Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the
"Company"), a leading manufacturer of bromine, crude salt and
specialty chemical products in China, today announced its financial
results for the third quarter ended September 30, 2016.
Third quarter and year-to-date
highlights
Year to Date
- Income from operations increased 12% to
$39,953,640
- Net Income increased 13% to
$30,179,696
- Fully Diluted Earnings per share increased 12% to $0.65
from $0.58.
Third Quarter
- Income from operations increased
slightly to $13,956,200.
- Net Income was almost flat at $10,515,713
- Earnings per share were flat at $0.23.
- Income from operations in the bromine segment increased
83%
- Cash at the end of the quarter was $141,083,587 ($3.02
per share*)
- Net Net Cash equaled $2.59 per
share*
- Working capital equaled $4.30 per
share*
- Shareholders equity reached $7.65 per
share*
Mr. Xiaobin Liu, Gulf’s Chief Executive Officer
stated, “Despite the continuing weakness in the Chinese economy,
especially in industries related to our core business such as oil
exploration in terms of money amount, we are pleased to report a
quarter with improved income from operations and flat earnings per
share. We are especially pleased with the strong performance of our
bromine business. If the economy improves, as we believe it
eventually will, we will have significant upside leverage in all of
our core businesses.”
“Our cash balances continue to increase,” Mr.
Liu continued. “We are now making good progress in building the
infrastructure in Sichuan. We are very optimistic about the
opportunities ahead of
us.” Three
Months Ended September 30, 2016
Comparison of the Three-Month Period
Ended September 30, 2016 and
2015
|
Three-MonthPeriod EndedSeptember 30, 2016 |
|
Three-MonthPeriod EndedSeptember 30, 2015 |
|
Percent Change Increase/(Decrease) |
Net revenue |
$ |
38,811,622 |
|
|
$ |
42,601,598 |
|
|
|
(9 |
%) |
|
Cost of net
revenue |
$ |
(23,107,921 |
) |
|
$ |
(27,000,576 |
) |
|
|
(14 |
%) |
|
Gross profit |
$ |
15,703,701 |
|
|
$ |
15,601,022 |
|
|
|
1 |
% |
|
Sales, marketing and
other operating expenses |
$ |
(83,087 |
) |
|
$ |
(91,919 |
) |
|
|
(10 |
%) |
|
Research and
development costs |
$ |
(68,115 |
) |
|
$ |
(69,403 |
) |
|
|
(2 |
%) |
|
Write-off/Impairment on
property, plant and equipment |
$ |
(90,395 |
) |
|
$ |
(819,701 |
) |
|
|
(89 |
%) |
|
General and
administrative expenses |
$ |
(1,613,933 |
) |
|
$ |
(831,955 |
) |
|
|
94 |
% |
|
Other operating
income |
$ |
108,029 |
|
|
$ |
115,114 |
|
|
|
(6 |
%) |
|
Income from
operations |
$ |
13,956,200 |
|
|
$ |
13,903,158 |
|
|
|
0.4 |
% |
|
Other income, net |
$ |
78,042 |
|
|
$ |
66,636 |
|
|
|
17 |
% |
|
Income before
taxes |
$ |
14,034,242 |
|
|
$ |
13,969,794 |
|
|
|
0.5 |
% |
|
Income taxes |
$ |
(3,518,529 |
) |
|
$ |
(3,290,372 |
) |
|
|
7 |
% |
|
Net income |
$ |
10,515,713 |
|
|
$ |
10,679,422 |
|
|
|
(2 |
%) |
|
For the period ended September 30, 2016 compared
to the period ended September 30, 2015, net revenues decreased 9%
to $38,811,622 from $42,601,598. Cost of Goods Sold decreased 14%
to $23,107,921 from $27,000,576. Gross profit increased 1% to
$15,703,701 from $15,601,022. Gross margin increased 384 basis
points to 40% from 37%. Sales and marketing expenses declined 10%.
