Asia Time Corp (AMEX:TYM)
Historical Stock Chart
From Jun 2019 to Jun 2024
Asia Time Corporation (NYSE Alternext US: TYM) (“Asia Time”), a
Hong Kong-based watch movement and complete watch distributor, today
announced financial results for the third quarter ended September 30,
2008.
Third Quarter Financial Highlights
Revenue growth of 74.3% year-over-year to $40.0 million
Total operating expense decrease of 10.3% year-over-year
Net income increase of 44.5% year-over year to $4.2 million, or $0.15
per diluted share
Backlog of approximately $3.6 million at September 30, 2008, compared
with backlog of approximately $2.4 million at June 30, 2008(1)
“Our strong third quarter performance was on track with our
expectations, and we continue to target revenue and net earnings growth
for the full year 2008 of more than 50% compared with 2007,” said Kwong
Kai Shun, Chairman and CEO of Asia Time. “Despite global economic
weakness, backlog at September 30 gives us good visibility to order
fulfillments as we proceed with the 2008 holiday selling season. This is
indicative of the strength of our repeatable core revenue streams and
long-established customer and supplier relationships, along with our
scale and diversification as one of the largest Hong Kong-based
distributors of timepiece movements worldwide. We have a broad portfolio
of products, healthy inventories and ample capital resources to continue
to execute well within the current environment and position for
expansion in the year ahead.”
Third Quarter Financial Results
Net sales for the third quarter ended September 30, 2008 increased 74.3%
to $40.0 million, compared with $23.0 million for the third quarter
ended September 30, 2007. The total volume of movements sold increased
to 33.6 million pieces in the third quarter of 2008 from 26.2 million
pieces in the comparable three-month period in 2007, reflecting higher
sales of middle- to high-end movements. Sales of completed watches for
the three months ended September 30, 2008 totaled $3.4 million, compared
with $4.6 million for the comparable period in 2007, a decrease of
25.5%. The total volume of completed watches sold decreased from 540,000
pieces to 60,000 pieces, or 88.9%. The decrease in completed watch
volume was due to the Company’s strategic shift to focus this business
segment on high-end mechanical watches, which have a longer production
lead time but higher profit margins.
Third quarter gross profit increased 42.8% to $6.5 million, compared
with $4.6 million for the third quarter of 2007. Gross margin was 16.3%
for the third quarter of 2008, compared with 19.9% for the third quarter
of 2007. The decrease in gross profit as a percentage of net sales was
primarily attributable to an increase in sales of watch movements as a
percentage of total revenue for the third quarter of 2008. Watch
movements generally carry lower gross profit margins compared with
completed watches.
Administrative and other operating expenses including stock-based
compensation totaled $620,000 for the third quarter of 2008, compared
with $691,000 for the third quarter of 2007, a decrease of 10.3%. The
decrease was primarily due to higher stock-based compensation expense in
the prior-year period offset by higher professional and legal expense in
the current-year period associated with public company reporting
requirements.
Income taxes for the third quarter of 2008 were $953,000, or 2.4% of net
sales, compared with $698,000, or 3.0% of net sales, for the third
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 third quarter of 2007 to 16.5% for the third quarter of 2008.
Net income for the third quarter of 2008 was $4.2 million, or $0.15 per
diluted share, based on 27.2 million weighted average shares
outstanding. This compares with third quarter 2007 net income of $2.9
million, or $0.11 per diluted share, based on 25.4 million weighted
average shares outstanding.
Year-to-Date Financial Results
Net sales for the nine months ended September 30, 2008 increased 77.0%
to $115.0 million, compared with $65.0 million for the nine month period
ended September 30, 2007.
Gross profit for the first nine months of 2008 increased 72.3% to $17.5
million, compared with $10.1 million for the first nine months of 2007.
Gross margin was 15.2% for the first nine months of 2008, compared with
15.6% for the first nine months of 2007.
Administrative and other operating expenses including stock-based
compensation was $2.9 million for the first nine months of 2008,
compared with $3.3 million for the first nine months of 2007, a decrease
of 11.1%. The 2007 period includes a one-time recognition of
approximately $1.9 million of stock-based compensation pursuant to
escrow shares provided by Mr. Kwong related to a January 2007 private
placement.
Net income for the nine months ended September 30, 2008 was $9.8
million, or $0.36 per diluted share, based on 27.1 million weighted
average shares outstanding. This compares with net income of $3.9
million, or $0.16 per diluted share, based on 24.9 million weighted
average shares outstanding for the nine months ended September 30, 2007.
Balance Sheet and Capital Resources
At September 30, 2008, Asia Time’s cash and cash equivalents totaled
$3.0 million and total assets were $73.0 million. Working capital
totaled $32.0 million.
