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,
2017.
Fiscal Year 2017 Highlights
- Year-end cash $208,906,759
($4.46*)
per share.
- The net cash position increased by $45,022,185
($0.96* per share).
- Net net cash was
$197,967,532*
($4.23* per
share).
- Working capital was $237,847,214
($5.08* per share).
- Book value was $376,560,196
($8.05* per share).
- Cash from operations $62,751,616
($1.34* per share).
- Total revenue was
$107,522,441, a decline
of 28% compared to the previous
year.
- Gross profit decreased 19% to
$44,365,351.
- Income from operations declined 77% to $11,171,611.
This includes the impairment of property plant and equipment due to
the relocation of the chemical business of $16,636,322
and a charge for direct labor and factory overhead of
$6,883,557 incurred during the shutdown.
- Excluding these two items, as well eliminating
unrealized gains and losses from changes in the value of the
currency, operating income would have been $36,249,249*, a decline
of 21%*.
- Income before taxes equaled $11,563,453, a decline of
76%. Excluding the items cited above, income would have been
$36,641,091*, a decline of 21%*.
- The tax rate increased from 25% to 78% because of
the new tax act in the U.S., causing companies to have to pay taxes
on foreign earnings over 8 years.
- Net income declined 93% to $2,551,313. Excluding the
items referenced above and the change in the tax rate, net income
would have been
$27,627,383*.
- Earnings per share were $0.05. Excluding the items
listed above, EPS would have been $0.59*.
- Bromine revenues declined 26% to $42,224,901. Income
from operations declined 41% to $12,460,230.
- Crude salt revenues increased slightly to $8,986,080
despite the factory closures. Income from
operation increased $2,417,061 due to the higher
price of salt.
- Chemical revenues declined 33% to $56,311,460.
Write-offs of PP&E totaled $16,636,322, resulting in a segment
loss of approximately $1 million.
Balance Sheet
Gulf Resources ended 2018 with cash of $208.906,759, an increase
of 27.5% from that of the previous year. Cash per share was $4.46*.
Net net cash (cash minus all liabilities) was $197,967,532* ($4.23*
per share). Current assets were $241,513,446 or $5.16* per share.
Working capital was $237,847,214 ($5.08* per share).
Mr. Liu Xiaobin, the President and CEO of Gulf stated, “Despite
having to close our factories for four months, we ended the year in
an extremely strong cash position. This cash position gives Gulf
the ability to finish its rectification, build its new chemical
factory, drill natural gas wells, and make attractive
acquisitions.
Accounts receivable declined to $29,765,884 from $51,835,218.
During this difficult period, we extended payment terms for
some of our customers. However, we are pleased to note that
approximately 66% of the balances of accounts receivable as of
December 31, 2017 more than 90 days past due were settled by
February 28, 2018.
The current ratio was 65.9:1*.
Book value was $376,560,196 ($8.05* per share)
“Gulf believes,” Mr. Liu continued, ‘that it has one of the
strongest balance sheets in its industry. At a time when many
competitors are unable to finance the cost of rectification or
building new factories, Gulf has more than ample resources. Gulf
believes its financial strength will give it unparalleled
opportunities as many of its competitors struggle with limited
capital."
Cash Flow
During the year of 2017, Gulf generated $62,751,616 in cash.
This equates to $1.34* per share. The company invested $28,419,975
in property plant & equipment and prepaid leases. Free cash
flow before the impact of currency was $34,057,768* ($0.73* per
share). Net cash increased $45,022,185 ($0.96* per share).
“We are pleased,” Mr. Liu stated, “to have
increased our cash position by more than $45 million.”
Financial Results
Total revenue was $107,522,441, a decline of 28%
compared to the previous year. Gross profit decreased 19% to
$44,365,351. These declines were largely caused by the factory
shutdowns as well as by some order cancellations from customers
whose factories were also closed. Income from operations declined
77% to $11,171,611. However, this figure includes the impairment of
property plant and equipment due to chemical business relocation of
$16,636,322 and a charge for direct labor and factory overhead of
$6,883,557 incurred during the shutdown. In addition, the change in
the value of the dollar versus the RMB caused an unrealized
exchange loss versus a gain for the previous year. The net
difference amounted to $3,260,487.
Excluding the impairment, the charges for direct
labor and factory overhead, and eliminating the unrealized currency
gains and losses, income from operations would have been
$36,249,249*, a decline of 21%* from the previous year.
