Company to Hold Conference Call with
Accompanying Slide Presentation at 8:30 a.m.
ET on March 16, 2018
WUHAN CITY, China, March 15,
2018 /PRNewswire/ -- Kingold Jewelry, Inc. ("Kingold" or
"the Company") (NASDAQ: KGJI), one of China's leading manufacturers and designers of
high quality 24-karat gold jewelry, ornaments and
investment-oriented products, today announced its financial results
for the fourth quarter and year ended December 31, 2017.
2017 Financial and Operating Highlights (all results are
compared to prior year)
- Net sales were $2.01 billion,
increased by 41% from $1.42 billion;
the increase was mainly due to an increase in the total sales
volume.
- Processed a total of 103.4 metric tons [one metric ton = 35,274
ounces] of 24-karat gold products in 2017, an increase of 37.2%
compared to 75.3 metric tons. This result exceeded the Company's
previously announced estimate of between 80 metric tons and 90
metric tons.
- Gross profit increased by 37% to $199.9
million from $146.4
million.
- Gross margin was 9.9% compared to 10.3%.
- Net income was $26.2 million, or
$0.39 per diluted share, compared to
$92.9 million, or $1.40 per diluted share.
- Book value per diluted share was $5.87 at December 31,
2017 compared to $4.26 at
December 31, 2016.
2017 Fourth Quarter Financial Highlights (all results
compared to prior year period)
- Net sales were $657.1 million,
compared to $357.6 million.
- Processed a total of 31.2 metric tons of 24-karat gold
products, compared to 19.7 metric tons.
- Net income was $10.5 million, or
$0.16 per diluted share, compared to
$42.0 million, or $0.63 per diluted share.
Outlook for 2018
- The Company expects to process between 100 metric tons and 110
metric tons of 24-karat gold products in 2018.
Management Commentary
Mr. Zhihong Jia, Chairman and CEO
of the Company, commented, "Kingold delivered strong operating
results and achieved a record gold processing volume for the year
2017 based on continuous expansion to meet the market's increasing
demand for 24-karat gold products. Kingold is determined to achieve
further strategic expansion in China's gold industry and will continue to
explore gold investment as a major component of Kingold's overall
strategic development. We have leveraged the investment in gold in
addition to purchasing gold to increase production and benefitted
from rapid expansion, despite encountering challenges of a higher
interest rate environment and a growing overall loan amount. As we
are committed to becoming a more prominent player in China's gold industry, we expect to make
timely adjustments in our investment and operation strategies in
response to market changes to maintain our industry leading
position and stay competitive."
2017 OPERATIONAL REVIEW
Metric Tons
of Gold Sales
|
|
Three Months
Ended:
|
|
December 31,
2017
|
December 31,
2016
|
|
Volume
|
% of Total
|
Volume
|
% of Total
|
Branded*
|
16.8
|
53.8%
|
9.9
|
50.3%
|
Customized**
|
14.4
|
46.2%
|
9.8
|
49.7%
|
Total
|
31.2
|
100.0%
|
19.7
|
100%
|
|
Year
Ended:
|
|
December 31,
2017
|
December 31,
2016
|
|
Volume
|
% of Total
|
Volume
|
% of Total
|
Branded*
|
51.5
|
49.8%
|
38.5
|
51.1%
|
Customized**
|
51.9
|
50.2%
|
36.9
|
48.9%
|
Total
|
103.4
|
100.0%
|
75.4
|
100.0%
|
|
|
|
*
|
Branded
Production:
|
The Company
acquires gold from the Shanghai Gold Exchange to produce branded
products.
|
|
|
|
**
|
Customized
Production:
|
Clients who
purchase customized products supply gold to the Company for
processing.
|
For the three months ended December 31,
2017, the Company processed a total of 31.2 metric tons of
gold, of which branded production was 16.8 metric tons,
representing 53.8% of total gold processed, and customized
production was 14.4 metric tons, representing 46.2% of total gold
processed in the fourth quarter of 2017. In the fourth quarter of
2016, the Company processed a total of 19.7 metric tons, of which
branded production was 9.9 metric tons, or 50.3% of the total gold
processed, and customized production was 9.8 metric tons, or 49.7%
of total gold processed.
