GFRE= Have owned for awhile and not selling.
(BSNS WIRE) Gulf Resources, Inc. Announces First Quarter 2008 Financial Results
Gulf Resources, Inc. Announces First Quarter 2008 Financial Results
NEW YORK & SHANDONG PROVINCE, Ch8U. --(BUSINESS WIRE)----
Gulf Resources, Inc. (OTCBB: GFRE), a leading producer of bromine,
crude salt and specialty chemicals in China, today announced its
operating results for the first quarter of 2008.
Net revenues for the first quarter of 2008 increased 118% to $21.9
million compared to $10.1 million for the first quarter of 2007. First
quarter's net income was $6.1 million, compared to $2.6 million for
the first quarter of 2007, with earnings per share increasing to $0.06
per diluted share compared to $0.03 per diluted share for the
comparable period of 2007.
Ming Yang, Chief Executive Officer of Gulf Resources stated, "We
are very pleased with our first quarter results. During the quarter,
our growth in revenues and the increase in net income, compared to
last year's results, were due to our successful integration of four
bromine acquisitions completed in 2007 and an improvement in operating
efficiencies across all our businesses. Additionally, during the
quarter we completed our fifth acquisition of a bromine production
facility, with annual production capacity of roughly 4,700 metric
tons, and look forward to a significant contribution from this
acquisition in future quarters due to continuing strong demand."
First Quarter Highlights
The $11.8 million increase in net revenues during the first
quarter of 2008 was attributable to strong growth in sales in our
bromine and crude salt segment, with its revenue more than tripling to
$16.4 million from $5.3 million in the first quarter 2007. This was
primarily a result of the five bromine asset purchases, production
increases in our existing facilities and favorable foreign exchange
rates. Another factor contributing to the Company's revenue increase
was the 16% increase in chemical product sales, which reached $5.5
million, up from $4.8 million in the first quarter 2007. This increase
resulted from the introduction of new products and the addition of new
customers.
Gross profit in the quarter was $9.4 million with a gross margin
of 43%, compared to $4.0 million in gross profit and a gross margin of
40% recorded during the first quarter 2007. The favorable variances
resulted from the higher revenues, along with increased economies of
scale achieved in large part due to the asset acquisitions while
continuing to improve operational efficiencies and cost controls.
General, administrative, and research and development expenses in
the quarter were $1.0 million, up $0.9 million from last year's first
quarter level, reflecting the professional fees resulting from the
Company's new corporate structure and the funding of a new research
venture.
Net income in the first quarter was $6.1 million, an improvement
of $3.5 million, or 140% from the prior year's $2.6 million. This
increase reflects the higher revenues, improved cost efficiencies and
a reduction in our effective tax rate in the quarter to 27%, resulting
from the lowering of the Chinese corporate income tax rate.
Balance Sheet and Cash Flow
The Company had $11.0 million in cash and equivalents, and $20.9
million in notes payable as of March 31, 2008. During the quarter, the
Company generated $7.1 million in cash from operations, an increase of
$6.0 million over the first quarter 2007 level, largely due to the
increased net income.
Fiscal 2008 Outlook
Gulf Resources reaffirms previously issued guidance for its 2008
financial results, with revenues expected to be between $84 million to
$90 million, net income expected to be between $22 million to $25
million, and diluted earnings per share expected to be between $0.22
and $0.25. This guidance does not include the impact of any unusual
charges or the impact of potential acquisitions.
Mr. Yang concluded, "Gulf will continue to leverage our leading
position in the China bromine market to seek out opportunities for
profitable growth, through acquisitions and operating efficiencies, in
both our business segments. We are delighted about the progress our
company has realized in the past and look forward to building upon
that in each succeeding quarter. Our focus is, and will remain, to
provide increased value to our shareholders."
About Gulf Resources, Inc.
Gulf Resources, Inc. operates through two wholly-owned
subsidiaries, SCHC and SYCI. SCHC is engaged in the production and
sale of bromine and crude salt in China. Bromine is used to
manufacture a wide variety of compounds utilized in industry and
agriculture. SYCI manufactures chemical products utilized in a variety
of applications, including oil & gas field explorations and as
papermaking chemical agents.
