FUQI posts earnings... raises guidance

jst4mymny · #1 (**permalink**) 08-12-2008, 10:42 AM

FUQI International, Inc. Reports Second Quarter 2008 Financial Results
Tuesday August 12, 7:30 am ET

-- 2Q08 Revenues Increased 154% to $66.9 Million --
-- 2Q08 Net Income Increased 253% to $5.3 Million, or $0.25 per Diluted Share --
-- Company Raises Fiscal 2008 Revenue, Net Income and Diluted EPS Forecast -
-- Provides Retail Revenue Forecast for Second Half of 2008 --

SHENZHEN, China, Aug. 12 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq GM: FUQI) today announced financial results for the second quarter ended June 30, 2008.
Revenues for the second quarter of 2008 increased 154% to $66.9 million from $26.3 million in the second quarter of 2007, due to increases in sales volumes and selling prices. A higher inventory level going into the quarter provided existing and potential customers with sufficient comfort to begin increasing the size of orders overall.

Gross profit in the second quarter of 2008 increased 129% to $7.1 million compared to $3.1 million for the same period in the prior year. This increase in gross profit was primarily attributable to higher selling prices for new jewelry designs, which resulted in increased processing fees on jewelry items delivered during the second quarter.

Gross profit margin for the second quarter was 10.6% in the second quarter of 2008, within the Company's previous 2008 second quarter guidance estimate of 10.5%, and down from 11.6% in the same period of the prior year. This decrease was primarily due to higher raw materials prices, which more than offset the increase in sales. It is important to note that management prepared for fluctuating raw materials prices by entering into futures contracts, which resulted in a below-the-line gain of $721,000 during the quarter.

Operating expenses in the second quarter of 2008 increased to $1.1 million compared to $927,000 in the same period of the prior year. This increase was a result of higher administrative expenses required to support a growing revenue base, higher advertising costs, business taxes, options granted and increased salaries to certain executives, as well as expenses incurred as a result of being a publicly traded company. These expenses were offset by a year-over-year decrease in bad debt expense, as well as the absence of a one-time discretionary bonus of $88,000 that was issued to the Company's CFO in the prior year's period. Operating income for the second quarter increased to $6.0 million from $2.1 million in the second quarter of 2007.

Net Income for the second quarter of 2008 increased 253% to $5.3 million, or $0.25 per diluted share, compared to $1.5 million, or $0.10 per diluted share, in the same period of the prior year. Net margin was 7.9% compared to 5.7% in the prior year period. The increase in net margin was primarily a result of our strong growth in revenue in excess of the increase in our operating expenses. Non-cash items in the second quarter of 2008 included a $149 thousand expense for equity based compensation and a $167 thousand retail barter revenue gain. (Barter exchanges are incurred when retail customers trade-in their jewelry to obtain barter credits that can be used in lieu of cash to buy jewelry products at the Company's retail counters). Second quarter 2008 net income also benefited from a $721 thousand non-operating income derivative gain associated with gold futures the Company purchased to hedge against its inventory position during the quarter.

At the end of the second quarter, the Company had cash of $76.9 million, versus $28.9 million of cash at the end of the first quarter 2008. The primary reasons for the increase in cash were 1) an increase in the operating profits resulting in strong sales during the quarter and 2) the use of existing inventory, which had been built up going into the second quarter in anticipation of strong demand. Total inventory at the end of the second quarter was $35.1 million, down from $64.2 million at the end of the first quarter. Management expects inventory and cash positions to fluctuate from time to time as the Company anticipates periods of high demand and increases of inventory to meet that expected demand.

Mr. Yu Kwai Chong, Chairman of Fuqi International commented, ''We are very pleased with our results for the second quarter, which exceeded our expectations, despite some slowing in the growth rate of the Chinese economy, and the economic impact of the May earthquake in the Sichuan Province. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. With our strong capital position, the right mix of products and distribution and a strong management team, Fuqi, along with our recent retail acquisition Temix, is poised to build the leading provider of luxury jewelry products in China.''

2008 Financial Outlook

For the full year 2008, the Company is raising its 2008 revenue, net income and diluted earnings per share estimates. It now expects total revenue of approximately $325 - $333 million. This forecast is comprised of $315.5 - $323 million in expected wholesale revenue and $9.5 - $10 million in expected revenue from retail. The Company also anticipates consolidated net income of $23.7 - $24.3 million, and diluted EPS of $1.07 - $1.09, based on a weighted average share count of 22.2 million shares. In 2008, the Company expects long term wholesale gross margin of 10.5%, with additional gross margin upside as its branded retail business becomes more meaningful to overall sales.

