LJ International, Inc. (MM) (NASDAQ:JADE)
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LJ International Revenue Rises 30% In First Quarter 2004
Operating Income Up 32% as Jewelry Firm Begins Expansion Into China's Retail
Market
First Quarter Highlights:
-- Revenue of $14.5 million, up 30% from $11.1 million in the first quarter of
2003.
-- Net income of $421,000, or $0.04 per fully diluted share, compared to
$358,000, also $0.04 per share, a year earlier. This is the Company's seventh
straight profitable quarter.
-- Operating income of $572,000, up 32% from $434,000 in the first quarter of
2003.
-- Balance sheet remains strong with over $5.3 million in cash and zero
long-term debt.
-- Company makes significant move into China during first quarter, with new
Hong Kong showroom and Mainland Chinese Government approval for accelerated
expansion.
HONG KONG and LOS ANGELES, May 13 /Xinhua-PRNewswire-FirstCall/ -- LJ
International, Inc. (LJI) (NASDAQ:JADE), one of the fastest-growing fine
jewelry companies in the world, today announced financial results for the first
quarter of 2004, ending March 31.
The year-over-year revenue increase continued the trend of the past year, when
sales rose 26% from 2002 to 2003. The Company attributed the first- quarter
rise in sales to acceptance of new products, new customers as well as an
increase in orders from existing customers.
During the first quarter, LJI made its first significant entry into the
mainland Chinese retail jewelry market, opening up its first Hong Kong showroom
and gaining government approval to expand its product lines into China. Since
the end of the first quarter it has announced two other major Chinese marketing
initiatives. One is a memorandum of understanding to market and sell LJI
jewelry through a joint venture with China Commerce Group a leading China-based
operator of several retail outlets including the upscale 'China Friendship
Shops,' Hualian Department Stores and Juntai Department stores, among others.
The other is a new strategic vendor partnership under which LJI is now selling
jewelry featuring colored stones through the global retailer Carrefour.
Carrefour is the second largest retailer in the world and the operator of 35
giant 'hypermarkets' in China.
The Company also announced in the first quarter that it had received initial
orders from Australia's largest TV home shopping network, and it announced that
it had received a $1.3 million order for colored-stone jewelry from the largest
warehouse club chain in the U.S.
'Our first-quarter financial results, which were at the higher end of our
earlier guidance, clearly indicate that LJI is successfully executing its
expansion strategy,' said Yu Chuan Yih, LJI's chairman and CEO. 'The
combination of new product introductions and new customers are the primary
reasons behind our sales growth. Our plans to rapidly expand into the fast-
growing Chinese consumer market are expected to generate a new and growing
revenue channel for LJI in the current and coming years. Excluding potential
contributions from China, we continue to remain comfortable with double digit
revenue growth in the coming quarters. Earnings should also be favorably
impacted by our progress in growing sales while decreasing our overall expenses
as a percentage of overall sales.'
Balance Sheet Continues to Strengthen
As of March 31, 2004, LJI reported cash and cash equivalents of $5.34 million
with zero long-term debt. The strength in the Company's balance sheet should
provide LJI with the necessary financial flexibility to execute on its growth
initiatives, particularly as it begins its penetration of the Chinese market.
Company Sees Continued Sales Growth
For the second quarter of 2004, the Company said it expected sales to total
between $13.5million and $14.0 million, or 12% to 21% above the $11.6 million
reported in the second quarter of 2003. It indicated that revenues appear to be
on track to reach its 2004 full-year target of approximately $68 million,
representing an approximate 17% gain over the $58.2 million reported for all of
2003. The Company is projecting EPS between $0.01 to $0.02 for the second
quarter of 2004.
If you would like to be added to LJI's investor email lists, please contact
Haris Tajyar with Investor Relations International at .
Conference Call Information
LJI will be conducting a conference call today at 11:00 a.m. EDT to discuss
first quarter results. If you would like to participate live via phone, please
dial 877-407-8031 and ask for LJ International, Inc. call. International
callers can dial 201-689-8031.