R&D costs declined 2%. Impairment of PP&E declined to
$90,395 from $819,701. G&A expenses increased 94% to $1,613,933
from $831,955. However the increase was attributable to a decline
in unrealized foreign exchange gains in 2016 compared to 2015.
Excluding these gains, G&A actually declined by 5%.
Income from operations increase slightly to
$13,956,200 from $13,903,158. Other income increased 17%. Pre-tax
income increased slightly to $14,034,242 from $13,969,794. Taxes
increased 7%. The tax rate increased to 25.1% from 23.6%. Net
income declined 2% to $10,515,713 from $10,679,422.
Results by Segment
Bromine Sales of bromine
increased 7% to $15,971,847 from $14,940,666. Volume decreased by
5% to 4,511 tonnes due to the slowdown in the Chinese economy. The
average selling price increased 12% to $3,541 per tonne.
Productivity declined 3% to 46%. Cost of production declined 22%.
Despite the lower productivity, production cost per tonne declined
14% to $1,795. Gross profit increased 51% to $8,865,637. Gross
margin increased to 56% from 39%.
Income from operations increased 83% to
$7,898.302. As a percentage of revenues, income from operations
increased to 49% from 29%.
The company is extremely pleased with the strong
results from the bromine segment, especially considering the
weakness in the Chinese economy. With the capital improvements and
the reduction of competition, the company believes profits from
Bromine could strengthen considerably in the future.
Crude SaltCrude Salt revenues
declined 24% to $2,310,799. Volume in tonnes declined 9%. The
average selling price decreased 16% to $27.99 from $33.26. The
decrease in volume and pricing was due to the slowdown in the
Chinese economy that has impacted our customers’ industries. The
cost of net revenue increased 10%, largely due to the increase in
depreciation and amortization due to enhancement projects. Gross
profit margins were -8%. The crude salt segment lost $382,917
compared to a profit of $351,251 in the previous year.
Chemical ProductsNet revenues
in our chemical products segment decreased to $20,528,975 from
$24,628,731, a decrease of 17%. Revenues in our original chemical
business declined by 27%, with Oil and gas additives declining 26%,
Paper manufacturing additives declining 33%, and Pesticides
additives declining 27%. Revenues in our SCRC segment declined by
5%, with Pharmaceutical intermediaries declining 2%, and By
Products declining 10%. The company attributes most of the decline
to the weakness of these industries in the Chinese economy.
Cost of net revenue for our chemical products
segment for the three-month period ended September 30, 2016, was
$13,502,894, representing a decrease of $2,140,628 or 14% over the
same period in 2015. COGS were 66% of sales compared to 64% of
sales in the previous period. Income from operations was
$6,442,708, a decrease of 23%.
The company believes that the chemical business
will slowly start to improve from its current levels. Some smaller
competitors have recently gone out of business. The Chinese economy
appears to be stabilizing, and there are significant opportunities
in pharmaceuticals as healthcare spending increases.
In the third quarter, the company announced its
intention to merge its two chemical subsidiaries (SYCI and SCRC).
Because this integration has not been completed, the company is
continuing to report these two businesses as separate entities.
Once the merger is completed, the company expects to be able to
reduce overhead costs and improve purchasing leverage. In addition,
the combination should free up capital due to the capital reserve
fund.
Natural Gas
On December 15, 2015, the Company registered a
new subsidiary in the Sichuan Province of the PRC named Daying
County Haoyuan Chemical Company Limited (“DCHC”) to develop natural
gas and brine resources (including bromine and crude salt) in
China. The Natural gas segment (DCHC) had no revenues in the
quarter and incurred a loss of $2,476. During the quarter, the
company spent $1.46 Million, primarily constructing roads and other
facilities. At the end of the quarter, this segment had assets of
$1,687,960. As noted in the recent press release, the company
expects to complete the drilling of the first well by January 2017.
The company remains highly optimistic about the opportunities for
natural gas and brine resources in Sichuan province.
