"During the third quarter of 2010, product demand continued to be robust and Home System benefited from the substantial increase in sales of ceiling fans and decorative lightings. We are making innovative products and are seeing a strong response from our customers. Building upon this performance, on October 1, 2010 the Company closed the acquisitions of two fan manufacturers. As a result of these acquisitions, Home System will expand its geographic market coverage into Southeast Asia and Japan, thus further diversifying our customer base and our product lines, as well as reducing the seasonality impact on the Company's operation. This will enable us to more consistent production levels and thus improve our manufacturing efficiencies. Moreover, by combining the raw product procurements requirements, we expect to improve our raw material pricing, thus benefiting our gross margin and earnings. With an improved debt to capitalization ratio and stronger market base, we are confident in our business strategy and believe that Home System is very well positioned for continued growth."
With the completion of these two acquisitions, the Company has made significant progress towards its goal of offering a diverse product portfolio and broadening our customer base. We also believe that our costs going forward can be meaningfully decreased due to the benefit of combining Sanfan's and Jinxinglong's purchasing with that of Home System's. With a broader market for Home System's products, the Company will continue its robust product development, to better serve the growing market for fans and lightings.