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 first quarter ended March 31, 2013.
First
Quarter 2013 Highlights
- Revenue was $22.5 million, a year-over-year decrease of 5%
- Gross profit was $4.5 million, a year-over-year decrease of
33%
- Gross margin decreased to 20 % as compared to 28% in the first
quarter of 2012
- Income from operations was $2.6 million as compared to $4.6
million in the first quarter of 2012
- Operating margin was 12% compared to 19% for the first quarter
of 2012
- Net income was $1.9 million or $0.05 per basic and diluted
share, versus $3.3 million, or $0.10 per basic and diluted share a
year ago, respectively.
- Cash totaled $78.5 million as of March 31, 2013
"Due to the lower demand of bromine as influenced by continuing
macroeconomic tightening policy imposed by the Chinese government,
the average selling price of bromine decreased from $3,569 per
tonne for the first quarter in 2012 to $3,053 per tonne for the
same period this year , we reported lower operating performance in
this quarter in comparison to the same period of last year as we
were unable to offset the deceasing revenue of bromine segment by
those increasing from crude salt and chemical products segments,"
said Mr. Xiaobin Liu, CEO of the Company.
First Quarter 2013 Results
Gulf Resources' net revenue was $22,502,580 for three-month
period ended March 31, 2013, a decrease of approximately $1.3
million (or 5%) as compared to the same period in 2012. This
decrease was primarily attributable to the reduction of our bromine
segment products, which decreased from $13,453,882 for the
three-month period ended March 31, 2012 to $11,734,367 for the same
period in 2013, a decrease of approximately 13%.
Revenue from the crude salt segment increased from $2,274,924
for the three-month period ended March 31, 2012 to $2,450,786 for
the same period in 2013, an increase of approximately 8%. Revenue
from the chemical products segment slightly increased from
$8,079,868 for the three-month period ended March 31, 2012 to
$8,317,427 for the same period in 2013, an increase of
approximately 3%.
Gross profit was $4,517,108, or 20%, of net revenue for
three-month period ended March 31, 2013 compared to $6,692,792, or
28%, of net revenue for the same period in 2012. The decrease in
gross profit percentage was primarily attributable to a drop in the
margin percentage in all of our three segments.
The total research and development costs incurred for the
three-month periods ended March 31, 2013 and 2012 were $17,702 and
$42,798, respectively, a decrease of 59%. Research and development
costs for the three-month period ended March 31, 2013and 2012
represented raw materials used by Shouguang Yuxin Chemical Industry
Co., Ltd for testing the manufacturing routine.
General and administrative expenses were $1,969,217 for the
three-month period ended March 31, 2013, a decrease of $142,988 (or
7%) as compared to $2,112,205 for the same period in 2012. The
decrease of $142,988 was primarily due to the decrease in legal
cost in connection with class action litigation from $411,289 for
the three-month period ended March 31,2012 to $93,200 for the same
period in 2013 since the workload was reduced during the settlement
stage discussion, partially offset by an increase in the
depreciation of the newly acquired office units in a commercial
building in September 2012.
Income from operations was $2,605,448 for the three-month period
ended March 31, 2013 (or 12% of net revenue), a decrease of
$1,971,651, or approximately 43%, over income from operations for
the same period in 2012. The decrease resulted primarily from the
decrease of selling price of our bromine segment and the increase
in depreciation and amortization of the plant and machinery due to
the enhancement projects from in the second quarter of 2012 to our
extraction wells and transmission channels and ducts, which
accelerated the depreciation and amortization of the plant and
machinery. Other operating income, which represented the sales of
wastewater to some of our customers, was $95,562 for the
three-month period ended March 31, 2013, representing an increase
of $38,488 (or 67%) from $57,074 for the same period in
2012.
Other income, net of $19,837 represented bank interest income,
net of capital lease interest expense for the three -month period
ended March 31, 2013, a decrease of $24,641 (or approximately 55%)
as compared to the same period in 2012, mainly due to lower average
bank balance held in the period ended March 31,2013 compared to
period ended March 31,2012. Net income was $1,882,965 for the
three-month period ended March 31, 2013, a decrease of $1,404,142
(or approximately 43%) compared to the same period in 2012. This
decrease was primarily attributable to the decrease of selling
price for our bromine segment due to the macro-economic tightening
policy imposed by the PRC government to slow down the economy.
Income taxes were $0.7 million for the first quarter of 2013, a
decrease of 44.0% from $1.3 million for the first quarter of 2012.
The Company's effective tax rate was 28% and 29% for the
three-month periods ended March 31, 2013 and 2012
respectively.
Financial Condition As of March 31, 2013, Gulf
Resources had cash of $78.5 million, total liabilities of $12.7
million, and stockholders' equity of $266.9 million. For the three
months ended March 31, 2013, the Company had working capital of
$105.3 million. As of March 31, 2013, the Company generated $13.3
million in cash flow from operations, and used $290,071 in
investing activities for additions of prepaid land leases.
Subsequent Events
On April 18, 2013 the Company announced that its board of
directors has approved a new share repurchase program under which
the Company is authorized, but not obligated, to purchase up to $2
million of its issued and outstanding shares of common stock from
time to time over the next 12 months. Please refer to the link
http://finance.yahoo.com/news/gulf-resources-announces-2-million-123000718.html
for further details
On April 30, 2013, the class action parties of the class action
litigation executed a stipulation and agreement of settlement. The
proposed settlement is subject to review and approval of the Court.
The Company currently cannot estimate the amount or range of the
overall costs in connection with this litigation. The Company
believes that such costs will be reimbursed by the insurance
company to the extent covered by the insurance policies.
Then Company's 2013 Annual Meeting of the stockholders will be
held on June 18, 2013, at 10:00 a.m. (local time), at the Company's
headquarters located at Level 11, Vegetable Building, Industrial
Park of the East City, Shouguang City , Shandong Province
262700
Business Outlook
"Due to the cold weather in winter, the Chinese New Year, as
well as the macro-economic tightening policy imposed by the PRC
government, the Company did not perform well during the first
quarter in 2013. But we should also see that the selling price of
bromine has increased to $3,053 per tonne during this quarter, as
compared to $2,954 per tonne in the fourth quarter in 2012. We
believe that this indicates an increasing demand of bromine from
the downstream industrial customers. Therefore, we are confidence
that we can achieve the earning targets set forth in the financial
guidance announced in January this year," said Mr. Xiaobin Liu, CEO
of the Company
Conference Call
Gulf Resources' management will host a conference call on
Friday, May 10, 2013 at 8:00 AM Eastern Time to discuss its
financial results for the first quarter ended March 31, 2013.
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 68758186. A replay of the conference call
will be available for 14 days starting from 11:00 AM ET on Friday,
May 10, 2013. To access the replay, dial +1 (855) 859-2056.
International callers should dial +1 (404) 537-3406. The pass code
is 68758186. 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 90-day
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.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.
CONTACT: Max Ma
Max_vx@163.com
Helen Xu
beishengrong@vip.163.com
Gulf Resources (NASDAQ:GURE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gulf Resources (NASDAQ:GURE)
Historical Stock Chart
From Jul 2023 to Jul 2024