Fiscal 2004 Net Revenues up 90%, EPS for Fiscal 2004 at $0.21
PRINCETON JUNCTION, N.J. April 5 /Xinhua-PRNewswire/ -- Lanbo Financial
Group, Inc (OTC Bulletin Board: LNBO), an investment holding company with a
primary focus in identifying attractively valued acquisition targets in high
growth sectors in China, filed an Annual Report on Form 10K-SB with the
Securities and Exchange Commission on March 31, 2005 announcing its financial
results for the fiscal year ended December 31, 2004.
Financial Highlights for Fiscal 2004
* Net revenues increased 90% to $40.3 million from $21.2 million for
fiscal 2003, as sales from property development continued to grow.
* Income from operations increased 100% to $11.8 million from $5.9 million
for fiscal 2003.
* Net income increased 25% to $4.5 million, or $0.21 per diluted share,
from $3.6 million, or $0.19 per diluted share, for fiscal 2003.
Fiscal Year 2004 Results
Income from Operations and Net Income. Income from operations increased
to $11.8 million in the year ended December 31, 2004, from $5.9 million in the
prior year. Lanbo recorded a reverse merger transaction expense of
$2.9 million. As a result, Lanbo recorded net profits for fiscal 2004 of
$4.5 million, or $0.21 per diluted share. By comparison, for fiscal 2003,
Lanbo reported net income of $3.6 million, or $0.19 per diluted share. Net
income was boosted by a more creative marketing strategy and a focus on cost
reduction.
Net Revenues. Net revenues increased 90% to $40.3 million in fiscal year
2004 from $21.2 million for fiscal 2003. The greater revenues in fiscal 2004
resulted directly from an increase in sales of property development. The
revenue breakdown by project was:
* Xinxing Gangwan, $14.19 million
* Xinxing Junjingyuan, $10.49 million
* Xingxing In Home, $4.18 million
* Xingxing Hanyuan, $1.73 million
* Other projects, $9.67 million
Gross Profit and SG&A. Gross profit increased 65% to $13.0 million in
fiscal 2004, from $7.9 million for fiscal 2003. Gross profit margin was 32%
in fiscal 2004. SG&A declined by 43% to $1.2 million in fiscal 2004 from
$2.1 million for fiscal 2003. The decrease in SG&A is attributable to the
decrease of management overhead in payroll for administrative offices and a
decline in consulting fees.
Mr. Pingji Lu, Chairman and CEO of Lanbo, stated, "2004 proved to be an
exciting year for us. We signed three Letters of Intent in November for the
acquisition of 55% of the business of Nanjing Damei Real Estate Development
Co., Ltd.; 65% of the business of Shenzhen Qingbao Science and Technology Co.,
Ltd. and 60% of the business of Weifang Gongda Telecommunications Co., Ltd.
Although the closing of these acquisitions remains subject to obtaining
adequate financing, we are confident that these deals will be completed this
year and will diversify our revenue stream. With the addition of the three
acquisition targets, Lanbo will not only be able to expand its footprint in
the China real estate market outside of Xi'an, but also diversify Lanbo's
portfolio into other high growth areas in China such as consumer electronics."
Lanbo acquired 100% of Xi'an Newstar Real Estate Development Co., Ltd
(Newstar), engaged in the construction, development and sale of residential
real estate in Xi'an, in September 2003. Newstar originally operated as a
state-owned enterprise, during which time it completed a number of significant
real estate development and construction projects in Xi'an, including the
Xinxing Great Wall Building, Xinxing Residential Community, Xinxing Mansion
and Xinxing Merchants Square. Newstar has a leading position in the regional
Xi'an real estate market.