As we have noted, we expense all exploration
costs. When the financial viability of a business is confirmed, we
then capitalize expenditures. In the exploration stage, we spent
$7,848,873 on our natural gas and brine project in Sichuan. These
expenditures were expensed under the bromine segment.
Comparison of the Nine-Month Period
Ended September 30, 2016 and
2015
|
Nine-MonthPeriod Ended September 30, 2016 |
|
Nine-MonthPeriod EndedSeptember 30, 2015 |
|
% Change |
Net revenue |
$ |
120,907,839 |
|
|
$ |
126,862,497 |
|
|
|
(5 |
%) |
|
$ |
(76,184,822 |
) |
|
$ |
(84,761,554 |
) |
|
|
(10 |
%) |
Gross profit |
$ |
44,723,017 |
|
|
$ |
42,100,943 |
|
|
|
6 |
% |
Sales, marketing and
other operating expenses |
$ |
(269,357 |
) |
|
$ |
(294,095 |
) |
|
|
(8 |
%) |
Research and
development costs |
$ |
(198,330 |
) |
|
$ |
(181,108 |
) |
|
|
10 |
% |
Exploration cost |
$ |
- |
|
|
|
(325,840 |
) |
|
|
(100 |
%) |
Write-off/Impairment on
property, plant and equipment |
$ |
(90,395 |
) |
|
$ |
(819,701 |
) |
|
|
(89 |
%) |
General and
administrative expenses |
$ |
(4,539,845 |
) |
|
$ |
(5,247,318 |
) |
|
|
(13 |
%) |
Other operating
income |
$ |
328,550 |
|
|
$ |
342,317 |
|
|
|
(4 |
%) |
Income from
operations |
$ |
39,953,640 |
|
|
$ |
35,575,198 |
|
|
|
12 |
% |
Other income, net |
$ |
222,678 |
|
|
$ |
199,913 |
|
|
|
11 |
% |
Income before
taxes |
$ |
40,176,318 |
|
|
$ |
35,775,111 |
|
|
|
12 |
% |
Income taxes |
$ |
(9,996,622 |
) |
|
$ |
(9,005,158 |
) |
|
|
11 |
% |
Net income |
$ |
30,179,696 |
|
|
$ |
26,769,953 |
|
|
|
13 |
% |
For the 9 months ending September 30, 2016,
revenues declined 5% to $120,907,839. Cost of revenues declined
10%. Gross profits increased 6% to $44,723,017.
SG&A costs declined by 8%. R&D increased
by 10%. Other operating income declined by 4%, Exploration costs
declined $325,840, as the company began to capitalize the
investments in Sichuan. Write offs/Impairments declined from
$819,701 to $90.395. G&A costs declined 13%. However there were
a number of one-time charges.
Income from operations increased 12% to
$39,953.640. Income before taxes increased 12% to $40,176,318. Net
Income increased 13% to $30,179,696. Fully Diluted Earnings per
share increased 12 % to $0.65 from $0.58.
9 Month Segment Results
BromineRevenue in Bromine
increased 16% to $47,621,980. While volumes decreased, the selling
price increased by 21%. Cost of revenues declined 9.4%. The
production cost of bromine per tonne was $2,251, a decrease of 1%
(or $27) over the same period in 2015. Gross profits increased 72%
to $22,030,498.The gross profit margin was 46% compared to 31% for
the same period in 2015. Income from operations was $19,103,472, an
increase of 113%.
Crude SaltRevenue in crude salt
declined 19%. Cost of goods declined by 7%. The average selling
price declined 11%. Gross profit margins were 4% compared to 17%
for the same period in 2015. The loss from operations was $165,403
compared to a profit of $534,760 in the previous year.
ChemicalsRevenue in chemicals
declined 14% to $66,902,764. Revenues in our original chemical
business declined 25%, with Oil & Gas additives declining 25%,
papermaking additives declining 27%, and pesticide additives
declining 25%. Revenues in our SCRC business declined 4%.
