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| 8-K - Annec Green Refractories Corp | v223452_8k.htm |
Annec Green Refractories Corporation Reports Financial Results for 2010 and the First Quarter of 2011
Announces 95.7% Increase in Revenues to $63.4 Million and 200% Increase in Net Income to $7.2 Million for 2010
Achieves 63.8% Increase in Revenues to $13.1 Million and 10 times Increase in Net Income to $1.4 Million for the First Quarter of 2011
ZHENGZHOU, China May 17, 2011 /PRNewswire-Asia/ — Annec Green Refractories Corporation (OTCBB: ANNCD), one of leading refractory enterprises in China, today announced financial results for 2010 and the first quarter of 2011:
Full Year 2010 Highlights
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Revenues increased 95.7% to $63.4 million compared to $32.4 million for 2009
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Gross profit increased 100% to $23.3 million versus $11.6 million for 2009
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Operating income increased 150% to $9.5 million versus $3.8 million for 2009
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Net income for 2010 increased 200% to $7.2 million versus $2.4 million for 2009
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First Quarter 2011 Highlights
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Revenue increased 63.8% to $13.1 million compared to $8.0 million for Q1 2010
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Gross profit increased 89.7% to $5.5 million versus $2.9 million for Q1 2010
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Operating income increased 4 time to $2.0 million versus $0.5 million Q1 2010
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Net income for increased 10 times to $1.4 million versus $0.1 million for Q1 2010
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Mr. Fuchao Li, Chairman, commented, "We are very pleased to report a 95.7 percent increase in revenues and a 200 percent increase in net income for 2010. We continued this strong growth in the first quarter 2011 with a 63.8 percent increase in revenues and a 10 times increase in net income. With our headquarters in Zhengzhou, Henan, we believe we are extremely well positioned with strong brand recognition and established long-term distributor relationships."
Mr. Li continued, "We have built a very efficient and scalable operation. We have five (5) special production lines of refractory for hot blast stove and steel and iron smelting consumables. We also have more than 1,000 sets of modern processing equipment and four (4) high temperature tunnel kilns. The forming equipments are 400 ton and 600 ton pneumatic brick presses. In addition, in 2010, we rented a 1,000 ton brick press and blast furnace tunnel kiln.
Mr. Li concluded, "Looking ahead, our strategy is to capture market share as one of the only fully integrated refractory companies in Henan by the end of 2011. Our focus is on entering new regional markets in China, and increasing our presence in high-end overseas markets. While our primary focus is generating strong free cash flow to internally fund our organic growth, we are also considering opportunistically pursuing strategic and accretive acquisitions. Overall, we are extremely encouraged by both the near-term and long-term outlook for the business, and believe our ability to increase net income by 200% in 2010 year illustrates our ability to generate meaningful value for shareholders."
About ANNEC GREEN REFRACTORIES CORPORATION
We indirectly control though subsidiaries, Zhengzhou Annec Industrial Co., Ltd. ("Annec"), a PRC wholly-Foreign Owned Enterprise, which is engaged in the business of design, manufacturing of and selling of medium and high level refractory materials for top combustion type, internal combustion type, and external combustion type hot blast stoves, and through our variable interest entity ("VIE"), Annec (Beijing) Engineering Technology Co., Ltd. ("Beijing Annec"), a PRC limited company, we provide turnkey service for large hot blast stove projects, integrating the structural design, equipment purchase, construction, refractory production/sale and after-sale service of hot blast stoves.
This release contains certain "forward-looking statements" relating to the business of the Company. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements include, but are not limited to, that our brand will continue to have strong brand recognition, that our operations are efficient and scalable, that we be able to enter into new regional markets in China and high-end overseas markets, that we will be able to find and consummate strategic and accretive acquisitions and that our net income will increase by 200% this year. Further the forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors. [Not sure what that statement means] The Company does not assume a duty to update these forward-looking statements.