For the year ended December 31,
2017, Kingold processed a total of 103.4 metric tons of
gold, of which branded production was 51.5 metric tons, or 49.8% of
total gold processed, and customized production was 51.9 metric
tons, or 50.2% of total gold processed. In 2016, the Company
processed a total of 75.4 metric tons of gold, of which branded
production was 38.5 metric tons, or 51.1% of the total, and
customized production was 36.9 metric tons, or 48.9% of the
total.
2017 FINANCIAL REVIEW
Net Sales
Net sales for the three months ended December 31, 2017 was $657.1 million, representing an increase of
$299.5 million, or 83.8%, from
$357.6 million for the same period in
2016.
Net sales for the year ended December 31,
2017 was $2,009.7 million, an
increase of 41% from the $1,420.6
million reported in the year of 2016. The increase in net
sales was primarily driven by increase in total sales volume from
75.3 metric tons in 2016 to 103.4 metric tons in 2017, the increase
in the average unit selling price for branded production from
RMB 241.33 per gram in 2016 to
RMB 257.20 per gram in 2017, as well
as the increase in average unit selling price for customized
production increased from RMB 4.26
per gram in 2016 to RMB 6.38 per gram
in 2017.
Gross Profit
Gross profit for the three months ended December 31, 2017 was $56.4 million, compared to $21.4 million for the same period in 2016.
Gross profit was $199.9 million
for the year ended December 31, 2017,
compared to $146.4 million for year
of 2016. The increase in gross profit was due to the increase in
total sales volume from 75.3 metric tons in 2016 to 103.4 metric
tons in 2017, and the increase in unit selling prices.
Gross Margin
The Company's gross margin was 8.6% for the three months ended
December 31, 2017, compared to 6.0%
in the prior year period.
The Company's gross margin for the year ended December 31, 2017 was 9.9%, compared to 10.3% in
the prior year period. The slight decrease was due to higher
proportional increase in unit cost than unit price for the branded
production sales.
Net Income
Net income for the three months ended December 31, 2017 was $10.5 million, or $0.16 per diluted share based on 66.8 million
weighted average diluted shares outstanding, compared to net income
of $42.0 million in the prior year
period, or $0.63 per diluted share
based on 66.5 million weighted average diluted shares outstanding
in the prior-year period.
Net income for the year ended December
31, 2017 was $26.2 million, or
$0.39 per diluted share based on 66.5
million weighted average diluted shares outstanding, compared to
net income of $92.9 million in the
prior year, or $1.40 per diluted
share based on 66.3 million weighted average diluted shares
outstanding, in the prior-year. The decrease was mainly due to
one-time sales gain on sale of Jewelry Park of 63.2 million in
2016, and increase in interest expenses in 2017.
Balance Sheet and Cash flow
(in millions
except for percentages)
|
12/31/2017
|
12/31/2016
|
%
Changed
|
Cash
|
$
5.0
|
$
21.3
|
(76.5%)
|
Inventories
(gold)
|
$
135
|
$
119.4
|
13.1%
|
Working
Capital
|
$
768.3
|
$
459.9
|
67.1%
|
Stockholders'
Equity
|
$
390.2
|
$
282.5
|
38.1%
|
Net cash used in operating activities was $25.7 million for the year ended December 31, 2017, compared with net cash
provided by operating activities of $74
million for the year of 2016. The change was mainly due to
the decrease in net income, increase in value added tax recoverable
of $60.2 million, increase in
inventories of $7.3 million for the
increased production to meet sales demand, offset by the increase
in other payable and accrued expense of $4.1
million and increase in income tax payable of $4.7 million.
Kingold's net cash from operating activities can fluctuate
significantly due to changes in inventories (principally gold).
Other factors that may vary significantly include the Company's
purchases of gold and income taxes. The Company expects that the
net cash it generates from operating activities will continue to
fluctuate as the Company's inventories, receivables, accounts
payables, and the other factors described above change with
increased production and the purchase of larger or smaller
quantities of raw materials (principally gold). These fluctuations
could cause net cash from operating activities to decrease, even if
the net income grows as the Company continues to expand. Although
the Company expects that net cash from operating activities will
increase over the long term, but cannot predict how these
fluctuations will affect Kingold's cash flow in any particular
accounting period.
