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Press Release Source: HQ Sustainable Maritime Industries, Inc.
HQ Quarter Revenues Up 47%; Six-Month Revenues Up 73% Friday August 11, 10:00 pm ET
Profit From Operations Doubled for the Quarter and Rose 177% for the Six-Month Period
SEATTLE, WA--(MARKET WIRE)--Aug 11, 2006 -- HQ Sustainable Maritime Industries, Inc. (HQ) (OTC BB:HQSM.OB - News), a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today its financial results for the three months and six months ended June 30, 2006, as reported in its Form 10-QSB filed with the Securities and Exchange Commission on August 11th, 2006. ADVERTISEMENT
For the three months ended June 30, 2006, the Company's revenue rose by $3,058,326 or 47%, to $9,574,081 compared to $6,515,755 for the same period in 2005. In addition, profit from operations more than doubled for this quarter, rising to $2,403,345 for 2006 from $1,128,754 for the same period in 2005.
For the six months ended June 30, 2006, HQ revenues increased 73% to $16,459,421, compared to $9,532,641 for the same period in 2005. Profit from operations for the six-month period in 2006 increased 177%, rising to $2,488,421 year-to-date, up from $899,482 for the corresponding period in 2005. HQ's two principal operating segments both contributed positively to the Company's improved results:
Aquatic Products Segment
HQ's principal activity is the manufacturing and selling of zero-toxin aquatic products, for which it has built a vertically integrated operation to ensure control over every aspect of quality and support HQ's goal to become the market leader in zero-toxin aquaculture.
Second quarter revenue from this segment was $5,630,062 in 2006, compared to $4,064,815 for the same quarter in 2005, an improvement of 39%. Net income from this segment rose to $665,390 for the 2006 quarter, compared to $302,284 for the corresponding period in 2005.
Six-month revenue doubled for this segment in 2006, rising to $10,303,560 from $5,157,310 for the same period in 2005. Net income from this segment was $673,423 for the first six months of 2006, compared to a net loss of $93,685 for the same period in 2005.
Health and Bio-products Segment
HQ's subsidiary, Jiahua Marine, is engaged in manufacturing and selling health and bio-products sold in China, which also enrich feed used in HQ's aquaculture production. During the three months ended June 30, 2006 and 2005, Jiahua Marine realized sales of $3,944,019 and $2,450,940 respectively, an increase of 61%. Net income from this segment was $2,062,800 and $1,199,512 for the three months ended June 30, 2006 and 2005, respectively.
For the six months ended June 30, 2006 and 2005, Jiahua Marine realized sales of $6,155,861 and $4,375,331 respectively, an increase of 41%. Net income from this segment rose to $2,622,601 for the 2006 period, up from $1,604,279 for the same period in 2005.
Said Norbert Sporns, CEO of HQ, "We are extremely pleased but not surprised by the results of this quarter and the last six months. They are the outcome of careful planning and consistent delivery on our intentions. Building on the achievements of the first half of this year, we are making great strides toward establishing our new consumer brand, 'TiLoveYa' tilapia, as the leading toxin-free seafood product in a market place that is growing rapidly. Tilapia is now the third most popular fish in the United States.
"Spurring our growth are our new Senior Vice President of Sales and Distribution and our new Retail Sales Manager. Moreover, the doubling of our cooperative farming capacity, announced August 8, together with our new processing plant and our new feed mill, should ensure our ability to meet the growing demand for our products. Investors and customers can gain greater understanding of our 'toxin-free' operations through a Q&A from biotechnologist Dr. Stephen G. Newman, posted on our Web site under Investor Relations."
"In addition," Mr. Sporns continued, "More investors are now learning about HQ's unique business strengths through our feature on Alexander Haig's 'World Business Review,' which can now be seen as paid programming on the CNBC and Bravo! channels. Recently, HQ was also the subject of a major article on the front page of the business section of the Seattle Post-Intelligencer, Seattle's leading morning newspaper. To read the article, please go to: http://seattlepi.nwsource.com/business/279016_tilapia27.html. HQ is also being featured on a program in the Platinum Television Group's educational series, 'Business & Beyond,' which will be aired in the coming weeks. We expect to have more very positive news in the near future."
About HQ Sustainable Maritime Industries, Inc.
HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea. HQ practices cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. The company is dedicated to sustainable zero-toxin methods giving its customers the purest products possible. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets. It has recently acquired a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to headquarters in Seattle and operational offices based in Haikou, Hainan, HQ has offices in Hong Kong, Beijing, and Shanghai. (http://www.hqfish.com).
Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of HQ Sustainable Maritime Industries, Inc. (the Company) to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov under "Search for Company Filings." Consulting For Strategic Growth I, Ltd. ("CFSG") provides HQ Sustainable Maritime Industries, Inc. (HQ) with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG receives a fixed monthly fee for the duration of the agreement. Independent of CFSG's receipt of cash compensation from HQ, CFSG may choose to purchase the common stock of the company and thereafter sell those shares at any time it deems appropriate to do so.
HQ SUSTAINABLE MARITIME INDUSTRIES, INC. AND SUBSIDIARIES (INCORPORATED IN THE STATE OF DELAWARE WITH LIMITED LIABILITY)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2006 2005 2006 2005 ------------ ------------ ------------ ------------
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