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 fourth quarter and fiscal year ended December 31,
2016.
Fiscal Year 2016 Highlights
- Revenue was $149,275,002, a decline of 8% compared to the
previous year.
- Gross profit totaled $54,489,331, an increase of 2%
- Income from operations was $47,723,342, an increase of 6% (or
32% of net revenue).
- Net income was $36,225,831, an increase of 6%
- Basic earnings per share were $0.78, an increase of 4% compared
to $0.75.
- Cash totaled $163,884,574 ($3.50 per share*).
- Net net cash (cash-liabilities) totaled $147,654,419 ($3.16 per
share*).
- Cash flow per share totaled $55,216,598. ($1.18 per
share*.)
- Free cash flow before the impact of exchange rates was
$39,967,832 or $0.85* per share.
- Working capital was $207,822,294 ($4.44* per share*.)
- Shareholders' equity reached $349,461,198 or $7.47* per
share.
- The company began test production at its first well in Sichuan
Province.
For the fiscal year ending Dec. 31, 201, net sales were
$149,275,002, a decline of 8% compared to $162,317,120 in the
previous year. Sales of bromine products increased 8% to
$56,811,730 compared to $52,385,491. Sales of crude salt declined
14% to $8,985,852 compared to $10,494,939, while sales of chemical
products declined 16% to $83,477,420 from $99,436,690.
Gross profit totaled $54,489,331, an increase of 2% compared in
$53,281,250 in the previous year. Sales, marketing and other
operating expenses were $343,105, a decline of 9% compared to 2015.
R&D costs were $261,931, an increase of 13.6% compared to 2015.
There were no exploration costs because expenses related to the
drilling of natural gas and brine wells in Sichuan Province are now
being capitalized.
The write-off of property, plant, and equipment declined to
$106,545 from $969,638. However the company also took a loss on the
demolition of factory #6 including the value of property,
plant and equipment,and mineral rights of $1,053,445. Taken
together, the total write-offs for 2016 were $1,159,990, an
increase of 20%. General & Administrative expenses were
$5,434,755, a decline of 19% from $6,668,838 in the previous year.
Other operating income was $433,792 compared to $453,731.
Income from operations was $47,723,342, an increase of 6%
compared to 45,164,710. Other income was $312,696 compared to
$275,235. Income before taxes was $48,036,038, an increase of 6%
compared to $45,439,945. Taxes were $11,810,207 compared to
$11,371,908. After tax earnings were $36,225,831, an increase of 6%
compared to $34,068,037.
Basic earnings per share were $0.78, an increase of 4% compared
to $0.75. Fully diluted earnings per share were $0.78 compared to
$0.74, an increase of 5%.
Mr. Xiaobin Liu, the President and CEO of Gulf Resources stated,
“We are pleased to have exceeded our net income guidance slightly
for 2016 despite the continuing downturn in the Chinese economy and
the financial tightening that has impacted many of our
customers.”
2016 Segment Analysis
BromineFor 2016, net revenues in Bromine were
$56,811,730, and increase of 8% compared to $52,385,491 in 2015.
The major contributor to the gain was the selling price that
increased 20% to $3,799 from $3,162. Several factors impacted the
higher selling price. The worldwide supply demand equation
continued to be very favorable, as can be seen from the price
increases of major international producers. The weaker RMB also
contributed to price increases as imports became more expensive.
Supply in China continues to be reduced, both because some wells
are less productive and because the government is forcing the
closure of some facilities for environmental and other reasons.
The price of Bromine has continued its upward trajectory. At the
beginning of this month, it was $4,142, an increase of 9% over the
average price in 2016.
The sales volume of bromine decreased 10% to 14,955 tonnes. The
decrease was caused by the slowdown in the Chinese economy and the
financial tightening, which has affected our customers’
industries.
The cost of revenue per tonne of bromine declined to $2,292 from
$2,334, despite the lower utilization of our factories.
With much higher selling prices and lower costs, the profits in
our bromine segment increased to $21,224,862, an increase of 96%
from $10,854,711 in 2015.
