Financial Highlights - Full Year 2009 vs. Full Year 2008
-- Revenue increased 14.2% to RMB2,078.0 million in 2009 as compared
to RMB1,820.3 million in 2008
-- Gross profit increased 23.4% to RMB613.1 million in 2009 as
compared to RMB497.0 million in 2008
-- Net profit increased 47.2% to RMB248.0 million in 2009 as compared
to RMB168.5 million in 2008
-- Adjusted Earnings (as defined in the Sale and Purchase Agreement)
increased 47.7% to RMB281.0 million in 2009 as compared to
RMB190.3 million in 2008
Shuipan Lin, Exceed's founder, Chairman and CEO, commented, "2009 was an
especially meaningful year for our Company. We started the year as a
privately-held business and concluded as a publicly owned company trading
on NASDAQ and the first Chinese sportswear brand to be listed in the United
States. Even though we only obtained financial resources from our
newly-listed status in the last quarter of 2009, we are pleased that we
achieved meaningful growth in our revenue, gross profit and net profit for
the year ended 2009 as compared with the year ended 2008."
Chairman Lin continued, "Our retail distribution network has grown over the
course of 2009. We ended the year with 3,694 retail stores in our network,
up from 3,277 at the end of 2008. The results from our sales fairs, at
which more than 90% of our products are sold, have also been very
encouraging. During our September 2009 sales fair, for which the majority
of deliveries are made in 2010, orders increased by more than 40% compared
to the same sales fair in 2008. During our February 2010 sales fair, orders
increased by more than 18.2% compared to the February 2009 sales fair."
Chairman Lin added, "Going forward, we will continue to remain focused on
improving our business by expanding our distribution network and
strengthening our operations."
Pursuant to the earn-out provisions of the agreement for sale and purchase
("Sale and Purchase Agreement") dated May 8, 2009 entered into among
Windrace International Company Limited, the Company and the original
shareholders of Windrace International Company Limited, among others, as
amended by a supplemental agreement dated July 24, 2009, the Company
anticipates that it will issue 5,563,714 common shares to the original
shareholders of Windrace International Company Limited in 2010. This
earn-out issuance is a result of the Company achieving its 2009 Target
Earnings (as defined in the Sale and Purchase Agreement) of US$38,067,350.
Roadshow
The Company anticipates that management will conduct a multi-week global
roadshow to meet with investors and potential investors as soon as
practicable after this announcement. Persons who are interested in meeting
with management are requested to refer to the contact listed below.
About Exceed
Exceed Company Ltd. designs, develops and engages in wholesale of footwear,
apparel and accessories under its own brand, XIDELONG, in China. Since it
began operations in 2002, Exceed has targeted its growth on the consumer
markets in the second- and third-tier cities in China. Exceed has three
principal categories of products: (i) footwear, which comprises running,
leisure, basketball, skateboarding and canvas footwear, (ii) apparel, which
mainly comprises sports tops, pants, jackets, track suits and coats, and
(iii) accessories, which mainly comprise bags, socks, hats and caps. Exceed
Company Ltd. currently trades on Nasdaq under the symbols "EDS", "EDSWW"
and "EDSUU".
Forward Looking Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
regarding future events and future performance of Exceed. These statements
are based on management's current expectations or beliefs. Actual results
may vary materially from those expressed or implied by the statements
herein. This information is qualified in its entirety by cautionary
statements and risk factor disclosure contained in certain of Exceed's
Securities and Exchange Commission filings. For a description of certain
factors that could cause actual results to vary from current expectations
and forward-looking statements contained in this press release, please
refer to documents that Exceed files from time to time with the Securities
and Exchange Commission. Exceed is under no obligation to, and expressly
disclaims any obligation to, update or alter its forward-looking statements,
whether as a result of new information, future events, changes in
assumptions or otherwise.
EXCEED COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended December 31, 2009
2009 2009 2008
(in thousands except for
share and per share data)
USD'000 RMB'000 RMB'000
REVENUE 304,423 2,077,958 1,820,282
Cost of sales (214,603) (1,464,856) (1,323,262)
---------- ---------- ----------
Gross profit 89,820 613,102 497,020
Other income and gains 858 5,855 1,188
Selling and distribution costs (39,280) (268,123) (225,752)
Administrative expenses (6,521) (44,509) (29,205)
Aborted IPO expenses - - (31,382)
Research and development expenses (3,656) (24,953) (17,649)
Finance costs (4,332) (29,566) (23,511)
Share of loss in jointly-controlled
entity (2) (16) -
---------- ---------- ----------
PROFIT BEFORE TAX 36,887 251,790 170,709
Tax (552) (3,771) (2,181)
---------- ---------- ----------
PROFIT FOR THE YEAR 36,335 248,019 168,528
Other comprehensive income for the year,
net of tax:
Exchange differences on translation of
financial statements of overseas
subsidiaries 350 2,391 3,180
---------- ---------- ----------
Total comprehensive income for the year
attributable to equity holders of the
Company 36,685 250,410 171,708
========== ========== ==========
EARNINGS PER SHARE
Net profit per share
Basic 1.86 12.68 9.91
Diluted 1.59 10.83 9.91
========== ========== ==========
Weighted average number of shares
outstanding
Basic 19,559,498 19,559,498 17,008,633
Diluted 22,894,924 22,894,924 17,008,633
---------- ---------- ----------
EXCEED COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2009
2009 2009 2008
USD'000 RMB'000 RMB'000
NON-CURRENT ASSETS
Property, plant and equipment 39,933 272,578 286,644
Prepaid land lease payments 4,299 29,347 30,099
