SOURCE: HQ Sustainable Maritime Industries Inc.

April 13, 2005 09:56 ET

HQSM Reports Revenues Increased by 92% for Eight Month Period Ended December 31st, 2004

333% Increase of Net Income Attributable to Shareholders

NEW YORK, NY -- (MARKET WIRE) -- April 13, 2005 -- HQ Sustainable Maritime Industries, Inc. (HQ) (OTC BB: HQSM), a Delaware corporation engaged in integrated aquaculture and aquatic product processing, announced today its financial results for the eight month period ended December 31st, as reported in its Form 10-KSB filed with the Securities and Exchange Commission on April 11th, 2004. Due to the reverse merger in 2004, the company changed year-end and the income statement is for an eight-month period.

Revenues for the quarter increased by $10,001,816, or 92%, to $20,782,264 from $10,780,448 in the corresponding period of 2003. The increase was attributed to HQSM's acquisition of Sealink, the sole owner of Hainan Jiahua Marine Bio-Products Co., Ltd. ("Jiahua Marine"), in August 2004 and the resulting inclusion of Sealink's revenues as part of the current reporting period results. Also contributing to the rise in revenue was the increase in HQ's production activity following the re-opening of its reconstructed and expanded processing plant. Net income attributable to shareholders increased 333% to $2,130,047 for the period from $490,522, for the comparative period for 2003.

Revenues for the eight-month period of $20,782,264 generated gross profit and net income of $5,144,508 and $2,130,047 respectively.

The full text of Form 10-K for the eight-month period ended December 31st, 2004, can be reviewed at www.sec.gov.

Said Norbert Sporns, CEO of HQ, "We are pleased with the results for the period. In fact, out of the 8 months reported, only 6 reflect full operations as the plant was shut down for extensive expansion prior to June 2004. The period covered was one of transition including the important acquisitions of Jiahua Marine, as well as the minority interest in HQ's aquatic products processing operations and the expanded production capacity of our new plant. We believe HQ is well positioned for continued growth in the coming months and year as the company continues to expand into its natural niche as the leading producer of the highest quality aquatic products in accordance with the Chairman's roadmap published earlier this year."

About HQ Sustainable Maritime Industries, Inc.

HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea. HQ's activities include using renewable ocean resources, practicing cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. Its variety of farmed and ocean-harvested products -- ranging from tilapia and shrimp to squid and red snapper -- are sold around the world. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets; the Government of China has also certified it as a leading agricultural enterprise. It has recently acquired a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to operational offices based in Haikou, Hainan, HQ has offices in Montreal, Hong Kong, New York City, Beijing, and Shanghai. (http://www.hqfish.com)

       HQ SUSTAINABLE MARITIME INDUSTRIES, INC. AND SUBSIDIARIES
     (INCORPORATED IN THE STATE OF DELAWARE WITH LIMITED LIABILITY)
                          STATEMENTS OF INCOME
         FOR THE EIGHT MONTHS ENDED DECEMBER 31, 2004 AND 2003

                                            May 1, 2004 to   May 1, 2003 to
                                            Dec. 31, 2004    Dec. 31, 2003
                                             ------------     ------------

SALES                                        $ 20,782,264     $ 10,780,448

COST OF SALES                                  15,637,756        7,456,045

                                             ------------     ------------
GROSS PROFIT/(LOSS)                             5,144,508        3,324,403

SELLING AND DISTRIBUTION EXPENSES                 331,379          474,231

ADVERTISING                                     1,674,988                -

GENERAL AND ADMINISTRATIVE EXPENSES             1,871,275          672,681

DEPRECIATION                                      509,300          210,411

PROVISION FOR DOUBTFUL DEBTS                            -          800,264

                                             ------------     ------------
INCOME/(LOSS) FROM OPERATIONS                     757,566        1,166,816

FINANCE COSTS                                     400,064          304,344

OTHER INCOME                                   (2,340,895)         (94,984)

OTHER EXPENSES                                    139,525          188,296
                                             ------------     ------------

INCOME/(LOSS) BEFORE INCOME TAXES               2,558,872          769,160

INCOME TAXES
  CURRENT                                               -                -
  DEFERRED                                        193,819          120,511

                                             ------------     ------------
NET INCOME/(LOSS) BEFORE MINORITY INTEREST      2,365,053          648,649

MINORITY INTEREST                                (235,006)        (158,127)

NET INCOME/(LOSS) ATTRIBUTABLE               ------------     ------------
 TO SHAREHOLDERS                             $  2,130,047     $    490,522
                                             ============     ============

NET INCOME/(LOSS) PER SHARE
  BASIC AND DILUTED                          $       0.03     $        N/A
                                             ============     ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING     69,770,366              N/A
                                             ============     ============
Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use words such as "anticipate, "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of HQ Sustainable Maritime Industries, Inc. (the Company) to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov under "Search for Company Filings."

Contact Information

  • CONTACT:
    Norbert Sporns
    Chief Executive Officer
    HQ Sustainable Maritime Industries, Inc.
    Tel. 212-618-1712
    Fax: 212-618-1713
    Sporns@hqfish.com