SHANDONG, China, March 15,
2012 /PRNewswire-Asia-FirstCall/ -- 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, 2011.
Fourth Quarter 2011 Highlights
- Revenue was $30.5 million, a
year-over-year decrease of 17.8%
- Gross profit was $10.4 million, a
year-over-year decrease of 46.8%
- Gross margin decreased to 34.1% from 52.7% for the fourth
quarter of 2010
- Income from operations was $1.9
million as compared to $16.2
million in the fourth quarter of 2010
- Operating margin was 6.2% compared to 43.7% for the fourth
quarter of 2010
- Net income was $1.0 million or
$0.03 per basic and diluted share,
versus $12 million, or $0.35 per basic and diluted share a year ago
- Cash totaled $78.6 million as of
December 31, 2011
Fiscal Year 2011 Highlights
- Revenue was $165.0 million, a
year-over-year increase of 4.2%
- Gross profit was $75.4 million, a
decrease of 3.4%
- Gross margin was 45.7%, compared to 49.3% in 2010
- Net income was $31.0 million, or
$0.89 per basic and diluted share, a
year-over-year decrease of 39.6% from $51.3
million, or $1.48 per basic
and diluted share
"For the year 2011, our top-line revenue remained stable as our
business segments adapted to a challenging market environment for
our products. During the year, we engaged in substantial
exploration and acquisition-seeking activities that we believe will
lead to sustainable growth opportunities. However, the
continuing influence of macroeconomic tightening policies in
China resulted in weakened market
demand for a number of our products in the fourth quarter of the
year. The quarter's operating environment was especially
difficult compared to the same period in 2010 as the average
selling prices of both bromine and crude salt decreased. Despite
slowing economic growth in the domestic market, we now expect the
prices for bromine and crude salt to stay relatively stable with
only minor volatility throughout the year in 2012," said
Xiaobin Liu, Chief Executive Officer
of Gulf Resources.
Fourth Quarter 2011 Results
Gulf Resources' revenue was $30.5
million for the fourth quarter of 2011, a decrease of 17.8%
from $37.1 million for the fourth
quarter of 2010. The decrease in net revenue was primarily
attributable to the decline in selling price in the segments of
bromine and crude salt. Revenue from the bromine and crude salt
segments was $19.6 million and
$2.4 million, respectively,
representing a total of 72.1% of sales revenue for the fourth
quarter of 2011.
Revenue from the chemical products segment was $8.5 million, or 27.9% of total revenue, for the
fourth quarter of 2011, a decrease of 19.8% from $10.6 million in the corresponding period in
2010. The decrease in revenue from this product segment was mainly
due to a drop in sales volume for oil and gas exploration additives
and paper manufacturing additives, which offset the incremental
benefit arising from the increase in chemical product prices and a
higher sales volume for pesticides manufacturing additives compared
to the same quarter last year.
Gross profit for the fourth quarter of 2011 was $10.4 million, a decrease of 46.9% from
$19.6 million from the fourth quarter
of 2010, and gross profit margin for the three months ended
December 31, 2011 was 34.1%, compared
to 52.8% for the corresponding period last year. The decrease in
gross margin was mainly due to the decrease in selling prices in
bromine and crude salts segments which began following the second
quarter of this year.
Sales, marketing and other operating expenses for the fourth
quarter of 2011 were $19,075 compared
with $21,190 for the corresponding
quarter last year. The decrease in these costs in the fourth
quarter of 2011 was mainly due to the decrease in sales that caused
reduced sales-related expenses.
General and administrative expenses for the fourth quarter of
2011 were $6.4 million, compared to
$2.9 million for the fourth quarter
of 2010. The increase was mainly due to rising labor costs in the
form of higher salaries and better benefits for the workers.
Additionally, the Company incurred expenses to seek cooperation
opportunities for potential projects.
Research and development expenses were $51,421 for the fourth quarter of 2011 compared
with $587,429 for the corresponding
period last year. The reduced research and development expense in
the quarter was mainly due to the conclusion of the research and
development cooperation agreement with East China University of
Science and Technology and the cessation of research for the new
production line of wastewater treatment additives.
Income from operations for the fourth quarter of 2011 was
$1.9 million, compared to
$16.2 million for the corresponding
quarter of 2010. The operating margin was 6.2% for the fourth
quarter of 2011, compared to 43.7% for the fourth quarter of
2010.
For the fourth quarter of 2011, the Company incurred other
income of $18,707 compared to
$61,888 for the corresponding quarter
last year mainly due to an increase in interest expense related to
the capital lease of a manufacturing facility.
