Huaxing Machinery Corp.
TSX VENTURE : HUA

May 05, 2011 16:10 ET

Huaxing Machinery Corp. Reports Year-End 2010 Consolidated Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 5, 2011) - Huaxing Machinery Corp. (TSX VENTURE:HUA) ("Huaxing" or the "Company") (formerly Samurai Capital Corp., TSXV – SMU.P) reports its audited consolidated financial results for the year ended December 31, 2010.

For the fiscal year ended December 31, 2010, income from operations and net income are $2,131,962 and $1,462,285, respectively. Comparative results are as follows:

Fiscal 2010
$
Fiscal 2009
$
Sales22,993,25116,658,638
Gross Profit5,530,9354,584,202
EBITDA2,544,9032,297,285
Net Earnings1,462,2851,424,026

The Company through its wholly owned subsidiary Gold Rhino Limited ("Gold Rhino") acquired 80% interest in its operating subsidiary Shandong Gold Rhino-Huaxing Machinery Corp. ("SGRHM") on February 12, 2009. Sales, gross profit, EBITDA and net earnings represent the fiscal results before allocation to the 20% non-controlling interest of SGRHM.

During fiscal year ended December 31, 2010, Huaxing's domestic sales of its main products amounted to $18,729,755 (2009 - $13,571,799) with cost of goods sold of $14,725,424 (2009 - $10,364,670) excluding amortization of production equipment and related patent, resulting in gross profit of $4,004,331 (2009 - $3,207,128).

During fiscal year ended December 31, 2010 export sales amounted to $3,211,632 (2009 - $2,420,190) with cost of goods sold of $1,990,864 (2009 - $1,223,370) excluding amortization of production equipment and related patent, resulting in gross profit of $1,220,769 (2009 - $1,196,820).

During fiscal year ended December 31, 2010 other income, including sales of raw and processed material as well as commissioned processing services were $1,046,756 (2009 - $534,363) with cost of goods sold of $596,256 (2009 - $384,954), resulting in gross profit of $450,500 (2009 - $149,409).

The Board of Directors did not declare a dividend for the fiscal year ended December 31, 2010.

Huaxing's consolidated financial statements for the year ended December 31, 2010 are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com under the Company's profile.

About Huaxing Machinery Corp.

On January 21, 2011 Samurai Capital Corp. completed its Qualifying Transaction by acquiring all the issued and outstanding shares of Gold Rhino, a private company incorporated under the laws of Hong Kong. Gold Rhino holds an 80% equity interest in SGRHM, a company based in Boxing County, Shandong Province, China. SGRHM is a manufacturer of stone cutting, polishing and processing machinery and equipment for the building and construction industry. Upon completion of the Qualified Transaction, Samurai Capital Corp. changed its name to Huaxing Machinery Corp.

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. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

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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