China TMK Battery Systems (DFEL) Reports Q4, FY2010 Results

QualityStocks would like to highlight China TMK Battery Systems, Inc. (OTCBB: DFEL). The company manufactures and distributes high rate discharge Nickel Metal Hydride ("Ni-MH") multi-cell batteries in its manufacturing facility located in Shenzhen, China. TMK maintains a diverse roster of large, consumer-focused clients with major production facilities in China.

In the company’s news,

China TMK Battery Systems recently posted its financial results for the fourth quarter and full year ended December 31, 2010.

The company reported a 38.8 percent increase in fourth quarter 2010 revenues to $19.9 million, driven by expanded sales efforts and increased demand for TMK’s products from both existing and new customers.

Total cost of sales increased 43.9 percent to $15.3 million for the fourth quarter of 2010 compared to the same period in 2009. Gross profit increased 24.7 percent to $4.7 million, with gross margin of 23.6 percent in the fourth quarter compared to $3.8 million and gross margin of 26.6 percent in 2009.

Income from operations increased 22.7 percent to $3.6 million for the fourth quarter of 2010; operating margins were 17.9 percent, compared to 20.2 percent in 2009.

Revenues for the full year 2010 ended December 31, 2010, were increased 36.6 percent to a record $66.4 million compared to $48.6 million in the same period in 2009.

Cost of sales for fiscal year 2010 increased by 40.4 percent to approximately $51.1 million, compared to approximately $36.5 million for the same period in 2009. Gross profit increased by 26.3 percent to approximately $15.3 million compared to approximately $12.1 million for the same period in 2009, representing gross margins of approximately 23.0 percent and 24.9 percent, respectively.

Income from operations increased slightly to $9.2 million and operating margins were 13.9 percent, compared to 19.0 percent in 2009.

As of December 31, 2010, the company reported cash and cash equivalents totaled $0.4 million.

The company noted its strengthening position in the Ni-MH battery market and how the company plans on taking advantage of various market variables.

“2010 was a fruitful year for TMK,” Henian Wu, the company’s chairman and president stated in the press release. “We are becoming an emerging player in the $5 billion global Ni-MH battery market, which we believe is expanding due to strong demand for rechargeable consumer devices. With greater production capacity, an expanded R&D team focused on new product introductions and an enhanced sales and marketing staff, we are well positioned to benefit from both domestic and global demand.”

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Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.