Eternal Technologies Group, Inc. (OTCBB:ETLT):
| 2007 Summary |
| Revenues increased 23.9% |
| Earnings increased 38.3% |
| Earnings per share increased 27.3% |
| Stockholders Equity increased 29.56% to $1.40 per share |
Eternal Technologies Group, Inc. (OTCBB:ETLT) today reported record revenues and record earnings for the year-ended December 31, 2007. Revenues for the year-ended December 31, 2007 increased by $6,872,615 or 23.9% to $35,590,718 from $28,718,103 for the year-ended December 31, 2006. Cost of sales for the year-ended December 1, 2007 increased by 5,157,066 or 27.2% to $24,143,968 from $18,986,902 for the year-ended December 31, 2006. As a result our gross profit increased by $1,715,549 to $11,446,750 for the year-ended December 31, 2007 from $9,731,201 for the year-ended December 31, 2006.
Operating expenses including depreciation, research and development expense, increased by $1,427,646 or 30.2% to 6,161,083 for the year-ended December 31, 2007 from $4,733,437 for the year-ended December 31, 2006. Other income increased by $1,627,839 to $2,067,535 for the year-ended December 31, 2007 from $439,696 for the prior year.
Income tax expenses increased by $46,053 to $601,845 for the year-ended December 31, 2007 from $555,792 for the prior year.
As a result of the foregoing, the Company’s earnings increased by $1,869,689 or 38.3% to $6,751,357 for the current year from $4,881,668 for the prior year. Per share earnings increased $.03 per share or 27.3% to $.14 per share for the year-ended December 31, 2007 from $.11 for the year-ended December 31, 2006.
For the year-ended December 31, 2007 total stockholders equity increased by 16,616,139 or 29.56% to 72,822,262 from $56,206,123 as of December 31, 2006. Book Value per share as of December 31, 2007 was approximately $1.40 per share ($1.397).
For 2008, the Company anticipates additional earning growth as the 2007 acquisition begins to contribute to the Company’s earnings.
(See financial Statements (without footnotes) attached)
| ETERNAL TECHNOLOGIES GROUP, INC. CONSOLIDATED BALANCE SHEETS December 31, 2007 and 2006 (Amounts in United States Dollars) | ||||||||||||
| December 31, | December 31, | |||||||||||
| 2007 | 2006 | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 12,692,479 | $ | 16,024,123 | ||||||||
| Short-term investments | 13,827,174 | 15,350,176 | ||||||||||
| Accounts receivable | 6,274,866 | 6,790,534 | ||||||||||
| Inventories | 6,312,236 | 5,358,213 | ||||||||||
| Prepayments and deposits | 14,082 | 200,705 | ||||||||||
| Total current assets | 39,120,837 | 43,723,751 | ||||||||||
| Advances to distributors | - | 1,048,929 | ||||||||||
Property and equipment, net of accumulated depreciation of $4,296,083 and $3,943,592 at December 31, 2007 and December 31, 2006, respectively | 7,161,773 | 6,882,175 | ||||||||||
Land use rights, net of accumulated amortization of $2,043,266 and $1,647,961 at December 31, 2007 and December 31, 2006, respectively | 4,765,501 | 4,722,362 | ||||||||||
| Intangible assets | 6,571,098 | 1,688,520 | ||||||||||
| Other assets | 17,433,088 | - | ||||||||||
| Total assets | $ | 75,052,297 | $ | 58,065,737 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Notes Payable | $ | 443,366 | $ | 443,366 | ||||||||
| Accounts payable and accrued liabilities | 1,294,310 | 532,037 | ||||||||||
| Amounts due to related parties | 215,295 | 216,175 | ||||||||||
| Payable due to income taxes | 167,764 | 229,680 | ||||||||||
| Derivative financial instrument liability | 109,300 | 438,356 | ||||||||||
| Total current liabilities | 2,230,035 | 1,859,614 | ||||||||||
| Stockholders' equity: | ||||||||||||
| Preferred shares - $0.001 par value, 5,000,000 | ||||||||||||
| Authorized, none issued or outstanding | - | - | ||||||||||
| Common shares - $0.001 par value; 95,000,000 | ||||||||||||
| Authorized; 52,138,034 shares issued and | ||||||||||||
| outstanding | 52,137 | 43,566 | ||||||||||
| Additional paid - in capital | 21,303,505 | 14,931,218 | ||||||||||
| Subscription receivable | - | (10,176 | ) | |||||||||
| Retained earnings | 44,848,766 | 38,097,409 | ||||||||||
