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 second quarter ended June 30, 2013.
Second
Quarter 2013 Highlights
"We are pleased to report that Company's net revenue for the
second quarter of 2013 has increased 5% as compared with the same
quarter of 2012, which is mainly due to the increased sales effort
of the Company. As compared with the same period in 2012, the sales
revenue of chemical products segments largely increased 18%, and
the sales volume of bromine increased 13%. The selling prices of
some products increased as compared with the same period of 2012,
such as crude salt, oil and gas exploration additives, and
pesticides manufacturing additives. But the net income decreased 6%
as compared with the same quarter of 2012, mainly due to the
depreciation and amortization costs." said Mr. Xiaobin Liu, CEO of
the Company. Second Quarter 2013 Financial Results
Gulf Resources' net revenue was $32,853,896 for three-month period
ended June 30, 2013, an increase of approximately $1.5 million (or
5%) as compared to the same period in 2012. This increase was
primarily attributable to the growth in our chemical products
segment, which increased from $9,995,759 for the three-month period
ended June 30, 2012 to $11,750,644 for the same period in 2013, an
increase of approximately 18%.
Revenue from the crude salt segment decreased from $3,779,658
for the three-month period ended June 30, 2012 to $3,629,976 for
the same period in 2013, a decrease of approximately 4%. Revenue
from the bromine products segment slightly decreased from
$17,539,429 for the three-month period ended June 30, 2012 to
$17,473,276 for the same period in 2013, a decrease of
approximately 0.4%.
Gross profit was $9,593,695, or 29% of net revenue, for the
three-month period ended June 30, 2013 compared to $9,925,195, or
32% of net revenue, for the same period in 2012. The decrease in
the gross profit percentage was primarily attributable to a drop in
the margin percentage of bromine and crude salt segments.
The total research and development costs incurred for the
three-month periods ended June 30, 2013 and 2012 were $54,480 and
$62,526, respectively, a decrease of 13%. Research and development
costs for the three-month period ended June 30, 2013 and 2012
represented raw materials used by SYCI for testing the
manufacturing routine.
General and administrative expenses were $2,422,452 for the
three-month period ended June 30, 2013, an increase of $1,051,586
(or 77%) as compared to $1,370,866 for the same period in 2012.
Income from operations was $7,378,775 for the three-month period
ended June 30, 2013 (or 22% of net revenue), a decrease of
$254,428, or approximately 3%, over income from operations for the
same period in 2012.
Other operating income was $287,127 for the three-month period
ended June 30, 2013, which represented (i) the sales of wastewater
to some of our customers in the amount of $116,035 and (ii) a sum
of $171,092 for legal fees incurred in 2013.
Other income, net of $25,846 represented bank interest income,
net of capital lease interest expense for the three -month period
ended June 30, 2013. Net income was $5,355,899 for the three-month
period ended June 30, 2013, a decrease of $332,775 (or
approximately 6%) compared to the same period in 2012. This
decrease was primarily attributable to the non-cash expense related
to stock options granted to employees recognized for the
three-month period ended June 30, 2013.
Income taxes were $2.05 million for the second quarter of 2013,
an increase of 4% from $1.98 million for the second quarter of
2012. The Company's effective tax rate was 28% and 26% for the
three-month periods ended June 30, 2013 and 2012 respectively.
Six Months Ended June 30, 2013 Net revenue for the
six-month period ended June 30, 2013 was $55,356,476, representing
an increase of approximately $0.2 million (or 0.4%) over the same
period in 2012. Gross profit was $14,110,803, or 25%, of net
revenue for six-month period ended June 30, 2013 compared to
$16,617,987, or 30%, 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 of bromine and crude salt
segments. Income from operations was $9,984,223 for the six-month
period ended June 30, 2013 (or 18% of net revenue), a decrease of
$2,226,079, or approximately 18%, over income from operations for
the same period in 2012.
Net income was $7.2 million, or $0.19 per basic and diluted
share, respectively, compared to $9.0 million, or $0.26 per basic
and diluted share, respectively, for the same period a year ago.
Financial Condition As of June 30, 2013, Gulf
Resources had cash of $86.4 million, total liabilities of $14.4
million, and stockholders' equity of $277.1 million. Ended June 30,
2013, the Company had working capital of $119.9 million. As of June
30, 2013, the Company generated $20.7 million in cash flow from
operations, and we used approximately $0.6 million cash for the
prepayment of land leases. Business Outlook
"Although still impacted by China's macro-economic conditions, some
raw materials prices are increasing. The average bromine price in
this quarter had increased to $3,084 per tonne as compared to
$2,954 by end of 2012. Crude salt price is in a steadily upward
trend, reached $41 per tonne in second quarter of 2013. The gross
margin of chemical products segment also increased to 33% in the
second quarter of 2013, as compared to 31% for the same period of
2012. The Company will continually try to expand its sales markets,
increase its production utilization rate and decrease management
and administration expenses. We are confident that we can achieve
the earnings targets set forth in the financial guidance announced
at beginning of this year." said Mr. Xiaobin Liu, CEO of the
Company. Conference Call Gulf Resources'
management will host a conference call on Monday, August 12, 2013
at 8:00 AM Eastern Time to discuss its financial results for the
Second quarter ended June 30, 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 30016256. A replay of the conference call
will be available for 14 days starting starting from 11:00 AM ET on
Monday, August 12, 2013. To access the replay, dial +1 (855)
859-2056. International callers should dial +1 (404) 537-3406. The
pass code is30016256. 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
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