Third Quarter 2009 Results -- Revenues were RMB410.7 million (US$60.2 million) compared to RMB607.9 million in 3Q08. -- Handset shipments were 406,000 units compared to 629,000 units in 3Q08. -- Gross margin was 15.5% compared to 53.1% in 3Q08. -- Operating income was RMB7.7 million (US$1.1 million) compared to RMB239.8 million in 3Q08. -- Net loss attributable to holders of ordinary shares was RMB83.8 million (US$12.3 million) in 3Q09, which resulted mainly due to significant non-cash charges relating to the accounting for the convertible notes issued by the Company in May 2008.
Revenues for the third quarter of 2009 were
Total handset shipment in the third quarter of 2009 was approximately 406,000 units, representing a decrease of 35.5% compared with 629,000 units in the same period of 2008. The decrease in handset shipments compared to the same period of last year was primarily due to fewer new model launches and a slow-down in shipments amid increasing competition in the handset market.
The ASP of handset products decreased to
Gross profit in the third quarter of 2009 was
Selling and distribution ("S&D") expenses in the third quarter of 2009
were
General and administrative ("G&A") expenses were
Research and development ("R&D") expenses were
Total share-based compensation expenses, which have been allocated to S&D,
G&A and R&D expenses, decreased to
Operating income in the third quarter of 2009 was
Net loss attributable to holders of ordinary shares in the third quarter of 2009 was RMB83.8 million (US$12.3 million), compared to an income of RMB150.0 million in the same period of 2008. The net loss in the third quarter of 2009 resulted mainly due to the following non-cash charges that arose on the accounting for the convertible notes issued by the Company in May 2008: Three months ended September June 30, September 30, 2008 2009 30, 2009 RMB RMB RMB Non-cash interest expense (29,957) (67,265) (89,450) Non-cash gain (loss) on remeasurement of embedded derivatives 38,984 (51,635) 18,809 Net non-cash gain (loss) 9,027 (118,900) (70,641)
Basic and diluted loss per share were both
Recent Developments (1) In November 2009, a holder of the US$70 million 4% convertible notes due 2011 (the "Notes") issued by the Company in May 2008 exercised its right to require the Company to redeem US$30 million of the principal amount of the Notes. Pursuant to the terms of the Notes, the Company paid approximately RMB217.0 million as settlement of the principal amount being redeemed plus accrued interest thereon of approximately US$1.1 million. (2) In November and December 2009, two holders of the Notes exercised the option to convert US$15.7 million of the principal amount of the Notes and accrued interest thereon of approximately US$590,000 into 4,114,000 ordinary shares of the Company. (3) In December 2009, the Company granted a total of 1,955,057 restricted shares to a director and various employees pursuant to its 2007 Equity Incentive Plan. Concurrent with the grant, the Company cancelled all 1,744,800 outstanding share options that were previously granted in March 2007. The restricted shares vest on various dates, with the last vesting date being April 1, 2012.
Foreign Exchange Rate Used
About Qiao Xing Mobile Communication Co., Ltd.
Qiao Xing Mobile Communication Co., Ltd. is a domestic manufacturer of
mobile handsets in
Safe Harbor Statement
This announcement contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "intend," "is /are likely to," "may," "plan," "potential," "will" or other similar expressions. Statements that are not historical facts, including statements about QXM's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. QXM does not undertake any obligation to update any forward-looking statement, except as required under applicable laws. All information provided in this press release is as of January [OPEN], 2010, and QXM undertakes no duty to update such information, except as required under applicable laws.
For further information, contact: Lucy Wang Qiao Xing Mobile Communication Co., Ltd. Tel: +86-10-8219-3883 Email: wangjinglu@cectelecom.com Qiao Xing Mobile Communication Co., Ltd. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (Amounts in thousands) December 31, September 30, 2008 2009 RMB RMB Assets Cash 2,907,148 3,185,065 Restricted cash 136,299 171,616 Accounts receivable, net 462,282 441,176 Bills receivable 43,516 5,880 Inventories 183,169 186,453 Prepayments to suppliers 363,907 156,229 Prepaid expenses and other current assets 38,996 41,832 Deferred income taxes 6,994 6,098 Deferred debt issuance costs, net 34,689 7,289 Total current assets 4,177,000 4,201,638 Property, machinery and equipment, net 167,233 159,643 Land use rights 35,304 34,701 Equity investment 7,803 7,803 Goodwill 112,814 112,814 Other intangible assets, net 22,766 19,195 Total assets 4,522,920 4,535,794 Liabilities and equity Short-term borrowings 983,950 885,700 Accounts payable 52,047 129,962 Prepayments from customers 42,551 6,169 Accrued liabilities 50,014 108,689 Amounts due to related parties 11,155 17,650 Other payables and current liabilities 7,227 14,842 Income taxes payable 38,462 -- Embedded derivative liability 124,130 114,890 Convertible notes 206,211 384,257 Total current liabilities 1,515,747 1,662,159 Deferred income taxes 320 125 Total liabilities 1,516,067 1,662,284 Equity Shareholders' equity 2,914,788 2,778,671 Noncontrolling interests 92,065 94,839 Total equity 3,006,853 2,873,510 Total liabilities and equity 4,522,920 4,535,794 Qiao Xing Mobile Communication Co., Ltd. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations (Amounts in thousands, except share and per share data) Three months ended September 30, June 30, September 30, 2008 2009 2009 RMB RMB RMB Revenues 607,882 578,884 410,746 Cost of goods sold (285,097) (446,306) (347,092) Gross profit 322,785 132,578 63,654 Selling and distribution expenses (61,249) (31,727) (34,476) General and administrative expenses (11,481) (11,922) (12,165) Research and development expenses (7,049) (6,487) (8,133) Amortization of intangible assets (3,158) (1,190) (1,190) Operating income 239,848 81,252 7,690 Interest income 6,568 2,789 3,873 Interest expense (50,363) (82,770) (105,562) Foreign exchange (loss) gain, net (8,708) (172) (256) Gain (loss) on remeasurement of embedded derivatives 38,984 (51,635) 18,809 Loss on partial extinguishment of convertible notes (10,634) -- -- Other income (loss), net 611 (198) (16) Income (loss) before income tax expense 216,306 (50,734) (75,462) Income tax expense (60,241) (15,488) (8,494) Net income (loss) 156,065 (66,222) (83,956) Net (income) loss attributable to noncontrolling interests (6,019) (2,155) 136 Net income(loss) attributable to holders of ordinary shares 150,046 (68,377) (83,820) Income (loss) per ordinary share: Basic 2.62 (1.44) (1.76) Diluted 2.62 (1.44) (1.76) Weighted average number of shares outstanding: Basic 46,805,000 47,610,000 47,610,000 Diluted 46,805,000 47,610,000 47,610,000
SOURCE Qiao Xing Mobile Communication Co., Ltd.