Income taxes were $0.9 million for
the fourth quarter of 2011, a decrease of 78.1% from $4.3 million for the fourth quarter of 2010. The
Company's effective tax rate was 30% compared to 26% in the year
ago period.
Net income was $1.0 million for
the fourth quarter of 2011, a decrease of 91.7% from $12.0 million for the fourth quarter of 2010.
Besides the decline in product sales prices that accounts for the
decrease in net income and certain expenses items, the unrealized
exchange loss in relation to the translation difference of
inter-company balances in USD and RMB and the increased recognition
of stock option expenses due to higher a recognition requirement
imposed by our recently appointed audit firm also had an one-time
negative effect on our performance in the fourth quarter of 2011.
Basic and diluted earnings per share in fourth quarter of 2011 were
$0.03 per basic and diluted share
compared to $0.35 per basic and
diluted share in the fourth quarter of 2010. Weighted average
number of diluted shares for the three months ended December 31, 2011 was 34,673,615 compared with
34,675,329 for the three months ended December 31, 2010.
Fiscal Year 2011 Financial Results
Revenue for fiscal year 2011 was $165.0
million, an increase of 4.2% from $158.3 million for fiscal year 2010. The increase
in revenue was primarily attributable to the growth in both the
bromine and crude salt segments due to higher average selling
prices in 2011 on an annual basis. Gross profit was $75.4 million, a decrease of 3.4% from
$78.1 million for fiscal year 2010.
Gross margin for fiscal 2011 was 45.7%, compared to 49.3% for
fiscal year 2010. Operating income was $44.3
million, a decrease of 35.9% from $69.1 million for fiscal year 2010. Net income
was $31.0 million, or $0.89 per basic and diluted share, a decrease of
39.6% from $51.3 million, or
$1.48 per basic and diluted share,
for fiscal year 2010.
Financial Condition
As of December 31, 2011, Gulf
Resources had cash of $78.6 million,
current liabilities of $12.2 million,
and shareholders' equity of $243.1
million. At fiscal year end, the Company had working capital
of $93.3 million and a current ratio
of 8.7. For the twelve months ended December
31, 2011, the Company generated $59.0
million in cash flow from operations, primarily attributable
to net income, and used $52.0 million
in investing activities, mainly due to purchases of property, plant
and equipment.
Non-GAAP Financial Measures
To supplement the Company's condensed consolidated financial
statements for the three and fiscal year ended December 31, 2011 and December 31, 2010 presented on a GAAP basis, the
Company provided adjusted financial information in this release
that excludes the impact of non-cash expenses related to
cancellation of all non-vested stock options, options granted to
employees and a warrant issued to its investor relations firm
resulting from the service agreement and non-cash expenses related
to write/off impairment on property. The Company's management
believes that these adjusted measures, adjusted net income and
adjusted diluted earnings per share provide investors with a better
understanding of how the results relate to the Company's current
and historical performance. The additional adjusted information is
not meant to be considered in isolation or as a substitute for GAAP
financials. The adjusted financial information that the Company
provides also may differ from the adjusted information provided by
other companies. Management believes that these adjusted financial
measures are useful to investors because they exclude non-cash
expenses that management excludes when it internally evaluates the
performance of the Company's business and makes operating
decisions, including internal budgeting, and performance
measurement, because these measures provide a consistent method of
comparison to historical periods. Moreover, management believes
that these adjusted measures reflect the essential operating
activities of the Company. Adjusted measures are subject to
inherent limitations because they do not include all of the
expenses included under GAAP and because they involve the exercise
of judgment of which charges are excluded from the adjusted
financial measure. However, the Company's management compensates
for these limitations by providing the relevant disclosure of the
items excluded. A reconciliation of each adjusted measure to the
nearest GAAP measure follows:
|
Three Months
ended
|
Twelve Months
ended
|
|
December
31,
|
December
31,
|
|
2011
|
2010
|
2011
|
2010
|
Net Income
|
980,160
|
11,999,637
|
29,972,600
|
39,283,683
|
Write-off / Impairment
Charge
|
-
|
-
|
7,570,566
|
-
|
Stock Compensation
Expense
|
14,400
|
93,462
|
7,481,400
|
1,282,428
|
Adjusted Net
Income
|
994,560
|
12,093,099
|
45,024,566
|
40,566,111
|
|
|
|
|
|
Earnings Per Share –
Diluted
|
0.03
|
0.35
|
0.89
|
1.48
|
Write-off / Impairment
Charge - Per Diluted Share
|
-
|
-
|
0.22
|
-
|
Stock Compensation
Expense - Per Diluted Share
|
0.00
|
0.00
|
0.22
|
0.04
|
Adjusted Earnings Per
Share – Diluted
|
0.03
|
0.35
|
1.32
|
1.52
|
Subsequent Events
- In February 2012, the Company
issued a press release regarding recent market speculation as to
the Company's plans with respect to a potential third-party
investment in the Company or a privatization transaction.
