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SOURCE: China Armco Metals, Inc.
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March 31, 2010 16:39 ET
China Armco Metals Reports Record Financial Results for the Full Year of 2009
SAN MATEO, CA--(Marketwire - March 31, 2010) - China Armco Metals, Inc. (NYSE Amex: CNAM)
Financial Highlights
-- Full year 2009 revenue reaches a record $86.9 million, up 57% from 2008
-- Full year 2009 net income increases to $5.1 million, up 54% from 2008
-- Full year basic and diluted EPS rises to $0.51 per share on 10.1 million shares,
up from $0.44 on 7.5 million shares
-- Company to provide earnings guidance for 2010 during today's 4:30 p.m. EDT
Conference Call
China Armco Metals, Inc. (NYSE Amex: CNAM), a distributor of imported metal ore
and growing scrap metal recycler, today announced China Armco's financial results
for the year ended December 31, 2009.
Full Year Financial Results
For the full year of 2009 China Armco generated record revenue of $86.9 million
as compared to revenue of $55.4 million for the same period of 2008, an increase
of 57%. The performance for the full year of 2009 reflected a marked improvement
in the Chinese economy, particularly in the steel production industry resulting
in an increase in demand and prices of metal ore in China Armco's metal ore
distribution business. Performance was also aided by an increase in capital
available to China Armco through various credit facilities obtained throughout
2009.
Cost of goods sold for the full year of 2009 were $78.0 million, an increase
of $26.8 million compared to the full year of 2008. Gross margins were 10.3%
for the year ended December 31, 2009 versus gross margins of 7.5% in 2008. Overall
margins were favorably impacted by a rising price environment for a number of
metal ore distributed by China Armco coupled with China Armco's effective sourcing
capabilities. China Armco derives profits from sales of several types of ore.
Each type of ore has a target gross margin and when [combined] produced the 10.3%
blended gross profit margin for China Armco. Operating expenses for the full
year of 2009 were $1.7 million as compared to $1.3 million for the same period
in 2008. The increase is mainly a result of costs associated with the launching
of its metal recycling operations in 2010.
Income taxes were $1.2 million for the year ended December 31, 2009 as compared
to $787,000 for the full year of 2008. China Armco's China operations are subject
to a statutory tax rate of 17.5% and its Hong Kong distribution operations are
subject to Hong Kong SAR income taxes as of January 1, 2008.
For the year ended December 31, 2009 net income rose to $5.1 million as compared
to $3.3 million in 2008, an increase of 55%. On a basic and diluted basis, earnings
per share for the full year of 2009 were $0.51 per share based on 10.1 million
weighted average common shares outstanding as compared to $0.44 per basic and
diluted share in 2008 on 7.5 million weighted average common shares outstanding.
Balance Sheet Highlights
At December 31, 2009, total assets were $59.6 million, an increase of over 106%
from the $28.8 million at December 31, 2008. This increase was largely attributable
to the utilization of financing facilities obtained throughout 2009 to complete
construction and purchase equipment for its metal recycling facility as well
as purchase inventory to expand its distribution business. At December 31, 2009,
shareholder equity was $17.1 million compared to $15.3 million at December 31,
2008. Total current assets were $37.8 million with working capital of
approximately $5.3 million. Subsequent to year's end, China Armco received
approximately $6.6 million from the exercise of 1,310,346 warrants in March of
2010.
Commenting on this financial performance for 2009, Kexuan Yao, China Armco's
Chairman and CEO stated, "Our efforts to maintain business relationships and
work with our customers in the uncertain period late in 2008 and 2009 coupled
with our ability to secure necessary credit facilities, enabled us to thrive
and expand as China recovered throughout 2009. Commodities sales and metal
production continues to increase creating a very favorable environment for the
future. We are excited to launch the operations of our scrap metal facility and
believe we have laid the foundation for an extended period of expansion in both
top and bottom line performance for the remainder of 2010 and beyond. Our new
scrap metal production capacity places us among the top ten producers in China
and we intend to aggressively exploit this opportunity with an eye toward further
expansion."
China Armco Metals Conference Call to discuss China Armco's financial results
for the full year of 2009.
China Armco Metals will hold a conference call today to discuss its 2009 results
as well as provide its outlook for 2001. The call information is as follows:
-- Date: March 31, 2010
-- Time: 4:30 p.m. Eastern Daylight Time
-- Dial-in number for US/Canada: (877) 407-6180
-- Dial-In number for international callers: (201) 689-8050
-- Conference ID: CNAM 2009 Annual Earnings Release Conference Call
This call is being webcast and can be accessed at
http://www.investorcalendar.com/IC/CEPage.asp?ID=156911. The playback of the
webcast can be accessed through either site until April 6, 2010. To access the
webcast, you will need to have the Windows Media Player on your desktop. For
the free download of the Media Player, please visit:
http://www.microsoft.com/windows/windowsmedia/en/download/default.asp
The Teleconference will be available for replay until 11:59 PM April 6, 2010
-- Replay Number (Toll Free) : (877) 660-6853
-- Replay Number (international) : (201) 612-7415
-- Account #: 286
-- Conference ID: 348153
About China Armco Metals, Inc.
China Armco Metals, Inc. is engaged in the sale and distribution of metal ore
and non-ferrous metals throughout the PRC and has entered the recycling business
with the recent launch of operations of a 1-million ton per year shredder and
recycler of metals located on 32 acres of land acquired by China Armco. China
Armco maintains customers throughout China which includes the fastest growing
steel producing mills and foundries in the PRC. Raw materials are supplied from
global suppliers in India, Hong Kong, Nigeria, Brazil, Turkey, and the Philippines.
