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Kingold Jewelry Reports Third-Quarter Results

Kingold Jewelry, Inc. (NASDAQ: KGJI), one of the leading manufacturers of 24-carat gold jewelry in China, today announced financial results for the third quarter of 2010, marked by significant gains in net sales, net income and earnings per share.

Net sales increased 81.1% to $ 169.7 million for the three months ended September 30, 2010, compared to $ 93.7 million for the three months ended September 30, 2009. Net income attributed to common stockholders increased to $ 5.2 million as compared to $2.2 million for the third quarter of 2009, an increase of 135.1%. Earnings per share increased to $ 0.12 per share (diluted) as compared to $ 0.07 per share (diluted), for the third quarter of 2009.

The increase in net sales was primarily driven by the Company’s increased working capital which has allowed it to take advantage of the surge in demand for the items it manufactures. In addition, the Company has also expanded its business operations into additional geographic areas which has broadened sales opportunities.

Net sales increased 76% to $ 338.1 million for the nine months ended September 30, 2010, compared to $ 192.0 million for the nine months ended September 30, 2009. Net income attributed to common stockholders increased to $13.5 million, or $ 0.31 per share (diluted), as compared to $ 5.8 million, or $ 0.17 per share (diluted), for the first nine months of 2009. Cash and cash equivalents for the period ended September 30, 2010 was $ 9.48 million, recognizing a net increase of $1.52 million, or 19.1%, from $7.96 million at December 31, 2009.

Kingold’s third quarter results are summarized below.

INCOME STATEMENT DATA (UNAUDITED)    
For the three months ended For the nine months
September 30, ended September 30,
2010 2009 2010 2009
 
NET SALES $ 169,706,497 $ 93,703,615 $ 338,062,808 $ 192,036,951
 
GROSS PROFIT $ 8,637,128 $ 3,628,217 $ 21,655,775 $ 9,602,722
 
INCOME FROM OPERATIONS $ 7,595,762 $ 3,216,739 $ 19,427,028 $ 8,395,600
 
NET INCOME ATTRIBUTABLE TO $ 5,247,571 $ 2,231,733 $ 13,500,482 $ 5,755,918
COMMON STOCKHOLDERS
 
EARNINGS PER SHARE - DILUTED $ 0.12 $ 0.07 $ 0.31 $ 0.17
   
BALANCE SHEET DATA (2010 UNAUDITED, 2009 AUDITED)
   

September 30, 2010

Decmeber 31, 2009

 
 
TOTAL ASSETS

 

$

79,517,765 $ 62,327,038
STOCKHOLDERS' EQUITY

 

$

65,643,561 $ 50,823,356
 
KINGOLD JEWELRY INC.
(FORMERLY ACTIVEWORLDS CORP.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
 
September 30, December 31,
2010 2009
   

ASSETS

 
CURRENT ASSETS
Cash and cash equivalents $ 9,484,044 $ 7,964,120
Restricted cash - 1,462,587
Accounts receivable 334,749 485,399
Inventories 50,660,556 31,756,009
Other current assets and prepaid expenses 455,536 101,189
Deferred offering costs 125,994 -
Value added tax recoverable 4,287,164 5,792,014
Total Current Assets 65,348,044 47,561,318
 
PROPERTY AND EQUIPMENT, NET 13,525,483 14,126,950
 
OTHER ASSETS
Other assets 144,280 141,198
Intangible assets, net 499,958 497,572
Total other assets 644,238 638,770
TOTAL ASSETS $ 79,517,765 $ 62,327,038
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 
CURRENT LIABILITIES
Accounts payable $ - -
Short term loans $ 8,967,055 $ 8,775,522
Other payables and accrued expenses 1,375,197 368,196
Income tax payable 2,004,715 1,347,295
Other taxes payable 61,757 192,415
Value added tax payable - -
Total Current Liabilities 12,408,723 10,683,428
 
COMMITMENTS AND CONTINGENCIES - -
 
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 500,000 shares
authorized, none issued or outstanding
as of September 30, 2010 and December 31, 2009 - -
Common stock $0.001 par value, 100,000,000 shares
authorized, 42,343,073 and 41,766,404 shares issued and outstanding
as of September 30, 2010 and December 31, 2009, respectively 42,343 41,766
Additional paid-in capital 31,076,541 31,077,118
Retained earnings
Unappropriated 29,108,122 15,669,257
Appropriated 940,528 878,911
Accumulated other comprehensive income 4,476,027 3,156,305
Total Stockholders' Equity 65,643,561 50,823,356
 
Noncontrolling interest 1,465,482 820,254
Total Equity 67,109,042 51,643,610
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 79,517,765 $ 62,327,038

ABOUT KINGOLD JEWELRY

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