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eFuture Information Technology Inc. (EFUT) Reports Q2 Sales Double, Earns Profit

eFuture Information Technology Inc. (EFUT), a supplier of management software solutions in China, reported second quarter financial results yesterday afternoon after the close. Revenues rose to $3.5 million, an increase of 103.9% over the same period in 2007. Gross profit rose 115% to $2.0 million as gross margin improved to 57.1% from 54.1% year-over-year. GAAP net income was $0.4 million, or 13 cents per diluted share, vs. a loss of $1.34 million in Q2 2007. Adjusted net income (non-GAAP) was $1.1 million, or 35 cents per diluted share. eFuture reiterated full-year 2008 revenue guidance of $19 – $20 million. There were no analyst earnings estimates.

“Our strongest-ever year-over-year growth in service revenue boosted top- line growth and helped turn our bottom line positive,” said Adam Yan, eFuture’s chairman and chief executive officer. “Gross profit has shown significant improvement with a 115 percent year-over-year increase, a sign that our strategy of integration and product synergy is keeping our costs under control as our revenues continue to expand.”

He continued, “As domestic consumption becomes a more important driver of an increasingly sophisticated Chinese economy, we expect to see growing IT software and service spending in the retail sector to improve China’s supply chain management infrastructure. We believe that eFuture is ideally positioned to capitalize on this growth, and we remain confident in our ability to provide the high-performance supply chain management solutions demanded by our discerning base of Fortune 500 and leading domestic clients.”

Shares of EFUT closed at $10.99 yesterday and have traded in a 52-week range of $9.35 – $34.00. With 3 million shares outstanding, EFUT has a market cap of $33 million. Shares traded over 15% higher after hours, hitting a high of $13.20 on volume of 48,000 shares. EFUT’s small float leads to outsized moves on relatively little volume.

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