About Lanbo
Lanbo is a diversified financial investment group headquartered in Xi'an,
China. Originally engaged in the construction, development, and sale of
residential real estate in China, Lanbo has become an investment holding
company through an aggressive strategy of mergers and acquisitions (M&A),
venture capital and special investment situations in China. Lanbo invests in
undervalued real estate and consumer electronics assets in high growth areas
within China. Currently, Lanbo subsidiaries include Xi'an Newstar Real Estate
Development Co., Ltd. Lanbo is committed to its mission of the continuing
pursuit of excellence in serving its customers, suppliers, team members,
partners and shareholders.
Forward-looking Statements
Certain statements contained in this press release are forward-looking
statements that involve risks and uncertainties. The statements contained
herein that are not purely historical are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-
looking statements deal with Lanbo's current plans, intentions, beliefs and
expectations and statements of future economic performance. Statements
containing terms like "believes," "does not believe," "plans," "expects,"
"intends," "estimates," "anticipates" and other phrases of similar meaning are
considered to imply uncertainty and are forward-looking statements. Forward-
looking statements involve known and unknown risks and uncertainties that may
cause Lanbo's actual results in future periods to differ materially from what
is currently anticipated. Factors that could cause or contribute to such
differences include those discussed from time to time in reports filed by
Lanbo with the Securities and Exchange Commission. Lanbo cannot guarantee its
future results, levels of activity, performance or achievements.
LANBO FINANCIAL INVESTMENT GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2003
A S S E T S
2004 2003
CURRENT ASSETS:
Cash $199,956 $ 476,352
Cash - restricted 1,508,376 854,536
Accounts receivable, trade,
net of allowance for doubtful
accounts of $370,246 and $314,768
as of December 31, 2004 and 2003,
respectively 3,790,974 768,617
Other receivables, net of allowance
for doubtful accounts of $1,090,852
and $1,090,852 as of December 31,
2004 and 2003, respectively 23,313 3,431,423
Other receivables - related party - 466,247
Employee advances - 146,912
Prepaid expense 5,952,638 2,085,945
Total current assets 11,475,257 8,230,032
REAL ESTATE HELD FOR DEVELOPMENT OR SALE 27,571,614 32,960,243
PLANT AND EQUIPMENT, net 2,545,782 1,348,827
LONG-TERM INVESTMENT 2,598,430 2,695,847
OTHER ASSETS:
Deferred charges - net 825 1,066
Total other assets 825 1,066
Total assets $44,191,908 $45,236,015
L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y
CURRENT LIABILITIES:
Accounts payable, trade $5,789,210 $9,596,591
Advances from customers 2,172,476 5,510,463
Wages and benefits payable 5,923,608 243,314
Income and other taxes payable 5,230,841 2,588,877
Accrued liabilities
Other payables 190,655 2,071,489
Other payables - related party 5,881,000 6,961,000
Short term loans payable - bank 7,623,000 9,196,000
Total current liabilities 32,810,790 36,167,734
Long term loans payable - bank 4,235,000 5,808,000
Total liabilities 37,045,790 41,975,734
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value,
authorized 10,800,000 shares,
6,840,000 shares issued and outstanding 35,715 19,286
Paid-in-capital 8,634,109 6,085,641
Statutory reserve 1,859,899 686,579
Retained earnings 2,376,395 2,228,775
Owner contribution receivable (5,760,000) (5,760,000)
Accumulated other comprehensive income - -
Total shareholders' equity 7,146,118 3,260,281
Total liabilities and
shareholders' equity $44,191,908 $45,236,015
LANBO FINANCIAL INVESTMENT GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 2003
GROSS REVENUES $40,258,202 $21,240,129
COST OF SALES 27,259,981 13,356,866