As noted, prices have continued to rise in 2017. In 2016, our
capacity utilization was well under 40%. Our orders have been
improving. If the Chinese economy does improve, we could have
significant upside leverage in our bromine sector. We invested
$15.23 million to carry out enhancement projects for our bromine
extraction and crude salt production facilities in the third
quarter. We expect to spend a similar amount of money in 2017. We
believe these enhancement projects will reduce the leakage
rate and attempt to recover the annual production capacity of
bromine and crude salt to a higher level in the future
During 2016, we were forced to close our Factory #6 to
accommodate the tourism requirements of the local government. The
government paid us approximately the book value of
property, plant and equipment of our factory. However, the
company took a total loss on the demolition of factory #6
including the value of property, plant and equipment and
mineral rights of $1,053,445.
Crude Salt Crude salt revenues were $8,985,852,
a decrease of 14.4% from $10,494,939 in 2015. The decrease in net
revenue from our crude salt segment was due to the decrease in both
the sales volume and selling price of crude salt. The sales volume
of crude salt decreased by 4%, while the average selling price
decreased by 11%. Income from operations in crude salt declined to
$9,076 from $1,183,755.
Chemicals ProductsRevenues in Chemical Products
were $83,477,420, a decrease of 16.0% from $99,436,690 in 2015. By
volume in tonnes, chemical products declined 17%. The steepest
declines were in oil & gas exploration, paper manufacturing,
and pesticides manufacturing additives, each of which declined
between 28% and 30%. Pharmaceutical intermediaries and By products
declined 6% and 0.2% respectively. This decrease was primarily
attributable to the slowdown in the Chinese economy and the
financial tightening, which has affected our customers’
industries.
Net revenue declined in all segments except by products, which
showed a small increase. Net revenue from our oil and gas
exploration chemicals contributed $19,914,575. Net revenue from our
paper manufacturing additives contributed $3,456,932. Net revenue
from our pesticides manufacturing additives contributed
$11,194,214. Net revenue from our pharmaceutical intermediates
contributed $34,159,589, while net revenue from our by products was
$14,752,110.
Income from operations in our Chemical segment equaled
$25,473,792, a decline of 23% from $32,997,870 in 2015.
Gulf is continuing to finalize the paperwork on the merger
between its two chemical subsidiaries.
Cash FlowOur cash flow remained very strong.
Our net income was $36,225,831. Depreciation and amortization,
including prepaid land leases was $25,654,496. Accounts receivable
increased by $6,167,996. Unrealized translation losses were
$1,702,728. All told, net cash provided by operating activities was
$55,216,598. This equates to $1.18* per share.
We invested $16,995,862 in property, plant and equipment and
received $2,708,417 in compensation from the government. All told,
we spent $14,961,379 in investing activities. Our free cash flow
before the impact of exchange rates was $39,967,832 or $0.85 *per
share. The change in exchange rates cost $9,689,650. Even with the
negative exchange rate, our cash increased $30,278,182 ($0.65* per
share) to $163,884,574 ($3.50* per share).
Mr. Xiao Bin Liu stated, “We are very proud of our ability to
generate strong free cash flow while we are continuing to grow our
earnings and build new businesses.”
Balance SheetAs noted, we ended the year with
$163,884,574 in cash. Our current assets were $221,767,490 ($4.74*
per share). Excluding the change in cash, our current assets were
essentially unchanged.
Non-current assets declined to $143,923,863 from $165,922,111,
reflecting lower investment in PP&E and lower goodwill. Current
liabilities were $13,945,196 down from $16,076,437. Working capital
was $207,822,294 ($4.44* per share.)
Net net cash (cash minus all liabilities) was $147,654,419. This
equals $3.19* per share. Shareholders’ equity increased to
$349,461,198 or $7.55* per share.
Mr. Liu commented, “We are extremely pleased to have continued
to improve our balance sheet. Our very strong cash position should
put us in a position to develop our natural gas and brine resources
in Sichuan while continuing to look for further acquisitions in the
bromine and chemical industries.”
