Asia Time Reports 2008 Second Quarter Financial Results

  
    
  
  
    
      Asia Time Corporation (Amex:TYM) (“Asia 
      Time”) today announced financial results 
      for the second quarter ended June 30, 2008.
    
    
      Second Quarter Financial Highlights
    
    
      
        Revenue growth of 82.7% year-over-year to $38.1 million, compared with 
        $20.9 million for the second quarter of 2007
      
      
        71.1% increase in watch movements segment sales; and complete watch 
        segment sales more than doubled year-over-year
      
      
        Net income of $3.2 million, or $0.11 per diluted share, compared with 
        second quarter 2007 net income of $1.2 million, or $0.05 per diluted 
        share
      
    
    
      “We are pleased to report another quarter of 
      notable growth driven by increased sales of both our watch movements and 
      completed watches,” said Kwong Kai Shun, 
      Chairman and CEO of Asia Time. “We are 
      expanding our capabilities in both our core quartz movements and 
      complete watch and emerging mechanical watch business segments where we 
      see significant growth opportunities.
    
    
      “In addition to diversifying and expanding our 
      own quartz movement and complete watch product portfolio, as we go 
      forward we plan to produce and assemble mechanical watch movements and 
      complete watches for direct sales to international brand names. The high 
      growth mechanical watch market is vastly under-supplied and requires 
      highly sophisticated production and skilled labor. We believe we will be 
      at an immediate competitive advantage by being one of the highly skilled 
      volume producers of mechanical watches in China,” 
      Mr. Kwong added. “During the second quarter we 
      identified two potential acquisition targets. One of the targets is a 
      full-range manufacturer of plastic and metal watch parts and the other 
      is a supplier of analog watches. If we are to acquire the former, we 
      believe it will contribute to our strategy of producing low-end quartz 
      movements in-house. If we are to acquire the latter, we believe it will 
      result in an increased production of mechanical watches.”
    
    
      2008 Second Quarter Financial Results
    
    
      Net sales for the second quarter ended June 30, 2008 increased 82.7% to 
      $38.1 million, compared with $20.9 million for the second quarter ended 
      June 30, 2007.
    
    
      Second quarter gross profit more than doubled to $5.3 million, compared 
      with $2.3 million for the second quarter of 2007. Gross margin was 13.8% 
      for the second quarter of 2008, compared with 11.3% for the second 
      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 71.1% to $32.5 million for the 
      second quarter of 2008 from $19.0 million for the second quarter of 
      2007. Sales of completed watches increased to $5.6 million for the 
      second quarter of 2008 from $1.9 million for the second quarter of 2007.
    
    
      Administrative and other operating expenses totaled $727,000 for the 
      second quarter of 2008, compared with $559,000 for the second quarter of 
      2007. The increase in the 2008 period was primarily due to an increase 
      in professional fees related to reporting requirements as a public 
      company and additional employees and upgraded staff benefits.
    
    
      Income taxes for the second quarter of 2008 were $669,000, or 1.8% of 
      net sales, compared with $314,000, or 1.5% of net sales, for the second 
      quarter of 2007. The increase in income taxes was primarily due to an 
      increase in operating profit. The taxation rate decreased from 17.5% for 
      the second quarter 2007 to 16.5% for the second quarter of 2008.
    
    
      Net income for the second quarter of 2008 was $3.2 million, or $0.11 per 
      diluted share, based on 28.8 million weighted average shares 
      outstanding. This compares with second quarter 2007 net income of $1.2 
      million, or $0.05 per diluted share, based on 25.4 million weighted 
      average shares outstanding.
    
    
      Year-to-Date Financial Results
    
    
      Net sales for the six months ended June 30, 2008 increased 78.5% to 
      $75.0 million, compared with $42.0 million for the period ended June 30, 
      2007.
    
    
      Gross profit for the first half of 2008 increased 96.6% to $11.0 
      million, compared with $5.6 million for the first half of 2007.
    
    
      Administrative and other operating expenses for the first half of 2008 
      totaled $2.3 million and included a stock-based business consulting fee 
      of $700,000. This compares with administrative and other operating 
      expenses of $2.6 million for the first half of 2007. The 2007 period 
      includes a one-time recognition of $1.7 million of stock-based 
      compensation pursuant escrow shares provided to Mr. Kwong related to a 
      January 2007 private placement.
    
    
      Year-to-date net income was $5.7 million, or $0.21 per diluted share, 
      based on 27.1 million weighted average shares outstanding. This compares 
      with net income of $1.0 million, or $0.04 per diluted share, based on 
      24.6 million weighted average shares outstanding for the first half of 
      2007.
    
    
      Balance Sheet and Financing
    
    
      At June 30, 2008, Asia Time’s cash and cash 
      equivalents totaled $1.8 million and total assets were $64.0 million. 
      Working capital totaled $30.9 million.
    
    
      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.
      
    
    
      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, costs and expenses related 
      to our bond and warrant financing; 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.
    
