EX-99.1 2 hq8kex991111405.txt PRESS RELEASE DATED NOVEMBER 14, 2005. Exhibit 99.1 HQSM Reports Nine-Month Revenues Rise by 115% From 2004 Third Quarter Profit From Operations up 22% HQ Sustainable Maritime Industries, Inc. (HQ) (OTC BB: HQSM), a leader in zero-toxin integrated aquaculture and aquatic product processing, announced today its financial results for the third quarter and nine months ended September 30th, 2005, as reported in its Form 10-QSB filed with the Securities and Exchange Commission on November 14th, 2005. Revenues for the nine-month period ended September 30, 2005 increased by nearly $9.7 million, to more than $18 million from $8.3 million in the corresponding period of 2004, a rise of 115 percent. Revenues for the three-month period ended September 30, 2005 were $8.5 million, up from $7.6 million for the same period in 2004. Profit from operations for the third quarter 2005 rose to $1.6 million from $1.3 million for the third quarter 2004, an increase of 22% (before considering the non-recurring bad debt recovery of the 2004 third quarter). The improvement is due to higher volumes of sales as well as better cost control. Profit from operations for the nine months ended September 30, 2005 rose to $2.7 million from a loss of about $300,000 for the same period in 2004 (before considering the non-recurring bad debt recovery of the 2004 third quarter). The full text of Form 10-QSB for the three months and nine months ended September 30, 2005 can be reviewed at www.sec.gov. An extract is provided below. Said Norbert Sporns, CEO of HQ, "The third quarter shows strong growth even though the full benefits of our new branding and marketing initiatives are still to come. The move of our corporate offices to Seattle and the growth of our sales force and strengthened marketing strategy have yet to be felt." Mr. Sporns will discuss these results with MoneyTV in a broadcast on November 19th, as detailed in an earlier announcement. Check TV listings at www.moneytv.net. About HQ Sustainable Maritime Industries Inc. HQ Sustainable Maritime Industries Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea. HQ's activities include using renewable ocean resources, practicing cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. Its variety of farmed and ocean-harvested products -- ranging from tilapia and shrimp to squid and red snapper -- are sold around the world. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets. It has recently acquired a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to operational offices based in Haikou, Hainan, HQ has offices in Montreal, Hong Kong, Beijing, and Shanghai. (http://www.hqfish.com). Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate, "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of HQ Sustainable Maritime Industries, Inc. (the Company) to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov under "Search for Company Filings." Consulting For Strategic Growth I, Ltd. ("CFSG") provides HQ Sustainable Maritime Industries, Inc.(HQ) with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG receives a fixed monthly fee for the duration of the agreement. Independent of CFSG's receipt of cash compensation from HQ, CFSG may choose to purchase the common stock of the company and thereafter sell those shares at any time it deems appropriate to do so.
HQ SUSTAINABLE MARITIME INDUSTRIES, INC. AND SUBSIDIARIES (INCORPORATED IN THE STATE OF DELAWARE WITH LIMITED LIABILITY) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2005 2004 2005 2004 ------------- ------------- ------------- ------------- SALES $ 8,512,981 $ 7,665,287 $ 18,045,622 $ 8,367,579 COST OF SALES 5,065,821 4,575,381 10,085,144 5,323,743 ------------- ------------- ------------- ------------- GROSS PROFIT 3,447,160 3,089,906 7,960,478 3,043,836 SELLING AND DISTRIBUTION EXPENSES 51,862 124,775 158,247 220,976 ADVERTISING 845,960 542,409 2,676,962 542,409 GENERAL AND ADMINISTRATIVE EXPENSES 497,576 848,254 1,654,630 2,218,258 DEPRECIATION 238,593 255,656 719,635 414,334 PROVISION FOR DOUBTFUL ACCOUNTS (RECOVERY) 197,226 (2,284,953) 26,594 (1,015,291) ------------- ------------- ------------- ------------- PROFIT FROM OPERATIONS 1,615,943 3,603,765 2,724,410 663,150 FINANCE COSTS 96,474 136,361 278,457 179,986 OTHER EXPENSES 25,268 68,551 145,147 251,646 ------------- ------------- ------------- ------------- PROFIT BEFORE INCOME TAXES 1,494,201 3,398,853 2,300,806 231,518 INCOME TAXES CURRENT 138,360 -- 268,558 -- DEFERRED 17,241 165,303 51,327 199,390 ------------- ------------- ------------- ------------- NET PROFIT BEFORE MINORITY INTEREST 1,338,600 3,233,550 1,980,921 32,128 MINORITY INTEREST -- -- -- 337,944 ------------- ------------- ------------- ------------- NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS $ 1,338,600 3,233,550 $ 1,980,921 $ 370,072 ============= ============= ============= ============= NET PROFIT PER SHARE BASIC AND DILUTED $ 0.01 0.05 $ 0.02 $ 0.01 ============= ============= ============= ============= WEIGHTED AVERAGE COMMON SHARE OUTSTANDING - BASIC 100,874,941 70,031,231 99,332,094 44,820,674 ============= ============= ============= ============= WEIGHTED AVERAGE COMMON SHARE OUTSTANDING - DILUTED 102,693,123 70,031,231 101,150,276 44,820,674 ============= ============= ============= =============