Fourth Quarter 2016For the fourth quarter, net
revenues were $28,367,163 compared to $35,454,623, a decline of
20%. Despite the continuing downturn in the Chinese economy. The
primary reason for the decline was the capital constraints of many
of our customers. With tightening bank controls in China, many
elected to cut back on their inventories and postpone reorders
until the first quarter. The company has seen a good resumption of
orders in all segments during the first quarter.
In comparing Q4 2016 with Q4 2015, net revenues in bromine were
$9,189,750 compared to $11,318,715, a decline of 19% from
$11,318,715. Crude salt revenues were $2,602,757, a small increase
from $2,589,665. Chemical revenues were $16,574,656, a decline of
23% from $21,546,243.
In the fourth quarter, bromine sales in tonnes decreased 30% to
2,403. The Management believes that despite the continuing downturn
in the Chinese economy, many of its customers faced liquidity
constraints from local banks. These liquidity constraints plus the
slightly earlier Chinese New Year caused customers to reduce
year-end orders. This downtrend was reversed in the first quarter.
While the first quarter is not yet complete, the company has seen a
good increase in orders for its bromine business.
Despite the decline in sales, the bromine segment had income
from operations of $2,121,390, an increase of 11%.
In the fourth quarter, sales of crude salt by tonnes increased
9% to 94,038. The crude salt segment earned $172,479 in the
quarter.
In the fourth quarter, sales of chemical products declined 23%.
The major declines were in oil & gas, paper, and pesticides
manufacturing additives, each of which declined 38%.
Pharmaceuticals declined by 11%, while By products declined by
1%. The chemical business earned $4,775,676 in the quarter, a
decline of 30%. Since the beginning of the current quarter, the
company has seen a strong increase in sales of chemical
products.
Income from operations was $7,769,702, a decline of 19% from the
year earlier period. Net income was $6,046,135, a decline of 17%
from the year earlier period. Primary earnings per share were $0.13
vs. $0.16. Fully diluted earnings per share were $0.13 vs.
$0.16.
Mr. Liu commented, “Near the end of the quarter, the company saw
a substantial slowdown in orders. Management believes that despite
the continuing downturn in the Chinese economy, many of its
customers faced liquidity constraints from local banks. Because of
these constraints, many customers postponed orders. The timing of
the Chinese New Year also appears to have had impacted on the
quarter. Since the New Year was in January and was earlier than
last year, it appears many customers chose to postpone some orders
until after the New Year.”
“This downtrend was reversed in the first quarter,” Mr. Liu
continued. “Once the New Year was over, we began to see strong
increases in orders in all our business segments. While the first
quarter is not yet complete, the company is optimistic about the
current state of its business.”
Sichuan Natural Gas and Brine ProjectGulf
Resources is continuing to make excellent project with its natural
gas and brine project in Sichuan Province. The company has begun
trial production. It has been training its workers, so that it can
receive the needed operational and safe production certificates. It
expects to receive the product quality inspection report in the
very near future, after which it will secure customers for the
natural gas production. Based on everything the company has seen to
date, it believes the natural gas and brine opportunity in Sichuan
will be extremely profitable.
The current plan is for the company to apply for permission to
begin exploration and drilling of between 2 and 5 new wells in
2017. The costs of these wells will depend on the geographic
underground structure in each of the locations. However, on a
conservative basis, Gulf does not expect the average cost of a well
to exceed $10 million.
In addition, management would like to reiterate that its
approval for drilling includes both natural gas and brine resources
(bromine and crude salt). Based on earlier tests, it appears that
the concentration of brine is many times higher than the
concentration of brine in Shandong Province. Given the current
strong price of bromine and the actions by the Chinese government
to limit production for environmental reasons, the company believes
it could have substantial opportunity for the development and
production of bromine in Sichuan Province. The company will wait
until it has a sufficient number of wells drilled before deciding
how it will move ahead to develop these brine resources.
