FUQI International, Inc., the Chinese designer of precious metal jewelry, operating through the BVI-registered Fuqi International Holdings Co., Ltd., reported the financial results for the quarter and full year ended December 31, 2008.
Mr. Yu Kwai Chong, CEO and Chairman of Fuqi International, commented on company’s results saying that the fourth quarter of the year 2008 tends to be the strongest quarter of the season, due to the holidays of the season. He specially noted that the company maintained a strong balance sheet with $129.4 million in working capital and no long term debt. He also said that he believes the long-term outlook for the wholesale and retail jewelry market will remain positive.
The 4Q 2008 results reported by FUQI International, Inc. included revenues Increase 135% to $129.5 mln, from $55.1 mln in the fourth quarter of 2007; the increase is mainly due to increase in sales volumes and selling prices in the company’s wholesale business.
Gross profit margin increased 340 basis points to 14.0%, compared to 10.6% in the same period of 2007. Net income of the period increased to $9.7 mln, or $0.45 per diluted share. Gross profit in the fourth quarter of the year 2008 increased 212% to $18.1 mln, from $5.8 mln for the same period in the previous year. Operating expenses for the fourth quarter made 5.9 million – a 247% increase from $1.7 million in the prior year period. Income for the period increased 195% – from $4.1 mln to $12.1 mln, in the fourth quarter of 2007. Net income was $9.7 mln, compared to $7.4 million in the same period of the prior year.
For the twelve months period ended December 31, 2008, net sales increased 152% to $367.6 mln compared to $145.6 mln for the year 2007. Net sales from the wholesale business increased 147% from $144.3 mln in the prior year to $356.4 mln this year, while net sales from the retail business increased 8.2 times, from $1.2 mln in 2007 to this year’s $11.1 mln. Gross profit for 2008 increased 172% to $45.0 mln, compared to $16.5 mln in the prior year. Gross margin increased from 11.3% to 12.2%. Total operating expenses for 2008 made $11.6 million, or 3.2% of net sales, – compared to $4.0 mln, or 2.8% of net sales, in the prior year.
On December 31, 2008 Fuqi International had cash and cash equivalents of $56.6 mln, compared with $63.3 mln on December 31, 2007.