SOURCE: Asiamart, Inc.

April 05, 2007 11:00 ET

Asiamart Inc. Announces Year End and 4th Quarter Results for 2006

Revenue for 2006 Increased 15%; Retail Sales Increased 29.4% in 2006; Customer Visits Increased 44.4% in 2006

HONG KONG -- (MARKET WIRE) -- April 5, 2007 -- Asiamart, Inc. (OTCBB: AAMA), a leading tourist retailer in Hong Kong that operates outlet shopping centers reported its financial results for the fourth quarter and twelve-month period ending December 31, 2006.

For the year 2006, revenue increased 15.2% from $46.1 million to $53.1 million relative to the year ended December 31, 2005. Retail sales for 2006 totaled $46.7 million, representing a substantial increase of 29.4% from $36.1 million in 2005. Net income for 2006 was $3,149,030 compared to $3,522,898 in 2005. The company recorded a one-time merger transaction expense of $855,867 and the interest expense of $241,106 (representing amortization of a debt discount in connection with a debenture financing) in the year 2006. The company's gross profit margin improved significantly by 10.5%, from a 44.4% margin in 2005 to a 54.9% margin in 2006. Asiamart saw an increase of 44.4% in customer traffic from 451,286 customers in 2005 to 651,778 customers in 2006.

For the fourth quarter ended December 31, 2006 revenue decreased by 21.6% from $14.2 million to $11.1 million relative to the quarter ended December 31, 2005. Cost of sales significantly decreased from $7.7 million for the three months ended December 31, 2005 to $4.5 million for the three months ended December 31, 2006, a decrease of 42.1%, as compared to a 21.6% decrease in sales over the same comparable quarters in 2005 and 2006. Our gross profit margin improved by 14.2%. For the three months ended December 31, 2006, we earned referral income of $1.7 million, which offset a reduction in retail sales.

"2006 was a defining year for the company. The increase in our sales by 15% to $53.1 million is indicative of both the success of our business model and of our potential for growth going forward," said Alex Yue, CEO and Chairman of Asiamart.

"The completion of our $3.1 million debenture financing in October 2006 strengthens our financial position and provides us with the capital needed for our expansion. This includes the launching of our private-label Vokey™ cell phones in January 2007, expansion of our product line, and further development of our customer relations management program. Moreover, we anticipate opening a high-end retail store in Hong Kong in 2007 to offer luxury products aimed at more affluent tourists. We also are considering plans for two new developments: opening a new store in Macau, and developing an online presence to reach out to the growing number of internet users in China," Yue added.

About Asiamart, Inc.

Asiamart, Inc., a Delaware corporation, is a retail and trading company based in Hong Kong, focused on the outbound China tourist retail market. Asiamart operates a chain of outlets and discount shopping centers catering principally to tourists brought to its stores through a large network of travel companies and tour operators. Asiamart offers its customers select international brands in a wide range of merchandise categories including consumer electronics, cosmetics and skin care, dietary supplements, health care products and optical. For more details, see the company's latest report on Form 10-K filed with the SEC on April 4, 2007.

Cautionary Statement Regarding Forward-Looking Information

This press release contains forward-looking information about Asiamart that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and Asiamart's future performance, operations and products.

This forward-looking information should be considered only in connection with "Risk Factors" in Asiamart's quarterly report on Form 10-K filed with the SEC on April 4, 2007, and its other current and periodic reports filed with the SEC. Asiamart assumes no obligations to update any forward-looking statements or information set forth in this press release.

                      ASIAMART, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                     AS OF DECEMBER 31, 2006 AND 2005

                                A S S E T S

                                         2006                     2005
                                     ------------             ------------
CURRENT ASSETS:
 Cash and cash  equivalents          $  2,560,304             $    935,138

 Trade accounts receivable, less
  allowance for doubtful accounts
  of $19,290 and $19,350 at December
  31, 2006, and 2005, respectively      4,250,898                  760,853
 Trade accounts receivable - related
  party                                         -                  339,577
 Inventories                            1,042,024                1,828,838
 Due from directors/shareholders                -                3,746,673
 Due from related parties                       -                  123,528
 Deposits and prepaid  expenses         1,264,949                1,548,902
 Other receivables                        560,185                  341,384
                                     ------------             ------------
   Total current assets                 9,678,360                9,624,893
                                     ------------             ------------

PROPERTY AND EQUIPMENT, net               678,875                  580,266
                                     ------------             ------------

