On Monday, July 26, Security Technology (CSR 5.99-2.69%) announced its second-quarter financial report for the year ended June 30, 2010. The company’s second-quarter quarterly revenue totaled US$168.3 million, which was higher than the 141.41 billion reported in the same period of last year. The U.S. dollar is mainly due to the improvement of the company's business in various fields and the growing demand for surveillance and security products in China. Among them, government consumption accounts for 55% of total revenue, and enterprises account for 45%. Endogenous income increased by 32.2% and 32.2% compared with the same period of last year.
The gross profit of the company in the second quarter was US$ 43.36 million, which was an increase of 39.8% year-on-year (US$ 31.02 million last year). Gross profit margin increased by 390 basis points to 25.8% over the same period of last year. This increase was mainly due to the increase in profits from government contracts in the installation section.
Affected by the effective management of fixed gross margin and operating expenses, the company’s operating income in the second quarter increased significantly by 95.4% to US$24.56 million. The operating profit margin was 14.6%, which was higher than 8.9% in the same period of last year.
Second-quarter net profit increased by 174.0% from $6.5 million in the same period last year to $17.81 million. Diluted earnings per share increased from US$0.13 in the same period last year to US$0.23. These all reflect the company's strong performance in all business areas and its outstanding performance in improving profit margins, bottoming costs and non-cash expenses on convertible notes.
As of June 30, the company’s cash balance was $208.7 million, which was higher than the $142.29 million it received on March 13 this year.
Outlook
“Because of the growing market demand for our monitoring and security products and services, we are full of confidence in the company’s prospects. We believe that the company will continue to maintain its leading position in this field in China,†said Mr. Tu. “We believe that the company’s current size and market will enable us to be in a good position in the future competition. At the same time, we are now focusing on high-growth areas. We have huge assets to support our company’s goals. I I believe we have enough ability to achieve a good performance this year. "
Throughout 2010, the company reiterated that its expected revenue will reach between $830 million and $850 million. Diluted earnings per share will reach between $1.12 and $1.16.