China Forestry Industry Group reports 1Q net income of $2.1 million

Market: Flooring
Posted May 23, 2011

May 23, 2011. /Lesprom Network/. China Forestry Industry Group 's achieved revenue of $10.4 million in 1Q 2011, up 143.4% from the 1Q 2010. The increase was primarily due to the expansion of the Company's sales and distribution network following the acquisition of the laminate flooring business Silvan Flooring in late 2009, as the company said in a press release received by Lesprom Network.

Cost of sales increased 147.2% to $6.9 million for the 1Q 2011 from $2.8 million for the 1Q 2010, mainly due to increased sales in the period.

Gross profit was $3.6 million, an increase of 136.3% from the corresponding period in the previous year. Gross margin was 34.3%, compared to 35.3% in the corresponding three-month period last year. Gross margins have remained flat year-over-year, but increased from the 4Q 2010 largely due to increased sales of laminate flooring since the 4Q 2010 in proportion to fiber board, as laminate flooring generally enjoy a higher price premium. However, selling prices for the Company's laminate flooring were 18.7% lower year-over-year for the 1Q 2011 as the Company lowered prices to remain price competitive against peers, which offset the expansion in gross margin from the favorable product mix.

As a result, operating income was $2.9 million, an increase of 138.8% from $1.2 million previous year. Operating margin was 27.3%, compared to 27.9% for the corresponding period previous year.

Net income was $2.1 million for the 1Q 2011, compared to $1.2 million for the corresponding three-month period during the previous year.

"Our fiscal year 2011 began on a strong note with significant top and bottom line growth for the first quarter," said Yulu Bai, China Forestry Industry Group's Chairman and CEO. "The results were mainly driven by the performance of our laminate flooring subsidiary following the incorporation of Silvan Flooring and the accelerated marketing efforts to promote the "Silvan Touch" brand throughout 2010. Supported by our intention to expand our production capacity and sales network, we expect our growth momentum to continue as we strive to meet the strong demand for interior design and housing-related products in China."

China Forestry Industry Group, Inc., through its operating subsidiaries, Aosen Forestry and Silvan Flooring, is involved in the production and sale of floor materials and related products to residential and commercial customers in China. The Company's product lines include laminate flooring and fiber floor boards which are manufactured in a variety of colors, dimensions and designs. The Company's manufacturing facility in Qianxinan, Guizhou Province has an annual production capacity of 6 million square meters of laminate flooring and 75,000 cubic meters of industrial fiber boards.

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Topics: Finance

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