- In January 2012, after testing
done by a third-party independent testing expert, Centre Testing
International Corporation, the Company discovered underground brine
water resources and provided preliminary concentration results
after initiation of a non-binding Letter of Intent with the
municipal government of Daying County in Sichuan Province in China on June 7,
2011. According to the testing report, the bromine
concentration in the underground brine water resources is 1.53
grams per liter, which is approximately six to seven times higher
than the average bromine concentration from its brine water
resources at the Company's bromine factories in Shouguang City,
Shandong Province
- In January 2012, the Company
launched its new website domain to
http://www.gulfresourcesinc.com where the Company will
continue to provide communications with investors and disseminate
key information.
Business Outlook
"With the completion of equipment upgrades and improvements
carried out in 2011, we expect that the problem of aging equipment
will be solved and that this will facilitate enhanced bromine
extraction from brine water with lowered concentrations in the
Shandong area," said CEO Mr.
Xiaobin Liu. "Factory No. 4
completed its relocation by the end of 2011 and began production in
late November. We anticipate our bromine production capacity to
gradually recover to the same levels of a year ago. We will also
focus on exploring quality underground brine resources and to form
cooperation opportunities in Daying County in Sichuan
Province."
Management is currently reviewing full year production targets
and bromine price trends in 2012 and will provide 2012 full year
guidance before the 2012 first quarter earnings conference
call.
Conference Call
Gulf Resources' management will host a conference call on
Friday, March 16, 2012 at
8:00 AM Eastern Time to discuss its
financial results for the fourth quarter and fiscal year 2011 ended
December 31, 2011.
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 call +1 (706)
643-1666. The conference participant pass code is 62452369.
A replay of the conference call will be available for 14 days
starting from 11:00 AM ET on
Friday, March 16, 2012. To access the
replay, call +1 (855) 859-2056. International callers should call
+1 (404) 537-3406. The pass code is 62452369.
This conference call will be broadcast live over the Internet
and can be accessed by all interested parties by clicking on
http://www.gulfresourcesinc.com/events.html. Please access the link
at least fifteen minutes prior to the start of the call to
register, download, and install any necessary audio software. For
those unable to participate during the live broadcast, a
one-year replay will be available shortly after the call by
accessing the same link.
About Gulf Resources, Inc.
Gulf Resources, Inc. operates through two wholly-owned
subsidiaries, Shouguang City Haoyuan Chemical Company Limited
("SCHC") and Shouguang Yuxin Chemical Industry Co., Limited
("SYCI"). 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 & gas field explorations and as
papermaking chemical agents. For more information, visit
www.gulfresourcesinc.cn.
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.
|
CCG Investor
Relations Inc.
|
Helen Xu
|
David Rudnick, Account
Manager
|
Email:
beishengrong@vip.163.com
|
Phone:
+1-646-626-4172
|
Web:
http://www.gulfresourcesinc.com
|
Email:
david.rudnick@ccgir.com
|
|
|
|
Crocker Coulson,
President
|
|
Phone:
+1-646-213-1915
|
|
Email:
crocker.coulson@ccgir.com
|
|
Web:
http://www.ccgirasia.com
|
- Financial tables to follow -
GULF RESOURCES,
INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(Expressed in U.S.
