SOURCE: China Armco Metals, Inc.

March 30, 2012 18:29 ET

China Armco Metals Announces Financial Results for the Fourth Quarter and Full Year of 2011

SAN MATEO, CA--(Marketwire - Mar 30, 2012) - China Armco Metals, Inc. (NYSE Amex: CNAM) ("China Armco" or "the Company"), a distributor of imported metal ore and metal recycler, today announced its financial results for its fourth quarter and for the fiscal year ended December 31, 2011.

CHINA ARMCO METALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2011 December 31, 2010
ASSETS
CURRENT ASSETS:
Cash $ 1,042,591 $ 3,097,917
Pledged deposits 8,357,670 12,643,671
Marketable securities 1,636,742 2,890,380
Accounts receivable 758,500 19,115,019
Inventories 33,344,547 10,439,831
Advance on purchases 3,079,684 6,509,846
Prepaid corporate income taxes-Renewable Metals 467,546 -
Prepayments and other current assets 1,744,047 4,729,935
Total Current Assets 50,431,327 59,426,599
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 42,165,437 34,633,639
Accumulated depreciation (3,514,893 ) (761,515 )
PROPERTY, PLANT AND EQUIPMENT, net 38,650,544 33,872,124
LAND USE RIGHT
Land use right 6,422,956 2,338,289
Accumulated amortization (209,474 ) (153,965 )
LAND USE RIGHT, net 6,213,482 2,184,324
Total Assets $ 95,295,353 $ 95,483,047
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ 6,711,898 $ 24,765,820
Banker's acceptance notes payable and letters of credit 8,178,029 4,174,355
Current maturities of capital lease obligation 2,195,177 727,756
Current maturities of long-term debt 3,931,745 4,537,342
Accounts payable 18,543,129 3,435,528
Advances received from Chairman and CEO 607,009 799,394
Customer deposits 5,851,769 1,345,304
Corporate income tax payable-HK 99,042 1,091,038
Value added tax and other taxes payable 1,150 -
Accrued expenses and other current liabilities 2,713,532 6,316,568
Total Current Liabilities 48,832,480 47,193,105
CAPITAL LEASE OBLIGATION, net of current maturities 4,127,354 1,540,915
LONG-TERM DEBT, net of current maturities - 3,781,119
DERIVATIVE LIABILITY 203 138,143
Total Liabilities 52,960,037 52,653,282
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,15,421,008 and 14,840,948 shares issued and outstanding, respectively
15,421

14,841
Additional paid-in capital 29,733,619 28,966,596
Retained earnings 9,366,035 12,711,039
Accumulated other comprehensive income (loss):
Change in unrealized loss on marketable securities (797 ) (506,278 )
Foreign currency translation gain 3,221,038 1,643,567
Total Stockholders' Equity 42,335,316 42,829,765
Total Liabilities and Stockholders' Equity $ 95,295,353 $ 95,483,047
CHINA ARMCO METALS, INC. AND SUBSIDIARIES
CONSOLIDATED ONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Year
Ended
December 31, 2011
For the Year
Ended
December 31, 2010
NET REVENUES $ 106,216,065 $ 68,786,790
COST OF GOODS SOLD 100,363,253 66,325,780
GROSS PROFIT 5,852,812 2,461,010
OPERATING EXPENSES:
Selling expenses 293,887 1,157,725
Professional fees 824,275 673,547
General and administrative expenses 3,699,401 2,989,104
Operating cost of Renewable Metals idle manufacturing facility 1,946,369 -
Total operating expenses 6,763,932 4,820,376
LOSS FROM OPERATIONS (911,120 ) (2,359,366 )
OTHER (INCOME) EXPENSE:
Interest income (102,456 ) (45,020 )
Interest expense 1,792,885 475,871
Foreign currency transaction gain - marketable securities (220,881 ) -
Impairment other than temporary - marketable securities 1,980,000 -
Gain from vendor price adjustment - (1,011,080 )
Change in fair value of derivative liability (137,940 ) (91,269 )
Loan guarantee expense 158,066 244,998
Investment credit - government (1,547,030 ) -
Other (income) expense 278,578 139,747
Total other (income) expense 2,201,222 (286,753 )
LOSS BEFORE INCOME TAXES (3,112,342 ) (2,072,613 )
INCOME TAX PROVISION 232,662 153,263
NET LOSS (3,345,004 ) (2,225,876 )
OTHER COMPREHENSIVE INCOME (LOSS):
Change in unrealized loss of marketable securities (797 ) (506,278 )
Foreign currency translation gain 1,577,471 1,345,886
COMPREHENSIVE INCOME (LOSS) $ (1,768,330 ) $ (1,386,268 )
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
Net loss per common share - basic and diluted $ (0.22 ) $ (0.16 )
Weighted Average Common Shares Outstanding - basic and diluted 15,366,743 13,804,381
CHINA ARMCO METALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year
Ended
December 31, 2011
For the Year
Ended
December 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,345,004 ) $ (2,225,876 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation expense 2,726,315 620,411
Amortization expense 49,376 47,484
Change in fair value of derivative liability (137,940 ) (91,269 )
Gain from foreign currency exchange rate change on marketable securities (220,881 ) -
Impairment other than temporary - marketable securities 1,980,000 -
Stock based compensation 580,423 1,098,366
Changes in operating assets and liabilities:
Accounts receivable 18,569,271 9,726,980
Inventories (22,498,388 ) (9,926,767 )
Advance on purchases (852,982 ) (2,498,632 )
Prepayments and other current assets 2,688,460 (1,084,517 )
Accounts payable 14,992,427 (3,575,163 )
Customer deposits (491,603 ) (1,191,421 )
Taxes payable (990,833 ) (2,256,437 )
Accrued expenses and other current liabilities 1,305,792 5,639,489
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 14,354,433 (5,717,352 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from release of pledged deposits 50,146,115 -
Payment made towards pledged deposits (45,373,468 ) (11,844,576 )
Purchase of marketable securities - (3,396,658 )
Purchases of property and equipment (2,967,453 ) (14,180,038 )
Purchase of land use rights (2,664,162 ) -
NET CASH USED IN INVESTING ACTIVITIES (858,968 ) (29,421,272 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable 61,308,628 7,582,524
Repayment of loans payable (79,757,796 ) -
Banker's acceptance notes payable 3,837,383 4,174,355
Proceeds from mortgage payable 5,897,617 2,268,671
Repayment of mortgage payable (1,934,133 ) -
Proceeds from long-term debt - 1,512,447
Repayment of long-term debt (4,718,094 ) (2,268,671 )
Advances from (repayment to) Chairman and CEO (192,385 ) 1,264,801
Sales of common stock and warrants, net of offering costs - 9,112,974
Proceeds from exercise of warrants - 6,690,760
Proceeds from exercise of options - 6,500,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (15,558,780 ) 36,837,861
EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,990 654,870
NET CHANGE IN CASH (2,055,325 ) 2,354,107
Cash at beginning of year 3,097,917 743,810
Cash at end of year $ 1,042,591 $ 3,097,917
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid $ 1,792,885 $ 475,871
Income tax paid $ 1,224,230 $ 1,489,888
NON CASH FINANCING AND INVESTING ACTIVITIES:
Accrued compensation paid in common shares in lieu of cash $ 282,323 $ 500,000
Advance payments used towards construction in progress and land use rights $ 4,468,337 $ -

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