Shengkai Innovations is primarily engaged in the design, manufacture and sale of ceramic valves, high-tech ceramic materials and the provision of technical consultation and related services. The Company's industrial valve products are used by companies in the electric power, petrochemical and chemical, metallurgy and other industries as high-performance, more durable alternatives to traditional metal valves. The Company was founded in 1994 and is headquartered in Tianjin, the PRC.

Shengkai Innovations, Inc. Reports Fourth Quarter and FY2011 Results




Shengkai Innovations, Inc. (Nasdaq:VALV), a leading ceramic valve manufacturer in the People's Republic of China (the "PRC"), announced results for its fourth quarter and FY2011 ended June 30, 2011.

Revenues in the fourth quarter increased 70.9% year-over-year to approximately $27.3 million from approximately $16.0 million for the same quarter of FY2010. The increase was primarily attributable to the Company's continuous marketing efforts, increased customer demand and expanded production capacity at the new facility. Sales to customers in all business segments have grown during the quarter.

Gross profit in the fourth quarter increased 56.1% to approximately $14.7 million from approximately $9.4 million for the comparable period in FY2010. This increase was primarily attributable to the revenue growth. Gross margin was 54.0%, compared with 59.1% for the fourth quarter of FY2010. The decrease in gross margin was primarily due to 1) increase in depreciation expenses resulting from an addition of approximately $49.3 million to "Plant and equipment"; and 2) a 13% year-over-year price increase in steel raw material and steel die-casting components.

For the fiscal year ended June 30, 2011, the Company's revenues were approximately $93.5 million, up 72.6% from approximately $54.1 million for FY2010. All business segments grew and total ceramic valves output reached 23,298 sets, compared with 14,376 sets for FY2010.

Specifically, revenues from the electric power industry increased 63.4% year-over-year to approximately $57.7 million. The increase was primarily due to the broadening of customer base and repeated orders from existing customers. Approximately 80% of revenue from the electric power industry for FY2011 was generated from previously existing customers with the remaining 20% from new customer accounts.

More about VALV at www.shengkaiinnovations.com

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