Income before taxes equaled $11,563,453, a
decline of 76%. However, if the one-time charges and unrealized
currency exchange valuations are excluded, income would have been
$36,641,091*, a decline of 21%*.
The effective tax rate increased from 25%
to 78% because of the new tax law in the United States. Under U.S.
regulations, the statutory tax rate declined from 35% to 21%.
Net income declined 93% to $2,551,313. However,
if one-time charges, unrealized currency changes, and changes in
the tax rate are excluded, net income would have been
$27,627,383*.
Reported earnings per share were $0.05. However,
if one excludes the special charges, the unrealized currency
changes, and the new U.S. tax rate, earnings per share would have
been $0.59*.
“We were having a good year,” Mr. Liu continued,
“before the shutdown. The one-time issues, changes in currency
valuation, and the new tax law do distort the underlying strength
of our business.”
In the fourth quarter, we had revenues of
$3,361,568 and gross profit of $1,868,522. We controlled R&D
and marketing expenses. The major issues impacting the 4th quarter
were the write-down of PP&E, the charge for direct labor and
factory overhead, the negative impact of unrealized currency
exchanges, and the one-time mandatory transition tax.
2017 Segment
Analysis
Bromine2017, net revenues in Bromine were
$42,224,901, a decrease of 26% compared to $56,811,730 in
2016. The sales volume of bromine decreased from 14,955 tonnes for
the fiscal year 2016 to 10,681 tonnes for the same period in 2017,
a decrease of 29%. The selling price of bromine increased from
$3,799 per tonne for the fiscal year 2016 to $3,953 per tonne for
the same period in 2017, an increase of 4%. Income from operations
from our bromine segment was $12,460,230 for the fiscal year 2017,
a decrease of $8,764,632 (or approximately 41%) compared to the
same period in 2016. The decrease in sales and earnings was mainly
due to the closure of all of our plant and factories to perform
rectification and improvement since September 1, 2017, as well as
to the closure of some of our customers.
Crude SaltCrude salt revenues were $8,986,080,
a small increase from 2016. The sales volume of crude salt
decreased by 13% from 316,161 tonnes for the fiscal year 2016 to
274,534 tonnes for the same period in 2017. The average selling
price of crude salt increased from $28.42 per tonne for the fiscal
year 2016 to $32.73 per tonne for the same period in 2017 an
increase of 15%. Income from operations from our crude salt segment
was $2,426,137 for the fiscal year 2017, an increase of $2,417,061
(or approximately 26631%) as compared to the same period in 2016.
This increase is mainly attributable to increased selling price of
crude salt. The major reason for the decrease in the sales volume
of crude salt was mainly due to the closure of all of our plant and
factories to perform rectification and improvement since September
1, 2017. Some of our local customers were also requested to stop
production, which affected our customers’ industries and our sales
volume.
ChemicalsNet revenue from our
chemical products segment decreased 33% $56,311,460 for the same
period in 2017, a decrease of approximately 33%. All of the
products in the chemical business had significant declines,
although pharmaceutical intermediaries performed slight better than
the others. Gross margin was essentially flat. There is an
impairment loss of $16,636,322 on property plant and equipment. The
loss from operations in our chemicals segment was $1,024,569.
Excluding the write-down of PP&E, the segment would have earned
approximately $15.61 million. The primary reason for the decline in
sales and earnings was primarily attributable to the closure of our
chemical factories and being relocated since September 1, 2017.
Some of our local customers were also requested to stop production,
which affected our customers’ industries and our sales volume.
Update on Business
SegmentsBromineOn September 1, 2017, the
Company received notification from the Government of Yangkou
County, Shouguang City of PRC that production at all its factories
be halted with immediate effect in order for the Company to perform
rectification and improvement in accordance with the county’s new
safety and environmental protection requirements. Later on, the
local government organized the Safety Supervision and
Administration Department and the Environmental Protection
Departments conducted inspections of every bromine production
enterprise within its jurisdiction, in order to improve security,
environmental protections, pollution, and safety. The Company had
been working closely with the County authorities developed
rectification plans for both its bromine and its chemical
businesses. The Company and the government had agreed on a
rectification plan for Haoyuan Chemicals, the Company’s bromine
business which is currently under process.
As reported in January, the Company has
converted its factories and mines from coal to electricity,
installed computerized production monitoring and safety equipment,
lined all of the salt ponds, paved roads, and performed some other
upgrades. A report on the rectification including photographs of
the new equipment was issued on January 29, 2018. It can be found
on our website in the “About Gulf” tab.