dollars)
|
|
|
|
|
|
As of December
31,
|
|
|
2011
|
|
|
2010
|
Current
Assets
|
|
|
|
|
|
Cash
|
|
$
|
78,576,060
|
|
|
$
|
68,494,480
|
Accounts
receivable
|
|
|
21,919,828
|
|
|
|
21,542,229
|
Inventories
|
|
|
4,437,972
|
|
|
|
2,679,899
|
Prepayments and
deposits
|
|
|
307,600
|
|
|
|
939,940
|
Prepaid land
leases
|
|
|
46,582
|
|
|
|
42,761
|
Deferred tax
assets
|
|
|
228,702
|
|
|
|
99,694
|
Total Current
Assets
|
|
|
105,516,744
|
|
|
|
93,799,003
|
Non-Current
Assets
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
147,200,740
|
|
|
|
112,178,999
|
Property, plant and
equipment under capital leases, net
|
|
|
2,336,920
|
|
|
|
-
|
Prepaid land leases, net
of current portion
|
|
|
763,814
|
|
|
|
743,022
|
Deferred tax
assets
|
|
|
2,509,481
|
|
|
|
-
|
Total non-current
assets
|
|
|
152,810,955
|
|
|
|
112,922,021
|
Total Assets
|
|
$
|
258,327,699
|
|
|
$
|
206,721,024
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
7,373,643
|
|
|
$
|
6,419,735
|
Retention
payable
|
|
|
556,450
|
|
|
|
453,000
|
Capital lease
obligation, current portion
|
|
|
189,742
|
|
|
|
-
|
Taxes payable
|
|
|
4,058,550
|
|
|
|
7,163,095
|
Total Current
Liabilities
|
|
|
12,178,385
|
|
|
|
14,035,830
|
Non-Current
Liabilities
|
|
|
|
|
|
|
|
Capital lease
obligation, net of current portion
|
|
|
3,036,558
|
|
|
|
-
|
Total
Liabilities
|
|
$
|
15,214,943
|
|
|
$
|
14,035,830
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
PREFERRED STOCK; $0.001
par value; 1,000,000 shares authorized; none outstanding
|
|
$
|
|
|
|
$
|
-
|
COMMON STOCK; $0.0005
par value; 100,000,000 shares authorized; 34,745,342 and 34,735,912
shares issued; and 34,560,743 and 34,735,912 shares outstanding as
of December 31, 2011 and 2010, respectively
|
|
|
17,373
|
|
|
|
17,368
|
Treasury stock; 184,599
shares as of December 31, 2011 at cost
|
|
|
(500,000)
|
|
|
|
-
|
Additional paid-in
capital
|
|
|
74,107,979
|
|
|
|
66,626,584
|
Retained earnings
unappropriated
|
|
|
133,314,581
|
|
|
|
106,500,085
|
Retained earnings
appropriated
|
|
|
14,409,557
|
|
|
10,271,293
|
Cumulative translation
adjustment
|
|
|
21,763,266
|
|
|
|
9,269,864
|
Total Stockholders'
Equity
|
|
|
243,112,756
|
|
|
|
192,685,194
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
258,327,699
|
|
|
$
|
206,721,024
|
GULF RESOURCES,
INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Expressed in U.S.
dollars)
|
|
|
2011 Q4
|
|
2010 Q4
|
|
Consolidated
|
|
Consolidated
|
|
USD
|
|
USD
|
|
|
|
|
Net revenue
|
30,539,134
|
|
37,131,502
|
|
|
|
|
Cost of net
revenue
|
20,128,181
|
|
17,545,585
|
|
|
|
|
Gross profit
|
10,410,953
|
|
19,585,917
|
|
|
|
|
Sales, marketing and
other operating expenses
|
19,075
|
|
21,190
|
|
|
|
|
Research and development
cost
|
51,421
|
|
587,429
|
|
|
|
|
Exploration
costs
|
2,119,757
|
|
-
|
Write-off / Impairment
on property, plant and equipment
|
|
|
|
|
|
|
|
General and
administrative expenses
|
6,359,242
|
|
2,879,576
|
Other operating
income
|
37,853
|
|
135,162
|
|
28,639,823
|
|
20,898,618
|
|
|
|
|
INCOME FROM
OPERATIONS
|
1,899,311
|
|
16,232,884
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
Interest
expense
|
52,491
|
|
432
|
Interest
income
|
71,198
|
|
62,321
|
|
18,707
|
|
61,889
|
INCOME BEFORE
TAXES
|
1,918,018
|
|
16,294,773
|
|
|
|
|
INCOME TAXES
|
937,858
|
|
4,295,136
|
NET INCOME
|
980,160
|
|
11,999,637
|
|
|
|
|
COMPREHENSIVE
INCOME:
|
|
|
|
NET INCOME
|
980,160
|
|
11,999,637
|
OTHER COMPREHENSIVE
INCOME
|
|
|
|
- Foreign currency
translation adjustments
|
3,486,957
|
|
1,628,821
|
|
|
|
|
COMPREHENSIVE
INCOME
|
4,467,117
|
|
13,628,458
|
|
|
|
|
EARNINGS PER
SHARE:
|
|
|
|
BASIC
|
0.03
|
|
0.34
|
DILUTED
|
0.03
|
|
0.35
|
GULF RESOURCES,
INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Expressed in U.S.
