SOURCE: Wonhe High-Tech International, Inc.

November 15, 2012 08:00 ET

Wonhe High-Tech Announced Net Income of $2.0 Million for the Third Quarter of Fiscal Year 2012

SHENZHEN, CHINA--(Marketwire - Nov 15, 2012) - Wonhe High-Tech International, Inc. ("Wonhe High-Tech" or the "Company"), (OTCQB: WHHT), a high-tech enterprise specializing in sales of electronic products, today announced net income of $2.0 million or earnings per share of $0.08 for three months ended September 30, 2012.

Financial Highlights in Fiscal Year 2012

       
       
  Three months ended
September 30,2012
Three months ended
June 30,2012
Growth
Revenue $6.7 million $5.6 million 20.2%
Cost of Sales $3.4 million $2.9 million 20.3%
Gross Profit $3.3 million $2.7 million 20.1%
Gross Profit Margin 48.8% 48.8% 0%
Net Income $2.0 million $1.2 million 76.0%
Basic and diluted EPS* $0.08 $0.06 33.3%
       
       

Summary of Financial Performance for Three Months ended September 30, 2012

Sales revenue for the three months ended September 30, 2012, was $6.7 million, an increase of 20.2% as compared to $5.6 million for the three months ended June 30, 2012. Sales revenue for the nine months ended September 30, 2012 was $15.7 million. For the nine months ended September 30, 2011, there was no revenue as we started to sell products since December 2011.

The cost of sales for the three months ended September 30, 2012 was $3.4 million, an increase of 20.3% as compared to $2.9 million for the three months ended June 30, 2012. The increase in cost of sales was proportional with the increase in sales. The costs were primarily comprised of outsourced manufacturing costs for production and partial materials purchased by ourselves. The single unit cost was approximately $239. Cost of Sales was increased to $8.0 million for the nine months ended September 30, 2012.

Gross profit for the three months ended September 30, 2012 was $3.3 million, increased by $ 0.6 million or 20.1%, as compared to $2.7 million for the three months ended June 30, 2012. Gross Profit was $7.7 million for the nine months ended September 30, 2012, which represented a gross profit margin of 48.8%.

Net income for the three months ended September was $2.0 million, increased by $0.8 million or 76.0%, as compared to $1.2 million as of June 30, 2012. The earnings per share for the three months ended September was $0.08, an increase of $0.02 or 33.3%, as compared to $0.06 for the three months ended June 30, 2012. This increase was mainly due to the increase in our sales. Net Income attributable to common stock holders was $4.2 million or $0.20 EPS for the nine months ended September 30, 2012.

Liquidity and Capital Resources

As of September 30, 2012, we had cash and cash equivalents of $5.9 million, primarily consisting of cash in hand and demand deposits. To date, we have financed our operations primarily through cash flows from operations and equity contributions by our shareholders.

Mr. Nanfang Tong, CEO of Wonhe High-Tech, stated, "Since the company began the sale of HMC660 in December 2011, we have sold 33,671 series which generating sales revenue of $15.7 million as of the nine months ended September 30, 2012. We'll focus on expanding the client base for the company. The increasing demand for our products and services will facilitate the sustained growth of our financial performance."

About Wonhe High-Tech International, Inc.
Wonhe High-Tech International, Inc. is a high-tech enterprise which specializes in research and development (R&D), outsourced-manufacturing and marketing of high-end business and personal IT products and providing application services. For more information please visit http://www.szwonhe.com.

Cautionary Statement Regarding Forward Looking Information

Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our 8K dated June 27, 2012, and other recent filings. These filings are available at http://www.sec.gov/.

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