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China Jiangsu Golden Horse Steel Ball Reports Annual Revenue of $12.9 Million
China Jiangsu Golden Horse Steel Ball, Inc. (PINKSHEETS: CJGH) ("Golden Horse" or "the Company") a leading Chinese manufacturer and supplier of ball bearings has announced unaudited operating results for the year ended December 31, 2007 ("FY2007").
"We had a very solid year, and we were happy to see the continued growth in our business," commented Mr. Qiang Ma, President of China Jiangsu Golden Horse Steel Ball, Inc. "We expect to continue the year-on-year net revenue growth at a rate of approximately 20% for 2008."
For the year ended December 31, 2007, the Company recorded revenue of $12.9 million, an increase of $1.4 million or 12.0% from the $11.5 million recorded in fiscal 2006 ("FY2006"). The increase in revenue is attributable to growing global demand for steel bearings as the Company had positive growth in sales from its existing customer base and was able to obtain new contracts.
The cost of production materials, labor and other indirect manufacturing costs increased by $1.6 million or 16.3% to $11.2 million for FY2007 when compared to last year. The increase is mainly due to higher direct material costs as the price for raw material steel products continue to increase as a result of higher global demand. In addition, the Company has made capital investments to improve its offering of bearing products and modernization of equipment and machinery, including the opening on the new plant in Xuyi, which will result in efficient production processes.
Gross margin for the year was $1.7 million, a decrease of 10.3% from the $1.9 million recorded in 2006. The decrease in gross margin was a result of the aforementioned higher raw materials and the costs associated with upgrading manufacturing equipment and machinery.
Selling expenses were $84,000, a decrease of $58,000 or 41.0%, general and administrative expenses were $537,000, an increase of 64.2% from $327,000, and interest expense were $236,000, higher by $74,000 or 45.6%. The increase in general and administrative -- and financial -- expenses is primarily a result of the increased business activity and the opening of the new plant during the course of the year.
FY2007, the Company recorded net income of $1.1 million, an increase of $0.3 million or 36.5% from the $0.80 million recorded in FY2006.
As at December 31, 2007, the Company had a working capital surplus of $1.4 million and a working capital ratio of 1.11. The Company has made substantial investments in equipment and machinery in 2007 that will support the growth of the business activity from a production capacity and efficiency prospective. During FY2007, the Company's operating activities generated $2.0 million in cash. Investment activities during 2007 consumed $2.3 million for the purchase of capital equipment and machinery.
During FY2007, Total Assets increased by 32.4% from $15.3 million to $20.3 million and Total Shareholder Equity increased by 19.2% from $5.8 million to $6.9 million.
About Us:
Golden Horse along with its affiliates and controlled entities is one of the top five manufacturers of steel ball bearings in China. The Company produces over three billion ball bearings annually of various specifications along with its development of over 15 new products, such as stainless steel balls, aluminum balls, and ceramics balls. In addition, the Company continues to export its products to over twenty countries worldwide including the USA, Japan, Brazil, India, and Germany.
Forward-looking Statements:
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
http://www.goldenhorsesteel.com
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| HCB7218-E-T-P4S bearing | 90 | 160 | 30 |
| HCB7218-C-T-P4S bearing | 90 | 160 | 30 |