Q1 2009 Revenue Increases 15.6% and Net Income Climbs 26.1% Year-over-Year

BEIJING, Nov. 14 /Xinhua-PRNewswire/ -- Asian Financial, Inc. ('Asian Financial', or the 'Company'), a leading offset printing equipment provider in China, through its wholly-owned operating subsidiary, Duoyuan Digital Printing Technology Industry (China) Co., Ltd. ('Duoyuan'), today announced its financial results for the three months ended September 30, 2008.

    First Quarter 2009 Highlights
    -- Revenue was $26.2 million, an increase of 15.6% from $22.6 million for
       the same period last year
    -- Gross profit was $13.8 million, an increase of 21.1% from $11.4 million
       for the same period last year
    -- Gross margin was 52.9%, compared to 50.5% for the same period last year
    -- Operating income was $9.7 million, an increase of 16.6% from $8.3
       million for the same period last year
    -- Net income was $8.5 million, or $0.34 per basic and diluted share, an
       increase of 26.1% from $6.8 million, or $0.27 per basic and diluted
       share for the same period last year
    -- Appointed Mr. William D. Suh as Chief Financial Officer

'After closing a successful fiscal year 2008, we started the first quarter of fiscal 2009 with revenue and net income growth due to the continued increase in sales of our small and large-format multi-color presses,' said Mr. Wenhua Guo, Chairman and Chief Executive Officer of Asian Financial. 'More and more of our customers are demanding sophisticated printing equipment, such as our multi-color presses, to produce high quality printing materials more efficiently. During the past quarter we continued to develop new products in the multi-color press category, which we believe will further strengthen our profit margin as the year progresses.'

First Quarter 2009 Results

For the first quarter ended September 30, 2008, revenue was $26.2 million, a 15.6% increase from $22.6 million for the same period last year. The sales of large-format multi-color presses contributed to 58.8% of the Company's total revenue for the three months ended September 30, 2008, compared to 57.3% for the same period last year. The sales of our small and large-format multi-color presses constituted 84.1% of our revenue for the period, compared to 78.9% for the same period last year.

Gross profit was $13.8 million, an increase of 21.1% from $11.4 million for the same period last year. Gross profit margin was 52.9%, an increase of 50.5% from the same period last year. The increase in gross profit margin was mainly due to the growth in the sales of high-margin small and large-format multi-color presses. The gross profit margin of multi-color presses is higher compared to single-color presses.

Selling, general and administrative expenses amounted to $3.5 million, an increase of 17.0% from $3.0 million for the same period last year, due to salary increases for sales personnel, shipping and handling, and advertising expenses. Research and development expenses amounted to $0.7 million for the quarter, an increase of 324.9% from $0.2 million for the same period last year. Research and development expenses increased significantly as the Company produced prototypes of new models of single and multi-color presses during the quarter. These new products are scheduled for commercial production and sale by the fourth quarter of the fiscal year ending June 30, 2009.

Income from operations in the three months ended September 30, 2008 was $9.7 million, an increase of 16.6% from $8.3 million for the same period last year.

Net income increased 26.1% to $8.5 million, or $0.34 per basic and diluted share for the quarter, as compared to $6.8 million, or $0.27 per basic and diluted share, for the three months ended September 30, 2007.

Financial Condition

As of September 30, 2008, the Company had cash and cash equivalents of $19.0 million and working capital of approximately $55.9 million. Total shareholders' equity as of September 30, 2008 was $102.6 million, an increase of $8.8 million compared to $93.8 million as of June 30, 2008. For the three months ended September 30, 2008, the Company generated $11.0 million in cash flow from operating activities, primarily due to net income and the collection of accounts receivable. Capital expenditures totaled $9.1 million for the quarter, primarily due to upgrades at the Company's Hunan facility and production equipment purchases for the planned manufacturing of cold-set corrugated printing presses at the Langfang facility. Investments included a prepayment of $4.5 million to purchase surface treatment equipment for press and post-press products. The Company anticipates these projects to require additional investments of $6.0 million during fiscal 2009.

Recent Events

Effective October 1, 2008, the Company appointed Mr. William D. Suh to serve as the new Chief Financial Officer of the Company. Prior to joining the Company and since 1990, Mr. Suh was an accountant with Ganze & Company, the largest CPA firm in Napa, California, where he was elected to the partnership in 1997.

Mr.