GULF RESOURCES, INC. 
By
First Quarter 2010 Highlights
-- Revenue was $29.7 million, a year-over-year increase of 25.6%
-- Gross profit was $13.5 million, a year-over-year increase of 33.3%
-- Gross margin increased to 45.3% from 42.7% for the first quarter of
2009
-- Income from operations was $11.1 million, a year-over-year increase of
24.7%
-- Operating margin was 37.2% compared to 37.5% for the first quarter of
2009
-- Net income was $8.0 million, or $0.23 per basic and diluted share, an
increase of 22.3% from $6.5 million, or $0.23 per basic and diluted
share a year ago
-- Cash totaled $55.6 million as of March 31, 2010
First Quarter 2010 Results
"Our strong performance for the first quarter was mainly due to the
positive pricing environment for bromine. For the first quarter 2010, our
average selling price for bromine was
Gulf Resources' revenue was
Revenue from the chemical products segment was
Gross profit for the first quarter of 2010 totaled
Selling, general and administrative expenses for the first quarter of 2010
were
As a result, income from operations for the first quarter of 2010 was
For first quarter of 2010, the Company incurred other income of
Income taxes were
Net income was
Weighted average number of diluted shares for the three months ended
Financial Condition
As of
Recent Developments
In
In
Business Outlook
Gulf Resources expects the expansion of traditional end user markets, such
as pesticide, papermaking, pharmaceutical and flame retardant production to
continue supporting bromine prices in the near and intermediate term. The
Company expects bromine demand in
Since the end of the first quarter, improved weather conditions have
allowed bromine production to return to normal in the
"The current pricing environment is extremely supportive of bromine producers. As it takes approximately three months for our contract prices to fully absorb changes in market prices, we expect to see continued strong performance from our bromine and crude salt segment for the upcoming quarters. Moreover, the increased production due to milder weather has allowed us to fill orders that were pushed back in first quarter," said Mr. Liu. "Expanding our production capacity remains an integral part of our growth strategy, and we expect to close an additional two bromine production asset acquisitions in 2010. Our acquisition strategy is supported by our strong cash balance."
In addition to increasing bromine production capacity, the Company also plans to move downstream in the bromine market by integrating its business segments. The introduction of additives for wastewater treatment chemicals that utilize bromine in their formulation is the first step to commercialize chemical products that utilize the Company's bromine resources as raw material.
The Company reiterates guidance of revenue between
Conference Call
Gulf Resources' management will host a conference call
Hosting the call will be Mr.
To participate in this live conference call, please dial +1 (877) 440-3774 five to ten minutes prior to the scheduled conference call time. International callers should call +1 (706) 902-4014. The conference participant pass code is 74144212.
A replay of the conference call will be available for 14 days starting
from
This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://www.gulfresourcesinc.cn/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
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.