Future Business PlansGulf Resources is very
optimistic about its future. With tougher environmental
requirements, more stringent licensing standards, and tighter
financial controls, the company believes that many smaller
producers of bromine and related chemicals may be forced to close.
In addition, barriers to entry for new participants are getting
much higher. This means that pricing should continue to improve and
that Gulf should be able to increase its share of the market. It
also means that Gulf may be able to make attractive acquisitions in
both its bromine and chemical segments at prices that are
significantly additive to earnings.
In addition, Gulf is now considering the potential of export
related businesses. Exports offer Gulf the opportunity to expand
its business. In addition, exports could lead to a diversification
of Gulf’s financial and currency base. To date, Gulf has been
unable to pay dividends or buy back large amounts of stock because
of capital controls in China. If Gulf could succeed in developing
export related businesses, it would have much more flexibility,
which could enable it to help investors recognize some of the
company’s underlying value.
While there is no guarantee that Gulf will be able to develop
these export businesses, the company would like to assure investors
that this will be a focus in the future.
2017 GuidanceIn commenting on 2017, Mr. Liu
stated, “We will provide full 2017 guidance when we report the
first quarter 2017 results However at the present time, we are
optimistic. We believe that both our bromine and chemical segment
should show gains over 2016. We are seeing structural changes in
our industries because of government regulations and capital
constraints that should restrict competition and lead to better
pricing. We also expect to begin producing natural gas at our first
well in Sichuan in a relatively short period of time.”
“We recognize,” Mr. Liu concluded, “that the Chinese government
has put in place constraints that make it difficult to take money
out of the country. As such, we are actively exploring strategies
that will enable us to take steps to diversify our business in a
manner that will enhance shareholder value.“
* All per share calculations have not been audited and
have been calculated using the end of the year share count
of 46,793,791 as shown on the
balance sheet in the 10-K.
Conference Call
Gulf Resources' management will host a conference call on
Monday, March 20, 2017 at 8:00 a.m. Eastern Time to discuss its
financial results for the fourth quarter & Fiscal Year 2016
ended December 31, 2016.
Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the
call. 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 87889379.
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 03/20/2017 11:00 ET - 04/19/2017
22:59 ET. To access the replay, call +1 (855) 859-2056.
International callers should call +1 (404) 537-3406. The conference
ID is 87889379.
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 StatementsCertain 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 SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Expressed in U.S. dollars) |
|
|
|
|
|
As of December 31, |
|
|
2016 |
|
|
2015 |
|
Current Assets |
|
|
|
|
|
|
Cash |
|
$ |
163,884,574 |
|
|
$ |
133,606,392 |
|
Accounts
receivable |
|
|
51,835,218 |
|
|
|
49,980,358 |
|
Inventories, net |
|
|
5,881,681 |
|
|
|
7,180,800 |
|
Prepayments and deposits |
|
|
117,338 |
|
|
|
- |
|
Prepaid land leases |
|
|
47,255 |
|
|
|
49,833 |
|
Other
receivables |
|
|
1,424 |
|
|
|
559 |
|
Deferred tax assets |
|
|
- |
|
|
|
3,173 |
|
Total
Current Assets |
|
|
221,767,490 |
|
|
|
