NEW YORK, Nov. 17, 2005 (PRIMEZONE) -- Orsus Xelent Technologies, Inc. (OTCBB:ORXT), a designer and manufacturer of mobile phones, today announced its financial results for the third quarter ended September 30, 2005. The Company reported net income of $1,958,000 on revenues of $13,164,000, compared to a net income of $4,709,000 on revenues of $37,853,000 for the third quarter ended September 30, 2004. Using the current total of 29,756,000 fully diluted outstanding shares, the Company had earnings of $0.07 per share in the third quarter of 2005.
During 2005 competition within the Chinese cellular market has been fierce. To regain a competitive edge, the Company has focused its R&D efforts on enhancing the quality and functionality of its products, resulting in new product development. During the third quarter, Orsus Xelent launched a series of low to moderately priced new models with innovative functionality and multimedia capabilities to meet changing consumer demand. New product sales represented over 72.5% of total revenues in the third quarter and revenues in this quarter increased 578.5% over the previous quarter.
In an effort to curb reliance solely on the domestic cellular market of the PRC, Orsus Xelent expanded its operations to include sales to overseas markets. During the third quarter 2005, the Company implemented a plan to offer its cellular phone products and R&D services to foreign-based customers in Hong Kong, Southeast Asia, Latin America and the Middle East by establishing Orsus Xelent Trading (HK) Company Limited. To date, Orsus Xelent's reasonably priced products with innovative features have been highly competitive in Hong Kong and these other foreign markets.
According to Wang Xin, President & CEO of Orsus Xelent Technologies, "Although the overall operating environment has been difficult this year, we anticipate that revenues and earnings will demonstrate steady growth heading into 2006 with the introduction of new products, optimization of supply chain and expansion into overseas markets. The cellular phone market in the PRC is characterized by rapidly changing customer preferences and we have spent the third quarter investing in new products through increased R&D to meet domestic demand. Additionally, to establish a more diversified revenue base, we successfully developed the trading business in the Hong Kong and overseas markets by opening a subsidiary."
About Orsus Xelent Technologies, Inc.
Orsus Xelent Technologies, Inc., headquartered in Beijing, is a designer of feature-rich mobile phones in the People's Republic of China. These features include 1.8-inch to 2.2-inch TFT dual-color display, 1 to 120 minutes video recording, 300K to 2.0 Mega pixels photography, MP3, MPEG4 and U disk support, dual stereo speakers, multimedia messaging, 40 to 64 polyphonic ring tones, flip-phone technology and innovative lightweight design. For further information, please consult the company's web site: www.orsus-xelent.com.
Information Regarding Forward-Looking Statements: Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.
Orsus Xelent Technologies, Inc. Consolidated Financial Statements
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
US$'000 US$'000 US$'000 US$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating
revenues 13,164 37,853 16,604 52,917
---------- ---------- ---------- ----------
Operating
expenses:
Cost of sales 10,358 30,287 13,257 42,592
Sales and
marketing 430 1,545 1,131 2,396
General and
administrative 200 606 769 988
Research and
development 195 267 337 456
Depreciation 89 409 164 514
---------- ---------- ---------- ----------
Total operating
expenses 11,272 33,114 15,658 46,946
---------- ---------- ---------- ----------
Operating profit 1,892 4,739 946 5,971
Interest expense - (88) (25) (90)
Other income, net 89 28 541 32
---------- ---------- ---------- ----------
Income before
income taxes
and minority
interest 1,981 4,679 1,462 5,913
Income taxes (23) - (23) -
---------- ---------- ---------- ----------
Income before
minority
interest 1,958 4,679 1,439 5,913
Minority interest - 30 - 120
---------- ---------- ---------- ----------
Net income 1,958 4,709 1,439 6,033
========== ========== ========== ==========
Earnings per
share:
Basic 0.07 0.16 0.05 0.20
========== ========== ========== ==========
Weighted average
number of
common stock
outstanding 29,756,000 29,756,000 29,756,000 29,756,000
========== ========== ========== ==========