China Runji Cement Inc. (fka CRJI)

[MrBigz]

Results of Operations

Fiscal Year Ended August 31, 2008 Compared to the Fiscal Year Ended August 31, 2007.

Revenues . Consolidated operating revenues for the twelve-month period ended August 31, 2008 was $40,467,123, compared to $30,672,474 for the same corresponding period in year 2007, an increase of $9,794,649 or 31.9%. The increase is mainly the result of increased sales of cement, which amounted to 20,000 tons or 1.8%. The increase is also attributable to an increase in unit price of cement from $27 per ton to $35 per ton in the year 2008, which represents a growth in unit price of 29.6%.

Gross Profit . Gross profit increased by $6,229,087 or 177.4% to $9,740,424 for the year ended August 31, 2008 from $3,511,338 for the same corresponding period in year 2007. The significant increase is mainly due to the growth in unit price of cement, which exceeds the growth of cost of sales. The unit price of cement increased $6 per ton in 2008 compared year over year; while the growth of cost of sales only increased $2.60 per ton in the same corresponding period.

Selling Expense . Selling expenses for the 2008 and 2007 fiscal years were $182,539 and $231,004, respectively, a decrease of $48,465. The decrease is mainly attributable to a decrease in transportation fees of $35,492.

General and Administrative Expenses . General and administrative expenses for the 2008 fiscal year was $1,624,449, compared to $1,404,031 for the 2007 fiscal year, an increase of $220,418 or 16%. Among the increased General and Administrative Expenses was the cost incurred in Repairs & Maintenance, which increased by $194,853.


Net Income . Net income for the 2008 fiscal year was $6,962,683, compared to $777,877 for the 2007 fiscal year. The increase is attributable to increased gross profit.

Liquidity and Capital Resources

As of August 31, 2008 and 2007, cash and cash equivalents totaled $415,031 and $1,400,479, respectively.

The net cash from operations increased by $12,920,642 to $13,227,310 for the year ended August 31, 2008 from $306,668 for 2007 fiscal year. Among the increased net cash from operations, the contribution from accounts payable and accrued liabilities, customer deposit, accounts receivable amounted to $5,538,783, $3,111,267 and $2,713,777, respectively.


During the 2008 fiscal year, the Company obtained a total of $2,574,182 from financing activities compared to $15,476,433 for the 2007 fiscal year, a decrease of $12,902,251. The decrease was mainly attributable to the decrease in proceeds from related party loans of $10,338,974.


During the 2008 fiscal year, the Company used a total $17,136,499 in investing activities compared to $15,080,403 for 2007, an increase of $2,056,096. The increase of net cash used in investing activities of 2008 was mainly due to the construction of the second cement clinker production line and the Waste Heat Generator.