For the third quarter, the Company anticipates total wholesale revenue of approximately $75 - $77 million, which would represent a year-over-year increase of approximately 108% - 114%, respectively. Additionally, the Company expects retail revenue in the third quarter of approximately $3.8 - $4 million. Net income in the third quarter is expected to be in the range of $5.8 - $5.9 million, or $0.26 - $0.27 per diluted share, based on a weighted average share count of 22.1 million shares. Gross margin for the third quarter is expected to be approximately 10.5%, and net margin is expected to be approximately 7.3%.

Mr. Chong continued, ''We remain optimistic about the future growth of Fuqi, as evidenced by our increase in guidance. Our acquisition of Temix is complete and we are anticipating smooth execution of our integration plans. We are well on track to meet our goals for the year of opening or acquiring 60-80 retail counters and 8 to 10 stores. We have been evaluating the marketplace and are excited about the opportunities we see ahead of us, and in fact have already identified other possible locations. Our aggressive growth strategy combined with our strong capital position will allow us to quickly ramp up our retail business, while meeting the demand in our wholesale markets as well. We will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace.''

Mr. Chong concluded, ''As a result of the momentum we have built this year in our wholesale business, combined with our growing potential in the retail business, we are very encouraged about our future potential. Our ability to eport strong growth in our second quarter - our seasonally mildest quarter -- while the growth in the Chinese economy slowed a bit and we faced some negative impact from the earthquake is a testament to our ability to grow this business even in relatively challenging quarters. We are excited about the future of our wholesale and retail businesses and look forward to continuing on this growth trajectory to optimize value for our shareholders by making Fuqi the leading wholesale and retail company in our market.''

jst4mymny · #2 (**permalink**) 09-24-2008, 10:52 AM

FUQI International Expands Retail Jewelry Presence
Wednesday September 24, 8:30 am ET
-- Opens Two FUQI-Branded and One Temix Jewelry Counters --
-- Finalizes Two FUQI-Branded and Three Temix Jewelry Counters --
-- Company Reiterates Comfort with 3Q08 and FY08 Revenue, Net Income and Diluted EPS Forecasts --

SHENZHEN, China, Sept. 24 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced that it has expanded its retail presence within the Beijing and Shanghai markets.

Two FUQI-branded jewelry counters have opened in two department stores -- one at the 'Xidan Shopping Mall', the other at the 'Chengxiang Huamao Department Store', which are located among the biggest business and tourist districts in Beijing. The average size of each store counter ranges from 330-550 square feet. Approximately 2,000-2,500 SKU's will be available for sale at each counter on a monthly basis. Another two FUQI-branded jewelry counters are expected to open in Beijing in September and November 2008, respectively.

The Company has also opened one Temix jewelry counter at a 'Department Store of Articles for Women', a wholly-owned subsidiary of Shanghai Hualian Supermarket Corporation, located at the Huaihai Zhong Road in Shanghai which is a central shopping destination. Three additional Temix jewelry counters are expected to open- the first at the 'City Center Shopping Mall' in the Changning District, Shanghai; the second at the 'Blue Island Mansion Shopping Arcade', Chaoyang District, Beijing in late September 2008; and the third at the 'Chengxiang Trading Center', Haidian District, Beijing in November 2008. The average size of each store counter will be approximately 440-770 square feet with approximately 1,500-2,000 SKU's available for sale at each counter on a monthly basis.

Mr. Yu Kwai Chong, Chairman of FUQI International commented, "We are pleased to expand our retail brand presence by opening up more jewelry counters in new locations. Part of our retail strategy is to increase the recognition of both the FUQI and Temix brands in highly desirable locations in premier shopping malls in Tier 1 cities in China, such as Beijing and Shanghai. The FUQI brand is marketed to a broad group of mid-level income men and women that purchase more traditional gold and platinum jewelry and jewelry gift items while our Temix counters and retail stores represent contemporary, fashionable jewelry designs that appeal to young women. Temix also has a fashionable diamond business in addition to its wide selection of gold and platinum products. Several of our existing Temix stores will soon be offering fashionable jade jewelry into our product mix to fulfill the style demands of our growing base of female customers.

With these new retail outlets, we now have a total of 60 outlets comprised of 52 store counters and eight retail stores. Our balance sheet is healthy and our strong cash position allows us to actively evaluate and pursue retail acquisition opportunities in the market. We remain comfortable with our wholesale and retail growth plan for this year and are focused on strengthening our position as the leading provider of luxury jewelry products in the Chinese market," concluded Chong.