OUTLOOK FOR 2018
Based on its existing resources and capacity along with strong
demand for 24-karat gold products in China, the Company believes that its gold
sales are expected to be between 100 metric tons and 110 metric
tons during 2018. This guidance is based solely on current
projected, organic growth.
Conference Call Details
Kingold also announced that it will discuss these financial
results in a conference call on March 16,
2018, at 8:30 a.m. ET. The
dial-in numbers are:
Live Participant Dial In (Toll Free): 877-407-9038
Live Participant Dial In (International): 201-493-6742
The conference call will also be webcast live. To listen to the
call, please go to the Investor Relations section of Kingold's
website at www.kingoldjewelry.com, or click on the following link:
http://kingoldjewelry.equisolvewebcast.com/q4-2017.
The Company will also have an accompanying slide presentation
available in PDF format on its homepage prior to the conference
call.
About Kingold Jewelry, Inc.
Kingold Jewelry, Inc. (NASDAQ: KGJI), centrally located in
Wuhan City, one of China's largest cities, was founded in 2002
and today is one of China's
leading designers and manufacturers of high quality 24-karat gold
jewelry, ornaments, and investment-oriented products. The Company
sells its products both directly to retailers and through major
distributors across China. Kingold
has received numerous industry awards and has been a member of the
Shanghai Gold Exchange since 2003. For more information, please
visit www.kingoldjewelry.com.
Business Risks and Forward-Looking Statements
This press release contains forward-looking statements that are
subject to the safe harbors created under the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as
amended. You can identify these forward -looking statements by
words such as "expects," "believe," "project," "anticipate," or
similar expressions. The forward-looking statements in this release
include statements regarding Kingold's outlook with respect to its
2018 outlook for gold processing and investment. Forward-looking
statements are subject to a number of risks, including those
contained in Kingold's SEC filings available at www.sec.gov,
including Kingold's most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. Readers are cautioned not to place
undue reliance on any forward-looking statements, which speak only
as of the date on which they are made. Kingold undertakes no
obligation to update or revise any forward-looking statements for
any reason.
COMPANY CONTACT
Kingold Jewelry, Inc. Bin Liu,
CFO
Phone: +1-847-660-3498 (US) / +86-27-6569-4977 (China)
bl@kingoldjewelry.com
INVESTOR RELATIONS
The Equity Group Inc.
Katherine Yao, Senior Associate
Phone: +86-10-6587-6435
kyao@equityny.com
KINGOLD JEWELRY,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(IN US
DOLLARS)
UNAUDITED
|
|
|
For the three
months ended
December 31,
|
|
2017
|
|
2016
|
NET
SALES
|
$
|
657,065,727
|
|
$
|
357,629,226
|
COST OF
SALES
|
|
|
|
|
|
Cost of
sales
|
|
(600,235,997)
|
|
|
(335,902,864)
|
Depreciation
|
|
(387,406)
|
|
|
(339,923)
|
Total cost of
sales
|
|
(600,623,403)
|
|
|
(336,242,787)
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
56,442,324
|
|
|
21,386,439
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
2,897,969
|
|
|
3,927,958
|
Stock compensation
expenses
|
|
5,364
|
|
|
206,878
|
Depreciation
|
|
77,185
|
|
|
122,601
|
Amortization
|
|
2,858
|
|
|
2,762
|
Total operating
expenses
|
|
2,983,376
|
|
|
4,260,199
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
53,458,948
|
|
|
17,126,240
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
Gain on sale of
Jewelry Park
|
|
-
|
|
|
63,212,496
|
Other
income
|
|
484
|
|
|
102,061
|
Interest
income
|
|
427,048
|
|
|
722,309
|
Interest expense,
including $10,958,016, $7,479,382 and
|
|
|
|
|
|
$490,870 of
amortization of financing costs for the years ended December 31,
2017, 2016 and 2015
|
|
(39,790,115)
|
|
|
(23,822,407)
|
Total other expenses,
net
|
|
(39,362,583)
|
|
|
40,214,459
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS BEFORE TAXES
|
|
14,096,365
|
|
|
57,340,699
|
|
|
|
|
|
|
INCOME TAX
PROVISION (BENEFIT)
|
|
|
|
|
|
Current
|
|
4,682,155
|
|
|
(3,835,896)
|
Deferred
|
|
(1,063,593)
|
|
|
19,225,405
|
Total income tax
provision
|
|
3,618,562
|
|
|
15,389,509
|
|
|
|
|
|
|
NET
INCOME
|
|
10,477,803
|
|
|
41,951,190
|
Less: net loss
attribute to the noncontrolling interest
|
|
-
|
|
|
(4,585)
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
10,477,803
|
|
$
|
41,955,775
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
Unrealized gain (loss)
related to investments in gold, net of tax
|
$
|
(17,285,438)
|
|
$
|
(113,309,767)
|
Total foreign currency
translation gain (loss)
|
|
9,934,925
|
|
|
(13,467,727)
|
Less: foreign currency
translation gain (loss) attributable to noncontrolling
interest
|
|
-
|
|
|
(6,069)
|
Total Other
comprehensive income (loss) attributable to KINGOLD JEWELRY,
INC.
