SOURCE: Orsus Xelent Technologies, Inc.

November 15, 2006 08:24 ET

Orsus Xelent Technologies Reports Third Quarter 2006 Results

Conference Call Scheduled Thursday, November 16, 2006 at 9:30am EST

NEW YORK, NY -- (MARKET WIRE) -- November 15, 2006 -- Orsus Xelent Technologies, Inc. (OTCBB: ORXT), an emerging designer and manufacturer of award-winning mobile phones for the Asian market, reported today the Company's financial results for the quarter ended September 30, 2006.

Revenues were $45.9 million for the nine months ended September 30, 2006, representing a sharp increase of 176.45% as compared to the same period in 2005. Revenues for the three months ended September 30, 2006 were $20.5 million, representing a 55.92% increase over the same period in 2005. After experiencing reform in the cellular phone market in the first half of 2005, the Company adjusted its business model, market position and strategy, improved its technology, and the quality of its products. The Company believes that because of these efforts it is better prepared to take advantage of a rejuvenated cellular phone market in the Public's Republic of China.

For the nine months ended September 30, 2006, gross profit was $8.2 million, which represents an increase of $5.3 million or 158.39% as compared to the gross profit of $3.3 million for the same period in 2005. The gross profit in the third quarter of 2006 was $3.8 million representing 6.33% growth over the second quarter of 2006 and a slight decline of 0.40%, as compared with the third quarter of 2005.

Net income for the nine months ended September 30, 2006 was $4,647,000, or 10.12% of revenue, which represents a 223% increase compared to the same period in 2005. Net income for the three months ended September 30, 2006 was $2,366,000, which represents 51% of total net profit for the first nine months of 2006. The net income for the third quarter 2006 represents an increase of 20.84%, compared to the same period in 2005. The substantial increase in net profit is due to the Company's adjustment of its marketing strategy and improvements in the cellular phones market in this quarter.

"This was a very robust quarter for us. Our CDMA product revenues were up considerably and our new marketing strategy produced superb results. We continue to be optimistic in our profit expectations for the third quarter," said Xavier Xin Wang, President and CEO of Orsus Xelent.

The Company has scheduled a conference call for Thursday, November 16, 2006 at 9:30am Eastern Standard Time. Dial-in numbers are as follows:

U.S. callers: 1-866-365-4409
International callers: 303-248-9656
Pass code: 3478399
About Orsus Xelent Technologies

Incorporated in the state of Delaware and headquartered in Beijing, China, Orsus Xelent Technologies, Inc. is an emerging designer and manufacturer of award-winning mobile phones for the Asian market, primarily the People's Republic of China (PRC). The company's business comprises the design of mobile phones, related digital circuits, and software development, and is a recognized pioneer in mobile phone integration technology. It introduced the region's first wristwatch-style cellular phone, and it continues to break new ground with state-of-the-art phones that include advanced features like finger print recognition and touch-screen displays. Since the company's launch in 2004, it has established "Orsus" as a popular brand and achieved a significant share of the world's largest mobile phone market. It maintains more than 179 service call centers across the PRC, with additional offices in New York, Shanghai, Hong Kong, Shenzhen, and Tianjin. For more information, please visit: www.orsus-xelent.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.

                    Orsus Xelent Technologies, Inc.
              Condensed Consolidated Statements of Operations

                                (Unaudited)              (Unaudited)
                             Three months ended       Nine months ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2006        2005        2006        2005
                            US$   ’000  US$   ’000  US$   ’000  US$   ’000

Operating revenues:             20,525      13,164      45,901      16,604
                            ----------  ----------  ----------  ----------

Operating expenses:
 Cost of sales                  16,716      10,358      37,879      13,257
 Sales and marketing               140         430         926       1,131
 General and administrative      1,194         200       1,883         769
 Research and development           40         195         187         337
 Depreciation                       24          89         149         164
                            ----------  ----------  ----------  ----------

 Total operating expenses       18,114      11,272      41,024      15,658
                            ----------  ----------  ----------  ----------

Operating profit                 2,411       1,892       4,877         946

Interest expense                   (41)          -         (70)        (25)
Other income, net                   (4)         89           1         541
                            ----------  ----------  ----------  ----------

Income before income taxes       2,366       1,981       4,808       1,462

Income taxes                         -         (23)       (160)        (23)
                            ----------  ----------  ----------  ----------

Net income                       2,366       1,958       4,648       1,439

Other comprehensive income           -           -           -           -
                            ----------  ----------  ----------  ----------

                                 2,366       1,958       4,648       1,439
                            ==========  ==========  ==========  ==========

Earnings per share:

Basic                             0.08        0.07        0.16        0.05
                            ==========  ==========  ==========  ==========

Weighted average number of
 common stock outstanding   29,756,000  29,756,000  29,756,000  29,756,000
                            ==========  ==========  ==========  ==========



                      Orsus Xelent Technologies, Inc.
                   Condensed Consolidated Balance Sheet

                                               As of      As of
                                           Sept. 30,   Dec. 31,
                                                2006       2005
                                             US$’000    US$’000
                                          (Unaudited)

ASSETS
Current assets
 Cash and cash equivalents                        88      2,974
 Accounts receivable, net of allowance
  for doubtful accounts of $555,000
  ($149,000 in 2005)                          31,527     12,034
 Inventories                                   2,361      4,460
 Trade deposits paid                           3,112     10,580
 Advance to third party                          125          -
 Other current assets                            125        182
                                          ---------- ----------

 Total current assets                         37,338     30,230

Property, plant and equipment, net               782        781
                                          ---------- ----------

Total assets                                  38,120     31,011
                                          ========== ==========

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
 Short-term bank loan                          2,477          -
 Accounts payable – Trade                     11,764      7,939
 Accrued expenses and other accrued
  liabilities                                  3,474      2,238
 Trade deposits received                         260      5,432
 Due to directors                                320        320
 Provision for warranty                           57        122
 Taxes payable                                   181         21
                                          ---------- ----------

 Total current liabilities                    18,533     16,072
                                          ---------- ----------

Commitments and contingencies

Stockholders’ equity
Preferred stock, US$0.001 par value:
 Authorized: 100,000,000 shares,no shares
  issued
Common stock and paid-in capital,
 US$0.001 par value:
 Authorized: 100,000,000 shares
Issued and outstanding: 29,756,000 shares
 as of September 30, 2006 and as of
 December 31, 2005                                30         30
Additional paid-in capital                     2,484      2,484
Dedicated reserves                             1,042      1,042
Other comprehensive income                       349        349
Retained earnings                             15,682     11,034
                                          ---------- ----------

Total stockholders’ equity                    19,587     14,939
                                          ---------- ----------

Total liabilities and stockholders’
 equity                                       38,120     31,011
                                          ========== ==========
US caller dial-in number: 1-866-365-4409
International caller dial-in number: 1-303-248-9656
Caller access code: 3478399

Contact Information

  • For more information contact:

    Orsus Xelent Technologies, Inc.
    Xavier Xin Wang
    President and CEO
    US: Tel 212-719-7535
    Fax 212-790-9594
    PRC: Tel 010-85653777
    Fax 010-85653666

    RedChip Companies, Inc./Aurelius Consulting Group, Inc.
    1-800-REDCHIP
    (407) 644-4256
    info@aurcg.com
    www.runonideas.com
    www.redchip.com