To total cost of rectification is estimated to
be approximately $35 million. During 2017, the Company spent $17.9
million on this process. The largest portion, $13.7 million was
spent on enhancement work in the salt fields. The additional $4.2
million was primarily for equipment. In 2018, the Company will
continue to invest in this project on enhancement projects for
transmission channels and ducts, equipment and upgrades.
In addition to the $35 million, the Company
expects to spend an additional $40 million in 2018 to carry out
enhancement projects for its extraction wells. This should allow
the Company to increase its efficiency and utilization.
The Company expects to complete the
rectification and improvements of the bromine and crude salt
factories and be ready for the government inspection in the first
half of 2018, and will resume operations upon receipt of approval
from the government.
Once the company has received the approval from
government, it will begin test production. Then it will begin to
carefully ramp up production in each of the factories. Full
production should be achieved in a few months.
After the completion of the rectification, the
only potential constraint is the waste water treatment. It is still
unclear if the government will place some small limitations on
waste water. We are currently working with the government on the
waste water issue. In the worst case, it is possible we may have a
small reduction in capacity.
“We are extremely optimistic,” Mr. Liu stated,
“about the future of our bromine business. Bromine prices have
continued to rise. At the present time, Bromine is selling for
about RMB 32,000. This would equate to more than $5,000. Further,
between the rectification, the closure of smaller unlicensed
operators, and the waste water issues, we believe domestic capacity
could decrease by 30%. This should mean that domestic prices will
remain very high. We believe profits in bromine could achieve
record levels in the future.”
Because many smaller producers have not had the
capital to conduct the rectification required by the government,
management believes there could be some extremely attractive
acquisition opportunities in bromine. At the present time, All of
management’s attention is focused on getting its facilities
approved and in full production. However, management could consider
acquisitions in this segment in the future if the prices were
sufficiently attractive.
Chemicals
On November 24, 2017, the Company received a
letter from the Government of Yangkou County, Shouguang City
notifying the Company to relocate its two chemical production
plants located in the second living area of the Qinghe Oil
Extraction Plant to the Bohai Marine Fine Chemical Industrial Park.
This is because the two plants are located in or near a residential
area and their production activities will have certain impact on
the living environment of the residents. This is as a result of the
country’s effort to improve the development of the chemical
industry, manage safe production and curb environmental pollution
accident effectively, and ensure the quality of living environment
of residents. All chemical enterprises which do not comply with the
requirements of the safety and environmental protection regulations
will be ordered to shut down.
To date, the Company has secured the land for the chemical
factory. It is currently working on the design of the factory as
well as on the relevant documents to apply for construction and
project plan certificates. The company expects this process of take
several months. The Company expects the new factory will be fully
operational by the beginning of 2020. However, it is working very
hard to get the project completed earlier.
There is impairment loss on property, plant and equipment
related to the relocation of our chemical production plant to Bohai
Marine Fine Chemical Industry Park in the amount of $16,636,322.
Since much of the equipment that was used in the chemical
factories was relatively old. Further, even if it had been newer,
the company believes it might not have passed new environmental
tests. The total cost of the new factories is currently
estimated to be $60 million. The Company has incurred a relocation
cost of $9,732,118 for land lease.
The Company is not writing off any of the goodwill related to
its chemicals business. The Company believes the new chemical
factory should be able to produce strong sales and profits. There
may be much less capacity in the chemical industry, as many
factories may be permanently closed. In addition, other factories
will have their capacity reduced. Gulf should have a very modern
factory that operates highly efficiently. With less competition and
better equipment, Gulf believes it can generate sales and earnings
in this segment at a level well above previous results.
The level of capital expenditures in 2018 will depend on the
timing of the approvals. As soon as the design, project plan, and
construction are approved, Gulf will move ahead as quickly as
possible.
Gulf continues to control the land and buildings where the old
chemical factories are located. At this time, Gulf has not
considered how or if it can monetize this asset.
“We are very optimistic about the opportunities in chemicals,”
Mr. Liu stated. “Many factories may be permanently closed. This
should reduce capacity and lead to increased pricing. Once our new
factory is build, we should be able to generate strong sales and
earnings.”