– Financial tables follow –
CONSOLIDATED BALANCE SHEETS
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December 31,
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2010
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2009
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ASSETS
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Current assets:
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Cash
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$ | 1,504,971 | $ | 1,227,457 | ||||
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Restricted cash
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4,425,167 | 4,972,796 | ||||||
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Bank notes receivable
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1,056,569 | 741,168 | ||||||
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Accounts receivable (net of allowance of $572,793 and $709,479 at December 31, 2010 and 2009, respectively)
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16,130,117 | 16,485,191 | ||||||
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Retentions receivable
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4,553,071 | 1,052,759 | ||||||
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Prepaid expenses and deposits
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5,604,102 | 4,762,032 | ||||||
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Other receivables
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5,420,233 | 7,341,759 | ||||||
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Inventories
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25,703,214 | 18,826,280 | ||||||
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Total current assets
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64,397,444 | 55,409,442 | ||||||
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Long-term retentions receivable
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5,425,110 | 1,744,144 | ||||||
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Deposits for capital expenditure
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3,235,272 | - | ||||||
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Plant and equipment, net
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12,093,625 | 11,091,695 | ||||||
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Land use rights, net
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2,193,823 | - | ||||||
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Long-term investment
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151,722 | 146,259 | ||||||
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Total assets
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$ | 87,496,996 | $ | 68,391,540 | ||||
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LIABILITIES AND EQUITY
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Current liabilities:
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Short-term loans
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$ | 8,475,193 | $ | 4,811,911 | ||||
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Bank notes payable
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5,310,272 | 4,972,796 | ||||||
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Accounts payable and accrued expenses
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11,271,228 | 13,562,037 | ||||||
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Advances from customers
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23,105,778 | 18,921,030 | ||||||
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Salaries payable
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436,635 | 186,202 | ||||||
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Taxes payable
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2,535,965 | 615,707 | ||||||
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Related party payables
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917,008 | 1,913,064 | ||||||
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Loans payable to employees
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2,154,409 | 1,319,204 | ||||||
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Loans payable to other individuals
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1,972,387 | 1,901,363 | ||||||
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Other payable
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1,918,056 | 1,703,602 | ||||||
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Total current liabilities
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58,096,931 | 49,906,916 | ||||||
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Deferred income
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2,884,600 | 783,947 | ||||||
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Long-term loans
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1,189,501 | - | ||||||
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Total liabilities
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62,171,032 | 50,690,863 | ||||||
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Equity:
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Owner's capital
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2,612,769 | 2,612,769 | ||||||
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Capital surplus
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1,436,223 | 1,436,223 | ||||||
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Retained earnings
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20,700,451 | 13,910,357 | ||||||
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Accumulated other comprehensive income (loss)
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576,521 | (258,672 | ) | |||||
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Total equity
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25,325,964 | 17,700,677 | ||||||
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Total liabilities and equity
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$ | 87,496,996 | $ | 68,391,540 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
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Year Ended
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December 31,
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2010
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2009
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Revenues:
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Product revenues
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$ | 60,236,785 | $ | 29,171,923 | ||||
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Service revenues
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3,176,355 | 3,233,437 | ||||||
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Total revenues
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63,413,140 | 32,405,360 | ||||||
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Cost of revenues:
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Products
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37,206,740 | 18,214,253 | ||||||
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Services
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2,889,677 | 2,579,689 | ||||||
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Total cost of revenues
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40,096,417 | 20,793,942 | ||||||
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Gross profit
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23,316,723 | 11,611,418 | ||||||
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Operating expenses:
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Selling
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7,390,200 | 3,704,000 | ||||||
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General and administrative
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6,385,664 | 4,155,987 | ||||||
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Total operating expenses
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13,775,864 | 7,859,987 | ||||||
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Income from operations
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9,540,859 | 3,751,431 | ||||||
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Other income (expense):
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Interest income
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76,690 | 115,326 | ||||||
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Interest expense
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(1,574,268 | ) | (1,111,393 | ) | ||||
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Other income (expense), net
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608,766 | (40,009 | ) | |||||
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Total other income (expense)
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(888,812 | ) | (1,036,076 | ) | ||||
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Income before provision for income taxes
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8,652,047 | 2,715,355 | ||||||
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Provision for income taxes
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1,414,136 | 331,010 | ||||||
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Net income
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$ | 7,237,911 | $ | 2,384,345 | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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March 31,
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December 31,
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2011
