Attached files
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| 8-K - FORM 8-K - SOONER HOLDINGS INC /OK/ | v240762_8k.htm |
Exhibit 99.1
Sooner Holdings Inc. Reports Results for the Third Quarter of 2011
Sooner Holdings Inc. (OTCBB: SOON), a Fujian-based manufacturer and distributor of synthetic polyurethane synthetic leather (PU leather) for the shoe industry in China, today announced financial results and provided a business update for the third quarter of 2011.
Third Quarter 2011 Highlights
Revenue kept even at $7.0 million compared to $7.1 million for Q3 2010. Gross profit decreased 19% to $1.3 million versus $1.6 million for Q3 2010 due to the increasing costs. The decrease of gross margin was mainly due to an increase in raw materials and labor costs, and our sales of footwear had decreased approximately 34% during the three months ended September 30, 2011, compared to same period in 2010. Net income decreased 46.2% to $501 thousand versus $932 thousand for Q3 2010 due to the increased administrative expenses in this quarter and in 2011 the Company no longer enjoyed the preferential income tax holiday rate of 12.5% in 2010 and is paying the normal income tax rate of 25% in 2011.
Ang Kang Han, Chairman and President, commented, the liquidity imbalance on the condensed consolidated balance sheet is primarily due to the fact that the Company is investing towards its future expansion plans. Overall, we believe we are extremely well positioned to capture market share due to insufficient local supply of PU leather and the high grade characteristics of our synthetic leather. We have a new facility in San Ming that we expected to commence operation by the end of 2011, which will increase our capacity dramatically, and allow us to capitalize on the growing demand and new opportunities from our customers."
About Sooner Holdings Inc.
Sooner Holdings Inc., located in Fujian province, is a leading producer of synthetic polyurethane leather ("PU leather") for the shoe industry in China. The company's primary business is to design, manufacture and distribute PU leather. Flying Eagle also manufactures flip-flops and slippers for sale in China and abroad. For its high performance series, Flying Eagle uses high-density nonwoven fabric as base cloth because of its superior hydrolysis resistance, peel and tear strength, durability and air and moisture permeability. High performance PU leather is mainly used to make high-grade athletic shoes. Flying Eagle is located in ShiShi City, Fujian, close to Quanzhou — China's largest production base for sports shoes, sneakers and casual shoes. In this one region alone, there are more than 3,000 shoe manufacturers producing over 1 billion shoes annually located in close proximity.–
Financial tables follow –
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SOONER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30,
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December 31,
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2011
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2010
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ASSETS
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Current assets:
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Cash
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$ | 972,419 | $ | 1,084,204 | ||||
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Restricted cash
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702,927 | 137,688 | ||||||
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Notes receivable
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677,934 | - | ||||||
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Accounts receivable
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4,600,109 | 6,171,639 | ||||||
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Prepaid expenses and other current assets
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1,921,936 | 555,283 | ||||||
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Related party receivable
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- | 1,334,545 | ||||||
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Inventories
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8,739,498 | 6,968,039 | ||||||
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Total current assets
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17,614,823 | 16,251,398 | ||||||
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Deposit for construction in progress
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15,598,118 | 8,074,441 | ||||||
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Plant and equipment, net
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15,198,629 | 11,589,924 | ||||||
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Land use rights, net
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1,812,885 | 1,793,496 | ||||||
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Long-term investment
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156,206 | 151,722 | ||||||
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Total assets
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$ | 50,380,661 | $ | 37,860,981 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Liabilities:
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Short-term loans and notes payable
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$ | 17,885,595 | $ | 11,586,254 | ||||
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Related party payable
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674,045 | 198,756 | ||||||
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Accounts payable and other liabilities
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3,313,770 | 2,447,151 | ||||||
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Customer deposits
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713,978 | 925,352 | ||||||
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Tax payable
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2,739,504 | 1,814,856 | ||||||
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Total liabilities
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$ | 25,326,892 | $ | 16,972,369 | ||||
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Stockholders’ equity:
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Preferred stock, Series A, $0.0001 par value; 10,000,000 shares authorized; 19,200 and zero shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively
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2
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- | ||||||
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Common stock, $0.001 par value; 100,000,000 shares authorized; 14,632,553 and 12,688,016 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively
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14,633
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12,688
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Additional paid-in capital
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10,276,438 | 9,128,415 | ||||||
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Retained earnings
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12,947,568 | 10,607,267 | ||||||
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Accumulated other comprehensive income
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1,815,128 | 1,140,242 | ||||||
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Total stockholders’ equity
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25,053,769 | 20,888,612 | ||||||
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Total liabilities and stockholders’ equity
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$ | 50,380,661 | $ | 37,860,981 |
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SOONER HOLDINGS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2011
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2010
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2011
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2010
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Revenues
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$ | 7,041,089 | $ | 7,116,226 | $ | 22,678,465 | $ | 20,705,993 | ||||||||
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Cost of revenues