|
$
|
(7,350,513)
|
|
$
|
(126,771,425)
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME (LOSS) ATTRIBUTABLE TO:
|
|
|
|
|
|
Common
stockholders
|
$
|
3,127,290
|
|
$
|
(84,815,650)
|
Non-controlling
interest
|
|
-
|
|
|
(10,654)
|
Total
|
$
|
3,127,290
|
|
$
|
(84,826,304)
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
Basic
|
$
|
0.16
|
|
$
|
0.64
|
Diluted
|
$
|
0.16
|
|
$
|
0.63
|
|
|
|
|
|
|
Weighted average
number of shares
|
|
|
|
|
|
Basic
|
|
66,113,502
|
|
|
66,018,867
|
Diluted
|
|
66,773,097
|
|
|
66,470,631
|
KINGOLD JEWELRY,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
(IN US
DOLLARS)
|
|
|
For the years ended
December 31,
|
|
2017
|
|
2016
|
|
2015
|
NET
SALES
|
$
|
2,009,732,643
|
|
$
|
1,420,624,970
|
|
$
|
1,000,161,294
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
(1,808,612,014)
|
|
|
(1,273,041,387)
|
|
|
(960,562,184)
|
Depreciation
|
|
(1,193,453)
|
|
|
(1,208,998)
|
|
|
(1,284,170)
|
Total cost of
sales
|
|
(1,809,805,467)
|
|
|
(1,274,250,385)
|
|
|
(961,846,354)
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
199,927,176
|
|
|
146,374,585
|
|
|
38,314,940
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
13,444,222
|
|
|
11,985,807
|
|
|
7,685,840
|
Stock compensation
expenses
|
|
33,014
|
|
|
240,306
|
|
|
530,542
|
Depreciation
|
|
444,297
|
|
|
194,690
|
|
|
104,219
|
Amortization
|
|
11,188
|
|
|
11,379
|
|
|
12,137
|
Total operating
expenses
|
|
13,932,721
|
|
|
12,432,182
|
|
|
8,332,738
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
185,994,455
|
|
|
133,942,403
|
|
|
29,982,202
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
|
|
|
Gain on sale of
Jewelry Park
|
|
-
|
|
|
63,212,496
|
|
|
-
|
Other
income
|
|
66,642
|
|
|
26,443
|
|
|
20,689
|
Interest
income
|
|
2,251,972
|
|
|
2,904,781
|
|
|
208,061
|
Interest expense,
including $10,958,016, $7,479,382 and
|
|
|
|
|
|
|
|
|
$490,870 of
amortization of financing costs for the years ended December 31,
2017, 2016 and 2015
|
|
(152,945,558)
|
|
|
(74,555,096)
|
|
|
(2,310,451)
|
Total other expenses,
net
|
|
(150,626,944)
|
|
|
(8,411,376)
|
|
|
(2,081,701)
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS BEFORE TAXES
|
|
35,367,511
|
|
|
125,531,027
|
|
|
27,900,501
|
|
|
|
|
|
|
|
|
|
INCOME TAX
PROVISION (BENEFIT)
|
|
|
|
|
|
|
|
|
Current
|
|
17,678,757
|
|
|
33,055,811
|
|
|
4,488,815
|
Deferred
|
|
(8,503,898)
|
|
|
(428,101)
|
|
|
1,849,910
|
Total income tax
provision
|
|
9,174,859
|
|
|
32,627,710
|
|
|
6,338,725
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
26,192,652
|
|
|
92,903,317
|
|
|
21,561,776
|
Less: net loss
attribute to the noncontrolling interest
|
|
-
|
|
|
(6,495)
|
|
|
(296)
|
|
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
26,192,652
|
|
$
|
92,909,812
|
|
$
|
21,562,072
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
related to investments in gold, net of tax
|
$
|
58,650,446
|
|
$
|
(54,789,485)
|
|
$
|
-
|
Total foreign currency
translation gain (loss)
|
|
22,752,426
|
|
|
(21,461,689)
|
|
|
(14,740,716)
|
Less: foreign currency
translation gain (loss) attributable to noncontrolling
interest
|
|
-
|
|
|
(4,222)
|
|
|
4,251
|
Total Other
comprehensive income (loss) attributable to KINGOLD JEWELRY,
INC.