190,821,115 |
|
Non-Current Assets |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
108,731,126 |
|
|
|
127,871,323 |
|
Property, plant and equipment under capital leases, net |
|
|
554,257 |
|
|
|
927,218 |
|
Prepaid land leases, net of current portion |
|
|
4,754,169 |
|
|
|
5,197,216 |
|
Deferred tax assets |
|
|
2,215,772 |
|
|
|
2,367,180 |
|
Goodwill |
|
|
27,668,539 |
|
|
|
29,559,174 |
|
Total non-current
assets |
|
|
143,923,863 |
|
|
|
165,922,111 |
|
Total
Assets |
|
$ |
365,691,353 |
|
|
$ |
356,743,226 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
8,682,318 |
|
|
$ |
9,929,700 |
|
Retention payable |
|
|
733,869 |
|
|
|
1,135,956 |
|
Capital lease obligation, current portion |
|
|
187,678 |
|
|
|
196,778 |
|
Taxes
payable |
|
|
4,341,331 |
|
|
|
4,814,003 |
|
Total
Current Liabilities |
|
|
13,945,196 |
|
|
|
16,076,437 |
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
Capital lease obligation, net of current portion |
|
|
2,284,959 |
|
|
|
2,555,914 |
|
Total
Liabilities |
|
$ |
16,230,155 |
|
|
$ |
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 December 31, 2016 and 2015, respectively |
|
|
23,525 |
|
|
|
23,139 |
|
Treasury stock; 259,149 and 269,149 shares as of December 31, 2016
and 2015 |
|
|
(577,141 |
) |
|
|
(599,441 |
) |
Additional paid-in capital |
|
|
94,156,679 |
|
|
|
94,124,065 |
|
Retained earnings unappropriated |
|
|
248,941,696 |
|
|
|
215,286,395 |
|
Retained earnings appropriated |
|
|
22,910,966 |
|
|
20,340,436 |
|
Accumulated other comprehensive (loss) income |
|
|
(15,994,527 |
) |
|
|
8,936,281 |
|
Total
Stockholders’ Equity |
|
|
349,461,198 |
|
|
|
338,110,875 |
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
365,691,353 |
|
|
$ |
356,743,226 |
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME |
(Expressed in U.S. dollars) |
|
|
|
|
|
Years Ended December 31, |
|
|
2016 |
|
2015 |
NET REVENUE |
|
|
|
|
|
|
Net
revenue |
|
$ |
149,275,002 |
|
|
$ |
162,317,120 |
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
Cost of
net revenue |
|
|
(94,785,671 |
) |
|
|
(109,035,870 |
) |
Sales,
marketing and other operating expenses |
|
|
(343,105 |
) |
|
|
(375,365 |
) |
Research
and development cost |
|
|
(261,931 |
) |
|
|
(230,590 |
) |
Exploration cost |
|
|
- |
|
|
|
(325,840 |
) |
Write-off
/ Impairment on property, plant and equipment |
|
|
(106,545 |
) |
|
|
(969,638 |
) |
Loss on
demolition of factory |
|
|
(1,053,445 |
) |
|
|
- |
|
General
and administrative expenses |
|
|
(5,434,755 |
) |
|
|
(6,668,838 |
) |
Other
operating income |
|
|
433,792 |
|
|
|
453,731 |
|
|
|
|
(101,551,660 |
) |
|
|
(117,152,410 |
) |
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
|
47,723,342 |
|
|
|
45,164,710 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
Interest
expense |
|
|
(174,921 |
) |
|
|
(194,036 |
) |
Interest
income |
|
|
487,617 |
|
|
|
469,271 |
|
|
|
|
312,696 |
|
|
|
275,235 |
|
INCOME BEFORE
TAXES |
|
|
48,036,038 |
|
|
|
45,439,945 |
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
(11,810,207 |
) |
|
|
(11,371,908 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
36,225,831 |
|
|
$ |
34,068,037 |
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
|
|
|
|
NET INCOME |
|
|
36,225,831 |
|
|
|
34,068,037 |
|
OTHER COMPREHENSIVE
LOSS |
|
|
|
|
|
|
|
|
- Foreign currency
translation adjustments |
|
|
(24,930,808 |
) |
|
|
(21,740,602 |
) |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME |
|
$ |
11,295,023 |
|
|
$ |
12,327,435 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
BASIC |
|
$ |
0.78 |
|
|
$ |
0.75 |
|
DILUTED |
|
$ |
0.78 |
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF SHARES |