As of September 30, 2008, Asia Time’s general banking facilities
amounted to approximately $24.8 million, of which $0.8 million was
available as unused credit. During September 2008, Asia Time obtained a
$ 2.6 million extendible revolving credit facility from HSBC Hong Kong
to be used as needed for general operating purposes.
Conference Call and Webcast
Management of Asia Time will host a conference call today at 2:00 p.m.
Pacific time/5:00 p.m. Eastern time to discuss third quarter 2008
financial results and answer questions.
Individuals interested in participating in the conference call may do so
by dialing (800) 891-5765 from the U.S., or (660) 422-4961 from outside
the U.S. Those interested in listening to the conference call live via
the Internet may do so by visiting the Investor Relations section of the
Company’s Web site at www.asiatimecorp.com.
A telephone replay will be available for 48 hours following the
conclusion of the call by dialing 800-642-1687 from the U.S., or
706-645-9291 from outside the U.S., and entering reservation code
74793029. A webcast replay will be available on the Company’s web site
for one year.
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 asiatime@finprofiles.com.
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,
adverse capital and credit market conditions, 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
September 30,
December 31,
2008
2007
(Unaudited)
(Audited)
$
$
ASSETS
Current Assets :
Cash and cash equivalents
2,973,029
6,258,119
Restricted cash
7,979,513
8,248,879
Accounts receivable
25,204,251
14,341,989
Prepaid expenses and other receivables
17,004,909
7,704,999
Inventories, net
10,904,300
12,370,970
Total Current Assets
64,066,002
48,924,956
Deferred tax assets
29,964
29,929
Property and equipment, net
8,321,309
1,891,709
Leasehold lands
-
-
Held-to-maturity investments
300,578
300,231
Intangible assets
18,025
48,012
Restricted cash
256,772
256,476
TOTAL ASSETS
72,992,650
51,451,313
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current Liabilities :
Accounts payable
2,692,873
1,310,809
Other payables and accrued liabilities
627,358
132,507
Income taxes payable
4,718,084
2,293,887
Bank borrowings
24,022,728
20,438,479
Total Current Liabilities
32,061,043
24,175,682
Convertible bond payables
4,957,551
345,461
Deferred tax liabilities
57,019
56,953
TOTAL LIABILITIES
37,075,613
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 – Nil shares(2007 – 2,250,348
shares)
-
225
Common stock
Par value: 2008 US$0.0001 (2007 – US$0.0001)
Authorized: 100,000,000 shares
Issued and outstanding: 2008 – 26,570,677 shares(2007 –
23,156,629 shares)
2,657
2,316
Additional paid-in capital
12,636,309
13,481,036
Accumulated other comprehensive income/(loss)
19,119
(28,404
)
Retained earnings
23,258,952
13,418,044
TOTAL STOCKHOLDERS’ EQUITY
35,917,037
26,873,217
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
72,992,650
51,451,313
ASIA TIME CORPORATION
(Formerly SRKP 9, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in US Dollars)
Three months ended
September 30,
Nine months ended
September 30,
2008
2007
2008
2007
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
$
$
$
$
Net sales
40,049,042
22,972,645
114,997,186
64,960,224
Cost of sales
(33,533,669
)
(18,410,524
)
(97,534,658
)
(54,829,393
)
Gross profit
6,515,373
4,562,121
17,462,528
10,130,831
Other operating income
25,848
48,425
77,405
145,203
Depreciation
(371,581
)
(64,635
)
(986,492
)
(193,499
)
Administrative and other operating expenses, including stock-based
compensation
(619,553
)
(690,514
)
(2,929,940
)
(3,295,777
)
Income from operations
5,550,087
3,855,397
13,623,501
6,786,758
Fees and costs related to reverse merger
-
-
-
(736,197
)
Non-operating income
25,369
39,555
136,117
117,936
Interest expenses
(460,730
)
(316,516
)
(1,485,568
)
(830,935
)
Income before taxes
5,114,726
3,578,436
12,274,050
5,337,562
Income taxes
(952,833
)
(697,737
)
(2,433,142
)
(1,414,608
)
Net income
4,161,893
2,880,699
9,840,908
3,922,954
Earnings per common share
- Basic
0.16
0.12
0.39
0.17
- Diluted
0.15
0.11
0.36
0.16
Weighted average common shares
- Basic
26,570,394
23,156,629
25,386,013
22,844,721
- Diluted
27,244,540
25,406,977
27,059,811
24,874,262
(1) Asia Time views backlog as an important statistic in
evaluating its level of sales activity and short-term sales trends in
its business. It also cautions that backlog is only one indicator and
not the most effective indicator of the ultimate profitability of its
revenue.