Pharmaceutical intermediaries declined by 5%, while By Products
increased marginally. The Cost of Goods sold decreased 11% to
$44,473,675. Gross profit margin was 34% compared to 36% in the
previous year. Operating income declined 21% to $20,698,116.
Cash FlowDuring the nine-month
period ended September 30, 2016 and 2015, the company had positive
cash flow from operating activities approximately of $29.2 million
and $34.9 million. The company spent $15.23 million on enhancement
projects for its bromine and crude salt production and $1.46
million for the construction of roads and other infrastructure for
its natural gas project. The biggest use of cash was the increase
in accounts receivable. The company feels very confident about the
composition of these receivables. Approximately 27% of the accounts
receivable and 54% of the receivables more than 90 days old were
collected in October 2016. The company is pleased to continue to
generate free cash flow while it builds its business.
Balance Sheet
The company ended the quarter with cash of
$141,083,587 ($3.02 per share based on 46,793,791 shares
outstanding at the end of the quarter. Net net cash equaled
$121,193,490 ($2.59 per share). Current assets equaled $218,695,315
($4.67 per share). Working capital was approximately $201.2
million. ($4.30 per share.) Shareholders equity was $357,817,496
($7.65 per share.)
GuidanceThe company remains
optimistic about the opportunities ahead of us. Bromine prices have
remained very strong. We are seeing stabilization in the Chinese
economy, which should ultimately benefit some of our more
economically sensitive sectors. Healthcare expenditures are
increasing, which should benefit our pharmaceutical chemicals
business. We are making excellent progress in Sichuan. We continue
to believe that earnings and earnings per share in 2016 may exceed
that in 2015.
“2017 could be a very exciting year for Gulf,”
Mr. Xiaobin Liu, CEO stated. “With strong pricing in bromine, a
stabilization of the Chinese economy, and the beginning of
production of natural gas in Sichuan, we could see a good growth in
sales and earnings.”
“We appreciate the long patience of our
shareholders,” Mr. Liu concluded. “Like you, we would like to see a
higher stock price. In 2017, we should start to be able to show the
significant opportunities ahead of us that could enable us to
dramatically increase our earnings and share price.”
(* All per share
calculations have not been audited and have been calculated using
the end of the quater share count
of 46,793,791 as shown on the
balance sheet in the 10-Q)
Conference Callthe Company will
host a conference call on Monday, November 14, 2016 at 09:00
Eastern Time to discuss its financial results for the Third Quarter
2016 ended September 30, 2016.
Hosting the call will be Mr. Xiaobin Liu, CEO of
Gulf Resources. The Company's management team will be available for
investor questions following the prepared remarks.
To participate in this live conference call,
please dial +1 (877) 275-8968 five to ten minutes prior to the
scheduled conference call time. International callers should dial
+1 (706) 643-1666. The conference participant pass code is
17643437.
The webcasting is also available then, just
simply click on the link below:
http://www.gulfresourcesinc.com/events.html
A replay of the conference call will be
available two hours after the call's completion during 11/14/2016
11:00 EST - 12/14/2016 23:59 EST. To access the replay, call +1
(855) 859-2056. International callers should call +1 (404)
537-3406. The conference ID is 17643437.
About Gulf Resources, Inc.Gulf
Resources, Inc. operates through four wholly-owned subsidiaries,
Shouguang City Haoyuan Chemical Company Limited ("SCHC"), Shouguang
Yuxin Chemical Industry Co., Limited ("SYCI"), Shouguang City
Rongyuan Chemical Co, Limited (“ SCRC”) and Daying County Haoyuan
Chemical Company Limited (“DCHC”). The company believes that it is
one of the largest producers of bromine in China. Elemental Bromine
is used to manufacture a wide variety of compounds utilized in
industry and agriculture. Through SYCI, the company manufactures
chemical products utilized in a variety of applications, including
oil and gas field explorations and papermaking chemical agents.