Natural Gas
Gulf has solved the waste water problem in our initial well. The
secondary problem was the technical drilling problem. The Company
has been working with Xinan Shiyou Daxue (Southwest Petroleum
University) in Sichuan Province. The experts at this university
have helped with the design scheme that will solve the technical
drilling problem. The company has ordered the required custom
equipment and is now waiting for delivery and installation.
Originally, the Company believed it would be able to receive
this custom equipment in time to begin drilling during the first
quarter of 2018. However, because natural gas is in very short
supply and very high demand in China, the manufacturers of this
equipment were backlogged. We believe this equipment will be
delivered within the next month. It should take the company one
more month to install and test the equipment. We believe this will
enable us to begin production during the second quarter. The
Company expects to spend approximately $1 million on its natural
gas project in 2018.
The Company has not yet decided whether to drill another well in
2018. While the Company remains very optimistic about the
opportunities in the natural gas business, management believes its
primary objective should be to get the bromine plants fully
operational and do whatever is necessary to expedite the approvals
and begin construction on the chemical plant. These businesses have
traditionally been very profitable. The Company needs strong cash
flow and profits from these businesses if it is to fully develop
its natural gas business.
Over the intermediate to longer term, the company believes the
natural gas opportunity will be very substantial. Daying County is
very focused on development. In addition to drilling for natural
gas, Gulf could also drill for bromine, and it could also
eventually open a chemical plant, which could help this rural
county with employment. The issues Gulf is confronting with
rectification and relocation have not reduced its expectations of
the potential for the natural gas business.
Conclusion
The Company recognizes this is a difficult time for its
employees, its management, and its shareholders. We are working
diligently to get our bromine and crude salt business in operation,
to get our new chemical factory under construction, and to begin to
produce natural gas. The Company believes that after this difficult
period has ended, the competitive environment in China will improve
dramatically.
(* All calculations have not been audited and per share
have been calculated using the end of the year share count of
46,803,791 as shown on the balance sheet in the
10-K.)
(To enable investors to better understand our
financial results, we refer to one-time issues that impacted
earnings. These include the write-down of PP&E specifically for
the chemical factory of $16,636,322. Other write-downs are not
included as they were not deemed to be solely related to the
government’s order to close the factories; and the charge for
direct labor and factory overheads of $6,883,557 incurred during
the shutdown. In addition, the impact of the new U.S. tax law is
also deemed a “one-time” event, and assuming same tax rate of 25%
for year 2017&2016 while doing calculation. )
Conference Call
Gulf Resources' management will host a conference call on
Monday, March 19, 2018 at 8:30 a.m. Eastern Standard Time to
discuss its financial results for the fourth quarter& Fiscal
Year 2017 ended December 31, 2017.
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
6497588.
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 EDT -
04/19/2017 22:59 EDT. To access the replay, call +1 (855) 859-2056.
International callers should call +1 (404) 537-3406. The conference
ID is 6497588.
About Gulf Resources, Inc.Gulf Resources, Inc.
operates through three wholly-owned subsidiaries, Shouguang City
Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical
Industry Co., Limited ("SYCI"), 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, and
materials for human and animal antibiotics. 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.
CONTACT: Gulf Resources, Inc.Web:
http://www.gulfresourcesinc.com
Director of
Investor Relations
Helen Xu (Haiyan
Xu)
beishengrong@vip.163.com
|
|
GULF RESOURCES, INC. |
|
AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(Expressed in U.S. dollars) |
|
|
|
As of December 31, |
|
|
2017 |
|
|
2016 |
|
Current Assets |
|
|
|
|
|
|
Cash |
|
$ |
208,906,759 |
|
|
$ |
163,884,574 |
|
Accounts
receivable |
|
|
29,765,884 |
|
|
|
51,835,218 |
|
Inventories, net |
|
|
1,196,785 |
|
|
|
5,881,681 |
|
Prepayments and deposits |
|
|
1,395,289 |
|
|
|
117,338 |
|
Prepaid land leases |
|
|
246,640 |
|
|
|
47,255 |
|
Other
receivables |
|
|
2,089 |
|
|
|
1,424 |
|
Total
Current Assets |
|
|
241,513,446 |
|
|
|
221,767,490 |
|
Non-Current Assets |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
95,114,504 |
|
|
|
108,731,126 |
|
Property, plant and equipment under capital leases, net |
|
|
492,238 |
|
|
|
554,257 |
|
Prepaid land leases, net of current portion |
|
|
14,477,771 |
|
|
|
4,754,169 |
|
Deferred tax assets |
|
|
6,526,555 |
|
|
|
2,215,772 |
|
Goodwill |
|
|
29,374,909 |
|
|
|
27,668,539 |
|
Total non-current
assets |
|
|
145,985,977 |
|
|
|
143,923,863 |
|
Total
Assets |
|
$ |
387,499,423 |
|
|
$ |
365,691,353 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
1,032,083 |
|
|
$ |
8,682,318 |
|
Retention payable |
|
|
956,351 |
|
|
|
733,869 |
|
Capital lease obligation, current portion |
|
|
203,206 |
|
|
|
187,678 |
|
Taxes
payable-current |
|
|
1,474,592 |
|
|
|
4,341,331 |
|
Total
Current Liabilities |
|
|
3,666,232 |
|
|
|
13,945,196 |
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
Capital lease obligation, net of current portion |
|
|
2,303,995 |
|
|
|
2,284,959 |
|
Taxes
payable-non-current |
|
|
4,969,000 |
|
|
|
- |
|
Total
non-Current Liabilities |
|
|
7,272,995 |
|
|
|
2,284,959 |
|
Total
Liabilities |
|
$ |
10,939,227 |
|
|
$ |
16,230,155 |
|
|
|
|
|
|
|
|
|
|
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 47,052,940
shares issued; and 46,803,791 and 46,793,791 shares outstanding as
of December 31, 2017 and 2016, respectively |
|
|
23,525 |
|
|
|
23,525 |
|
Treasury stock; 249,149 and 259,149 shares as of December 31, 2017
and 2016 |
|
|
(554,870 |
) |
|
|
(577,141 |
) |
Additional paid-in capital |
|
|
94,524,608 |
|
|
|
94,156,679 |
|
Retained earnings unappropriated |
|
|
250,170,431 |
|
|
|
248,941,696 |
|
Retained earnings appropriated |
|
|
24,233,544 |
|
|
22,910,966 |
|
Accumulated other comprehensive income(loss) |
|
|
8,162,958 |
|
|
|
(15,994,527 |
) |
Total
Stockholders’ Equity |
|
|
376,560,196 |
|
|
|
349,461,198 |
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
387,499,423 |
|
|
$ |
365,691,353 |
|
|
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
|
AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME |
|
(Expressed in U.S. dollars) |
|
|
|
Years Ended December 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
NET REVENUE |
|
|
|
|
|
|
|
Net
revenue |
|
$ |
107,522,441 |
|
|
$ |
149,275,002 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
Cost of
net revenue |
|
|
(63,157,090 |
) |
|
|
(94,785,671 |
) |
|
Sales,
marketing and other operating expenses |
|
|
(278,600 |
) |
|
|
(343,105 |
) |
|
Research
and development cost |
|
|
(195,195 |
) |
|
|
(261,931 |
) |
|
Write-off
/ Impairment on property, plant and equipment |
|
|
(17,581,244 |
) |
|
|
(106,545 |
) |
|
Loss on
demolition of factory |
|
|
- |
|
|
|
(1,053,445 |
) |
|
Direct
labor and factory overheads incurred during plant shutdown |
|
|
(6,883,557 |
) |
|
|
- |
|
|
General
and administrative expenses |
|
|
(8,536,757 |
) |
|
|
(5,434,755 |
) |
|
Other
operating income |
|
|
281,613 |
|
|
|
433,792 |
|
|
|
|
|
(96,350,830 |
) |
|
|
(101,551,660 |
) |
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
|
11,171,611 |
|
|
|
47,723,342 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest
expense |
|
|
(164,321 |
) |
|
|
(174,921 |
) |
|
Interest
income |
|
|
556,163 |
|
|
|
487,617 |
|
|
|
|
|
391,842 |
|
|
|
312,696 |
|
|
INCOME BEFORE INCOME
TAXES |
|
|
11,563,453 |
|
|
|
48,036,038 |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
(9,012,140 |
) |
|
|
(11,810,207 |
) |