-- Financial tables to follow --
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)
March 31, December 31,
2010 2009
Current Assets (Unaudited) (Audited)
Cash $ 55,571,241 $ 45,536,735
Accounts receivable 14,194,076 14,960,002
Inventories 597,009 650,332
Prepayment and deposit 229,267 233,330
Prepaid land lease 51,356 46,133
Deferred tax asset 87,283 85,672
Other receivable 2,289 2,195,208
Total Current Assets 70,732,520 63,707,412
Property, plant and equipment, net 83,985,334 81,993,894
Prepaid land lease, net of current
portion 718,487 721,862
Total Assets $155,436,341 $146,423,168
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts payable and accrued
expenses 6,057,340 $ 5,823,745
Retention payable 660,150 660,150
Due to related parties 1,190 1,190
Taxes payable 5,155,325 5,555,113
Total Current Liabilities 11,874,005 12,040,198
Total Liabilities 11,874,005 12,040,198
Stockholders' Equity
PREFERRED STOCK; $0.001 par value;
1,000,000 shares authorized none
outstanding $ -- $ --
COMMON STOCK; $0.0005 par value;
100,000,000 shares authorized;
34,569,447 and 34,541,066 shares
issued and outstanding as of
March 31, 2010 and December 31,
2009, respectively 17,285 17,271
Additional paid in capital 65,924,978 64,718,026
Retained earnings unappropriated 67,800,425 59,808,289
Retained earnings appropriated 5,679,769 5,679,769
Cumulative translation adjustment 4,139,879 4,159,615
Total Stockholders' Equity 143,562,336 134,382,970
Total Liabilities and Stockholders'
Equity $155,436,341 $146,423,168
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. dollars)
(UNAUDITED)
Three Months Ended March 31,
2010 2009
NET REVENUE
Net sales $ 29,693,418 $ 23,633,538
OPERATING EXPENSES
Cost of net revenue (16,235,499) (13,540,940)
General and administrative expenses (2,277,492) (1,099,380)
Research and development cost (125,202) (124,969)
(18,638,193) (14,765,289)
INCOME FROM OPERATIONS 11,055,226 8,868,249
OTHER INCOME (EXPENSES)
Interest expense (174) (27,009)
Interest income 53,761 22,029
Sundry income 21,998 --
INCOME BEFORE INCOME TAXES 11,130,810 8,863,269
INCOME TAXES - current (3,138,674) (2,330,155)
NET INCOME $ 7,992,136 $ 6,533,114
EARNINGS PER SHARE
BASIC $ 0.23 $ 0.23
DILUTED $ 0.23 $ 0.23
WEIGHTED AVERAGE NUMBER OF SHARES
BASIC 34,561,233 28,763,044
DILUTED 34,762,991 28,763,044
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in U.S. dollars)
(UNAUDITED)
Three Months Ended March 31,
2010 2009
NET INCOME $ 7,992,136 $ 6,533,114
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment 19,734 (49,438)
COMPREHENSIVE INCOME $ 8,011,870 $ 6,483,676
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)
(UNAUDITED)
Three Months Ended March 31,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 7,992,136 $ 6,533,114
Adjustments to reconcile net income
Amortization of warrants -- 238,027
Amortization of prepaid expenses 22,057 3,957
Depreciation and amortization 2,377,621 1,469,822
Stock-based compensation expense 1,188,966 --
Deferred tax asset (1,609) --
Bad debt provision -- 64,117
Changes in assets and liabilities
Accounts receivable 772,311 (1,059,675)
Inventories 53,304 (82,293)
Prepayment and deposit 4,129 105,421
Other receivable -- --
Accounts payable and accrued expenses 251,535 2,238,313
Taxes payable (312,408) (382,458)
Net cash provided by operating activities 12,348,042 9,128,345
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions of prepaid land lease (23,912) --
Purchase of Property, plant and equipment (4,399,500) (10,019,262)
Net cash used in investing activities (4,423,412) (10,019,262)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from exercising stock options 18,000 --
Proceeds from private placement 2,192,919 --
Net cash provided by financing activities 2,210,919 --
EFFECTS OF EXCHANGE RATE CHANGE ON CASH
& CASH EQUIVALENTS (101,043) (36,709)
NET INCREASE IN CASH & CASH EQUIVALENT 10,034,506 (927,626)
CASH & CASH EQUIVALENT - BEGINNING OF
PERIOD 45,536,735 30,878,044
CASH & CASH EQUIVALENT - END OF PERIOD $ 55,571,241 $ 29,950,418
For more information, please contact:
Gulf Resources, Inc.
David Wang, VP of Finance
Email: gfre.2008@vip.163.com
Helen Xu
Email: beishengrong@vip.163.com
Web: http://www.gulfresourcesinc.cn/
CCG Investor Relations
Ms. Linda Salo, Sr. Financial Writer
Phone: +1-646-922-0894
Email: linda.salo@ccgir.com
Mr. Crocker Coulson, President
Phone: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com/SOURCE Gulf Resources, Inc.
