Huaxing Machinery Corp.
TSX VENTURE : HUA

July 04, 2011 19:39 ET

Huaxing Machinery Corp. Reports First Quarter 2011 Consolidated Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 4, 2011) - Huaxing Machinery Corp. (TSX VENTURE:HUA) ("Huaxing" or the "Company") (formerly Samurai Capital Corp. ("Samurai")), reports its unaudited consolidated financial results as at and for the three months ended March 31, 2011. All dollar amounts are expressed in Canadian dollars.

For the three months ended March 31, 2011, income from operations and net income are $456,846 and $320,911, respectively. Comparative results are as follows:

Three
Months
Ended
March 31,
2011
$
(unaudited
) Three
Months
Ended
March 31,
2010
$
(unaudited
) $ Change
from
Q1 2010
to Q1 2011
$
(unaudited
) % Change
from
Q1 2010
to Q1 2011
(unaudited
)
Sales 5,844,524 4,211,343 1,633,181 38.78 %
Gross Profit 1,091,045 813,979 277,066 34.04 %
Net Earnings 320,911 258,404 62,507 24.19 %
Net Earnings attributable to equity holders of the Company 235,217 215,811 19,406 8.99 %
Earnings per share – basic, based on weighted average number of shares issued and outstanding 0.02 0.02 0.00 0.00 %

On January 21, 2011, Samurai, formerly a capital pool company, acquired all of the issued and outstanding shares in Gold Rhino Limited ("Gold Rhino"), a private Hong Kong company, which holds an 80% equity interest in its operating subsidiary Shandong Gold Rhino-Huaxing Machinery Co. Ltd. ("SGRHM"), a private PRC company. The acquisition served as Samurai's qualifying transaction (the "QT") in accordance with the policies of the TSX Venture Exchange.

During the first quarter of 2011, Huaxing's domestic sales of its main products amounted to $4,574,482 (2010 - $3,315,585) at cost of goods sold of $3,700,191 (2010 - $2,617,727) excluding amortization of fair value adjustment to the production equipment and patent upon Gold Rhino's acquisition of SGRHM.

During the first quarter of 2011, export sales amounted to $599,358 (2010 - $676,051) at cost of goods sold of $400,056 (2010 - $436,730) excluding amortization of fair value adjustment to the production equipment and patent upon Gold Rhino's acquisition of SGRHM.

During the first quarter of 2011, miscellaneous and other income, including sales of raw and processed material as well as commissioned processing services were $677,570 (2010 - $226,993) at cost of goods sold of $616,288 (2010 - $99,284).

The Board of Directors did not declare a dividend for the first quarter of 2011.

Huaxing's unaudited interim consolidated financial statements as at and for the three months ended March 31, 2011 are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com under the Company's profile.

The Company's unaudited interim consolidated financial statements as at and for the three months ended March 31, 2011 also reflect the first-time adoption of International Financial Reporting Standards by the Company. The financial results as at and for the three months ended March 31, 2010 represents the financial results of Gold Rhino as a private company for such period prior to the completion of the QT. The foregoing reflects a selected extract of the Company's financial performance only, and must be viewed with the Company's full financial statements and management's discussion and analysis on SEDAR for further details.

About Huaxing Machinery Corp.

Huaxing is engaged in the business of machinery manufacturing. Through its wholly owned subsidiary, Gold Rhino, Huaxing holds an 80% controlling equity interest in SGRHM, which in turns holds the interests in the operating entity's main manufacturing facilities located in Boxing County, Shandong province, China. Its main products are stone cutting, polishing and processing machinery and equipment for the building and construction industry. Its six product series and 80 product models are sold in Chinese domestic and international markets.

Forward-Looking Statements

Certain information regarding Huaxing Machinery Corp. contains herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. The Company assumes no obligation to update such forward-looking statements, except as required by applicable securities laws or exchange regulations. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The Company seeks safe harbour.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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