dollars)
|
|
|
|
|
|
Years Ended December
31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
NET REVENUE
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
164,980,453
|
|
|
$
|
158,335,023
|
|
|
$
|
110,276,908
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES /
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenue
|
|
|
(89,538,212)
|
|
|
|
(80,254,759)
|
|
|
|
(62,697,871)
|
Sales, marketing and other
operating expenses
|
|
|
(86,936)
|
|
|
|
(136,364)
|
|
|
|
(21,712)
|
Research and development
cost
|
|
|
(398,842)
|
|
|
|
(2,200,291)
|
|
|
|
(500,406)
|
Exploration costs
|
|
|
(7,034,153)
|
|
|
|
-
|
|
|
|
-
|
Write-off / Impairment on
property, plant and equipment
|
|
|
(7,570,566)
|
|
|
|
-
|
|
|
|
-
|
General and administrative
expenses
|
|
|
(17,874,296)
|
|
|
|
(6,871,091)
|
|
|
|
(5,344,833)
|
Other operating
income
|
|
|
1,821,010
|
|
|
|
223,715
|
|
|
|
-
|
|
|
|
(120,681,995)
|
|
|
|
(89,238,790)
|
|
|
|
(68,564,822)
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
|
44,298,458
|
|
|
|
69,096,233
|
|
|
|
41,712,086
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(212,441)
|
|
|
|
(1,052)
|
|
|
|
(17,078)
|
Interest income
|
|
|
269,614
|
|
|
|
242,988
|
|
|
|
80,805
|
|
|
|
57,173
|
|
|
|
241,936
|
|
|
|
63,727
|
INCOME BEFORE
TAXES
|
|
|
44,355,631
|
|
|
|
69,338,169
|
|
|
|
41,775,813
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES
|
|
|
(13,402,871)
|
|
|
|
(18,054,849)
|
|
|
|
(11,184,398)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
30,952,760
|
|
|
$
|
51,283,320
|
|
|
$
|
30,591,415
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
30,952,760
|
|
|
|
51,283,320
|
|
|
|
30,591,415
|
OTHER COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign
currency translation adjustments
|
|
|
12,493,402
|
|
|
|
5,110,249
|
|
|
|
(183,595)
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
$
|
43,446,162
|
|
|
$
|
56,393,569
|
|
|
$
|
30,407,820
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
BASIC
|
|
$
|
0.89
|
|
|
$
|
1.48
|
|
|
$
|
1.00
|
DILUTED
|
|
$
|
0.89
|
|
|
$
|
1.48
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF SHARES
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
34,660,866
|
|
|
|
34,614,667
|
|
|
|
30,698,824
|
DILUTED
|
|
|
34,673,615
|
|
|
|
34,675,329
|
|
|
|
30,701,697
|
GULF RESOURCES,
INC.
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Expressed in U.S.
dollars)
|
|
|
|
Years Ended December
31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
30,952,760
|
|
|
$
|
51,283,320
|
|
|
$
|
30,591,415
|
Adjustments to reconcile
net income to
net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest on capital lease
obligation
|
|
|
210,347
|
|
|
|
-
|
|
|
|
-
|
Amortization of prepaid land
leases
|
|
|
424,467
|
|
|
|
104,940
|
|
|
|
57,985
|
Depreciation and
amortization
|
|
|
17,697,439
|
|
|
|
11,097,149
|
|
|
|
7,199,658
|
Allowance/(Reversal of
allowance) for
obsolete and
slow-moving inventories
|
|
|
8,178
|
|
|
|
1,915
|
|
|
|
(9,182)
|
Write-off / Impairment loss on
property, plant and equipment
|
|
|
7,570,566
|
|
|
|
-
|
|
|
|
-
|
Compensation income from local
government for demolition of factory
|
|
|
(1,340,026)
|
|
|
|
-
|
|
|
|
-
|
Exchange loss on inter-company
balances
|
|
|
1,398,574
|
|
|
|
-
|
|
|
|
-
|
Loss from disposal of
property, plant and equipment
|
|
|
-
|
|
|
|
1,289,407
|
|
|
|
528,749
|
Deferred tax asset
|
|
|
(2,569,647)
|
|
|
|
(11,272)
|
|
|
|
(82,166)
|
Stock-based compensation
expense
|
|
|
7,481,400
|
|
|
|
1,282,428
|
|
|
|
2,022,240
