SHANGHAI, China, April 30, 2009 (GLOBE NEWSWIRE) -- Linkwell Corporation (OTCBB:LWLL) (the "Company", or "Linkwell"), a leading developer, manufacturer and distributor of healthcare related disinfectants in China, recently reported its financial results for the fiscal year ended December 31, 2008.
Full Year 2008 Financial Highlights:
-- Total revenues increased 47% year-over-year to US$11.98
million
-- Gross profit increased 50% year-over-year to US$6.02
million
-- Gross margin was 50.2%, compared to 47.5% in 2007
-- Operating income increased 640% year-over-year to US$2.50
million
-- Net income increased 452% year-over-year to US$1.63 million
-- Diluted earnings per share were US$0.02
-- Cash and cash equivalents as of December 31, 2008 was
US$2.07million
"We are very pleased to deliver a great fiscal year with strong revenue growth and solid margin expansion in the face of significant macroeconomic headwinds," commented Mr. Xuelian Bian, Chairman and Chief Executive Officer of Linkwell. "We believe that the strong growth we have experienced in 2008 was mainly due to an increase of our sales efforts into our vast distribution network as well as our customer recognition of our high-quality, competitively priced disinfectant products. We are particularly proud the fact that our products were widely used in the Sichuan earthquake and 2008 Olympic Games to meet disinfection requirements. Furthermore, we have struck a very important and strategic relationship with Ecolab Inc. (NYSE:ECL), the global leader in cleaning, sanitizing, food safety and infection prevention products and services. In February 2008, Ecolab invested an initial $2 million in exchange for 10% of Linkwell Tech Group, Inc., our wholly owned operating subsidiary. We expect to begin to leverage our relationship with Ecolab to further our leadership in the Chinese disinfectant market."
Mr. Bian concluded, "While we have performed very well in terms of our core businesses, we think that our stock, which is currently trading at less than 5 times our trailing earnings, is vastly undervalued. Going forward, we will continue to execute our mission statement of supporting the highest standards of public health and safety, while maximizing shareholder value."
About Linkwell Corporation
Linkwell Corporation, through its subsidiary, Linkwell Tech Group, Inc., develops, manufactures and distributes disinfectant healthcare products in China. Linkwell's disinfectant healthcare products are recognized as one of leading domestic Chinese brands in this market segment. Linkwell currently has 56 different products include disinfectants in liquid, tablet, powder and aerosol form. Linkwell has a national marketing and sales presence throughout all 22 provinces, 5 autonomous regions, and 4 special municipalities of China. For more information, please visit http://www.linkwell.us.
Safe Harbor Statement
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, but not limited to, 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 of important factors, including, but not limited to, the impact of competitive products; pricing and new technology; changes in consumer preferences and tastes; effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production; and other factors as those 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 statements to reflect events or circumstances after the date hereof.
LINKWELL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
--------------------------------
2008 2007
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalent $ 2,072,687 $ 782,727
Accounts receivable (net of
allowance for doubtful
accounts of $801,895 and
$460,175 at December 31,
2008 and 2007 respectively) 3,526,440 2,759,745
Accounts receivable-related
parties (net of allowance
for doubtful accounts of
$376,437 and $221,359 at
December 31, 2008 and 2007
respectively) 3,470,553 1,992,233
Other receivables 204,480 157,835
Inventories (net of reserve
for obsolete inventory of
$145,031 and $136,287 at
December 31, 2008 and
December 31, 2007
respectively) 1,207,352 824,653
Prepaid expenses and other
current assets 339,378 --
Due from related parties 2,158,077 946,591
Assets from discontinued
operations -- 1,804,445
------------ ------------
Total current assets 12,978,967 9,268,229
Property, plant and equipment
- net 703,935 747,253
------------ ------------
Total assets $ 13,682,902 $ 10,015,482
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Loans payable $ 744,069 $ 699,210
Accounts payable and accrued
expenses 1,508,271 1,209,228
Taxes payable 220,103 92,933
Other payables 368,690 174,704
Due to related parties 94,583 41,801
Advances from customers 91,326 24,644
Liabilities of discontinued
operation -- 1,459,905
------------ ------------
Total current liabilities 3,027,042 3,702,425
Fair value of derivative
instrument 281,030 --
Minority interest 2,118,970 527,244
Stockholders' Equity:
Preferred Stock: (No par
value; 10,000,000 authorized,
no shares issued and
outstanding at December 31,
2008 and 2007, respectively) -- --
Common Stock: ($.0005 par
value, 150,000,000
authorized, 77,955,475 and
73,731,675 shares issued and
outstanding at December 31,
2008 and 2007, respectively) 38,978 36,866
Common stock issuable -- 11
Additional paid-in capital 6,512,346 5,724,363
Statutory surplus reserve 561,222 319,036
Retained earnings 430,849 (829,957)
Deferred compensation (318,556) (51,389)
Accumulated other
comprehensive income 1,031,021 586,883
------------ ------------
Total stockholders' equity 8,255,860 5,785,813
------------ ------------
Total liabilities and
stockholders' equity $ 13,682,902 $ 10,015,482
============ ============
LINKWELL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years
Ended December 31,
--------------------------------
2008 2007
------------ ------------
NET REVENUES
Non-affiliated companies $ 9,362,364 $ 5,486,026
Affiliated companies 2,623,560 2,641,691
------------ ------------
Total Net Revenues 11,985,924 8,127,717
COST OF SALES (5,963,830) (4,259,128)
------------ ------------
GROSS PROFIT 6,022,094 3,868,589
------------ ------------
OPERATING EXPENSES:
Selling expenses 1,083,431 848,488
General and administrative 2,432,327 2,629,006
------------ ------------
Total Operating Expenses 3,515,758 3,477,494
------------ ------------
INCOME FROM OPERATIONS 2,506,336 391,095
------------ ------------
OTHER (EXPENSE) INCOME:
Other (expense) income (66,554) 144,895
Put option expenses (281,030) --
Interest income 6,455 3,649
Interest expense (64,191) (67,717)
------------ -----------
Total Other (Expense) Income (405,320) 80,827
------------ ------------
INCOME FROM CONTINUING
OPERATION BEFORE INCOME
TAXES AND MINORITY INTEREST 2,101,016 471,922
INCOME TAXES (387,324) --
------------ ------------
INCOME FROM CONTINUING
OPERATION BEFORE MINORITY
INTEREST AND DISCONTINUED
OPERATION 1,713,692 471,922
MINORITY INTEREST (149,505) (132,924)
------------ ------------
INCOME FROM CONTINUING
OPERATION 1,564,187 338,998
DISCONTINUED OPERATIONS:
Gain from discontinued
operation (including gain on
disposal of $25,322 at
June 30, 2008) 65,083 21,137
------------ ------------
NET INCOME $ 1,629,270 $ 360,135
============ ============
BASIC AND DILUTED INCOME PER
COMMON SHARE:
Basic earnings per shares
from continuing operation $ 0.02 $ 0.00
============ ============
Basic earnings per shares
including discontinued
operation $ 0.02 $ 0.00
============ ============
Diluted earnings per shares
from continuing operation $ 0.02 $ 0.00
============ ============
Diluted earnings per shares
including discontinued
operation $ 0.02 $ 0.00
============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 75,339,667 73,195,593
============ ============
Diluted 75,549,558 73,455,345
============ ============