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Segment Reporting
 12 Months Ended
Dec. 31, 2011
Segment Reporting

(15) Segment Reporting

 

Since March 10, 2010, Baoding Shengde started its operations and thereafter the Company manages its operations through two business operating segments: HBOP, which produces printing paper and corrugating medium paper, and Baoding Shengde, which produces digital photo paper. They are managed separately because each business requires different technology and marketing strategies.

 

The Company evaluates performance of its operating segments based on net income.  Administrative functions such as finance, treasury, and information systems are centralized.  However, where applicable, portions of the administrative function expenses are allocated between the operating segments based on gross revenue generated.  The operating segments do share facilities in Xushui County, Baoding City, Hebei, China.  All sales were sold to customers located in the PRC.

 

Summarized financial information for the two reportable segments is as follows: 

    Year Ended  
    December 31, 2011  
          Baoding     Not Attributable     Elimination     Enterprise-wide,  
    HBOP     Shengde     to Segments     of Inter-segment     consolidated  
                               
Revenues   $ 142,498,116     $ 8,249,200       -       -     $ 150,747,316  
Gross Profit     30,191,480       2,758,595       -       -       32,950,075  
Depreciation and amortization     3,504,717       919,814       -       -       4,424,531  
Interest income     20,847       15,273       317       -       36,437  
Interest expense     699,892       -       -       -       699,892  
Income tax expense     7,136,886       662,340       -       -       7,799,226  
Net Income (Loss)     21,527,824       1,961,694       (1,840,854 )     -       21,648,664  
Total Assets     111,305,277       46,180,744       224,868       (12,753,025 )     144,957,864  

 

    Year Ended  
    December 31, 2010  
          Baoding     Not Attributable     Elimination     Enterprise-wide,  
    HBOP     Shengde     to Segments     of Inter-segment     consolidated  
                               
Revenues   $ 118,858,497     $ 5,131,420       -       -     $ 123,989,917  
Gross Profit     23,952,872       2,222,730       -       -       26,175,602  
Depreciation and amortization     3,421,975       725,802       -       -       4,147,777  
Interest income     72,303       83,749       7,131       -       163,183  
Interest expense     633,010       -       -       -       633,010  
Income tax expense     5,405,884       558,737       -       -       5,964,621  
Net Income (Loss)     16,172,333       1,676,293       (2,297,090 )     -       15,551,536  
Total Assets     91,883,320       32,931,982       95,724       (9,404,685 )     115,506,341  

 

 

For the year ended December 31, 2009, all business operations, except for costs to maintain the Company as a U.S. public company, were entirely attributable to HBOP.