| Treasury shares, at cost, 1,509,730 shares | (882,090 | ) | - | |||||||||
| Accumulated other comprehensive income | 7,499,944 | 3,144,106 | ||||||||||
| Total stockholders' equity | 72,822,262 | 56,206,123 | ||||||||||
| Total liabilities and stockholders' equity | $ | 75,052,297 | $ | 58,065,737 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements. | ||||||||||||
| ETERNAL TECHNOLOGIES GROUP, INC. | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||
| FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 | ||||||
| (AMOUNTS IN UNITED STATES DOLLARS) | ||||||
| 2007 | 2006 | |||||
| Revenue: | ||||||
Agricultural and genetics sales | ||||||
Medical device sales and | $ | 24,240,206 | $ | 19,690,199 | ||
services | 10,592,359 | 8,738,499 | ||||
| Land lease | 758,153 | 289,405 | ||||
| Total revenue | 35,590,718 | 28,718,103 | ||||
| Cost of sales and services | ||||||
| Agricultural and genetics sales | 19,957,333 | 15,498,711 | ||||
| Medical device sales and services | 3,624,052 | 3,085,532 | ||||
| Land lease | 562,583 | 402,659 | ||||
| Total cost of sales and services | 24,143,968 | 18,986,902 | ||||
| Gross profit | 11,446,750 | 9,731,201 | ||||
Depreciation expenses and amortization | 560,071 | 666,943 | ||||
| Selling, general and administrative expenses | 5,036,500 | 3,682,740 | ||||
| Research and development expenses | 564,512 | 383,754 | ||||
| Income from operations | 5,285,667 | 4,997,764 | ||||
| Other income (expense) | ||||||
| Interest income | 223,480 | 180,421 | ||||
| Gain on sale of assets | 477,540 | - | ||||
| Investment Income | 1,251,554 | 451,021 | ||||
Change in value of derivative financial instruments | 114,961 | (191,746) | ||||
| Other income (expense), net | 2,067,535 | 439,696 | ||||
Income before provision for income taxes | 7,353,202 | 5,437,460 | ||||
| Provision for income taxes | 601,845 | 555,792 | ||||
| Net income | $ | 6,751,357 | $ | 4,881,668 | ||
Net income per common share basic and diluted | $ | 0.14 | $ | 0.11 | ||
Weighted average number of common shares outstanding, Basic Diluted | 47,867,890 | 43,567,300 | ||||
| 47,929,145 | 43,801,540 | |||||
The accompanying notes are an integral part of these consolidated financial statements. | ||||||
ETERNAL TECHNOLOGIES GROUP, INC. | ||||||||||||||||||||||||||
| Common Stock Shares | Amount | Additional Paid-In Capital | Treasury Shares | Stock Subscription Receivable | Retained Earnings |
Accumulated
Other Comprehensive Income | Total | |||||||||||||||||||
|
Balance at December
31, 2005 | 39,854,026 | 39,854 | 13,217,874 | - | (10,176 | ) | 33,215,741 | 1,176,170 | 47,639,463 | |||||||||||||||||
| Net Income | - | - | - | - | - | 4,881,668 | - | 4,881,668 | ||||||||||||||||||
Foreign currency | - | - | - | - | - | - | 1,967,936 | 1,967,936 | ||||||||||||||||||
translation adjustment | ||||||||||||||||||||||||||
Other comprehensive | 6,849,604 | |||||||||||||||||||||||||
| Income | - | |||||||||||||||||||||||||
| Common stock issued for cash | 3,000,000 | 3,000 | 1,197,000 | - | - | - | - | 1,200,000 | ||||||||||||||||||
Loss on issuance of common Stock | - | - | 97,721 | - | - | - | - | 97,721 | ||||||||||||||||||
Common stock issued for conversion of convertible notes | 713,274 | 712 | 418,623 | - | - | - | - | 419,335 | ||||||||||||||||||
| Balance at December 31, 2006 | 43,567,300 | 43,566 | 14,931,218 | - | (10,176 | ) | 38,097,409 | 3,144,106 | 56,206,123 | |||||||||||||||||
| Net income | - | - | - | - | - | 6,751,357 | - | 6,751,357 | ||||||||||||||||||
Foreign currency | - | - | - | - | - | - | 4,355,838 | 4,355,838 | ||||||||||||||||||
translation adjustment | ||||||||||||||||||||||||||
Other Comprehensive | 11,107,195 | |||||||||||||||||||||||||
| Income | ||||||||||||||||||||||||||
| Compensatory element of common stock issued for services | 1,000,000 | 1,000 | 607,000 | - | - | - | - | 608,000 | ||||||||||||||||||
| Common stock issued for purchase of long term investment | 7,297,507 | 7,298 | 5,551,466 | - | - | - | - | 5,558,764 | ||||||||||||||||||
