Gulf Resources Announced the Pro Forma 8-K Filing
April 17 2015 - 4:30PM
Gulf Resources, Inc. (Nasdaq:GURE) a leading manufacturer of
bromine, crude salt and specialty chemical products in China, today
announced the company has filed its Pro Forma 8-K for the
acquisition of Shouguang City Rongyuan Chemical Co., Ltd. (SCRC).
Gulf Resources signed the Equity Interest Transfer Agreement
with SCRC on Jan. 12, 2015. The transaction was closed on Feb. 4,
2015. Gulf is required to file the Pro Forma 8-K with the SEC by
April 20, 2015. Based on the agreement, the former shareholders of
SCRC guaranteed SCRC's audited 2014 net income would not be less
than RMB70 million (approximately $11.4 million).
The audited financial statements show that in 2014 SCRC
reported:
- Sales of $52,382,605, and increase of 23.1% from $42,562,392 in
2013
- Income from operations of $15,987,202, an increase of 28.3%
from $12,459,050 in 2013.
- Net Income of $12,047,478, an increase of 28.6% from $9,371,590
in 2013, exceeding the guarantee of $11.4 million.
- Cash of $24,484,964, working capital of $34,873,709 and
shareholders' equity of $54,169,792.
On a pro-forma basis, Gulf Resources would have ended 2014
with
- Revenues of $160,625,493, 41% higher than the $113,660,331
reported in the 10-K.
- Net Income of $29,675,079, 66% higher than the $17,871,795
reported in the 10-K.
- Basic Pro-Forma Earnings Per Share of $0.65, 41% higher than
the $0.46 reported in the 10-K.
- Cash of $104,764,959
- Stockholders' equity of $325,446,553.
Gulf Resources CEO Xiaobin Liu Stated, "We are very pleased with
SCRC's strong performance. We believe this transaction will lead
Gulf Resources into a downstream business that should help
GURE increase its profit margins, improve its return on investment,
and produce more consistent and reliable earnings."
"With this major downstream acquisition," Liu continued, "major
international price increases in bromine, and the discovery of
natural gas in Sichuan; we are optimistic about our future and
believe we are on the right path to significantly increasing
shareholder value."
* The sellers of SCRC agreed as part of the purchase price to
accept 7,268,011 shares of Gulf Resources stock, based on a
valuation of $2.00, which was a 73% premium to the price on the day
the agreement was reached. For accounting purposes, these shares
are now being valued at $1.84, which was the closing price of Gulf
Resources' stock on the day of the closing of the agreement. The
price difference between the original $2.00 and the current $1.84
is solely for accounting purposes. There has been no change in the
number of shares issued. In addition, the sellers of SCRC have
agreed to a 5 year lock-up.
About Gulf Resources, Inc.
Gulf Resources, Inc. operates through two wholly-owned
subsidiaries, Shouguang City HaoyuanChemical 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 and gas field explorations and 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: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu
beishengrong@vip.163.com
IR Manager
Max Ma
Max_vx@163.com
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