|
|
|
|
|
|
BASIC |
|
|
46,279,033 |
|
|
|
45,167,288 |
|
DILUTED |
|
|
46,625,663 |
|
|
|
46,109,404 |
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed in U.S. dollars) |
|
|
|
Years Ended December 31, |
|
|
2016 |
|
2015 |
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income |
|
$ |
36,225,831 |
|
|
$ |
34,068,037 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Interest
on capital lease obligation |
|
|
174,167 |
|
|
|
193,162 |
|
Amortization of prepaid land leases |
|
|
774,250 |
|
|
|
774,512 |
|
Depreciation and amortization |
|
|
24,880,246 |
|
|
|
29,095,648 |
|
Allowance
for obsolete and slow-moving inventories |
|
|
(12,691 |
) |
|
|
9,236 |
|
Write-off
/ Impairment loss on property, plant and equipment |
|
|
106,545 |
|
|
|
969,638 |
|
Loss on
demolition of factory |
|
|
1,053,445 |
|
|
|
- |
|
Unrealized translation difference |
|
|
(1,702,728 |
) |
|
|
(1,575,397 |
) |
Deferred
tax asset |
|
|
3,013 |
|
|
|
(83,856 |
) |
Stock-based compensation expense-options |
|
|
40,300 |
|
|
|
374,600 |
|
Treasury
stock issued for services |
|
|
15,000 |
|
|
|
- |
|
Changes
in assets and liabilities, net of effects of acquisition: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(6,167,996 |
) |
|
|
7,387,941 |
|
Other
receivables |
|
|
(877 |
) |
|
|
37,713 |
|
Inventories |
|
|
901,528 |
|
|
|
(592,841 |
) |
Prepayment and deposits |
|
|
(128,384 |
) |
|
|
92,400 |
|
Accounts
payable and accrued expenses |
|
|
(503,015 |
) |
|
|
(1,847,462 |
) |
Retention
payable |
|
|
(365,150 |
) |
|
|
841,225 |
|
Taxes
payable |
|
|
(76,886 |
) |
|
|
656,654 |
|
Net cash provided by operating activities |
|
|
55,216,598 |
|
|
|
70,401,210 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Additions of prepaid
land leases |
|
|
(673,934 |
) |
|
|
(683,129 |
) |
Compensation received
from government on property disposition |
|
|
2,708,417 |
|
|
|
- |
|
Purchase of property,
plant and equipment |
|
|
(16,995,862 |
) |
|
|
(22,858,625 |
) |
Consideration paid for
business acquisition |
|
|
- |
|
|
|
(66,305,606 |
) |
Cash acquired from
acquisition |
|
|
- |
|
|
|
14,074,720 |
|
Net cash used
in investing activities |
|
|
(14,961,379 |
) |
|
|
(75,772,640 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Repurchase of common
stock |
|
|
- |
|
|
|
(37,713 |
) |
Repayment of capital
lease obligation |
|
|
(287,387 |
) |
|
|
(306,683 |
) |
Net cash used
in financing activities |
|
|
(287,387 |
) |
|
|
(344,396 |
) |
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
(9,689,650 |
) |
|
|
(7,263,383 |
) |
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS |
|
|
30,278,182 |
|
|
|
(12,979,209 |
) |
CASH AND CASH
EQUIVALENTS - BEGINNING OF YEAR |
|
|
133,606,392 |
|
|
|
146,585,601 |
|
CASH AND CASH
EQUIVALENTS - END OF YEAR |
|
$ |
163,884,574 |
|
|
$ |
133,606,392 |
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
(Expressed in U.S. dollars) |
|
|
|
|
|
Years Ended December 31, |
|
|
2016 |
|
2015 |
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION |
|
|
|
|
|
|
Cash paid during the
year for: |
|
|
|
|
|
|
Income
taxes |
|
$ |
12,140,763 |
|
|
$ |
10,747,472 |
|
SUPPLEMENTAL DISCLOSURE
OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Par value
of common stock issued upon cashless exercise of options |
|
$ |
386 |
|
|
$ |
49 |
|
Fair
value of common stock issued for acquisition of business |
|
$ |
- |
|
|
$ |
13,373,140 |
|
Transfer
from construction in progress to property, plant and equipment |
|
$ |
57,596 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
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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