The Company today reiterated comfort with its previously announced financial forecast for 3Q08 and FY08. For the third quarter, the Company anticipates total wholesale revenue of approximately $75 - $77 million, which would represent a year-over-year increase of approximately 108% - 114%, respectively. Additionally, the Company expects retail revenue in the third quarter of approximately $3.8 - $4 million. Net income in the third quarter is expected to be in the range of $5.8 - $5.9 million, or $0.26 - $0.27 per diluted share, based on a weighted average share count of 22.1 million shares. For the full year 2008, the Company expects total revenue of approximately $325 - $333 million. This forecast is comprised of $315.5 - $323 million in expected wholesale revenue and $9.5 - $10 million in expected revenue from retail. The Company also anticipates consolidated net income of $23.7 - $24.3 million, and diluted EPS of $1.07 - $1.09, based on a weighted average share count of 22.2 million shares.

jst4mymny · #3 (**permalink**) 10-24-2008, 11:11 AM

more good news

Market Report -- In Play (FUQI)October 22, 2008 9:57 AM

Fuqi International Inc (FUQI) All Briefing.com news
Fuqi Intl: Top buy idea ahead of quarter earnings; Expect upside results and increased guidance - Merriman Merriman is expecting upside to Q3 estimates and guidance. Firm says mgmt already reaffirmed Q3 guidance on Sep 24, giving firm very strong comfort in meeting Q3 results. However, firm actually expects upside to Q3 expectations driven by continued market share gains within the wholesale jewelry channel (due to FUQI's strong capital position), the contribution of Temix following its acquisition, better-than-expected gross margins and any commodity hedging gains. Firm also believes mgmt will increase FY08 guidance towards their estimate. At this point, firm's FY08 EPS estimate of $1.21 is well above mgmt's guidance of $1.07-1.09, as well as the consensus estimate of $1.14.

jst4mymny · #4 (**permalink**) 11-14-2008, 11:53 AM

FUQI International, Inc. Reports Third Quarter 2008 Financial Results
Friday November 14, 7:30 am ET
-- 3Q08 Revenues Increased 159% to $93.7 Million
-- 3Q08 Net Income Increased 140% to $6.5 Million, or $0.31 per Diluted Share
-- Company Raises Fiscal 2008 Revenue, Net Income and Diluted EPS Forecast

SHENZHEN, China, Nov. 14 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced financial results for the quarter ended September 30, 2008.

Revenues for the third quarter of 2008 increased 159% to $93.7 million from $36.2 million in the third quarter of 2007, due to increases in sales volumes and selling prices in the wholesale business. Wholesale contributed $90.5 million to overall revenues, representing growth of 152% year over year, and exceeding expectations. Retail revenues were slightly lower than expected, primarily as a result of slower retail business in Beijing and Shanghai regions during the Olympic Games. Retail contributed $3.2 million to overall revenues during the quarter, with $2.2 million coming from Temix and $1.0 million from Fuqi branded products.

Gross profit in the third quarter of 2008 increased 144% to $11.0 million from $4.5 million for the same period in the prior year. Gross profit was positively impacted by higher than expected sales in the wholesale business and by the contribution of incremental gross profits from the retail business. Gross profit margin was 11.7% in the third quarter of 2008, down from 12.4% in the same period of the prior year.

Operating expenses in the third quarter of 2008 increased to $2.7 million from $807,000 in the same period of the prior year. This increase was a result of expanded administrative costs required to support a growing revenue base, higher promotion costs, payrolls, business taxes, options granted and increased salaries to certain executives, as well as expenses incurred as a result of being a publicly traded company. Additionally, personnel expenses associated with retail expansion, as well as higher security costs during the Olympics contributed to higher operating expenses. Operating income in the third quarter increased 124% to $8.3 million from $3.7 million in the third quarter of 2007.

Net income in the third quarter of 2008 increased 141% to $6.5 million, or $0.31 per diluted share, from $2.7 million, or $0.21 per diluted share, in the same period of the prior year. Net margin was 7.0%, down from 7.5% in the prior year period. The decrease in net margin was primarily a result of increased operating expenses due to infrastructure expansion to support revenue growth. Non-cash items in the third quarter of 2008 included a $149,000 expense for equity based compensation and a $209,000 retail barter revenue gain. (Barter exchanges are incurred when retail customers trade-in their jewelry to obtain barter credits that can be used in lieu of cash to buy jewelry products at the Company's retail counters). Third quarter 2008 net income also benefited from a $23,000 non-operating income derivative gain associated with gold futures the Company purchased to hedge against its inventory position during the quarter.

On September 30, 2008, the Company had cash of $56.2 million, compared with $63.3 million on December 31, 2007, as the Company invested in inventory to fill up retail counter and store show cases and fulfill large orders generated from jewelry trade fairs, and as the Company paid $3.9 million cash consideration during the quarter for the acquisition of Temix. Total inventory at the end of the third quarter was $50.4 million, up from $35.1 million at the end of the second quarter, which includes inventory valued at approximately $9.8 million from the Temix acquisition. Management expects inventory and cash positions to fluctuate from time to time as the Company anticipates periods of high demand and increases of inventory to meet that expected demand.