China Armco's product lines include ferrous and non-ferrous ore, iron ore, chrome
ore, nickel ore, magnesium, copper ore, manganese ore and steel billet. The
recycling facility is expected to be capable of recycling one million metric
tons of scrap metal per year which will position China Armco as one of the 10
largest recyclers of scrap metal in China. China Armco estimates the recycled
metal market as 70 million metric tons.
Safe Harbor Statement
In connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, China Armco Metals, Inc., is hereby providing cautionary
statements identifying important factors that could cause our actual results
to differ materially from those projected in forward-looking statements (as
defined in such act). Any statements that are not historical facts and that express,
or involve discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, indicated
through the use of words or phrases such as "will likely result," "are expected
to," "will continue," "is anticipated," "estimated," "intends," "plans,"
"believes" and "projects") may be forward-looking and may involve estimates and
uncertainties which could cause actual results to differ materially from those
expressed in the forward-looking statements. These statements include, but are
not limited to, our guidance and expectations regarding revenues, net income
and earnings. In addition, any such statements are qualified in their entirety
by reference to, and are accompanied by, the following key factors that have
a direct bearing on our results of operations:
We caution that the factors described herein could cause actual results to differ
materially from those expressed in any forward-looking statements we make and
that investors should not place undue reliance on any such forward-looking
statements. Further, any forward-looking statement speaks only as of the date
on which such statement is made, and we undertake no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances. New factors emerge from time to time,
and it is not possible for us to predict all of such factors. Further, we cannot
assess the impact of each such factor on our results of operations or the extent
to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. This press
release is qualified in its entirety by the cautionary statements and risk factor
disclosure contained in our Securities and Exchange Commission filings, including
our Annual Report on Form 10-K for the year ended December 31, 2009.
CHINA ARMCO METALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2009 2008
------------ -------------
ASSETS
CURRENT ASSETS:
Cash $ 743,810 $ 3,253,533
Pledged deposits 779,169 -
Accounts receivable, net 28,390,528 16,722,307
Inventories 496,149 197,402
Advance on purchases 3,903,782 3,680,872
Prepayments and other current assets 3,513,538 379,452
------------ -------------
Total Current Assets 37,826,976 24,233,566
PROPERTY, PLANT AND EQUIPMENT, net 19,642,861 2,377,816
LAND USE RIGHTS, net 2,158,234 2,208,902
------------ -------------
Total Assets $ 59,628,071 $ 28,820,284
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ 17,021,558 $ 2,914,345
Current maturities of long-term debt 2,193,881 -
Accounts payable 6,841,584 6,694,534
Advances from stockholder 35,475 236,595
Customer deposits 2,453,098 2,613,653
Corporate income tax payable 1,990,277 787,759
Value added tax and other taxes payable 1,312,455 251,553
Accrued expenses and other current
liabilities 654,756 32,899
------------ -------------
Total Current Liabilities 32,503,084 13,531,338
LONG-TERM DEBT 6,581,641 -
DERIVATIVE LIABILITY 3,417,974 -
------------ -------------
Total Liabilities 42,502,699 13,531,338
------------ -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000
shares authorized; none issued or outstanding - -
Common stock, $0.001 par value, 74,000,000
shares authorized, 10,310,699 and 10,092,449
shares issued and outstanding, respectively 10,310 10,092
Additional paid-in capital 2,556,966 6,942,588
Deferred compensation (676,500) -
Retained earnings 14,936,915 7,967,064
Accumulated other comprehensive income:
Foreign currency translation 297,681 369,202
------------ -------------
Total Stockholders' Equity 17,125,372 15,288,946
------------ -------------
Total Liabilities and Stockholders' Equity $ 59,628,071 $ 28,820,284
============ =============
CHINA ARMCO METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Year For the Year
Ended Ended
December 31, December 31,
2009 2008
------------ ------------
NET REVENUES $ 86,939,841 $ 55,358,567
COST OF GOODS SOLD 77,995,219 51,226,667
------------ ------------
GROSS PROFIT 8,944,622 4,131,900
OPERATING EXPENSES:
Selling expenses 447,051 121,362
General and administrative expenses 1,263,957 1,129,442
------------ ------------
Total operating expenses 1,711,008 1,250,804
------------ ------------
INCOME FROM OPERATIONS 7,233,614 2,881,096
------------ ------------
OTHER (INCOME) EXPENSE:
Interest income (14,092) (15,696)
Interest expense 526,326 164,110
Import and export agency income - (3,367)
Gain from contracts termination - (1,151,453)
Loss (gain) on change in fair value of
derivative liability 166,025 -
Loss on forward foreign currency contracts - 19,739
Government subsidy (52,347) -
Other (income) expense 271,249 (191,097)
------------ ------------
Total other (income) expense 897,161 (1,177,764)
------------ ------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
INCOME TAXES 1,212,057 787,759
------------ ------------
INCOME FROM CONTINUING OPERATIONS 5,124,396 3,271,101
DISCONTINUED OPERATIONS
Gain on disposal of discontinued operations,
net of tax - 61,514
------------ ------------
INCOME FROM DISCONTINUED OPERATIONS - 61,514
------------ ------------
NET INCOME 5,124,396 3,332,615
OTHER COMPREHENSIVE INCOME:
Foreign currency translation gain (loss) (71,521) 292,544
------------ ------------
COMPREHENSIVE INCOME $ 5,052,875 $ 3,625,159
============ ============
NET INCOME PER COMMON SHARE - BASIC AND
DILUTED:
Continuing operations $ 0.51 $ 0.44
Discontinued operations $ 0.00 $ 0.00
------------ ------------
Total net income per common share $ 0.51 $ 0.44
============ ============
Weighted Common Shares Outstanding - basic
and diluted 10,101,603 7,512,085
============ ============