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Shengkai Innovations Reports Second Quarter FY 2011 Results

-- Revenue up 78% Y-O-Y, Gross Profit up 80% Y-O-Y, Gross Margin of 59%

-- Net Income of $14.9 million or Diluted EPS $0.42

-- Teleconference to be held today at 8 a.m. ET

TIANJIN, China, Feb. 11, 2011 (GLOBE NEWSWIRE) -- Shengkai Innovations, Inc. (Nasdaq:VALV) (the "Company"), a leading ceramic valve manufacturer in the People's Republic of China (the "PRC"), today announced its financial results for the fiscal year 2011 second quarter and six months ended December 31, 2010.

FY2011 Q2 Financial Highlights and Recent Developments

  • Revenues increased 78.4% year-over-year to approximately $22.4 million;
  • Revenues from the electric power segment increased 84.5% year-over-year to approximately $16.0 million;
  • Revenues from the petrochemical and chemical segment increased 71.4% year-over-year to approximately $5.3 million;
  • Gross profit increased 79.6% year-over-year to approximately $13.3 million with a 59.2% gross margin;  
  • Net income was approximately $14.9 million, or $0.42 earnings per diluted share, compared to a net loss of approximately $22.2 million, or $0.98 loss per share, in the second quarter of FY2010;
  • Non-GAAP net income was approximately $8.5 million, or $0.24 non-GAAP earnings per share after adjusting for non-cash items including stock compensation expense, share-based compensation, and gain resulting from changes in the fair value of instruments; and
  • Quarterly ceramic valves output achieved 5,350 sets compared with 3,498 sets a year ago.

FY2011 Six Month Financial Highlights

  • Revenues increased 67.2% year-over-year to approximately $39.5 million;
  • Revenues from the electric power segment increased 65.4% year-over-year to approximately $27.2 million;
  • Revenues from the petrochemical and chemical segment increased 82.1% year-over-year to approximately $10.6 million;
  • Gross profit increased 63.8% year-over-year to approximately $23.2 million with a 58.7% gross margin;  
  • Net income was approximately $41.8 million, or $1.18 earnings per diluted share, compared to a net loss of approximately $25.0 million, or $1.12 loss per share, in the second quarter of FY2010; and
  • Non-GAAP net income was approximately $14.7 million, or $0.42 non-GAAP earnings per share, after adjusting for non-cash items including stock compensation expense, share-based compensation, and gain resulting from changes in the fair value of instruments.

Mr. Chen Wang, Chairman and Chief Executive Officer of Shengkai Innovations commented, "We are very encouraged by continued significant revenue growth in all three of our business segments and rising profitability at the same time. After the inauguration of our new facility in September, we have already successfully reached full capacity for the single month of December. However, this is just the beginning of our next phase of rapid growth. As the market is embracing new materials with superior performance over traditional metal products, we may continue to see robust demand from electric power, petrochemical and coal chemical sectors. In particular, as China's industrial and urban development continues in the Central and Western regions, demand for our ceramic valves from the petrochemical sector may become one of our fastest growing areas."

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