Mr. Yu Kwai Chong, Chairman of Fuqi International, commented, "We are very pleased with our results for the third quarter, which exceeded our expectations, despite some slowing in the growth rate of the global economy, and therefore the Chinese economy, as well as the financial impact of the Olympics, which not only caused slower than expected retail sales, but also higher security expenses. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. We also believe that recent government stimulus policies can motivate additional consumer spending. We have a strong balance sheet to support our growth, the right mix of products and distribution and a strong management team. We believe that Fuqi is poised to build the leading provider of luxury jewelry products in China."

2008 Financial Outlook

For the full year 2008, the Company is raising its 2008 revenue, net income and diluted earnings per share estimates. It now expects total revenue of approximately $345 - $350 million. This forecast is comprised of $337 - $341 million in expected wholesale revenue and $8 - $9 million in expected revenue from retail. The Company also anticipates consolidated net income of $25.9 - $26.5 million, and diluted EPS of $1.17 - $1.20, based on a weighted average share count of 22.1 million shares.

For the fourth quarter, the Company anticipates total revenue of approximately $107-112 million, which represents $103 - $107 million in wholesale revenues and $4 - 5 million in retail revenues. Net income in the fourth quarter is expected to be in the range of $7.6 - $8.0 million, or $0.34 - $0.36 per diluted share, based on a weighted average share count of 22.1 million shares. Gross margin for the fourth quarter is expected to be approximately 11.0%, and net margin is expected to be approximately 7.1%.

Mr. Chong continued, "Having handily exceeded our own expectations for the third quarter, in the face of a slowing global economy, we remain optimistic about the future growth of Fuqi in China, as evidenced by our increase in guidance. Our growth will continue to be driven by wholesale revenue in the near term, but we believe that longer term the Temix and Fuqi retail brands can have a significant impact on our margins. We believe we are well positioned in both the wholesale and the retail business to capture ongoing demand for luxury jewelry products - primarily gold, but also platinum and diamond. Our Temix expansion is complete in the larger markets and we are beginning to focus our expansion into Tier 2 and 3 cities, where we believe the best future opportunities for revenue growth are. To serve the overall business, we will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace."

Conference Call

The Company will conduct a conference call to discuss the third quarter 2008 results today, Friday, November 14, 2008 before the market open at 8:30 am ET. Listeners may access the call by dialing #1-913-312-4374. To listen to the live webcast of the event, please go to ViaVid - Providing Integrated Communication Solutions from Teleconferencing to Webcasting. A replay of the call will be available through November 21, 2008. Listeners may access the replay by dialing # 719-457-0820; Passcode: 6545879.

About FUQI International, Inc.

Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market.

jst4mymny · #5 (**permalink**) 11-14-2008, 02:32 PM

UPDATE 1-China's Fuqi Q3 beats Street; ups '08 view, shares rise
Fri Nov 14, 2008 10:51am EST

* Fuqi Q3 EPS 31 cents beats Street by 5 cents

* Q3 sales up 159 pct driven by wholesale business

* Raises 2008 outlook fourth time this year

* Shares rise as much as 33 pct

Nov 14 (Reuters) - Chinese jewelry maker Fuqi International Inc (FUQI.O: Quote, Profile, Research, Stock Buzz) posted better-than-expected quarterly results, driven by increase in the wholesale business and raised its 2008 outlook fourth time this year, sending its shares up as much as 33 percent.

The company, whose design database has more than 28,000 items made from platinum, gold, karat gold, diamonds and other precious metals and stones, said it continues to see increasing demand for its products and larger orders from existing customers.

"We also believe that recent government stimulus policies can motivate additional consumer spending," Chairman Yu Kwai Chong said in a statement.

Earlier this week, China approved a 4 trillion yuan ($586 billion) government spending package to give fillip to its slowing economy.

For the full year, the company now expects earnings of $1.17 to $1.20 a share and total revenue of about $345 million to $350 million.

It had earlier forecast a profit of $1.07 to $1.09 a share on revenue of about $325 million to $333 million for the year.

Fuqi posted net income of $6.5 million, or 31 cents a share, for the third quarter ended Sept. 30. It earned $2.7 million, or 21 cents a share, a year earlier.

Revenue at the company, which sells its products directly to distributors, retailers and other wholesalers, surged 159 percent to $93.7 million.

Wholesale business contributed $90.5 million.

Analysts on average expected a profit of 26 cents a share, before special items, on revenue of $79.0 million, according to Reuters Estimates.

The latest quarter's results included a $149,000 expense for equity based compensation, a $209,000 retail barter revenue gain and a $23,000 non-operating income derivative gain associated with gold futures.

Shares of the Shenzhen, China-based company, were trading up $1.17 at $6.45 in morning trade Friday on Nasdaq. They hit a high of $7 earlier in the session. Fuqi went public in October 2007 at $9 per share.