|
$
|
81,402,872
|
|
$
|
(76,246,952)
|
|
$
|
(14,744,967)
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME (LOSS) ATTRIBUTABLE TO:
|
|
|
|
|
|
|
|
|
Common
stockholders
|
$
|
107,595,524
|
|
$
|
16,662,860
|
|
$
|
6,817,105
|
Non-controlling
interest
|
|
-
|
|
|
(10,717)
|
|
|
3,955
|
Total
|
$
|
107,595,524
|
|
$
|
16,652,143
|
|
$
|
6,821,060
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.40
|
|
$
|
1.41
|
|
$
|
0.33
|
Diluted
|
$
|
0.39
|
|
$
|
1.40
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
|
|
|
|
|
|
|
|
Basic
|
|
66,050,498
|
|
|
65,991,487
|
|
|
65,963,502
|
Diluted
|
|
66,472,046
|
|
|
66,337,129
|
|
|
65,963,502
|
KINGOLD JEWELRY,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(IN US
DOLLARS)
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
4,997,125
|
|
$
|
21,333,193
|
Restricted
cash
|
|
5,534,551
|
|
|
52,786,257
|
Account
receivable
|
|
768,167
|
|
|
670,878
|
Inventories
|
|
135,042,713
|
|
|
119,435,595
|
Investment in
gold
|
|
1,562,943,153
|
|
|
281,895,403
|
Other current assets
and prepaid expenses
|
|
100,592
|
|
|
698,217
|
Prepaid income
tax
|
|
-
|
|
|
3,330,468
|
Value added tax
recoverable
|
|
353,732,758
|
|
|
272,835,051
|
Total current
assets
|
|
2,063,119,059
|
|
|
752,985,062
|
PROPERTY AND
EQUIPMENT, NET
|
|
7,299,643
|
|
|
7,224,698
|
OTHER
ASSETS
|
|
|
|
|
|
Restricted
cash
|
|
7,392,721
|
|
|
7,558,173
|
Investment in
gold
|
|
957,124,267
|
|
|
1,493,938,551
|
Other
assets
|
|
302,072
|
|
|
283,003
|
Deferred income tax
assets
|
|
6,677,675
|
|
|
-
|
Land use
right
|
|
429,915
|
|
|
413,662
|
Total long-term
assets
|
|
979,226,293
|
|
|
1,509,418,087
|
TOTAL
ASSETS
|
$
|
3,042,345,352
|
|
$
|
2,262,403,149
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
Short term
loans
|
$
|
962,101,746
|
|
$
|
234,691,670
|
Third parties
loans
|
|
-
|
|
|
28,798,526
|
Gold leases payable -
Bank
|
|
-
|
|
|
7,167,391
|
Other payables and
accrued expenses
|
|
18,913,863
|
|
|
13,716,472
|
Related party
loan
|
|
307,389,647
|
|
|
-
|
Due to related
party
|
|
2,630,301
|
|
|
7,223,321
|
Income tax
payable
|
|
1,208,742
|
|
|
-
|
Other taxes
payable
|
|
2,615,463
|
|
|
1,518,731
|
Total current
liabilities
|
|
1,294,859,762
|
|
|
293,116,111
|
Deferred income tax
liability
|
|
-
|
|
|
1,249,622
|
Related party
loans
|
|
567,843,066
|
|
|
460,776,408
|
Long term
loans
|
|
789,410,137
|
|
|
1,224,770,721
|
TOTAL
LIABILITIES
|
$
|
2,652,112,965
|
|
$
|
1,979,912,862
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
EUIITY
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 500.000 shares authorized, none issued or
outstanding as of December 31, 2017 and 2016
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Common stock $0.001
par value, 100,000,000 shares authorized, 66,113,502 and 66,018,867
shares issued and outstanding as of December 31, 2017 and December
31, 2016
|
|
66,113
|
|
|
66,018
|
Additional paid-in
capital
|
|
80,377,449
|
|
|
80,230,968
|
Retained
earnings
|
|
|
|
|
|
Unappropriated
|
|
303,666,611
|
|
|
277,473,959
|
Appropriated
|
|
967,543
|
|
|
967,543
|
Accumulated other
comprehensive income (deficit)
|
|
5,154,671
|
|
|
(76,248,201)
|
Total
Equity
|
|
390,232,387
|
|
|
282,490,287
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
3,042,345,352
|
|
$
|
2,262,403,149
|
KINGOLD JEWELRY,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN U.S.
