Jade Art Group (PINK:JADA)

2010 Third Quarter Financial Highlights

• Revenue was $2.3 million in the third quarter, down from $10.7 million of revenue recorded in the third quarter of 2009.

• Gross profit was $1.4 million, compared to $9.2 million in the third quarter of 2009.

• Net income in the third quarter of 2010 was $235,576, a decrease of 96% compared to net income of $6.3 million in the third quarter of 2009.

• Basic and diluted earnings per share in the third quarter of 2010 were $0.00 as compared to $0.08 per basic and diluted share in the third quarter of 2009.

Bad debt expense for the third quarter was $767,691. This bad debt expense results from delayed payments from our five major customers. As a result of these delayed payments, the Company has suspended shipments of raw jade to two of our customers. The Company will continue to monitor this situation and periodically reevaluate the adequacy of the bad debt reserve.

"The Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2010, the Company’s controls and procedures were not effective."

 

 

2010 First Quarter Financial Highlights

• Revenue of $5.9 million represents a 19% increase over revenue of $5.0 million recorded in the first quarter of 2009.
• Gross profit was $4.8 million, compared to $3.9 million in the first quarter of 2009.
• Net income in the first quarter of 2010 was $3.2 million, an increase of 32% compared to net income of $2.4 million in the first quarter of 2009.
• Fully diluted earnings per share in the first quarter of 2010 increased to $0.04 from $0.03 in the first quarter of 2009.

“Our improved first quarter performance was primarily driven by the sales growth realized during the quarter,” said Mr. Hua-Cai Song, Chief Executive Officer of the Company. “This growth in sales from our existing customers reflects the improvement on the economic environment which has had a positive impact on the activity in the high-end commercial and residential construction markets and the jade jewelry market.”

Commenting on the Company’s financial results for 2009, Hua-Cai Song, Chief Executive Officer of the Company, said, “The inclement weather occurred in China during the year caused conditions unfavorable to mining and transporting Jade Art’s raw materials. Moreover, we feel that the global economic downturn has temporarily reduced the demand of luxury goods, which directly impacted the Company’s commercial and residential construction material markets and the high-end jade jewelry market. Although we have not yet seen a rebound in the luxury goods market, we are well positioned to take advantage of opportunities when economic conditions improve.”

"...Chinese economy is recovering and showing great improvement. This has a positive impact on the commercial and residential construction markets and the high-end jewelry market into which the company sells raw jade. The new sales policy, reduction on the rate of sales advances on new orders from 30% to 10%, is another factor that contributes improving the revenue JADA indicates that is not in need of capital."

Source: SEC Third Quarter 10Q filing.