Common stock issued for conversion of warrants | 273,227 | 273 | 213,821 | - | - | - | - | 214,094 | ||||||||||||||||||
|
Collection of subscription
receivable | - | - | - | - | 10,176 | - | - | 10,176 | ||||||||||||||||||
| Common stock repurchase | - | - | - | (882,090 | ) | - | - | - | (882,090 | ) | ||||||||||||||||
| Balance at December 31, 2007 | 52,138,034 | $ | 52,137 | $ | 21,303,505 | $ | (882,090 | ) | $ | - | $ | 44,848,766 | $ | 7,499,944 | $ | 72,822,262 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
| ETERNAL TECHNOLOGIES GROUP, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE YEARS ENDED DECEMBER 31,2007 AND 2006 | ||||||||
| (AMOUNTS IN UNITED STATES DOLLARS) | ||||||||
| 2007 | 2006 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | $ | 6,751,357 | $ | 4,881,668 | ||||
| Depreciation and amortization | 1,122,654 | 1,069,602 | ||||||
| Gain on Disposition of Equipment | (477,540 | ) | - | |||||
| Earnings of Long-term Investment | (393,846 | ) | - | |||||
| Earnings of Short-term Investment | (148,786 | ) | - | |||||
| Change in value of derivative financial instruments | (114,961 | ) | 191,746 | |||||
| Compensatory element of common stock issued for services | 608,000 | 97,721 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventories | (585,239 | ) | (5,218,442 | ) | ||||
| Accounts receivable | 1,406,901 | 580,109 | ||||||
| Prepayments and deposits | 200,437 | 65,352 | ||||||
| Accounts payable and accrued expenses | 647,931 | (45,853 | ) | |||||
| Account payable to related parties | (1,700 | ) | (32,061 | ) | ||||
| Net cash provided by operating activities | 9,015,207 | 1,589,842 | ||||||
| Cash flows from investing activities: | ||||||||
| Redemption/(purchase of) short-term investment | 2,728,279 | (5,116,726 | ) | |||||
| Purchase of property and equipment | (1,304,493 | ) | - | |||||
| Proceeds from disposition of equipment | 1,417,974 | - | ||||||
| Purchase of patents | (5,060,217 | ) | (537,257 | ) | ||||
| Proceeds from/(advances to) distributors | 1,121,123 | (511,673 | ) | |||||
| Purchase of long-term investment | (11,480,478 | ) | - | |||||
| Net cash used in investing activities | (12,577,812 | ) | (6,165,656 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from sales of common stock | - | 1,200,000 | ||||||
| Repurchase of common stock | (882,090 | ) | - | |||||
| Proceeds collected from common stock subscription | 10,176 | - | ||||||
| Net cash (used in)/ provided by financing activities | (871,914 | ) | 1,200,000 | |||||
| Effect of exchange rate changes on cash | 1,102,874 | 1,175,449 | ||||||
| Net decrease in cash and cash equivalents | (3,331,644 | ) | (2,200,365 | ) | ||||
| Cash and cash equivalents, beginning of period | 16,024,123 | 18,224,488 | ||||||
| Cash and cash equivalents, end of period | $ | 12,692,479 | $ | 16,024,123 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest Paid | $ | - | $ | - | ||||
| Tax paid | 380,039 | 413,232 | ||||||
The accompanying notes are an integral part of these consolidated financial statements. |
About Eternal Technologies
Eternal is a major agricultural genetics and biopharmaceutical R&D firm operating in China with the support of the Chinese Government. Eternal's animal breeding division has a strong asset base, cash position and net income. Eternal has become one of China's leading institutions for biopharmaceutical and biotech research, pure breed cultivation and breed stock production. The Company has secured a key market niche by commercializing gene engineering technologies and providing superior breeding stock, allowing China's citizens the ability to improve their living standards. With the world's largest population, a double-digit national growth rate and entry into the WTO, Eternal Technologies has a playing field set for tremendous opportunity. As a prominent player in the agricultural genetics industry, cash in the bank and an untapped market, Eternal has the potential to become a major player in China's national growth.
For more information please visit website:
http://www.eternaltechs.com
Contacts:
Annie Shi, 281-683-2395
info@heronpublic.com
