        
        
        
        
          3,101,525
        
        
        
        
          2,293,887
        
      
      
        
          Bank borrowings
        
        
        
        
          20,918,549
        
        
        
        
          20,438,479
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Liabilities
        
        
        
        
          24,408,783
        
        
        
        
          24,175,682
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Convertible bond payables
        
        
        
        
          4,842,229
        
        
        
        
          345,461
        
      
      
        
          Deferred tax liabilities
        
        
        
        
          57,071
        
        
        
        
          56,953
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES
        
        
        
        
          29,308,083
        
        
        
        
          24,578,096
        
      
    
    
      
        
          
            ASIA TIME CORPORATION
          
        
      
      
        
          
            (Formerly SRKP 9, Inc.)
          
        
      
      
        
        
        
           
        
        
        
      
      
        
          
            CONSOLIDATED BALANCE SHEETS (Cont’d)
          
        
      
      
        
          
            (Stated in US Dollars)
          
        
      
      
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          As of
        
      
      
        
        
        
        
        
          March 31,

          
            2008
          
          
            (Unaudited)
          
        
        
           
        
        
          December 31,

          
            2007
          
          
            (Audited)
          
        
      
      
        
          
             
          
        
        
        
        
          $
        
        
        
        
          $
        
      
      
        
          STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred stock
        
        
        
        
        
        
        
        
        
      
      
        
          Par value: 2008 – US$0.0001 (2007 – 
          US$0.0001)
        
        
        
        
        
        
        
        
        
      
      
        
          
            Authorized: 2008 – 10,000,000 shares 
            (2007 – 10,000,000 shares)
          
        
        
        
        
        
        
        
        
        
      
      
        
          
            Issued and outstanding: 2008 – 
            1,627,888 issued (2007 – 2,250,348 
            issued)
          
        
        
        
        
          163
        
        
        
        
          225
        
      
      
        
          Common stock
        
        
        
        
        
        
        
        
        
      
      
        
          Par value: 2008 US$0.0001 (2007 – 
          US$0.0001)
        
        
        
        
        
        
        
        
        
      
      
        
          Authorized: 100,000,000 shares
        
        
        
        
        
        
        
        
        
      
      
        
          
            Issued and outstanding: 2008 – 
            24,942,789 shares (2007 – 23,156,629 
            shares)
          
        
        
        
        
          2,494
        
        
        
        
          2,316
        
      
      
        
          Additional paid-in capital
        
        
        
        
          12,636,308
        
        
        
        
          13,481,036
        
      
      
        
          Accumulated other comprehensive income
        
        
        
        
          39,331
        
        
        
        
          (28,404)
        
      
      
        
          Retained earnings
        
        
        
        
          15,865,465
        
        
        
        
          13,418,044
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL STOCKHOLDERS’ EQUITY
        
        
        
        
          28,543,761
        
        
        
        
          26,873,217
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND STOCKHOLDERS’ 
          EQUITY
        
        
        
        
          57,851,844
        
        
        
        
          51,451,313
        
      
    
    
      
        
          
            ASIA TIME CORPORATION
          
        
      
      
        
          
            (Formerly SRKP 9, Inc.)
          
        
      
      
        
        
        
           
        
        
        
      
      
        
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
        
      
      
        
          
            (Stated in US Dollars)
          
        
      
      
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Three months ended March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
        
        
        
        
          (Unaudited)
        
        
        
        
          (Unaudited)
        
      
      
        
        
        
        
        
          $
        
        
        
        
          $
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
          36,825,248
        
        
        
        
          21,118,142
        
      
      
        
          Cost of sales
        
        
        
        
          (31,146,298)
        
        
        
        
          (17,898,978)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
          5,678,950
        
        
        
        
          3,219,164
        
      
      
        
          Other operating income
        
        
        
        
          25,663
        
        
        
        
          48,497
        
      
      
        
          Depreciation
        
        
        
        
          (307,573)
        
        
        
        
          (65,431)
        
      
      
        
          
            Administrative and other operating expenses, including Stock-based 
            compensation
          
        
        
        
        
          
            (1,583,191)
          
        
        
        
        
          
            (2,046,406)
          
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
          3,813,849
        
        
        
        
          1,155,824
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Fees and costs related to reverse merger
        
        
        
        
          -
        
        
        
        
          (736,197)
        
      
      
        
          Non-operating income
        
        
        
        
          46,852
        
        
        
        
          29,929
        
      
      
        
          Interest expenses
        
        
        
        
          (601,634)
        
        
        
        
          (239,429)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before taxes
        
        
        
        
          3,259,067
        
        
        
        
          210,127
        
      
      
        
          Income taxes
        
        
        
        
          (811,646)
        
        
        
        
          (402,667)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income/(loss)
        
        
        
        
          2,447,421
        
        
        
        
          (192,540)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings/(loss) per share of common stock
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic
        
        
        
        
          0.10
        
        
        
        
          (0.01)
        
      
      
        
          - Diluted
        
        
        
        
          0.08
        
        
        
        
          (0.01)
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average number of shares of common stock
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic
        
        
        
        
          24,060,247
        
        
        
        
          23,156,629
        
      
      
        
          - Diluted
        
        
        
        
          28,912,901
        
        
        
        
          23,791,079