Eastern Security & Protection Services, Inc. (OTCBB:EASTD) (the "Company") recently announced the financial results for its fiscal year ended December 31, 2010. The Company's annual report on Form 10-K was filed with the U.S. Securities and Exchange Commission on March 31, 2011.
Fiscal Year 2010 Corporate Event Highlights:
- On December 31, 2010, the Company completed the merger with OTCBB listed Velvet Rope Special Events, Inc.
- On December 31, 2010, the Company appointed Mr. Rui Tan as Chairman, and Ms. Jing Wang, Dr. Chuang Gao, and Mr. Chen Fang to the Board of Directors.
- On December 31, 2010, the Company appointed Mr. Rui Tan to serve as our President and Chief Executive Officer, Ms. Jing Wang to serve as our Chief Financial Officer, and Mr. Xin Tian to serve as our Chief Operating Officer.
"Fiscal year 2010 was a milestone year for the Company as we completed our transition from privately-owned to publicly-traded company. In addition, the appointments to our Board of Directors and Officers have further strengthened our management team. I am also pleased to announce that the Company attained significant increases in sales and earnings in 2010, more than doubling revenues and net income. We remain excited about the prospects of continuing at this rapid pace of growth," commented Mr. Tan, Eastern Security & Protection Services, Inc.’s President, Chief Executive Officer and Chairman.
Fiscal Year 2010 Results:
- Total revenue for fiscal year 2010 increased 163% to $16.49 million from $6.27 million in fiscal year 2009.
- Gross profit increased 153% to $7.36 million, as compared to $2.91 million in the prior year.
- Net income increased 135% to $4.19 million, as compared to $1.78 million in fiscal year 2009.
- Fully diluted earnings per share were $0.588, compared to $0.25 in fiscal year 2009.
Financial Condition:
- As of December 31, 2010, the Company had $2.31 million in cash, as compared to $0.35 million at the end of fiscal year 2009.
- Shareholders' equity was $6.9 million, as compared to $2.3 million at the end of fiscal year 2009.
- The Company generated $3.5 million in cash flow from operating activities in fiscal year 2010.
- Net cash flow used in investing activities was $2.3 million in fiscal year 2010.
About Eastern Security & Protection Services, Inc.
Eastern Security & Protection Services, Inc. is primarily engaged in the sales, distribution, installation and maintenance of security and safety products and systems. Our customers are presently located almost exclusively in the PRC and are primarily comprised of: (i) governmental entities; (ii) non-profit organizations; and (iii) commercial entities; and, (iv) residential properties. We strive to provide customer-driven, one-stop services to our clients and actively pursue acquisition prospects and other strategic opportunities to expand our product range and the scope and capacity of our services. As of December 31, 2010, we had approximately 150 full time employees. For the year ended December 31, 2010, revenue was $ 16,494,752 and net income as $4,194,303. As at December 31, 2010 shareholders’ equity was $6,946,178 and total assets were $15,001,645.
Safe Harbor Statement - This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the future trading of the common stock of the company; the ability of the company to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
Eastern Security & Protection Services, Inc. (formerly Velvet
Rope Special Events, Inc.) | |||||||
| As of December 31, | |||||||
| 2010 | 2009 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 2,308,713 | $ | 356,176 | |||
| Accounts receivable | 4,341,365 | 868,186 | |||||
| Inventories | 313,389 | 47,465 | |||||
| Retention receivable | 147,414 | 298,574 | |||||
| Other receivables | 1,214,525 | 2,393,548 | |||||
| Prepayment and deposits | 317,952 | 173,260 | |||||
| Advance to suppliers | 238,337 | 90,151 | |||||
| Due from related parties | - | 84,923 | |||||
| Total current assets | 8,881,695 | 4,312,283 | |||||
| Property, plant and equipment, net | 1,531,025 | 1,512,445 | |||||
| Land use rights, net | 2,161,725 | 2,145,488 | |||||
| Prepayment and deposits, net of current portion | 2,427,200 | - | |||||
| Total assets | $ | 15,001,645 | $ | 7,970,216 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities | |||||||
| Accounts payable | 89,601 | 468,485 | |||||
| Dividend payable | 2,427,200 | 2,347,200 | |||||
