SOURCE: Xinde Technology Co

November 16, 2010 08:00 ET

Xinde Technology Reports First Quarter Results

WEIFANG, CHINA--(Marketwire - November 16, 2010) - Xinde Technology Company (OTCBB: WTFS), a widely respected China based designer and manufacturer of internal combustion engines and parts, primarily for the domestic market in China, announced today that net income in its first quarter ended September 30, 2010 increased 23% year over year despite a 20% decline in revenues in the same period.

Revenues in the quarter were $30,138,909 compared to $37,634,510 in the year earlier period, which the Company said primarily reflected lower diesel engine sales, in an increasingly competitive market which lowered selling prices per unit. Net income in the period of $5,456,377, compared with $4,426,736 in the prior year first quarter, and was boosted by an exemption granted by local tax authorities for a Value Added Tax payable of $3,231,156.

Continued Focus on Environmentally Friendly Products

Mr. Dianjun Liu, President and CEO of the Company, stated, "There were significant bright spots in the quarter. Sales of our electricity pump, which has met the Euro III standard, increased 24% compared to the same period last year and we remain very excited about the growth potential of our environmentally friendly product lines." He continued, "Sales of one of our traditional, multi-cylinder engines also showed strength, increasing 41% compared with the same period in 2009. Going forward, I also believe adjustments we made in our product structure at Huaxin and Jinma to improve overall margins will contribute to improved results."

About Xinde Technology Company
Based in China's Shandong Province in the city of Weifang, Xinde Technology Company competes in three primary product segments, namely (1) fuel injection system products, (2) diesel engine products and (3) generator products. The Company has a broad range of products including non-vehicle diesel engines, diesel generators, injection pumps, injectors and three-coupling components, agricultural machinery and construction machinery which greatly reduces its comprehensive costs which, in turn, increases its competitiveness. The Company recently announced the successful launch of its 6CT/6LT Internal Combustion Engine Product Line.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety important factors, including, but not limited to, the impact of competitive conditions and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, financing and other factors as discussed in the Company's reports filed with the Securities and Exchange Commission from time to time, In addition, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date hereof. No securities regulatory authority has either approved or disapproved the contents of this new release. This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements. The Company filings with the US Securities and Exchange Commission, including the annual report for the fiscal year ended March 31, 2009 on Form 10-K, can be viewed on EDGAR Online or www.sec.gov.

 
 
XINDE TECHNOLOGY COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(UNAUDITED)
 
  Three Months Ended  
  September 30, 2010     September 30, 2009  
REVENUES, NET $ 30,138,909     $ 37,634,510  
               
COST OF GOODS SOLD   (25,480,066 )     (31,642,335 )
GROSS PROFIT   4,658,843       5,992,175  
               
Selling and marketing   1,232,706       433,004  
General and administrative   326,022       293,212  
INCOME FROM OPERATIONS   3,100,115       5,265,959  
               
Interest expense, net   (141,090 )     (106,323 )
Other income (expense), net   134,603       (5,263 )
Refundable value added tax   3,231,156       -  
             
INCOME FROM OPERATIONS BEFORE INCOME TAXES   6,324,784       5,154,373  
INCOME TAXES   (868,407 )     (727,637 )
             
NET INCOME   5,456,377       4,426,736  
               
OTHER COMPREHENSIVE INCOME              
               
Foreign currency translation gain   973,804       28,886  
               
OTHER COMPREHENSIVE INCOME   973,804       28,886  
               
COMPREHENSIVE INCOME $ 6,430,181     $ 4,455,622  
               
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED   60,000,000       42,000,000  
NET INCOME PER COMMON SHARE, BASIC AND DILUTED $ 0.09     $ 0.11  

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