SCRC is a leading manufacturer of materials for human and animal
antibiotics in China and other parts of Asia. DCHC was established
to further explore and develop natural gas and brine resources
(including bromine and crude salt) in China. For more information,
visit www.gulfresourcesinc.com.
Forward-Looking Statements
Certain statements in this news release contain
forward-looking information about Gulf Resources and its
subsidiaries business and products within the meaning of Rule 175
under the Securities Act of 1933 and Rule 3b-6 under the Securities
Exchange Act of 1934, and are subject to the safe harbor created by
those rules. The actual results may differ materially depending on
a number of risk factors including, but not limited to, the general
economic and business conditions in the PRC, future product
development and production capabilities, shipments to end
customers, market acceptance of new and existing products,
additional competition from existing and new competitors for
bromine and other oilfield and power production chemicals, changes
in technology, the ability to make future bromine asset purchases,
and various other factors beyond its control. All forward-looking
statements are expressly qualified in their entirety by this
Cautionary Statement and the risks factors detailed in the
company's reports filed with the Securities and Exchange
Commission. Gulf Resources undertakes no duty to revise or update
any forward-looking statements to reflect events or circumstances
after the date of this release.
|
GULF RESOURCES, INC.AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Expressed in U.S.
dollars) |
|
|
|
September 30, 2016Unaudited |
|
|
December 31, 2015Audited |
|
Current Assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
141,083,587 |
|
|
$ |
133,606,392 |
|
Accounts
receivable |
|
|
71,396,808 |
|
|
|
49,980,358 |
|
Inventories, net |
|
|
5,772,072 |
|
|
|
7,180,800 |
|
Prepayments and deposits |
|
|
70,086 |
|
|
|
- |
|
Prepaid land leases |
|
|
372,203 |
|
|
|
49,833 |
|
Other
receivable |
|
|
559 |
|
|
|
599 |
|
Deferred tax assets |
|
|
- |
|
|
|
3,173 |
|
Total
Current Assets |
|
|
218,695,315 |
|
|
|
190,821,115 |
|
Non-Current Assets |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
122,424,766 |
|
|
|
127,871,323 |
|
Property, plant and equipment under capital leases, net |
|
|
657,249 |
|
|
|
927,218 |
|
Prepaid land leases, net of current portion |
|
|
4,881,908 |
|
|
|
5,197,216 |
|
Deferred tax assets |
|
|
2,304,937 |
|
|
|
2,367,180 |
|
Goodwill |
|
|
28,743,418 |
|
|
|
29,559,174 |
|
Total non-current
assets |
|
|
159,012,278 |
|
|
|
165,922,111 |
|
Total
Assets |
|
$ |
377,707,593 |
|
|
$ |
356,743,226 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
10,492,195 |
|
|
$ |
9,929,700 |
|
Retention payable |
|
|
771,395 |
|
|
|
1,135,956 |
|
Capital lease obligation, current portion |
|
|
153,310 |
|
|
|
196,778 |
|
Taxes
payable |
|
|
6,099,471 |
|
|
|
4,814,003 |
|
Total
Current Liabilities |
|
|
17,516,371 |
|
|
|
16,076,437 |
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
Capital lease obligation, net of current portion |
|
|
2,373,726 |
|
|
|
2,555,914 |
|
Total
Liabilities |
|
$ |
19,890,097 |
|
|
$ |
18,632,351 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
PREFERRED STOCK; $0.001