DOLLARS)
|
|
|
|
|
|
For the years ended
December 31,
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
26,192,652
|
|
$
|
92,903,317
|
|
$
|
21,561,776
|
|
Adjustments to
reconcile net income to cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
1,637,750
|
|
|
1,403,688
|
|
|
1,388,389
|
|
|
Amortization of
intangible assets
|
|
|
11,188
|
|
|
11,379
|
|
|
12,137
|
|
|
Share based
compensation for services
|
|
|
33,014
|
|
|
44,572
|
|
|
530,542
|
|
|
Warrants and shares
issued for consulting services
|
|
|
-
|
|
|
195,734
|
|
|
-
|
|
|
Amortization of
deferred financing costs included in interest expense
|
|
10,958,016
|
|
|
7,479,382
|
|
|
490,870
|
|
|
Gain on sale of
Jewelry Park
|
|
|
|
|
|
(63,212,496)
|
|
|
|
|
|
Gain on
deconsolidation of subsidiaries
|
|
|
|
|
|
(7,933)
|
|
|
|
|
|
Deferred tax provision
(benefit)
|
|
|
(7,683,962)
|
|
|
(428,101)
|
|
|
1,849,910
|
|
Changes in operating
assets and liabilities (Increase) decrease in:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
|
(50,154)
|
|
|
885,824
|
|
|
(1,196,167)
|
|
|
Inventories
|
|
|
|
(7,279,205)
|
|
|
173,787,168
|
|
|
(101,320,758)
|
|
|
Other current assets
and prepaid expenses
|
|
|
620,730
|
|
|
216,904
|
|
|
(1,032,953)
|
|
|
Value added tax
recoverable
|
|
|
(60,195,642)
|
|
|
(270,013,201)
|
|
|
(11,739,723)
|
|
Increase (decrease)
in:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other payables and
accrued expenses
|
|
|
4,143,958
|
|
|
8,081,669
|
|
|
3,634,673
|
|
|
Customer
deposits
|
|
|
|
185,434
|
|
|
(21,673,364)
|
|
|
23,118,418
|
|
|
Income tax
payable
|
|
|
|
4,718,786
|
|
|
(4,575,428)
|
|
|
201,484
|
|
|
Other taxes
payable
|
|
|
|
957,521
|
|
|
893,665
|
|
|
(27,126)
|
|
Net cash used in
operating activities
|
|
|
(25,749,914)
|
|
|
(74,007,221)
|
|
|
(62,528,528)
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(1,241,172)
|
|
|
(1,507,696)
|
|
|
(67,190)
|
|
Investment in
gold
|
|
|
|
(551,958,950)
|
|
|
(1,913,474,159)
|
|
|
-
|
|
Proceeds from disposal
of subsidiaries
|
|
|
-
|
|
|
82,780
|
|
|
-
|
|
Long term
investment
|
|
|
|
-
|
|
|
(143,993)
|
|
|
-
|
|
Construction payable -
Jewelry Park
|
|
|
-
|
|
|
-
|
|
|
24,884,408
|
|
Proceed from sale of
Jewelry Park
|
|
|
-
|
|
|
171,580,801
|
|
|
-
|
|
Construction costs
related to Jewelry Park
|
|
|
-
|
|
|
(19,415,722)
|
|
|
(52,775,958)
|
|
Net cash used in
investing activities
|
|
|
(553,200,122)
|
|
|
(1,762,877,989)
|
|
|
(27,958,740)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from
minority interest for capital registration
|
|
|
-
|
|
|
-
|
|
|
69,319
|
|
Proceeds from other
loans - short term
|
|
|
170,341,868
|
|
|
249,695,218
|
|
|
89,904,958
|
|
