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Mr. Keneath Chen Dan Matsui/Eugene Heller
Capital Operation Department Silverman Heller Associates
Qiao Xing Universal Telephone, Inc. 1100 Glendon Avenue, PH-1
Huizhou, Guangdong, P.R.C. Los Angeles, CA 90024-5305
http:\\www.qiaoxing.com Tel: (310) 208-2550
E-mail: [email protected] Fax: (310) 208-0931
Tel: (011) 86-752-2808-188 E-mail: [email protected]
Fax: (011) 86-752-2803-101
QIAO Xing Universal Telephone reports
sIX-MONTH results
GUANGDONG, CHINA (October 5, 2000) -- Qiao Xing Universal Telephone, Inc.
("Company") (NASDAQ: XING) today announced results for the six-month period
ended June 30, 2000.
Net sales were $22.9 million, compared to $21.6 million for the six-month period
in 1999. The increase is attributable to the growing market for the Company's
line of high quality corded and cordless telephones, including the successful
introduction of digitally enhanced cordless telephones ("DECT") into its product
line and resulting sales.
Operating profit for six months was $4.4 million versus $ 4.7 million in 1999.
The slight decline was due to higher marketing expenses associated with
increasing Qiao Xing's brand awareness and development of the Company's new
special-functions telephone, which is expected to contribute to sales and profit
growth in subsequent periods.
However, net income for the period rose to $2.8 million, or 25 cents per share
on weighted average number of shares outstanding of 11,365,314, from $2.7
million, or 30 cents per share on 9,176,000 shares, in 1999. The increase in net
income was attributable lower interest and other expenses compared to the year-
earlier period. The higher number of outstanding shares in 2000 is the result of
additional financings earlier in the year.
Commenting on the Company's outlook, Mr. Rui Lin Wu, chairman of Qiao Xing,
said: "We plan to maintain our leadership role in China's burgeoning
telecommunications market by remaining focused on R&D and new product
development and eliminating unprofitable product lines. The development and
successful introduction of our DECT and special-functions phone are the result
of this strategy. We incurred significant up-front expenses in bringing these
products to market, but their higher price points and higher margins, compared
to other phones in our product line, will contribute to stronger top- and
bottom-line results going forward.
"We also plan to continue expanding our distribution network in both local and
foreign markets," added Mr. Wu. "As we strengthen our product line, we will be
able to effectively compete in more markets, globally and in terms of product
niches. We are looking forward to establishing additional agreements in the
future.
Mr. Wu further commented on Qiao Xing's involvement in CDMA technology: "We
recently obtained approval from the China Ministry of Information Industry to
participate in a government-funded
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research and development project related to CDMA core technologies. This
involvement is very encouraging from the standpoint of obtaining approval to
manufacture and market CDMA telephones in China. Should we receive such
approval, it would be an important step in further broadening the scope of our
business and creating new profit-generating opportunities."
In August 1995, Qiao Xing Universal Telephone, Inc. became the first telephone
manufacturer in China to receive the ISO 9001 Quality System Accreditation
award. The Company currently produces 165 models of corded telephones and 25
cordless models. Its sales network is extensive with 1,350 retail store
locations throughout China. Ranked #2 in telephone sales in China for 1997 and
1998, the Company achieved the #1 sales ranking for 1999.
This press release contains "forward-looking statements" regarding future
business opportunities and activities. Such forward-looking information involves
important risks and uncertainties that could significantly affect future
results. These risks and uncertainties include, but are not limited to, those
relating to economic, political, legal and social conditions in the People's
Republic of China, dependence upon key management personnel, competition,
material factors relating to the operations of the business, and domestic and
global general economic conditions.
Qiao Xing Universal Telephone, Inc.
Consolidated Income Statement
Six months
Six months ended ended June 30,
June 30, 2000 1999
(Unaudited) (Unaudited)
US$'000 US$'000
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Sales, net 22,891 21,642
Cost of sales (16,093) (13,382)
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Gross profit 6,798 8,260
Selling expenses (901) (1,056)
Operating expenses (1,503) (2,490)
Interest expenses (136) (591)
Interest income 37 91
Other Income (expenses), net (9) (19)
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Income before tax 4,286 4,195
Provision for income tax (1,106) (1,128)
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Income before minority interests 3,180 3,067
Minority interests (362) (335)
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Net Income 2,818 2,732
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Weighted average number of shares outstanding 11,365,314 9,176,000
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Earnings per common share 0.25 0.30
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