par value; 1,000,000 shares authorized; none outstanding |
|
$ |
- |
|
|
$ |
- |
|
COMMON STOCK; $0.0005
par value; 80,000,000 shares authorized; 47,052,940 and 46,276,269
shares issued; and 46,793,791 and 46,007,120 shares outstanding as
of September 30, 2016 and December 31, 2015, respectively |
|
|
23,525 |
|
|
|
23,139 |
|
Treasury stock; 259,149
and 269,149 shares as of September 30, 2016 and December 31, 2015
at cost |
|
|
(577,141 |
) |
|
|
(599,441 |
) |
Additional paid-in capital |
|
|
94,133,779 |
|
|
|
94,124,065 |
|
Retained earnings unappropriated |
|
|
243,172,187 |
|
|
|
215,286,395 |
|
Retained earnings appropriated |
|
|
22,634,340 |
|
|
|
20,340,436 |
|
Accumulated other comprehensive loss/ income |
|
|
(1,569,194 |
) |
|
|
8,936,281 |
|
Total
Stockholders’ Equity |
|
|
357,817,496 |
|
|
|
338,110,875 |
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
377,707,593 |
|
|
$ |
356,743,226 |
|
GULF RESOURCES, INC.AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME(Expressed in U.S. dollars)(UNAUDITED) |
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, |
|
|
Nine-Month Period Ended September 30, |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
38,811,622 |
|
|
$ |
42,601,598 |
|
|
$ |
120,907,839 |
|
|
$ |
126,862,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenue |
|
|
(23,107,921 |
) |
|
|
(27,000,576 |
) |
|
|
(76,184,822 |
) |
|
|
(84,761,554 |
) |
Sales, marketing and other
operating expenses |
|
|
(83,087 |
) |
|
|
(91,919 |
) |
|
|
(269,357 |
) |
|
|
(294,095 |
) |
Research and development cost |
|
|
(68,115 |
) |
|
|
(69,403 |
) |
|
|
(198,330 |
) |
|
|
(181,108 |
) |
Exploration cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(325,840 |
) |
Write-off/Impairment on property,
plant and equipment |
|
|
(90,395 |
) |
|
|
(819,701 |
) |
|
|
(90,395 |
) |
|
|
(819,701 |
) |
General and administrative
expenses |
|
|
(1,613,933 |
) |
|
|
(831,955 |
) |
|
|
(4,539,845 |
) |
|
|
(5,247,318 |
) |
Other operating income |
|
|
108,029 |
|
|
|
115,114 |
|
|
|
328,550 |
|
|
|
342,317 |
|
|
|
|
(24,855,422 |
) |
|
|
(28,698,440 |
) |
|
|
(80,954,199 |
) |
|
|
(91,287,299 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
|
13,956,200 |
|
|
|
13,903,158 |
|
|
|
39,953,640 |
|
|
|
35,575,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(42,012 |
) |
|
|
(46,675 |
) |
|
|
(134,150 |
) |
|
|
(148,541 |
) |
Interest income |
|
|
120,054 |
|
|
|
113,311 |
|
|
|
356,828 |
|
|
|
348,454 |
|
INCOME BEFORE
TAXES |
|
|
14,034,242 |
|
|
|
13,969,794 |
|
|
|
40,176,318 |
|
|
|
35,775,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
(3,518,529 |
) |
|
|
(3,290,372 |
) |
|
|
(9,996,622 |
) |
|
|
(9,005,158 |
) |
NET INCOME |
|
$ |
10,515,713 |
|
|
$ |
10,679,422 |
|
|
$ |
30,179,696 |
|
|
$ |
26,769,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
10,515,713 |
|
|
$ |
10,679,422 |
|
|
$ |
30,179,696 |
|
|
$ |
26,769,953 |
|
OTHER COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign currency translation
adjustments |
|
|
(2,637,763 |
) |
|
|
(14,565,025 |
) |
|
|
(10,505,475 |
) |
|
|
(14,199,993 |
) |
COMPREHENSIVE
INCOME/(LOSS) |
|
$ |
7,877,950 |
|
|
$ |
(3,885,603 |
) |
|
$ |
19,674,221 |
|
|
$ |
12,569,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
$ |
0.23 |
|
|
$ |
0.23 |
|
|
$ |
0.65 |
|
|
$ |