Repayments of other
loans - short term
|
|
|
(304,869,025)
|
|
|
(54,183,411)
|
|
|
(48,139,288)
|
|
Proceeds from other
loans - long term
|
|
|
319,668,492
|
|
|
1,285,200,403
|
|
|
64,217,827
|
|
Repayments of other
loans - long term
|
|
|
-
|
|
|
(30,252,404)
|
|
|
-
|
|
Payment of loan
origination fees
|
|
|
(9,572,415)
|
|
|
(15,720,998)
|
|
|
-
|
|
Proceeds from third
parties loans
|
|
|
-
|
|
|
37,627,369
|
|
|
-
|
|
Repayment of third
parties loans
|
|
|
(29,598,934)
|
|
|
(7,525,474)
|
|
|
-
|
|
Restricted
cash
|
|
|
|
49,573,775
|
|
|
(37,037,105)
|
|
|
(13,177,515)
|
|
(Repayment of)
borrowings from related party
|
|
|
(4,738,508)
|
|
|
7,282,931
|
|
|
200,015
|
|
Proceeds from related
parties loans - short term
|
|
|
295,989,344
|
|
|
150,509,475
|
|
|
-
|
|
Proceeds from related
parties loans - long term
|
|
|
821,370,431
|
|
|
481,630,318
|
|
|
-
|
|
Repayment of related
parties loans
|
|
|
(748,170,175)
|
|
|
(150,509,475)
|
|
|
-
|
|
Repayment of debt
financing instruments under private placement
|
|
-
|
|
|
(60,203,790)
|
|
|
-
|
|
Deferred financing
costs on debt payable
|
|
|
-
|
|
|
-
|
|
|
(642,178)
|
|
Net proceeds from
exercise of warrants
|
|
|
113,562
|
|
|
-
|
|
|
-
|
|
Net cash provided by
financing activities
|
|
|
560,108,415
|
|
|
1,856,513,057
|
|
|
92,433,138
|
EFFECT OF EXCHANGE
RATES ON CASH
|
|
|
2,505,553
|
|
|
(1,395,223)
|
|
|
(176,959)
|
NET INCREASE
(DECREASE) IN CASH
|
|
|
(16,336,068)
|
|
|
18,232,624
|
|
|
1,768,911
|
CASH, BEGINNING OF
YEAR
|
|
|
|
21,333,193
|
|
|
3,100,569
|
|
|
1,331,658
|
CASH, END OF
YEAR
|
|
|
$
|
4,997,125
|
|
$
|
21,333,193
|
|
$
|
3,100,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
expense
|
|
$
|
128,823,958
|
|
$
|
60,312,949
|
|
$
|
2,197,249
|
|
Cash paid for income
tax
|
|
|
$
|
13,091,812
|
|
$
|
37,631,297
|
|
$
|
4,488,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING
AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Assets settled related
to Jewelry Park due to sale
|
|
$
|
-
|
|
$
|
9,029,085
|
|
$
|
-
|
|
Payables settled
related to Jewelry Park due to sale
|
|
$
|
-
|
|
$
|
206,348,490
|
|
$
|
-
|
|
Gold leased from
bank
|
|
|
$
|
-
|
|
$
|
7,491,775
|
|
$
|
|
|
Investments in gold
obtained in a lease from a related party
|
|
$
|
133,721,408
|
|
$
|
562,936,695
|
|
$
|
-
|
|
Investments in gold
transferred to inventories
|
|
$
|
417,937,474
|
|
$
|
-
|
|
$
|
-
|
|
Unrealized gain on
investments in gold
|
|
|
$
|
58,650,446
|
|
$
|
(54,789,485)
|
|
$
|
-
|
View original
content:http://www.prnewswire.com/news-releases/kingold-jewelry-reports-financial-results-for-the-fourth-quarter-and-year-ended-december-31-2017-300614997.html
SOURCE Kingold Jewelry, Inc.