GROSS PROFIT 12,998,221 7,883,263
OTHER OPERATING INCOME - 190,148
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,236,856 2,138,113
INCOME FROM OPERATIONS 11,761,365 5,935,298
REVERSE MERGER TRANSACTION EXPENSE (2,892,945) -
OTHER EXPENSE, net of other income (784,292) (530,396)
INCOME BEFORE INCOME TAX 8,084,128 5,404,902
PROVISION FOR INCOME TAXES 3,558,640 1,829,039
NET INCOME 4,525,488 3,575,863
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment - -
COMPREHENSIVE INCOME $4,525,488 $3,575,863
BASIC AND DILUTED INCOME
PER COMMON SHARE 0.21 0.19
BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 21,105,675 19,285,714
LANBO FINANCIAL INVESTMENT GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
Owner
Contribu-
Number Common Paid in Statutory Retained tion
of shares Stock capital reserves earnings Receivable
BALANCE,
December
31,
2002 19,285,714 $19,286 $6,081,888 $150,199 $(810,708) -$
Net Income 3,575,863
Capital
contribution 3,753
Adjustment to
statutory reserve 536,380 (536,380)
Stock receivable (6,840,000)
Cash received in
consideration of stock
receivable 1,080,000
Foreign currency
translation adjustments
BALANCE,
December 31,
2003 19,285,714 $19,286 $6,085,641 $686,579 $2,228,775 $(5,760,000)
Net income 4,525,488
Recapitalization
as a result
of
merger 2,500,000 2,500 167
Stock issued
for reverse
merger
expense 13,928,571 13,929 2,548,301
Adjustment
to statutory
reserve 1,173,320 (1,173,320)
Dividend
distributed (3,204,548)
Stock receivable
Foreign currency
translation adjustments
BALANCE,
December 31,
2004 35,714,285 $35,715 $8,634,109 $1,859,899 $2,376,395 $(5,760,000)
LANBO FINANCIAL INVESTMENT GROUP CO., LTD AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,525,488 $ 3,575,863
Adjustments to reconcile
net income to cash
provided by (used in) operating activities:
Depreciation 209,113 156,714
Loss on disposal of fixed assets 3,979
(Increase) decrease in assets:
Change in restricted cash -653,840 -692,212
Accounts receivable - trade -3,566,857 627,852
Other receivables 3,408,110 617,492
Other receivables - related party 466,247 -466,247
Inventories 5,388,629 -16,394,365
Employee advances 146,912 -96,828
Prepaid expenses -3,866,693 -782,191
Deferred charges 241 2,232
Increase (decrease) in liabilities:
Accounts payable -3,807,381 7,153,780
Advances from customers -3,337,987 1,043,039
Wages and benefits payable 5,680,294 29,690
Other taxes payable 2,641,964 2,562,420
Accrued liability -
Other payables -1,880,834 (1,998,541)
Other payables - related party -1,080,000 121,000
Net cash used in operating activities 4,273,406 -4,536,323
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase (decrease) in Long-term investments
Increase in registered capital -
Purchase of equipment and automobiles 97,417 -2,695,847
Net cash used in investing activities 2,564,897 0
-1,406,068 -33,565
CASH FLOWS FROM FINANCING ACTIVITIES: 1,256,246 (2,729,412)
Dividend paid
Cash received in consideration
of stock receivable
Borrowings (payments)
on short term notes payable (3,204,548) -
Net cash provided by
financing activities 1,080,000
-2,601,500 5,929,000
INCREASE (DECREASE) IN CASH -5,806,048 7,009,000
CASH, beginning of year (276,396) -256,735
CASH, end of year $476,352 733,087
199,956 $476,352
Contact
Mary Xia
Lanbo Financial Group, Inc. (USA)
Email: maryxia@comcast.net
Tel: (609) 799-1889
Brandi Piacente
Investor Relations
The Anne McBride Company, Inc.
Email: bpiacente@annemcbride.com
Tel: (212) 983-1702 ext. 208
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SOURCE Lanbo Financial Group, Inc
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CONTACT:
Mary Xia of Lanbo Financial Group, Inc.
(USA), maryxia@comcast.net, +1-609-799-1889; Brandi Piacente,
Investor Relations, The Anne McBride Company, Inc.,
bpiacente@annemcbride.com, +1-212-983-1702, ext. 208
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