    
      
        
          ASIA TIME CORPORATION
        
      
      
        
          
            (Formerly SRKP 9, Inc.)
          
        
      
      
        
          CONSOLIDATED BALANCE SHEETS
        
      
      
        
          
            (Stated in US Dollars)
          
        
      
      
        
        
        
           
        
        
        
      
      
        
        
        
          
             
          
        
        
          
            As of
          
        
      
      
        
        
        
          
             
          
        
        
          
            June 30,2008
          
        
        
          
             
          
        
        
          
            December 31,2007
          
        
      
      
        
        
        
          
             
          
        
        
          
            (Unaudited)
          
        
        
          
             
          
        
        
          
            (Audited)
          
        
      
      
        
        
        
          
             
          
        
        
          
            $
          
        
        
          
             
          
        
        
          
            $
          
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Current Assets :
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          1,838,723
        
        
        
        
        
        
          6,258,119
        
        
        
      
      
        
          Restricted cash
        
        
        
        
          7,955,331
        
        
        
        
        
        
          8,248,879
        
        
        
      
      
        
          Accounts receivable
        
        
        
        
          20,922,873
        
        
        
        
        
        
          14,341,989
        
        
        
      
      
        
          Prepaid expenses and other receivables
        
        
        
        
          14,547,132
        
        
        
        
        
        
          7,704,999
        
        
        
      
      
        
          Inventories, net
        
        
        
        
          13,160,240
        
        
           
        
        
        
        
          12,370,970
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Assets
        
        
        
        
          58,424,299
        
        
        
        
        
        
          48,924,956
        
        
        
      
      
        
          Deferred tax assets
        
        
        
        
          29,895
        
        
        
        
        
        
          29,929
        
        
        
      
      
        
          Property and equipment, net
        
        
        
        
          4,967,897
        
        
        
        
        
        
          1,891,709
        
        
        
      
      
        
          Leasehold lands
        
        
        
        
          -
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Held-to-maturity investments
        
        
        
        
          299,885
        
        
        
        
        
        
          300,231
        
        
        
      
      
        
          Intangible assets
        
        
        
        
          27,975
        
        
        
        
        
        
          48,012
        
        
        
      
      
        
          Restricted cash
        
        
        
        
          256,180
        
        
           
        
        
        
        
          256,476
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL ASSETS
        
        
        
        
          64,006,131
        
        
           
        
        
        
        
          51,451,313
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Current Liabilities :
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable
        
        
        
        
          695,098
        
        
        
        
        
        
          1,310,809
        
        
        
      
      
        
          Other payables and accrued liabilities
        
        
        
        
          743,457
        
        
        
        
        
        
          132,507
        
        
        
      
      
        
          Income taxes payable
        
        
        
        
          3,755,674
        
        
        
        
        
        
          2,293,887
        
        
        
      
      
        
          Bank borrowings
        
        
        
        
          22,310,355
        
        
           
        
        
        
        
          20,438,479
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Liabilities
        
        
        
        
          27,504,584
        
        
        
        
        
        
          24,175,682
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Convertible bond payables
        
        
        
        
          4,779,824
        
        
        
        
        
        
          345,461
        
        
        
      
      
        
          Deferred tax liabilities
        
        
        
        
          56,888
        
        
           
        
        
        
        
          56,953
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES
        
        
        
        
          32,341,296
        
        
           
        
        
        
        
          24,578,096
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          COMMITMENTS AND CONTINGENCIES
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          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 – 43,056 
          issued (2007 – 2,250,348 issued)
        
        
        
        
          4
        
        
        
        
        
        
          225
        
        
        
      
      
        
          Common stock
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Par value: 2008 US$0.0001 (2007 – 
          US$0.0001)
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Authorized: 100,000,000 shares
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Issued and outstanding: 2008 – 26,527,621 
          shares (2007 – 23,156,629 shares)
        
        
        
        
          2,653
        
        
        
        
        
        
          2,316
        
        
        
      
      
        
          Additional paid-in capital
        
        
        
        
          12,636,309
        
        
        
        
        
        
          13,481,036
        
        
        
      
      
        
          Accumulated other comprehensive income
        
        
        
        
          (71,190
        
        
          )
        
        
        
        
          (28,404
        
        
          )
        
      
      
        
          Retained earnings
        
        
        
        
          19,097,059
        
        
           
        
        
        
        
          13,418,044
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL STOCKHOLDERS’ EQUITY
        
        
        
        
          31,664,835
        
        
           
        
        
        
        
          26,873,217
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          TOTAL LIABILITIES AND STOCKHOLDERS’ 
          EQUITY
        
        
        
        
          64,006,131
        
        
           
        
        
        
        
          51,451,313
        
        
           
        
      
    
    
      
        
          ASIA TIME CORPORATION
        
      
      
        
          
            (Formerly SRKP 9, Inc.)
          
