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Heli Electronics Corp. Releases Third Quarter 2010 Financial Results

GUANGZHOU, China, Nov 12, 2010 (BUSINESS WIRE) -- Heli Electronics Corp.

(OTCBB:HELI) has released its third quarter 2010 financial results. Heli Electronics is a marketing, distribution, and after-sales service company of electronic products in Mainland China, and is the primary marketing and distribution agency of Haier Electronics AV Division in China. The Company reported revenue of $32,066,034 for the three months ended September 30, 2010.

This is a 301.4% or $24,078,201 increase over its Q3 2009 revenue of $7,987,833.

For the nine months ended September 30, 2010, Heli reported revenue of $75,759,613, an increase of $53,748,480, 244.2% over the prior year's first nine months.

The most recent quarter also saw a significant increase in net income. In the three months ended September 30, 2010, Heli's net income was $2,297,472, a 290.2% increase, or $1,708,736 over its third quarter 2009 net income of $588,736. For the nine months ended September 30, 2010, Heli reported net income of $5,806,759, an increase of 253.0%, or $4,161,925 over nine months ended September 30, 2009, with results of $1,644,834. Additionally, Heli's operating income saw an increase of over 300% to $3,144,957 for the third quarter of 2010.

For the nine months ended September 30, 2010, Heli reported earnings per share at $0.03 for the nine months ended September 30, 2010. For the third quarter alone, the Company reported earnings of $0.01 per share.

Mr. Xin Qiu, President and CEO of Heli Electronics Corp., recently stated, "Given Heli's third quarter performance, we can clearly see from the financial results that the company's operations have remarkably improved and has met expectations. The results prove that our shareholders can be confident in our abilities to meet and exceed future expectations; and it will also help us continue to grow our business and expand to new fields." Other Financial Information Heli's assets have increased from the end of 2009, with total assets of $22,135,026 as of September 30, 2010, an increase of 352.7% over the previous year. As of the end of the third quarter, the company's total liabilities are $13,529,167. Total leverage has increased 422.7% since December 31, 2009. Total shareholders' equity is $8,605,859, an increase of 274.0% since the end of 2009.

A full copy of the company's quarterly financial filing can be found here: http://sec.gov/Archives/edgar/data/1431676/000106299310003592/0001062993-10-003592-index.htm Business Outlook Heli's financial position improved greatly over the past year due to its increased business in the AV industry in Mainland China. The company continues to leverage its position in the industry to gain new partnerships and venture into other areas of electronics. It has significantly increased its business with Haier Electronics' AV Division since its inception, and upper management anticipates this business to grow significantly in the near future. Management also believes the company's strengths will help it expand market share within the electronics industry and eventually capitalize on opportunities in new fields, which they expect will in turn result in greater financial success for the company and its shareholders.

About Heli Electronics Corp.

Heli Electronics Corp. (www.helielectronics.com) is traded under the symbol HELI on the OTCBB exchange and is based in Guangzhou, China. It is the primary marketing, promotion, logistics, and after-sales service agency of audio and visual (AV) products for Haier Group, a world leader in electronics and electrical appliances. Its products include speakers, multimedia stereo systems, and home theatres, among other types of AV products. The company seeks to establish a broad network in China to provide comprehensive after-sales service, brand establishment, brand promotion, distribution, and logistics management of a wide array of electronics and electrical appliances. Backed by Haier's strong brand presence and an abundance of sales channels throughout Mainland China, HELI has grown immensely since its inception in March 2008.

Further information on the Company can be found at www.sec.gov and the company's website at www.helielectronics.com Safe Harbor Statement Statements in this press release regarding Heli Electronics Corp's products, services, capabilities, performance, opportunities, development and business outlook that are forward-looking, specifically the ability of the company to continue growing and expanding its operations, involve and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond Heli Electronics Corp's control and difficult to predict, and could cause actual results to differ materially from those anticipated, expressed or forecasted in the forward-looking statements. Such risks and uncertainties may include, but are not limited to: lack of operating history, transitioning from a development company to an operating company, difficulties in distinguishing Heli Electronics Corp's products and services, ability to deploy Heli Electronics Corp's products, lack of or delay in market acceptance and fluctuations in customer demand, dependence on a limited number of significant customers, reliance on third party vendors and strategic partners, ability to meet future capital requirements on acceptable terms and the global economy, compliance with federal and state regulatory requirements, timing, availability and success of new technology and product introductions and the other factors discussed in Heli Electronics Corp's filings with the Securities and Exchange Commission.