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
2,551,313 |
|
|
$ |
36,225,831 |
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
NET INCOME |
|
|
2,551,313 |
|
|
|
36,225,831 |
|
|
OTHER COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
- Foreign
currency translation adjustments |
|
|
24,157,485 |
|
|
|
(24,930,808 |
) |
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME |
|
$ |
26,708,798 |
|
|
$ |
11,295,023 |
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
BASIC |
|
$ |
0.05 |
|
|
$ |
0.78 |
|
|
DILUTED |
|
$ |
0.05 |
|
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF SHARES |
|
|
|
|
|
|
|
BASIC |
|
|
46,796,476 |
|
|
|
46,279,033 |
|
|
DILUTED |
|
|
46,835,830 |
|
|
|
46,625,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed in U.S. dollars) |
|
|
Years Ended December 31, |
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,551,313 |
|
|
$ |
36,225,831 |
|
|
|
Adjustments to
reconcile net income tonet cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
Interest
on capital lease obligation |
|
|
163,184 |
|
|
|
174,167 |
|
|
|
Amortization of prepaid land leases |
|
|
982,108 |
|
|
|
774,250 |
|
|
|
Depreciation and amortization |
|
|
20,197,313 |
|
|
|
24,880,246 |
|
|
|
Allowance
for obsolete and slow-moving inventories |
|
|
43,921 |
|
|
|
(12,691 |
) |
|
|
Write-off
/ Impairment loss on property, plant and equipment |
|
|
17,581,244 |
|
|
|
106,545 |
|
|
|
Loss on
demolition of factory |
|
|
- |
|
|
|
1,053,445 |
|
|
|
Unrealized translation difference |
|
|
1,557,759 |
|
|
|
(1,702,728 |
) |
|
|
Deferred
tax asset |
|
|
(4,126,947 |
) |
|
|
3,013 |
|
|
|
Stock-based compensation expense-options |
|
|
372,400 |
|
|
|
40,300 |
|
|
|
Treasury
stock issued for services |
|
|
17,800 |
|
|
|
15,000 |
|
|
|
Changes in assets and
liabilities |
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
26,110,087 |
|
|
|
(6,167,996 |
) |
|
|
Other
receivables |
|
|
(580 |
) |
|
|
(877 |
) |
|
|
Inventories |
|
|
4,883,850 |
|
|
|
901,528 |
|
|
|
Prepayment and deposits |
|
|
(1,389,367 |
) |
|
|
(128,384 |
) |
|
|
Accounts
payable and accrued expenses |
|
|
(8,203,290 |
) |
|
|
(503,015 |
) |
|
|
Retention
payable |
|
|
206,211 |
|
|
|
(365,150 |
) |
|
|
Taxes
payable |
|
|
1,804,610 |
|
|
|
(76,886 |
) |
|
|
Net cash provided by operating activities |
|
|
62,751,616 |
|
|
|
55,216,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
Additions of prepaid
land leases |
|
|
(10,481,323 |
) |
|
|
(673,934 |
) |
|
|
Compensation received
from government on property disposition |
|
|
- |
|
|
|
2,708,417 |
|
|
|
Purchase of property,
plant and equipment |
|
|
(17,938,652 |
) |
|
|
(16,995,862 |
) |
|
|
Net cash used
in investing activities |
|
|
(28,419,975 |
) |
|
|
(14,961,379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
Repayment of capital
lease obligation |
|
|
(273,873 |
) |
|
|
(287,387 |
) |
|
|
Net cash used
in financing activities |
|
|
(273,873 |
) |
|
|
(287,387 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECTS OF EXCHANGE
RATE CHANGESON CASH AND CASH EQUIVALENTS |
|
|
10,964,417 |
|
|
|
(9,689,650 |
) |
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS |
|
|
45,022,185 |
|
|
|
30,278,182 |
|
|
|
CASH AND CASH
EQUIVALENTS - BEGINNING OF YEAR |
|
|
163,884,574 |
|
|
|
133,606,392 |
|
|
|
CASH AND CASH
EQUIVALENTS - END OF YEAR |
|
$ |
208,906,759 |
|
|
$ |
163,884,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GULF RESOURCES, INC. |
|
AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
|
(Expressed in U.S. dollars) |
|
|
|
|
Years Ended December 31, |
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
|
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
Cash paid during the
year for: |
|
|
|
|
|
|
|
|
|
Income
taxes |
|
$ |
11,113,143 |
|
|
$ |
12,140,763 |
|
|
|
|
SUPPLEMENTAL DISCLOSURE
OF NON-CASH INVESTINGAND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
Par value
of common stock issued upon cashless exercise of options |
|
$ |
- |
|
|
$ |
386 |
|
|
|
Gulf Resources (NASDAQ:GURE)
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From May 2024 to Jun 2024
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