About LJ International
LJ International Inc. is a publicly-owned company, based in Hong Kong and the
U.S., engaged in designing, branding, marketing and distributing a full range
of fine jewelry. It has built its global business, currently one of the
fastest-growing in the jewelry industry, on a vertical integration strategy and
an unwavering commitment to quality and service. LJI distributes to fine
jewelers, department stores, national jewelry chains and electronic and
specialty retailers throughout North America and Western Europe, with a growing
retail presence in China through stores and e-shopping sites. Its product lines
incorporate all major categories sought by major retailers, including earrings,
necklaces, pendants, rings and bracelets. It trades on the Nasdaq National
Market under the symbol JADE.
For more information on LJI, please visit the Company's Web site at
http://www.ljintl.com/.
Forward looking statement: Except for the historical information, the matters
discussed in this news release may contain forward-looking statements,
including, but not limited to, factors relating to future sales. These
forward-looking statements may involve a number of risks and uncertainties.
Actual results may vary significantly based on a number of factors, including,
but not limited to, uncertainties in product demand, the impact of competitive
products and pricing, changing economic conditions around the world, release
and sales of new products and other risk factors detailed in the company's most
recent annual report and other filings with the Securities and Exchange
Commission.
LJ INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
As of
As of December
March 31 31
2004 2003
(Unaudited)
ASSETS US$ US$
Current assets:
Cash and cash equivalents 5,340 2,722
Restricted cash 5,913 5,931
Trade receivables, net of allowance for
doubtful accounts (US$159 as of March 31,2004
and December 31, 2003) 10,804 15,243
Derivative contracts 721 651
Inventories 23,526 21,487
Prepayments and other current assets 4,562 3,726
Total current assets 50,866 49,760
Properties held for lease, net 1,493 1,506
Property, plant and equipment, net 4,728 4,931
Due from related parties 508 508
Goodwill, net 1,521 1,521
Investment securities, net 2,460 2,460
Total assets 61,576 60,686
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdrafts 3,294 1,312
Notes payable, current portion 1,550 1,516
Capitalized lease obligation, current
portion 18 18
Letters of credit, gold and other loans 14,719 16,737
Embedded derivative 1,501 1,430
Trade payables 5,764 8,417
Accrued expenses and other payables 5,195 2,864
Income taxes payable 322 326
Deferred taxation 87 87
Total current liabilities 32,450 32,707
Other payables, non-current 73 77
Total liabilities 32,523 32,784
Minority interest - -
Stockholders' equity
Common stocks, par value US$0.01 each,
Authorized - 100 million shares,
Issued -
10,650,576 shares as of March 31, 2004;
9,890,006 shares as of
December 31, 2003 107 99
Additional paid-in capital 20,524 19,802
Accumulated other comprehensive loss (151) (151)
Retained earnings 8,573 8,152
Total stockholders' equity 29,053 27,902
Total liabilities and stockholders' equity 61,576 60,686
LJ INTERNATIONAL INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Three months ended
March 31
2004 2003
US$ US$
Operating revenue 14,497 11,139
Costs of goods sold (11,061) (8,286)
Gross profit 3,436 2,853
Selling, general and administrative expenses (2,864) (2,419)
Operating income 572 434
Other revenue and expense
Other revenues 32 60
Interest expenses (182) (144)
Income before income taxes and minority
interest 422 350
Income taxes (1) -
Income before minority interest 421 350
Minority interest - 8
Net income 421 358
Numerator:
Net income used in computing basic and
diluted earnings per share 421 358
Denominator:
Weighted average number of shares used
in calculating basic earnings per share 10,381,000 8,353,415
Effect of dilutive potential ordinary shares:
Warrants & stock options 1,523,788 -
Weighted average number of shares used
in calculating diluted earnings per share 11,904,788 8,353,415
Earnings per share:
Basic 0.04 0.04
Diluted 0.04 0.04
CONTACT:
Betty Ho, Vice President, Corporate Development,
LJ International Inc.
Tel: +852-2170-0001
Email:
Haris Tajyar, Managing Partner,
INVESTOR RELATIONS INTL
Tel: +1-818-382-9702
Email:
CONTACT: Betty Ho, Vice President, Corporate Development at LJI, +852-
2170-0001, or betty@ljintl.com; or Haris Tajyar, Managing Partner of INVESTOR
RELATIONS INTL, +1-818-382-9702, or htajyar@irintl.com
DATASOURCE: LJ International Inc.
Web Site: http://www.ljintl.com/