September 04, 2007
e-Future Information Technology 1st Half 2007 Earnings Call

by SA Editors



E Future Information Technology Inc. (NASDAQ: EFUT)
1st Half 2007 Earnings Call
August 21, 2007 8:30 pm ET

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Ping Yu

Thank you, Adam. I will now provide an overview of our financial highlights focusing on explaining margins and expense fluctuations along with profits and using numbers and percentages based on U.S. dollars.

We reported total revenues of $2.5 million for the first half year of 2007, up 21% over 2006. Orders increased 20% versus the prior year period.

Software sales for the first half year were $1.7 million, a 52% jump over the prior period in 2006. The growth was driven by the increases in small and medium-sized businesses and the increased sales on providing products to global customers operating in China.

Service fee income for the first half year was $0.4 million, a 22% increase over 2006 reflecting our efforts on Software as a Service business

Cost of software increased 88% over 2006, this increase resulted directly from our effort to provide our software and services to new customers who require more new features and functions and requires more labor on the implementation of the products.

Cost of service fee income was $0.1 million, a 43% increase over 2006, mainly due to the increase in our service fee income and the increased labor necessary to fulfill our service obligations.

The Gross Margin improved to 52%, compared to 47% in the first six months of 2006. Accordingly, the Gross Profit increased to $1.3 million, up 34% from the prior period.

G & A expenses were $0.7 million, a 76% increase over the first half of 2006, directly resulting from increased expenses on new branches and headcount, and additional legal, accounting and other fees related to our becoming a US public company.

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