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
995,713
|
|
|
|
(6,016,376)
|
|
|
|
(3,283,341)
|
Inventories
|
|
|
(1,621,118)
|
|
|
|
(1,970,745)
|
|
|
|
(222,749)
|
Prepayment and
deposits
|
|
|
648,734
|
|
|
|
(685,266)
|
|
|
|
(3,920)
|
Other receivables
|
|
|
-
|
|
|
|
2,307
|
|
|
|
353
|
Accounts payable and accrued
expenses
|
|
|
551,636
|
|
|
|
429,441
|
|
|
|
1,075,519
|
Retention payable
|
|
|
98,174
|
|
|
|
(221,805)
|
|
|
|
659,745
|
Due to related
parties
|
|
|
-
|
|
|
|
(1,190)
|
|
|
|
1,190
|
Taxes payable
|
|
|
(3,459,768)
|
|
|
|
1,415,198
|
|
|
|
1,284,882
|
Net cash provided by
operating activities
|
|
|
59,047,429
|
|
|
|
57,999,451
|
|
|
|
39,820,378
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Additions of prepaid
land leases
|
|
|
(406,380)
|
|
|
|
(100,315)
|
|
|
|
(72,411)
|
Compensation received
for demolition of factory
|
|
|
1,340,026
|
|
|
|
-
|
|
|
|
-
|
Proceeds from sales of
property, plant and equipment
|
|
|
-
|
|
|
|
479,260
|
|
|
|
704,767
|
Purchase of property,
plant and equipment
|
|
|
(52,907,374)
|
|
|
|
(39,463,457)
|
|
|
|
(38,876,657)
|
Net cash used in
investing activities
|
|
|
(51,973,728)
|
|
|
|
(39,084,512)
|
|
|
|
(38,244,301)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of notes
payable
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,650,000)
|
Repayment of
stockholder's notes payable
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,000)
|
Repurchase of common
stock
|
|
|
(500,000)
|
|
|
|
-
|
|
|
|
-
|
Repayment of capital
lease obligation
|
|
|
(288,739)
|
|
|
|
-
|
|
|
|
-
|
Proceeds from private
placement
|
|
|
-
|
|
|
|
2,192,919
|
|
|
|
21,307,142
|
Proceeds from exercising
stock options
|
|
|
-
|
|
|
|
18,000
|
|
|
|
-
|
Repayment of loan
payable
|
|
|
|
|
|
|
-
|
|
|
|
(4,031,775)
|
Advances (to)/from
related parties
|
|
|
-
|
|
|
|
-
|
|
|
|
(852,067)
|
Repayment to related
parties
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,649,837)
|
Net cash (used
in)/provided by financing activities
|
|
|
(788,739)
|
|
|
|
2,210,919
|
|
|
|
13,073,463
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE RATE
CHANGES
ON CASH AND CASH
EQUIVALENTS
|
|
|
3,796,618
|
|
|
|
1,831,887
|
|
|
|
9,151
|
NET INCREASE IN CASH AND
CASH EQUIVALENTS
|
|
|
10,081,580
|
|
|
|
22,957,745
|
|
|
|
14,658,691
|
CASH AND CASH
EQUIVALENTS - BEGINNING OF YEAR
|
|
|
68,494,480
|
|
|
|
45,536,735
|
|
|
|
30,878,044
|
CASH AND CASH
EQUIVALENTS - END OF YEAR
|
|
$
|
78,576,060
|
|
|
$
|
68,494,480
|
|
|
$
|
45,536,735
|
GULF RESOURCES,
INC
|
AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)
|
(Expressed in U.S.
dollars)
|
|
|
|
Years Ended December
31,
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
18,794,465
|
|
|
$
|
16,917,029
|
|
|
$
|
10,514,697
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
SUPPLEMENTAL DISCLOSURE
OF NON-CASH INVESTING
AND FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Inception capital lease
obligation for acquiring
property, plant and equipment
|
|
$
|
3,127,913
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for
exercising stock options
|
|
$
|
5
|
|
|
$
|
48
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for
exercising warrants
|
|
$
|
-
|
|
|
$
|
8
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for
settlement of stockholder's notes payable
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
21,287,493
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for
acquiring property, plant and equipment
|
|
$
|
-
|
|
|
$
|
608,227
|
|
|
$
|
6,028,588
|
SOURCE Gulf Resources, Inc.