| Accrued expenses | 124,463 | 15,166 | |||||
| Deferred maintenance revenue | 3,993,240 | 2,046,824 | |||||
| Taxes payable | 651,376 | 105,570 | |||||
| Due to related parties | 1,277 | 407,040 | |||||
| Bank loans | 758,500 | - | |||||
| Other current liabilities | 9,810 | 192,957 | |||||
| Total liabilities | $ | 8,055,467 | $ | 5,583,242 | |||
| Stockholders’ equity | |||||||
| Preferred stock at $0.0001 par value: 5,000,000 shares authorized, -0- shares issued and outstanding in 2010 and 2009 | - | - | |||||
| COMMON STOCK, par value at $0.0001 per share, 7,123,322 and 5,998,300 shares authorized, issued and outstanding as of December 31, 2010 and 2009 | 713 | 600 | |||||
| Additional paid in capital | 170,194 | 690 | |||||
| Statutory reserve | 462,933 | 241,023 | |||||
| Retained earnings unappropriated | 6,104,543 | 2,132,150 | |||||
| Accumulated other comprehensive income | 207,795 | 12,511 | |||||
| Total stockholders’ equity | 6,946,178 | 2,386,974 | |||||
| Total liabilities and stockholders’ equity | $ | 15,001,645 | $ | 7,970,216 | |||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| Years ended December 31, | ||||||||
| 2010 | 2009 | |||||||
| Revenues | $ | 16,494,752 | $ | 6,273,361 | ||||
| Cost of goods sold | (9,135,317 | ) | (3,362,139 | ) | ||||
| Gross margin | 7,359,435 | 2,911,222 | ||||||
| Sales, marketing and other operating expenses | (519,954 | ) | (233,517 | ) | ||||
| General and administrative expenses | (993,653 | ) | (291,857 | ) | ||||
| Income from operations | 5,845,828 | 2,385,848 | ||||||
| Acquisition related cost | (169,617 | ) | - | |||||
| Interest expense and bank charges | (36,960 | ) | (86 | ) | ||||
| Interest income | 3,110 | 3,902 | ||||||
| Other income (expense), net | 73,537 | (71 | ) | |||||
| Income from operations before income tax | 5,715,898 | 2,389,593 | ||||||
| Income tax expense | (1,521,595 | ) | (605,638 | ) | ||||
| Net income | $ | 4,194,303 | $ | 1,783,955 | ||||
| Basic and diluted weighted average shares outstanding | 7,123,322 | 7,123,322 | ||||||
| Basic and diluted net income per share | 0.5888 | 0.2504 | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Years ended December 31, | ||||||||
| 2010 | 2009 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 4,194,303 | $ | 1,783,955 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation of property, plant and equipment | 51,691 | 48,018 | ||||||
| Amortization of prepaid land lease | 55,478 | 54,979 | ||||||
| Loss on disposal of property, plant and equipment | 231 | - | ||||||
| Warrants issued for consulting services | 169,617 | - | ||||||
| (Increase) decrease in assets | ||||||||
| Accounts receivable | (3,358,237 | ) | 330,697 | |||||
| Inventories | (257,756 | ) | 658,808 | |||||
| Retention receivable | 157,337 | (291,831 | ) | |||||
| Other receivables | 1,229,359 | (2,041,674 | ) | |||||
| Prepayment and deposits | (136,741 | ) | (166,962 | ) | ||||
| Advance to suppliers | (141,517 | ) | (65,172 | ) | ||||
| Due from related parties | 85,641 | (5,201 | ) | |||||
| Increase (decrease) in liabilities | ||||||||
| Accounts payable | (385,064 | ) | (933,360 | ) | ||||
| Accruals and other payables | (276,720 | ) | 135,256 | |||||
| Deferred maintenance revenue | 1,830,140 | 1,544,529 | ||||||
| Taxes payable | 529,877 | (133,521 | ) | |||||
| Due to related parties | (209,516 | ) | 94,411 | |||||
| Net cash provided by operating activities | 3,538,123 | 1,010,932 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Prepayment and purchase of property, plant and equipment | (2,386,810 | ) | (2,953,622 | ) | ||||
| Net cash used in investing activities | (2,386,810 | ) | (2,953,622 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Bank loans | 739,700 | - | ||||||
| Capital contribution | - | 2,345,760 | ||||||
| Dividend paid | - | (439,830 | ) | |||||
| Net cash provided by financing activities | 739,700 | 1,905,930 | ||||||
| EFFECTS OF EXCHANGE RATE CHANGE ON CASH | 61,524 | (23 | ) | |||||
| NET INCREASE IN CASH & CASH EQUIVALENT | 1,952,537 | (36,783 | ) | |||||
| CASH & CASH EQUIVALENT - BEGINNING OF YEAR | 356,176 | 392,959 | ||||||
| CASH & CASH EQUIVALENT - END OF YEAR | $ | 2,308,713 | $ | 356,176 | ||||
Contacts:
Mr. Rui Tan,
President, Chief Executive Officer and Chairman
Ms. Jing Wang,
Chief Financial Officer and Director
Telephone: 86-24-2252-2550
ir@espsi.com