        
      
      
        
          CONSOLIDATED STATEMENTS OF OPERATIONS
        
      
      
        
          
            (Stated in US Dollars)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          
            Three months endedJune 30,
          
        
        
        
        
          
            Six months endedJune 30,
          
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
        
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
        
        
        
        
          (Unaudited)
        
        
        
        
          (Unaudited)
        
        
        
        
          (Unaudited)
        
        
        
        
          (Unaudited)
        
      
      
        
        
        
        
        
          $
        
        
        
        
          $
        
        
        
        
          $
        
        
        
        
          $
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
           
        
        
          38,122,896
        
        
        
        
        
        
           
        
        
          20,869,437
        
        
        
        
        
        
           
        
        
          74,948,144
        
        
        
        
        
        
           
        
        
          41,987,579
        
        
        
      
      
        
          Cost of sales
        
        
        
        
        
        
          (32,854,691
        
        
          )
        
        
        
        
           
        
        
          (18,519,891
        
        
          )
        
        
        
        
           
        
        
          (64,000,989
        
        
          )
        
        
        
        
           
        
        
          (36,418,869
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
        
        
          5,268,205
        
        
        
        
        
        
        
        
          2,349,546
        
        
        
        
        
        
        
        
          10,947,155
        
        
        
        
        
        
        
        
          5,568,710
        
        
        
      
      
        
          Other operating income
        
        
        
        
        
        
          25,894
        
        
        
        
        
        
        
        
          48,281
        
        
        
        
        
        
        
        
          51,557
        
        
        
        
        
        
        
        
          96,778
        
        
        
      
      
        
          Depreciation
        
        
        
        
        
        
          (307,338
        
        
          )
        
        
        
        
        
        
          (63,433
        
        
          )
        
        
        
        
        
        
          (614,911
        
        
          )
        
        
        
        
        
        
          (128,864
        
        
          )
        
      
      
        
          Administrative and other operating expenses, including stock-based 
          compensation
        
        
        
        
        
        
          (727,196
        
        
          )
        
        
        
        
           
        
        
          (558,857
        
        
          )
        
        
        
        
           
        
        
          (2,310,387
        
        
          )
        
        
        
        
           
        
        
          (2,605,263
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income from operations
        
        
        
        
        
        
          4,259,565
        
        
        
        
        
        
        
        
          1,775,537
        
        
        
        
        
        
        
        
          8,073,414
        
        
        
        
        
        
        
        
          2,931,361
        
        
        
      
      
        
          Fees and costs related to reverse merger
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (736,197
        
        
          )
        
      
      
        
          Non-operating income
        
        
        
        
        
        
          63,896
        
        
        
        
        
        
        
        
          48,452
        
        
        
        
        
        
        
        
          110,748
        
        
        
        
        
        
        
        
          78,381
        
        
        
      
      
        
          Interest expenses
        
        
        
        
        
        
          (423,204
        
        
          )
        
        
        
        
           
        
        
          (274,990
        
        
          )
        
        
        
        
           
        
        
          (1,024,838
        
        
          )
        
        
        
        
           
        
        
          (514,419
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income before taxes
        
        
        
        
        
        
          3,900,257
        
        
        
        
        
        
        
        
          1,548,999
        
        
        
        
        
        
        
        
          7,159,324
        
        
        
        
        
        
        
        
          1,759,126
        
        
        
      
      
        
          Income taxes
        
        
        
        
        
        
          (668,663
        
        
          )
        
        
        
        
           
        
        
          (314,204
        
        
          )
        
        
        
        
           
        
        
          (1,480,309
        
        
          )
        
        
        
        
           
        
        
          (716,871
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income
        
        
        
        
        
        
          3,231,594
        
        
           
        
        
        
        
           
        
        
          1,234,795
        
        
          
             
          
        
        
        
        
           
        
        
          5,679,015
        
        
           
        
        
        
        
           
        
        
          1,042,255
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings per common share
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic
        
        
        
        
        
        
          0.13
        
        
        
        
        
        
        
        
          0.05
        
        
        
        
        
        
        
        
          0.23
        
        
        
        
        
        
        
        
          0.05
        
        
        
      
      
        
          - Diluted
        
        
        
        
        
        
          0.11
        
        
           
        
        
        
        
           
        
        
          0.05
        
        
           
        
        
        
        
           
        
        
          0.21
        
        
           
        
        
        
        
           
        
        
          0.04
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average common shares
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          - Basic
        
        
        
        
        
        
          25,698,807
        
        
        
        
        
        
        
        
          23,156,629
        
        
        
        
        
        
        
        
          24,879,527
        
        
        
        
        
        
        
        
          22,686,183
        
        
        
      
      
        
          - Diluted
        
        
        
        
        
        
          28,809,386
        
        
           
        
        
        
        
           
        
        
          25,406,977
        
        
           
        
        
        
        
           
        
        
          27,053,765
        
        
           
        
        
        
        
           
        
        
          24,606,260