0.60 |
|
DILUTED |
|
$ |
0.23 |
|
|
$ |
0.23 |
|
|
$ |
0.65 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
|
46,301,217 |
|
|
|
46,007,120 |
|
|
|
46,106,194 |
|
|
|
44,884,268 |
|
DILUTED |
|
|
46,309,250 |
|
|
|
46,905,362 |
|
|
|
46,560,937 |
|
|
|
45,854,130 |
|
GULF RESOURCES, INC.AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Expressed in U.S. dollars) |
|
|
|
|
|
|
|
Nine-Month Period Ended September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income |
|
$ |
30,179,696 |
|
|
$ |
26,769,953 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Interest on capital lease
obligation |
|
|
133,504 |
|
|
|
147,808 |
|
Amortization of prepaid land
leases |
|
|
514,454 |
|
|
|
510,506 |
|
Depreciation and amortization |
|
|
19,031,650 |
|
|
|
21,954,512 |
|
Write-off/Impairment loss on
property, plant and equipment |
|
|
90,395 |
|
|
|
819,701 |
|
Unrealized translation
difference |
|
|
(729,764 |
) |
|
|
(1,037,429 |
) |
Stock-based compensation
expense-options |
|
|
17,400 |
|
|
|
353,300 |
|
Shares issued from treasury stock
for services |
|
|
15,000 |
|
|
|
- |
|
Deferred tax asset |
|
|
- |
|
|
|
(81,460 |
) |
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
(23,296,361 |
) |
|
|
(15,762,057 |
) |
Inventories |
|
|
1,219,588 |
|
|
|
(623,454 |
) |
Prepayments and deposits |
|
|
(20,850 |
) |
|
|
80,711 |
|
Other receivable |
|
|
- |
|
|
|
37,713 |
|
Accounts payable and accrued
expenses |
|
|
941,315 |
|
|
|
(56,477 |
) |
Retention payable |
|
|
(356,348 |
) |
|
|
248,266 |
|
Taxes payable |
|
|
1,474,602 |
|
|
|
1,554,226 |
|
Net cash
provided by operating activities |
|
|
29,214,281 |
|
|
|
34,915,819 |
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Additions of prepaid
land leases |
|
|
(673,934 |
) |
|
|
(683,129 |
) |
Purchase of property,
plant and equipment |
|
|
(16,749,192 |
) |
|
|
(2,792,700 |
) |
Consideration paid for
business acquisition |
|
|
- |
|
|
|
(66,305,606 |
) |
Cash acquired from
acquisition |
|
|
- |
|
|
|
14,074,720 |
|
Net cash used
in investing activities |
|
|
(17,423,126 |
) |
|
|
(55,706,715 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Repayment of capital
lease obligation |
|
|
(287,387 |
) |
|
|
(306,683 |
) |
Repurchase of common
stock |
|
|
- |
|
|
|
(37,713 |
) |
Net cash used
in financing activities |
|
|
(287,387 |
) |
|
|
(344,396 |
) |
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
(4,026,574 |
) |
|
|
(4,558,171 |
) |
NET INCREASE/(DECREASE)
IN CASH AND CASH EQUIVALENTS |
|
|
7,477,195 |
|
|
|
(25,693,463 |
) |
CASH AND CASH
EQUIVALENTS - BEGINNING OF PERIOD |
|
|
133,606,392 |
|
|
|
146,585,601 |
|
CASH AND CASH
EQUIVALENTS - END OF PERIOD |
|
$ |
141,083,587 |
|
|
$ |
120,892,138 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
Cash paid during the
period for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
8,740,519 |
|
|
$ |
7,527,690 |
|
SUPPLEMENTAL DISCLOSURE
OF NON-CASH FLOW INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Issuance of common stock upon
cashless exercise of options |
|
$ |
386 |
|
|
$ |
49 |
|
Issuance of common stock for
acquisition of business |
|
$ |
- |
|
|
|
13,373,140 |
|
CONTACT:
Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu (Haiyan Xu)
beishengrong@vip.163.com
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