---------- ---------- ----------
Total non-current assets 44,232 301,925 316,743
---------- ---------- ----------
CURRENT ASSETS
Inventories 8,199 55,966 86,060
Trade receivables 119,068 812,747 284,795
Prepayments, deposits and other
receivables 2,906 19,840 5,421
Due from a shareholder 15 103 -
Pledged deposits 2,198 15,000 2,300
Cash and bank balances 38,413 262,204 120,068
---------- ---------- ----------
Total current assets 170,799 1,165,860 498,644
---------- ---------- ----------
CURRENT LIABILITIES
Trade and bills payables 28,646 195,538 127,581
Deposits received, other payables and
accruals 9,206 62,842 68,378
Interest-bearing bank borrowings 8,497 58,000 20,000
Due to a director 247 1,687 890
Tax payable 189 1,286 268
Preferred shares - - 272,432
---------- ---------- ----------
Total current liabilities 46,785 319,353 489,549
---------- ---------- ----------
NET CURRENT ASSETS 124,014 846,507 9,095
========== ========== ==========
Net assets 168,246 1,148,432 325,838
========== ========== ==========
STOCKHOLDERS' EQUITY
Preferred stock - USD0.0001 par
value; 5,000,000 shares authorized;
nil issued and outstanding - - -
Common stock - par value of USD0.0001
per share; 55,000,000 shares authorized;
30,123,335 shares issued and outstanding 3 21 12
Reserves 168,243 1,148,411 325,826
---------- ---------- ----------
Total equity 168,246 1,148,432 325,838
========== ========== ==========
EXCEED COMPANY LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, 2009
2009 2009 2008
USD'000 RMB'000 RMB'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 36,887 251,790 170,709
Non-cash adjustments for:
Interest income (107) (727) (788)
Finance costs 4,333 29,566 23,511
Over-provision for aborted IPO
expenses (751) (5,128) -
Share of loss of a jointly-controlled
entity (2) (16) -
Loss on write-off of items of property,
plant and equipment - - 97
Loss on disposal of items of property,
plant and equipment 28 189 -
Depreciation 2,368 16,166 15,300
Amortisation of prepaid land lease
payments 110 752 746
Impairment of an advance of loan to a
jointly-controlled entity 2 16 -
---------- ---------- ----------
Operating cash flow before working
capital changes 42,868 292,608 209,575
Decrease/(increase) in inventories 4,409 30,094 (35,777)
Increase in trade receivables (77,345) (527,952) (143,132)
Increase in prepayments, deposits and
other receivables (1,366) (9,320) (2,711)
(Increase)/decrease in pledged deposits (1,861) (12,700) 16,700
Increase in trade and bills payables 9,956 67,956 4,255
Increase in deposits received,
other payables and accruals 1,397 9,533 1,892
---------- ---------- ----------
Cash (used in)/generated from operations (21,942) (149,781) 50,802
Interest paid (473) (3,228) (1,716)
PRC taxes paid (401) (2,738) (5,133)
---------- ---------- ----------
Net cash (outflow)/ inflow from
operating activities (22,816) (155,747) 43,953
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of items of property, plant
and equipment (335) (2,290) (17,256)
Interest received 107 727 788
---------- ---------- ----------
Net cash outflow from investing
activities (228) (1,563) (16,468)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from 2020 upon
recapitalization 50,279 343,200 -
Purchase of a unit option (2,503) (17,083) -
Capital contributions from equity holder
of the Company - - 28,400
Proceeds from issue of ordinary shares 30,035 205,018 -
Proceeds from issue of preferred shares - - 85,135
Redemption of preferred shares (39,912) (272,432) -
New bank loans 13,258 90,500 20,000
Repayment of bank loans (7,691) (52,500) (28,000)
Increase/(decrease) in amount due to a
director 118 806 (81,083)
Increase in amount due from a shareholder (15) (103) -
Exchange realignment 362 2,472 -
---------- ---------- ----------
Net cash inflow from financing activities 43,931 299,878 24,452
NET INCREASE IN CASH AND CASH
EQUIVALENTS 20,887 142,568 51,937
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 17,590 120,068 67,725
Effect of foreign exchange rate changes (64) (432) 406
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR 38,413 262,204 120,068
========== ========== ==========
ANALYSIS OF BALANCES OF CASH AND CASH
EQUIVALENTS
Cash and bank balances 38,413 262,204 120,068
========== ========== ==========
Adjusted Financial Information
The Company defines adjusted net earnings according to the interpretation
of 2009 Adjusted Earnings in the SPA. The adjusted net earnings has
provided a reconciliation below and is defined as the profit for the year
in the financial statement excluding the (i). the impact, positive or
negative, of any fair value assessment or accounting impact attributable to
the escrow agreement for the release of escrowed shares; (ii). the expenses
relating to the completion of the transactions contemplated by the SPA;
(iii). the expenses, including interest expenses and other related expenses,
related to the repurchase by Windrace of the preferred shares held by the
GS Investor; and (iv). the expenses relating to the grant of options under
share option plans Windrace may implement in the future.
Adjusted net earnings is a non-GAAP financial measure that does not have a
standardized meaning, and is therefore unlikely to be comparable to similar
measures presented by other companies. The Company believes that comparing
adjusted net earnings for different financial periods provides more useful
information about the growth or decline of its net earnings for the
relevant financial period and identifies the impact of items which the
Company does not consider to be part of its normal operating results.
2009 2009 2008
USD'000 RMB'000 RMB'000
Profit for the year 36,335 248,019 168,528
Acquisition related expenses 980 6,691 -
Interest on preferred shares 3,859 26,338 21,795
---------- ---------- ----------
2009 Adjusted Earnings
(as defined in the Sale and
Purchase Agreement) 41,174 281,048 190,323
========== ========== ==========
Contact Information: Investor Relations Contact Katharine O'Brien ICR (646) 277-1217 katharine.obrien@icrinc.com