Solar water heater specialists Deli Solar Inc. (OTCBB: DLSL) crept up 10.8 percent today, riding on the company’s latest second quarter 2007 financial results and boosting share prices to $2.30 a share.
According to the company’s latest statement, second-quarter sales figures for Deli Solar rose from $7.06 million in 2006 to $9.41 million in 2007, an increase of 33 percent – an increase the company attributed to the sale of more than 63,000 water heaters and 37,000 boilers during the second quarter of 2007. Gross profit for the company also increased, jumping 30 percent to $1.9 million, while gross margins fell from 21.1 percent in 2006 to 20.5 percent in 2007.
Income for the company also increased for the second quarter of 2007. Operating income totaled $800,000 compared to a mere $300,000 the year before, while net income for the second quarter rose 113 percent to $600,000.
Deli Du, the president and CEO of Deli Solar, attributed the company’s revenue growth to increased demand in its products, thanks to a savvy marketing campaign.
“Revenue growth was driven by higher unit sales of solar water heaters and residential boilers which benefited from continued investment in brand marketing, sales promotions and further expansion of our sales distribution network,” Du said in the statement. “While margins were slightly impacted by competition and pricing pressure, our ability to prudently manage raw material and organizational costs enabled us to dramatically increase operating profitability.”
In addition to the second quarter results, the company also released its six-month results today. According to its figures, sales increased 32 percent to $12.4 million for this six-month period ending June 30, 2007. Operating expenses increased only slightly, edging up from $1.5 million to $1.6 million. Operating income increased 109 percent during this period, rising from $500,000 to $1.1 million.
Deli Solar also reported $5.7 million in cash and cash equivalents and claimed it was “debt-free” in the statement.
With this important part of the company’s progress out of the way, Du said his company could start focusing on making progress for the rest of the year.
“We continue to make further progress on our acquisition strategy as we signed a purchase agreement on May 18, 2007, to buy 51 percent of Tianjin Huaneng Energy Equipment Company, which manufacturers energy-saving boilers and environmental protection equipment for industrial customers,” Du said.
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