SOURCE: Pacific Bepure Industry, Inc.

November 15, 2010 07:50 ET

Pacific Bepure Reports 2010 Third Quarter Net Income Grew 28% on 34% Increase in Sales

Company Cites Success of "Free Travel" Shoes, International Growth and Expanded Marketing Efforts in China's Strong Economy as Key Drivers of Sales Gains

JINJIANG CITY, CHINA--(Marketwire - November 15, 2010) - Pacific Bepure Industry Inc. (OTCBB: PBEP) (PINKSHEETS: PBEP) (the "Company"), one of China's leading domestic casual and sports footwear companies whose products are sold under the Baopiao (or Bepure) label, today announced strong gains in sales and profits in its third quarter and nine months ended September 30, 2010.

In this year's third quarter, the Company reported sales revenue increased 33.61% to $10,870,624 from $8,135,883 in the same period last year. Third quarter net income grew 28.18% to $2,529,038 or $0.17 per share, from $1,973,067 or $0.13 per share, in the same quarter last year, utilizing weighted average shares of 15,000,000 in each period.

For the first nine months this year, sales revenue grew to $20,157,801, a 32.64% advance over sales revenues of $15,196,896 in the same period in 2009. 2010 nine month net income reached $4,151,924 or $0.28 per share, a 27% gain over $3,270,393 or $0.22 per share (on 15mm weighted average shares) in the prior year period.

Continuing Success of Four Travel Series

"The outstanding appeal of our Four Travel series, especially our "Free Travel" shoes for fashionable young women, was at the heart of our success," stated Mr. Haiting Li, Chairman and CEO of the Company. He added, "During the quarter we also achieved continuing success with sales of our products in South America and improved sales in selected domestic markets we focused on, including Fujian, Zhejiang and Jiansu provinces, where our results in prior periods have not matched our success elsewhere. Additionally, the innovation for which our Baopaio brand is known translated into additional success with a popular new shoe that insulates the wearer against warmer temperatures."

Mr. Li stated further, "I'm particularly pleased that in the third quarter we improved margins over results achieved in the prior quarter with tighter production controls, despite the increases in wages we implemented in the second quarter. We also moved to the final stages of progress in construction of our new manufacturing facility in nearby Huian County, which is expected to be completed by year end. Ultimately, it will expand our capacity by 50% with four additional production lines."

Marketing and Sales Management Advances

During the quarter, the Company continued the installation of an Enterprise Resource Planning (ERP) system which it believes will greatly improve decision-making and sales policies, and supplement the advanced information management system it has in place.

The Company also began to realize benefits during the third quarter from the improved designs and construction of key sales outlets it implemented in the prior quarter. As of September 30, 2010, the Company reported there were 98 retail locations and 1521 counters in shopping malls throughout China distributing and selling its products. Earlier this year, the Company also initiated sales on the Internet which it continued to develop during the quarter.

Outlook

Mr. Li commented, "We remain very optimistic about continuing growth, as we further strengthen our domestic marketing efforts and also focus on international expansion. Our greatest asset is the growing recognition of our brand name that increasingly is synonymous with high fashion as well as comfort. One indicator of the success we see ahead is the excellent response to our seasonal new products fair for spring and summer of 2011 attended by distributors from throughout China, which generated a 30% increase in purchase agreements over what we achieved in the prior year."

SEE TABLE BELOW

About Pacific Bepure Industry Inc.

The Pacific Bepure footwear label "Baopiao" or "Bepure," is one of the most well known in China. The Company's four lines of "Travel Time" casual and sports shoes are aimed primarily at young women in China's smaller cities, who appreciate their comfort, style and value, as well as special features for which the brand is known, especially hidden height increasing technology. They are manufactured primarily by the Company, and sold in 22 provinces through a growing network of distributors in retail stores and other outlets, as well as on the Internet, and through a distributor to South America. Following a successful reverse merger in late 2009, Pacific Bepure is now a fully reporting company on the U.S. OTC Bulletin Board, where its shares trade under the symbol PBEP.OB. For more information, please visit the Company's website at www.baopiao.com.

Safe Harbor Statement

This press release may contain forward-looking statements which are based upon the current beliefs and expectations of our management, but are subject to risks and uncertainties, which could cause actual results and/or the timing of events to differ materially from those set forth in the forward-looking statements, including, among others: changes in the level of consumer spending or preferences or demand for our products; disruptions in the global financial markets; increasing competition; our ability to hire and retain key personnel and our relationship with our employees; our control of competent distributors; effectively carrying out and managing our growth strategy; failure to maintain the value and image of our brand and protect our intellectual property rights; declines in comparable store sales; seasonality; costs of materials and labor; location of our facilities in the same geographic area; manufacturing, supply or distribution difficulties or disruptions; compliance with or changes in laws and regulations; costs as a result of operating as a public company; material weaknesses in internal controls; interest rate and foreign currency risks; general economic and industry conditions, and other risks detailed in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K filed with the SEC on March 31, 2010. Our filings with the SEC are available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances unless required by applicable laws or regulations.

Pacific Bepure Industry Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
For the three and nine months ended September 30, 2010 and 2009
(Stated in US Dollars)


                            Nine months ended        Three months ended
                              September 30,             September 30,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

Sales revenue           $20,157,801  $15,196,896  $10,870,624  $ 8,135,883
Cost of sales            13,340,291    9,880,369    7,128,247    5,224,902
                        -----------  -----------  -----------  -----------

Gross profit              6,817,510    5,316,527    3,742,377    2,910,981
                        -----------  -----------  -----------  -----------

Operating expenses
Administrative expenses     828,225      633,005      247,180      184,043
Selling expenses            190,424      173,578       46,000       55,103
                        -----------  -----------  -----------  -----------

                          1,018,649      806,583      293,180      239,146
                        -----------  -----------  -----------  -----------

Income from operations    5,798,861    4,509,944    3,449,197    2,671,835
Other (expense)/income      (12,315)      (3,812)      10,619       (1,882)
Finance costs - Note 15    (194,678)     (88,245)     (72,102)     (31,726)
                        -----------  -----------  -----------  -----------

Income before income
 taxes                    5,591,868    4,417,887    3,387,714    2,638,227
Income taxes - Note 16   (1,439,944)  (1,147,494)    (858,676)    (665,160)
                        -----------  -----------  -----------  -----------

Net income                4,151,924    3,270,393    2,529,038    1,973,067

Other comprehensive
 income : -
Foreign currency
 translation
 adjustments                298,435       24,956      277,500       10,381
                        -----------  -----------  -----------  -----------


 Total comprehensive
 income                 $ 4,450,359  $ 3,295,349  $ 2,806,538  $ 1,983,448
                        ===========  ===========  ===========  ===========


Earnings per share:
Basic and diluted -
 Note 17                $     0.277  $     0.311  $     0.169  $     0.188
                        ===========  ===========  ===========  ===========

Weighted average number
 of shares
 outstanding :
Basic and diluted        15,000,000   10,500,000   15,000,000   10,500,000
                        ===========  ===========  ===========  ===========

Contact Information

  • Contacts:

    Haiting Li
    Chairman and Chief Executive Officer
    Pacific Bepure Industry Inc.
    Tel: (86 595) 8677 0999
    Fax: (86 595) 8677 5388

    Ken Donenfeld
    DGI Investor Relations
    donfgroup@aol.com
    kdonenfeld@dgiir.com
    Tel: 212-425-5700
    Fax: 646-381-9727