Heli Electronics Corp. and Subsidiaries Consolidated Balance Sheets September 30, December 31, 2010 2009 -------------- ------------ (Unaudited) Assets Current Assets Cash and cash equivalents $ 1,121,625 $ 270,775 Accounts receivable, net 16,724,185 3,335,423 VAT receivable 64,360 - Inventories, net 3,083,314 1,084,061 Advance to suppliers 1,116,455 183,661 ---------- --------- Total current assets 22,109,939 4,873,920 Property and equipment, net 25,087 15,338 ---------- --------- Total Assets $ 22,135,026 $ 4,889,258 ========== ========= Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 9,495,574 $ 1,782,663 Accrued liabilities 268,840 62,868 Income tax payable 859,122 742,959 ---------- --------- Total current liabilities 10,623,536 2,588,490 Due to related parties 2,905,631 - ---------- --------- Total Liabilities 13,529,167 2,588,490 ---------- --------- Shareholders' Equity - - Preferred Stock, $0.00001 par value, 100,000,000 shares authorized, 0 shares outstanding at September 30, 2010 and December 31, 2009, respectively 2,720 1,443 Common Stock $0.0001 par value, 12,000,000,000 shares authorized, 272,000,000 shares issued and outstanding at September 30, 2010 and 144,280,000 shares issued and outstanding at December 31, 2009, respectively Additional paid-in capital 347,305 70,632 Accumulated other comprehensive income (loss) 216,253 (4,129 ) Statutory reserve fund 223,421 223,421 Retained earnings 7,816,160 2,009,401 ---------- --------- Total shareholders' equity 8,605,859 2,300,768 ---------- --------- Total Liabilities and Shareholders' Equity $ 22,135,026 $ 4,889,258 ========== ========= The accompanying notes are an integral part of these consolidated financial statements Heli Electronics Corp. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income Three Months ended Nine Months ended September 30, September 30, --------------------------------- --------------------------------- 2010 2009 2010 2009 -------------- -------------- -------------- -------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue $ 32,066,034 $ 7,987,833 $ 75,759,613 $ 22,011,133 Cost of Goods Sold (28,097,447 ) (7,005,046 ) (66,327,417 ) (19,251,868 ) ----------- - ----------- - ----------- - ----------- - Gross Profit 3,968,587 982,787 9,432,196 2,759,265 ----------- ----------- ----------- ----------- General and administrative Selling Expenses 295,788 81,792 699,539 234,712 General and administrative 526,589 115,123 900,006 326,558 Depreciation 1,253 890 3,289 1,878 ----------- ----------- ----------- ----------- Total operating expenses 823,630 197,805 1,602,834 563,148 ----------- ----------- ----------- ----------- Income before income taxes 3,144,957 784,982 7,829,362 2,196,117 Income taxes (847,485 ) (196,246 ) (2,022,603 ) (551,283 ) ----------- - ----------- - ----------- - ----------- - Net income $ 2,297,472 $ 588,736 $ 5,806,759 $ 1,644,834 =========== =========== =========== =========== Other Comprehensive Income Foreign currency translation adjustment 197,591 4,722 220,382 1,447 ----------- ----------- ----------- ----------- Comprehensive Income $ 2,495,063 $ 593,458 $ 6,027,141 $ 1,646,281 =========== =========== =========== =========== Earnings per share - basic and diluted $ 0.01 $ 0.00 $ 0.03 $ 0.01 =========== =========== =========== =========== Weighed-average shares outstanding - basic and diluted 268,901,099 144,280,000 200,087,912 144,280,000 =========== =========== =========== =========== The accompanying notes are an integral part of these consolidated financial statements Heli Electronics Corp. and Subsidiaries Consolidated Statements of Changes in Shareholders' Equity For the nine months ended September 30, 2010 Accumulated Statutory Other Retained Total Common Stock Additional Reserve Comprehensive Earnings Shareholders' Shares Amount Paid-in Capital Fund Income (Unrestricted) Equity ------------- ------- ---------------- --------- -------------- --------------- -------------- Balances, December 31, 2009 144,280,000 1,443 70,632 223,421 (4,129 ) 2,009,401 2,300,768 Retain of 121,720,000 shares by original Dong Fang shareholders 121,720,000 1,217 (23,292 ) - - - (22,075 ) Issuance of 6,000,000 shares at $0.05 per share 6,000,000 60 299,965 - - - 300,025 Foreign currency translation adjustment - - - - 220,382 - 220,382 Net income for the nine months ended September 30, 2010 (unaudited) - - - - - 5,806,759 5,806,759 ----------- ----- ------- ------- ------- --------- --------- Balance at September 30, 2010 (Unaudited) 272,000,000 $ 2,720 $ 347,305 $ 223,421 $ 216,253 $ 7,816,160 $ 8,605,859 =========== ===== ======= ======= ======= ========= ========= The accompanying notes are an integral part of these consolidated financial statements Heli Electronics Corp. and Subsidiaries Consolidated Statements of Cash Flows Nine Months ended September 30, ------------------------------ 2010 2009 -------------- ------------- (Unaudited) (Unaudited) Cash Flows From Operating Activities Net Income $ 5,806,759 $ 1,644,834 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 3,323 1,878 Changes in operating assets and liabilities: Accounts receivable, net (13,310,314 ) (3,682,415 ) VAT receivable (64,360 ) 95,649 Advance to suppliers (928,474 ) - Inventories, net (1,973,756 ) (371,567 ) Accounts payable and accrued liabilities 7,875,476 2,776,465 Customer deposit - (125,892 ) Corporate tax payable 98,689 551,621 ----------- ---------- Net cash provided by (used in) operating activities (2,492,657 ) 890,573 ----------- - ---------- Cash Flows From Investing Activities Purchase of equipment (12,476 ) (12,013 ) ----------- - ---------- - Net cash used in investing activities (12,476 ) (12,013 ) ----------- - ---------- - Cash Flows From Financing Activities Net proceeds of share issuance 277,950 - Due to related parties 2,905,631 - ----------- ---------- Net cash provided by financing activities 3,183,581 - ----------- ---------- Effect of exchange rate changes on cash 172,402 1,327 ----------- ---------- Net increase in cash and cash equivalents 850,850 879,887 Cash and cash equivalents, beginning of period 270,775 60,753 ----------- ---------- Cash and cash equivalents, end of period $ 1,121,625 $ 940,640 =========== ========== Supplemental disclosure information: Income taxes paid $ 1,906,440 $ - ----------- ---------- Interest paid $ - $ - ----------- ---------- The accompanying notes are an integral part of these consolidated financial statements SOURCE: Heli Electronics Corp.

CONTACT: Heli Electronics Corp. Investor Relations Contact: Mickey Jiang, +86 020-36356928 (Office) Fax: +86 020-36356228 ir@helielectronics.com Copyright Business Wire 2010 -0- KEYWORD: China

Asia Pacific INDUSTRY KEYWORD: Technology

Consumer Electronics

Hardware

Audio/Video SUBJECT CODE: Earnings