SHENZHEN, China, Aug. 12 /Xinhua-PRNewswire-FirstCall/ -- FUQI
International, Inc. (Nasdaq GM: FUQI) today announced that it has completed
the purchase of two jewelry companies, Shanghai Tian Mei Jewelry Co. Ltd. and
Beijing Yinzhong Tian Mei Jewelry Co. Ltd., collectively known as Temix
("Temix") on August 7, 2008. FUQI has acquired 100% ownership of Temix an
asset purchase transaction.
Under the terms of the transaction, FUQI paid a total consideration of RMB
135 million (approximately USD$19.7 million, based on a conversion price of
USD: RMB 1.00:6.86), with RMB 80 million (approximately USD$11.7 million)
consideration to be paid in cash and the remaining consideration to be paid in
restricted common stock. The RMB 80 million paid in cash is for the value of
the inventory on hand in Temix retail locations. The issuance of FUQI's
shares included in the equity portion of the purchase price for Temix is RMB
55 million (approximately USD$8.0 million), or 1,080,666 shares, and one-half
of the shares will be placed into escrow and remain subject to the achievement
of certain performance targets over the two-year period following closing.
Temix is a 50 outlet branded jewelry store chain with locations
principally in Beijing, Shanghai, and Ningbo. Of the 50 outlets, 6 are
stand-alone stores and 44 are store counters within department stores. The
chain sells primarily diamond jewelry, but also sells karat gold and gemstone
jewels, including ruby and jade. For the year ended December 31, 2007, Temix
had revenues of approximately USD$12.3 million (unaudited) and the company was
profitable. Through the first six months of 2008, Temix had revenues of
approximately USD$9.2 million (unaudited) and was profitable.
Temix has been led by Mr. Chujian Huang, who is the founder and CEO of
Temix and a 15-year veteran in China's jewelry industry, particularly in the
Yangtze Delta region. Upon closing, Mr. Huang became a full-time employee of
FUQI, responsible for managing the Temix chain, and reports to Ms. Jianying Li,
Director of Retail Operations for FUQI International. Mr. Huang and the core
Temix management team agreed to stay with FUQI for at least three years.
Mr. Yu Kwai Chong, Chairman of FUQI International commented, "We are
pleased to close this transaction, which strengthens our efforts in China's
retail jewelry market. The Temix acquisition is expected to be accretive to
our business immediately upon closing and provides us with a strategic
opportunity to further diversify our business, improve our margin performance,
and expand our market presence. FUQI's strong financial position can
strengthen the performance at each Temix outlet by better capitalizing their
counters and stores to ensure they have an appropriate level of inventory, a
compelling mix of fashionable jewelry designs and strong brand promotion.
With this acquisition, we will have a total of 53 outlets, comprised of 47
store counters and 6 retail stores and are well on plan to reach our goal for
the full year to open or acquire up to 60 to 80 retail counters and 8 to 10
retail stores.
Additionally, we are pleased to welcome Temix's employees to FUQI
International and believe the experience and quality of the company's
management team will provide us with additional capabilities to accelerate our
penetration of the growing retail jewelry market. This announcement further
strengthens our leadership position in the jewelry industry, and we will
continue to look for opportunities to build our portfolio and expand our
market presence."
Additional information related to this transaction can be found in the
Company's Current Report on Form 8-K filed with the Securities and Exchange
Commission on August 12, 2008.
About FUQI International, Inc.
Based in Shenzhen, China, FUQI International, Inc. is a leading designer
of high quality precious metal jewelry in China, developing, promoting, and
selling a broad range of products in the large and rapidly expanding Chinese
luxury goods market. For additional information about the company, please log
on to the company's website at http://www.fuqi.com.cn .
Safe Harbor Statement
In addition to historical information, the statements set forth above
include forward-looking statements that may involve risk and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties include, but are not
limited to, fluctuation and unpredictability of costs related the gold,
platinum and precious metals and other commodities used to make FUQI's product;
changes in the laws of the PRC that affect FUQI's operations; FUQI's entrance
into the retail jewelry market; competition from FUQI's competitors; FUQI's
ability to obtain all necessary government certifications and/or licenses to
conduct FUQI's business; and fluctuation of the foreign currency exchange rate
between U.S. Dollars and Renminbi. The forward-looking statements are also
identified through use of the words "believe," "enable," "may," "will,"
"could," "intends," "estimate," "anticipate," "plan," "predict," "probable,"
"potential," "possible," "should," "continue," and other words of similar
meaning. Actual results could differ materially from the expectations
contained in forward-looking statements as a result of several factors,
including regulatory approval requirements and competitive conditions. We do
not undertake to update the forward-looking statements contained in this press
release. These and other factors that may result in differences are discussed
in greater detail in FUQI's reports and other filings with the Securities and
Exchange Commission, which can be accessed at http://www.sec.gov .
SOURCE FUQI International, Inc.