| > > Jade Art Group Recent Events and 2008 Outlook ()
Posted by tradeinstock on 2008-06-27 02:32:47 ( Scores: 0.00 )
On January 11, 2008, Jade Art Group announced the formation of a new wholly owned subsidiary, Jiangxi SheTai Jade Industrial Co., Ltd. (?JST?). JST now manages the sale and distribution of jade sourced from the SheTai Jade mine. This subsidiary is located in Yujiang Jiangxi, China, an area known as a major center for the processing and distribution of jade products.
On January 17, 2008, Jade Art Group signed an Exclusive Distribution Right Agreement with XiKai Mining enabling the Jade Art Group to acquire 90% of the raw jade produced from XiKai Mining?s SheTai Jade mine for a period of 50 years. The price has been set for the first five years at the equivalent of $285 per metric ton, and is subsequently subject to renegotiation every five years with adjustments not to exceed 10%. The SheTai raw jade has uses ranging from decorative commercial and residential construction material to high-end jewelry. In exchange for this exclusive right, Jade Art Group transferred its wholly-owned woodcarving business to XiKai Mining and agreed to pay XiKai Mining RMB 60 million (approximately $8.4 million) by March 2009. Jade Art Group has already paid approximately $6.7 million of this obligation.
On April 16, Richard E. Khaleel was appointed an independent member of the Board of Directors of the Jade Art Group. Mr. Khaleel is an experienced senior marketing executive, having served as the Chief Marketing Officer for the Bank of New York, the Chief Creative Marketing Officer at Alliance Bernstein, and the Vice President of Marketing at CNBC.
On April 28, Company announced that its Board of Directors had authorized a one-for-three reverse stock split of its outstanding common stock. The reverse split will reduce the number of outstanding shares from 239,940,000 shares to 79,980,000 shares. The Board set May 15, 2008 as the effective date for the reverse stock split. The marketplace effective date, on which the reverse stock split will be reflected in trading on the OTC Bulletin Board, will be determined by NASDAQ and is expected to be in late May or early June of 2008. The earnings per share results cited above are based on common shares outstanding before the reverse split.
Fiscal 2008 Outlook
Jade Art Group Inc. reaffirms guidance for its 2008 full-year financial results. This guidance reflects the results presently anticipated from continuing operations and does not include unusual or non-operating events. The following projections exclude results from discontinued operations, which were discussed in more detail above.
- Revenues are expected to be between $61 million and $65 million.
- Net income is expected to be between $37 million and $41 million.
- Diluted earnings per share are expected to be between $0.15 and $0.17.
(Note: The diluted earnings per share are based on the common shares outstanding before the pending reverse split. This is equivalent to between $0.46 and $0.51 per diluted share after the effective date of the reverse stock split.)
Mr. Song concluded, ?We are quite excited about our results to date and the opportunity to be a leading seller and distributer of raw jade in China. The increasing popularity of SheTai Jade and our favorable long term agreement enabling us to obtain high quality SheTai jade in significant quantities suggests further opportunities to generate increasing value to our shareholders.?