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5,734,412 | 5,539,513 | 17,919,682 | 15,931,867 | ||||||||||||
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Gross profit
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1,306,677 | 1,576,713 | 4,758,783 | 4,774,126 | ||||||||||||
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Operating expenses:
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Selling
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76,505 | 184,005 | 320,400 | 422,015 | ||||||||||||
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General and administrative
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313,715 | 146,332 | 662,637 | 398,548 | ||||||||||||
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Total operating expenses
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390,220 | 330,337 | 983,037 | 820,563 | ||||||||||||
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Income from operations
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916,457 | 1,246,376 | 3,775,746 | 3,953,563 | ||||||||||||
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Other income (expense):
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Interest expense and bank fees, net
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(255,951 | ) | (180,172 | ) | (690,962 | ) | (422,965 | ) | ||||||||
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Foreign exchange transaction loss
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(3,538 | ) | - | (9,443 | ) | - | ||||||||||
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Subsidy income
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- | - | 38,044 | - | ||||||||||||
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Other income (expense), net
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12,756 | 731 | 68,859 | 48,911 | ||||||||||||
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Total Other income (expense)
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(246,733 | ) | (179,441 | ) | (593,502 | ) | (374,054 | ) | ||||||||
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Income before provision for income taxes
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669,724 | 1,066,935 | 3,182,244 | 3,579,509 | ||||||||||||
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Provision for income taxes
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168,598 | 134,654 | 841,943 | 449,455 | ||||||||||||
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Net income
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$ | 501,126 | $ | 932,281 | $ | 2,340,301 | $ | 3,130,054 | ||||||||
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Net income per share–basic and dilutive
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$ | 0.03 | $ | 0.07 | $ | 0.16 | $ | 0.25 | ||||||||
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Shares used in computing net income
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per share–basic and dilutive
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14,632,553 | 12,688,016 | 14,390,376 | 12,688,016 | ||||||||||||
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SOONER HOLDINGS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
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____________
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Nine Months Ended
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September 30,
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2011
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2010
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Cash flows from operating activities:
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Net income
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$ | 2,340,301 | $ | 3,130,054 | ||||
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Adjustments to reconcile net income to net cash provided by
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(used in) operating activities:
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Depreciation and amortization
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440,910 | 370,961 | ||||||
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Change in assets and liabilities:
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Accounts receivable
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1,725,837 | (3,655,071 | ) | |||||
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Prepaid expenses and other current assets
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(1,328,616 | ) | (418,730 | ) | ||||
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Inventories
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(1,540,451 | ) | (1,184,748 | ) | ||||
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Accounts payable and other liabilities
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781,574 | (275,794 | ) | |||||
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Customer deposits
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(234,899 | ) | 361,240 | |||||
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Tax payable
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857,061 | 716,173 | ||||||
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Net cash provided by (used in) operating activities
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3,041,717 | $ | (955,915 | ) | ||||
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Cash flows from investing activities:
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Net proceeds from bank notes receivable
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(667,076 | ) | - | |||||
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Deposit for construction in progress
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(7,168,366 | ) | (1,032,425 | ) | ||||
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Purchase of plant and equipment
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(3,631,092 | ) | (361,645 | ) | ||||
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Additions to land use rights
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- | (875,829 | ) | |||||
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Restricted cash for issuance of bank notes payable
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(552,183 | ) | 287,028 | |||||
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Net cash used in investing activities
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(12,018,717 | ) | $ | (1,982,871 | ) | |||
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Cash flows from financing activities:
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Net proceeds from issuance of short term loan
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4,757,147 | 5,868,200 | ||||||
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Net proceeds from issuance of notes payable
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1,104,365 | (1,224,253 | ) | |||||
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Related party receivable
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1,351,981 | (4,211,467 | ) | |||||
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Related party payable
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461,897 | (408,881 | ) | |||||
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Proceeds from capital contributions
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1,149,970 | 2,998,328 | ||||||
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Net cash provided by financing activities
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8,825,360 | $ | 3,021,927 | |||||
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Net (decrease) increase in cash
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(151,640 | ) | 83,141 | |||||
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Effect of exchange rate changes
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39,855 | 36,955 | ||||||
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Cash at beginning of period
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1,084,204 | 1,619,559 | ||||||
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Cash at end of period
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$ | 972,419 | $ | 1,739,655 | ||||