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NEWS BULLETIN RE: LJ International, Inc.
Focal Industrial Center
FROM: 21 Man Lok Street
Hung Hom, Kowloon
The Financial Relations Board Hong Kong
----------------------------- Nasdaq/NMS: JADE
BSMG WORLDWIDE
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FOR FURTHER INFORMATION:
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At LJ International, Inc.: At The Financial Relations Board:
Ringo Ng Michael Gilburd Haris Tajyar Lisa Mueller
Chief Financial Officer VP, Corporate Development General Info. Investor Contact
011-852-2764-3622 (480) 551-0988 (310) 442-0599 (310) 442-0599
[email protected] [email protected] [email protected] [email protected]
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FOR IMMEDIATE RELEASE
Monday, September 18, 2000
LJ INTERNATIONAL REPORTS SUBSTANTIAL
GAINS IN FIRST QUARTER SALES AND EARNINGS
First Quarter Highlights:
. Existing product lines and new product introductions drive a 43% increase in
revenues to $10.7 million from $7.5 million
. Earnings increase 28% from $1 million last year to $1.2 million
. Lorenzo-branded jewelry line begins initial contributions
. Over 200 Lorenzo
authorized jewelers signed on since June 2000
HONG KONG and SCOTTSDALE, Arizona - September 18, 2000 - LJ International Inc.
(Nasdaq/NMS: JADE), the largest publicly-owned manufacturer of semi-precious
jewelry, today reported substantial sales and earnings gains for its first
quarter ended July 31, 2000.
"The initial contributions of the new Lorenzo-branded line of jewelry as well as
increased demand for our existing product lines resulted in substantial growth
in all areas, primarily revenues and earnings," said Yu Chuan Yih, Chairman and
CEO of LJ International. "We look forward to the next fiscal year and are better
positioned than ever to expand our market share as we continue to focus on
growing within our large high-volume customers."
Company Reports Record First Quarter Revenues
Revenues for the first quarter ended July 31, 2000 increased 43% to $10.7
million from $7.5 million in the same year-ago period. The increase in sales is
primarily a result of the new product launches, including the Company's recently
launched Lorenzo-branded line. The first quarter of fiscal 2001 represents the
fifth consecutive quarter-over-quarter revenue gain, and the third consecutive
quarter-over-quarter gain in excess of 40%.
Financial Relations Board, Inc. serves as financial relations counsel to
this company, is acting on the company's behalf in issuing this bulletin and
receiving compensation therefor. The information contained herein is furnished
for information purposes only and is not to be construed as an offer to buy or
sell securities.
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LJ International
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While incurring the cost of launching new product lines, the Company still
achieved net income of $1.2 million, or $0.15 per diluted share on 8.5 million
shares outstanding, an increase of 28% over net income of $1.0 million, or $0.15
per diluted share on 6.3 million shares outstanding in the year-ago quarter. The
increased number of outstanding shares is attributable to the conversion of the
Company's convertible debenture. The Company does not expect any further need
for additional financing.
"Our accelerating financial and operating gains, coupled with recent industry
trends that call for lower cost, high quality jewelry has contributed to this
quarter's success and our continued ramp-up," said Michael Gilburd, Vice
President of Corporate Development. "We expect sales to continue to grow, from
our diverse Lorenzo-branded line, to our Diamond Division and semi-precious
lines. The success of cross-selling the new product lines has directly
contributed to our growth."
The Lorenzo-branded jewelry line, which was launched in June of 2000, has
already attracted over 200 independent retailers. The line consists of over 200
unique styles of jewelry, manufactured with semi-precious stones.
Bright Fiscal Year 2001 Outlook
"The U.S. jewelry industry continues to grow and seek high quality, lower cost
suppliers from overseas markets. We believe this trend, coupled with China's
expected entry into the WTO, could accelerate our expansion plans. As we enter
the new fiscal year, our efforts to expand product lines and broaden
distribution channels will continue to be the focus of our successful growth
strategy. We expect the gains fueled by demand for both our core and new product
lines to continue throughout fiscal 2001," concluded Mr. Yih.
Investor Conference Call
LJ International will be holding an investor conference call to discuss the
Company's financial and operational results at 11:00 am EDT today, September 18,
2000. Investors will have the opportunity to listen to the conference call over
the Internet through Vcall at http://www.vcall.com. To listen to the live call,
please go to the web site at least fifteen minutes early to register, download,
and install any necessary audio software. For those who cannot listen to the
live broadcast, a replay will be available shortly after the call.
About LJ International Inc.
With manufacturing operations in the People's Republic of China for more than 10
years, LJ International Inc. has grown to become the world's largest publicly-
owned manufacturer and marketer of semi-precious jewelry. The Company's
operations are totally vertically integrated from mine-to-market. LJ
International operates two manufacturing facilities in China that employ
approximately 2,500 skilled craftsmen. The Company produces more than 2 million
pieces of fine finished jewelry, and annually cuts more than 4 million carats of
high quality gemstones, which are sold primarily to the largest jewelry
retailers in the United States and Europe. LJ International invites the public
to visit the Company's website at http://www.ljinc.com/ for additional
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information.
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LJ International
Page 3 of 4
Except for the historical information herein the matters discussed in this press
release contain forward-looking statements, including but not limited to future
sales, geographic expansion, customer diversification, the success of the
Company's Lorenzo-branded jewelry, and the implementation of the Company's
expansion strategy. 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.
[Financial Tables to Follow]
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LJ International
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LJ INTERNATIONAL, INC.
SELECTED FINANCIAL INFORMATION
IN ACCORDANCE WITH U.S. GAAP
(United States Dollars, in thousands, except per share amounts)
INCOME STATEMENT DATA
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Three months ended Three months ended
July 31, 2000 July 31, 1999
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(Unaudited) (Unaudited)
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Sales $ 10,748 $ 7,538
Cost of goods sold 6,619 4,244
Grodd profit 4,129 3,294
Selling, general and administrative expenses 2,814 2,097
Operating income 1,315 1,197
Other expenses, net 60 149
Income before income taxes 1,255 1,048
Income taxes 39 103
Minority Interests - 5
Net income under US GAAP $ 1,216 $ 950
Earnings per share - basic (US GAAP) $ 0.16 $ 0.15
Earnings per share - diluted (US GAAP) $ 0.15 $ 0.15
Weighted average shares outstanding - basic 8,258,013 6,347,046
Weighted average shares outstanding - diluted 8,472,613 6,347,560
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BALANCE SHEET DATA
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At July 31, 2000 At July 31, 1999
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(Unaudited) (Unaudited)
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Cash $ 6,118 $ 2,162
Accounts receivable, net 7,176 7,011
Inventories 20,062 13,122
Prepayments and others 2,777 321
Total current assets 36,133 22,616
Property, plant and equipment, net 6,497 6,575
Other assets 276 95
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Total assets $ 42,906 $ 29,286
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Total current liabilities 14,591 11,822
Total liabilities 15,254 12,634
Minority interests - 16
Related companies' advances (75) 366
Common stock 87 64
Additional paid-in capital 14,448 7,932
Warrant reserve 339 210
Retained earnings 12,853 8,064
Total shareholders' equity 27,652 16,636
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Total liabilities and shareholders' equity $ 42,906 $ 29,286
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