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2010
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ASSETS
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Current assets:
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Cash
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$ | 284,026 | $ | 1,504,971 | ||||
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Restricted cash
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2,926,104 | 4,425,167 | ||||||
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Bank notes receivable
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724,416 | 1,056,569 | ||||||
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Accounts receivable (net of allowance of $572,793 at March 31, 2010 and December 2009, respectively)
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17,245,686 | 16,130,117 | ||||||
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Retentions receivable
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5,447,629 | 4,553,071 | ||||||
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Prepaid expenses and deposits
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12,380,616 | 5,604,102 | ||||||
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Other receivables
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5,491,349 | 5,420,233 | ||||||
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Inventories
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29,160,149 | 25,703,214 | ||||||
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Total current assets
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73,659,975 | 64,397,444 | ||||||
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Long-term retentions receivable
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5,190,506 | 5,425,110 | ||||||
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Deposits for capital expenditure
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3,128,803 | 3,235,272 | ||||||
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Plant and equipment, net
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12,229,674 | 12,093,625 | ||||||
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Land use rights, net
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2,194,767 | 2,193,823 | ||||||
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Long-term investment
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152,669 | 151,722 | ||||||
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Total assets
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$ | 96,556,394 | $ | 87,496,996 | ||||
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LIABILITIES AND EQUITY
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Current liabilities:
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Short-term loans
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$ | 8,070,106 | $ | 8,475,193 | ||||
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Bank notes payable
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3,816,736 | 5,310,272 | ||||||
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Accounts payable and accrued expenses
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17,879,001 | 11,271,228 | ||||||
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Advances from customers
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27,269,664 | 23,105,778 | ||||||
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Salaries payable
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301,149 | 436,635 | ||||||
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Taxes payable
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2,058,008 | 2,535,965 | ||||||
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Related party payable
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922,734 | 917,008 | ||||||
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Loans payable to employees
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1,490,817 | 2,154,409 | ||||||
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Loans payable to other individuals
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1,984,703 | 1,972,387 | ||||||
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Other payable
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2,590,196 | 1,918,056 | ||||||
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Total current liabilities
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66,383,114 | 58,096,931 | ||||||
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Deferred income
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2,860,196 | 2,884,600 | ||||||
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Long-term loans
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1,122,120 | 1,189,501 | ||||||
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Total liabilities
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70,365,430 | 62,171,032 | ||||||
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Stockholders' equity:
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Common stock, $0.0001 par value, 100,000,000 shares authorized, 19,995,701 issues and outstanding
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2,000 | 2,000 | ||||||
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Additional paid in capital
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4,046,992 | 4,046,992 | ||||||
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Retained earnings
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21,405,035 | 20,700,451 | ||||||
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Accumulated other comprehensive income (loss)
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736,937 | 576,521 | ||||||
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Total equity
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26,190,964 | 25,325,964 | ||||||
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Total liabilities and equity
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$ | 96,556,394 | $ | 87,496,996 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended
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March 31,
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2011
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2010
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Revenues:
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Product and service
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$ | 13,058,029 | $ | 7,972,482 | ||||
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Cost of revenues:
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Product and service
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7,573,416 | 5,041,572 | ||||||
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Total cost of revenues
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7,573,416 | 5,041,572 | ||||||
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Gross profit
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5,484,613 | 2,930,909 | ||||||
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Operating expenses:
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Selling
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2,097,887 | 1,180,886 | ||||||
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General and administrative
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1,352,130 | 1,264,645 | ||||||
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Total operating expenses
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3,450,017 | 2,445,532 | ||||||
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Income from operations
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2,034,596 | 485,378 | ||||||
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Other income (expense):
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Interest income
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98,835 | 24,511 | ||||||
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Interest expense
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(605,260 | ) | (279,155 | ) | ||||
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Other income (expense), net
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136,550 | (74,902 | ) | |||||
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Total other income (expense)
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(369,874 | ) | (329,547 | ) | ||||
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Income before provision for income taxes
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1,664,722 | 155,831 | ||||||
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Provision for income taxes
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261,871 | 28,123 | ||||||
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Net income
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$ | 1,402,851 | $ | 127,708 | ||||
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Net income per share - basic
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$ | 0.07 | $ | 0.01 | ||||
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Net income per share - diluted
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$ | 0.07 | $ | 0.01 | ||||
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Shares used in computing net income per share - basic
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19,995,701 | 19,995,701 | ||||||
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Shares used in computing net income per share - diluted
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19,995,701 | 19,995,701 | ||||||
Contact:
Yolanda Li
Tel: +86-371-69999012
+86-15210121018
Email: annecyolanda@annec.com.cn