OTHER ASSETS:
 Long-term loan, net                    1,030,617                   70,305
 Long-term rental and
  utilities deposits                       14,095                  117,189
 Debt issuance costs                      289,914                        -
 Property held-for-sale                         -                  419,250
                                     ------------             ------------
   Total other assets                   1,334,626                  606,744
                                     ------------             ------------

      Total assets                   $ 11,691,861             $ 10,811,903
                                     ============             ============


                     LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable                       1,681,600                2,001,122
 Accrued liabilities                    1,018,409                  748,138
 Customer deposits                         11,184                   17,454
 Due to shareholders                      304,360                  575,449
 Taxes payable                            312,322                1,086,395
 Other payable                            102,080                        -
 Current maturities of
  long-term debt                          834,035                  503,018
                                     ------------             ------------
   Total current liabilities            4,263,990                4,931,576
                                     ------------             ------------

LONG-TERM LIABILITIES:
 Deferred tax liabilities                  15,508                   15,556
 Long-term debt                            88,359                  378,262
 Debentures payable, net of
  discount of $2,828,789                  241,106                        -
                                     ------------             ------------
   Total long-term liabilities            344,973                  393,818
                                     ------------             ------------

   Total liabilities                    4,608,963                5,325,394
                                     ------------             ------------

COMMITMENTS AND CONTINGENCIES                   -                        -
                                     ------------             ------------

SHAREHOLDERS' EQUITY:
 Preferred stock, $0.0001 par value,
  5,000,000 shares authorized, 0
  shares issued and outstanding                 -                        -
 Common stock, $0.0001 par value,
  200,000,000 shares authorized,
  24,535,755 shares issued and
  outstanding                               2,454                    2,454
 Additional paid-in-capital             3,455,441                  385,546
 Retained earnings                      3,577,445                5,079,898
 Accumulated other comprehensive
  income                                   47,558                   18,611
                                     ------------             ------------
   Total shareholders' equity           7,082,898                5,486,509
                                     ------------             ------------
      Total liabilities and
       shareholders' equity          $ 11,691,861             $ 10,811,903
                                     ============             ============


                      ASIAMART, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
           FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

                                       2006         2005         2004
                                   ------------ ------------ ------------
REVENUE
 Sales                             $ 50,984,193 $ 38,586,595 $ 34,326,163
 Referral income                      2,096,596            -            -
 Related party                           63,881    7,561,445    1,403,757
                                   ------------ ------------ ------------
  Total Revenue                      53,144,670   46,148,040   35,729,920

COST OF SALES                        23,961,497   25,673,819   21,939,481
                                   ------------ ------------ ------------

GROSS PROFIT                         29,183,173   20,474,221   13,790,439

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES             25,740,859   17,008,129   12,685,332
MERGER TRANSACTION EXPENSES             855,867            -            -
                                   ------------ ------------ ------------

INCOME FROM OPERATIONS                2,586,447    3,466,092    1,105,107

OTHER INCOME, net                     1,465,838      850,248      483,053
                                   ------------ ------------ ------------

INCOME BEFORE PROVISION
 FOR INCOME TAXES                     4,052,285    4,316,340    1,588,160

PROVISION FOR INCOME TAXES              903,255      793,442      285,042
                                   ------------ ------------ ------------

NET INCOME                            3,149,030    3,522,898    1,303,118

OTHER COMPREHENSIVE
 INCOME:
 Foreign currency translation
  adjustment                             28,947       16,086        1,633
                                   ------------ ------------ ------------

COMPREHENSIVE INCOME               $  3,177,977 $  3,538,984 $  1,304,751
                                   ============ ============ ============

BASIC EARNINGS PER SHARE           $       0.13 $       0.14 $       0.05
                                   ============ ============ ============

DILUTED EARNINGS PER SHARE         $       0.13 $       0.14 $       0.05
                                   ============ ============ ============

BASIC WEIGHTED AVERAGE SHARES
 OUTSTANDING                         24,535,755   24,535,755   24,535,755
                                   ============ ============ ============

DILUTED WEIGHTED AVERAGE SHARES
 OUTSTANDING                         25,103,781   24,535,755   24,535,755
                                   ============ ============ ============

Contact Information

  • Contacts:
    Noelle Hon
    Chief Investor Relations Officer
    Asiamart, Inc.
    (852) 3580-8800
    Hong Kong, SAR

    Adam Friedman
    Adam Friedman Associates, LLC
    (212) 981-2529 Ext. 18
    New York, NY