China Armco Metals Announces First Quarter 2012 Financial Results
(firmenpresse) - SAN MATEO, CA -- (Marketwire) -- 05/15/12 -- 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 the first quarter of 2012.
For the quarter ended March 31, 2012, net revenue remained at around $49 million, with a slight decrease of $0.4 million compared to the same period of 2011. China Armco sold 321,274 tons of iron ore and various other ores at an average price of $126 per ton through its trading business compared to sales of a total of 253,249 tons in the first quarter of 2011. China Armco's metal recycling business contributed $8.7 million in sales during the first three months of 2012, increased 38% compared to $6.3 million in sales in same period of 2011.
Gross profit for the first quarter of 2012 decreased 54% to $1.5 million, compared to $3.2 million in the first quarter of 2011. Gross profits for the trading and metal recycling business were $1.32 million and $0.14 million respectively. Gross margin for the trading and recycling businesses declined to 3% and 2% respectively, compared to 6% for both businesses in the first quarter of 2011.
Operating expenses decreased $0.1 million to $1.7 million for the first quarter of 2012 due to decreased professional fees and selling expenses related to port and warehouse fee. As a percentage of sales, operating expenses were 3.4% and 3.6% in the first quarter of 2012 and 2011, respectively, reflecting stable operating leverage at this high level of sales.
Operating loss for the first quarter of 2012 was $0.2 million compared to an operating income of $1.4 million in the first quarter of 2011.
Net loss for the first quarter of 2012 was $1.66 million which included a $0.4 million write-off of investment, or $0.10 loss per diluted share, compared to net income $0.6 million or $0.04 per share for the same period last year. The weighted average diluted shares outstanding increased from 15.3 million in the first quarter of 2011 to 16.7 million in the first quarter of 2012, due to equity issuance for payment and compensation and converted warrants during 2012.
Mr. Kexuan Yao, Chairman and CEO of China Armco, stated, "The first quarter was the most difficult quarter for China steel industry in recent years which whole industry suffered quarterly loss first time in 10 years. Both our trading and recycling businesses were adversely affected by the brutal market resulted in sharp declines on gross margins during the quarter. However, our revenue in recycling business continued to grow steady; the quantities of metal ores and scrap metals we sold in the first quarter reached record high compared to any first quarter in the past. We believe our solid and sound foundation in the industry, our strong relationship with our customers and suppliers around the world, and the strategy we have developed will enable us to overcome various challenges and fully leverage our operating model to generate incremental revenue and profitability. We consider the market is recovering from its bottom and we are well-positioned to capture a growing share of an increasing market demand for our products."
As of March 31, 2012, the Company had $0.98 million in cash and cash equivalents, compared to $1.04 million at the end of 2011. Working capital was ($1 million) and a current ratio of 1:1.02 on March 31, 2012 compared to $1.6 million and 1.03:1 on March 31, 2011. Total accounts receivable were $28.2 million at the end of the first quarter of 2012 compared to $0.8 million at the year end of 2011 primarily due to the $26.5 million accounts in receivable related to the sales of 230,000 MT of iron ore, which we expect to collect the payment in full during the second quarter of 2012. As of March 31, 2012, shareholders' equity was $41 million, essentially flat from December 31, 2011.
The Company had a $26 million net cash outflow from operations the first quarter of 2012 compared to a net outflow of $9.2 million in the same period last year. During the first quarter of 2012, China Armco successfully completed large order sales of metal ores and reduced inventories by $22 million to control market risks and speed up capital turnover. The Company has bank facilities, which provide for cash borrowings or the issuance of commercial letters of credit required in its metal ore trading business, aggregating $102 million. Approximately $58 million was available under these facilities at March 31, 2012.
Our trading business remained at approximately $40 million in net revenues during the first quarter of 2012 compared to the same period in 2011. In the first quarter of 2012, we completed large order sales of metal ores quickly and lowered our inventory level substantially to control market risks and speed up our capital turnover. We continued to firm our business relationship with large suppliers and stabilize our supply capacity .We believe our effort to build our supply capacity will benefit us in the long term and strengthen our market position in the industry in the PRC.
During the first quarter of 2012, despite the Chinese New Year holiday and market downturn, both production and revenues for our recycling business increased significantly compared to the same period of last year. The scrap metals recycled at our recycling facility increased by 103% to 25,071 MT compared to 12,373 MT in the same period of last year. Our scrap metal business sold approximately 16,753 MT of scrap metals, generating approximately $8.7 million of revenue. By comparison, for the first quarter of 2011, our scrap metal business sold approximately 14,435 MT of scrap metals, generating approximately $6.3 million of revenue. We have conducted a series of cost testing and variance analysis to improve our cost control and implement precise management in our recycling operations. We also developed a strategy to expand our sources of raw material acquisition and to establish a supply chain network locally to increase and stabilize the availability of raw materials near and for our recycling operation. We expect to continue to expend resources to build our overseas supply channels and recently development includes negotiations on business cooperation with U.S. and Japan suppliers.
The Company will conduct a conference call at 5:00 p.m. ET on Tuesday, May 15, 2012. To attend the call, please use the dial-in information below. When prompted, ask for the "China Armco Metals call" and/or be prepared to provide the conference ID.
Conference Call
Date: Tuesday, May 15, 2012
Time: 5:00 p.m. Eastern Time, US
Conference Line Dial-In (U.S.): 1-877-407-9210
International Dial-In: 1-201-689-8049
Conference ID# 394011: 2012 1st Quarter Financial Results Call
Webcast link:
The playback of the webcast can be accessed until 11/15/2012. 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:
Teleconference Replay:
Replay Number (Toll Free): 1-877-660-6853
Replay Number (International): 1-201-612-7415
Replay Passcodes (both required for playback):
Account#:286
Conference ID#: 394011
Teleconference will be available for replay until 11:59 PM 05/29/2012
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China Armco Metals, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals throughout the PRC and is in the recycling business in the PRC. China Armco's customers throughout China include some of the fastest growing steel producing mills and foundries in the PRC. Raw materials are acquired from a global group of suppliers located in diverse countries, including, but not limited to, Brazil, India, Indonesia, Ukraine and the United States. China Armco's product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet and recycled scrap metals. For more information about China Armco, please visit .
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 expectations regarding our revenues and production related to our scrap metal recycling operations and the extent of government imposed energy restrictions and resulting blackouts and impact on our recycling operations.
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 following, including, but not limited to, any expectations with respect to the Company's revenues and operations, institution of governmental regulations relating to our businesses and the international economic climate, and the cautionary statements and risk factor disclosures contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2011.
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For more information, please contact:
Company:
Christina Xiong
Investor Relations
China Armco Metals, Inc.
Office: 650.212.7620
Email:
Website:
Julie Gu
Office: 021-62375286
Email:
Website:
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Datum: 15.05.2012 - 12:30 Uhr
Sprache: Deutsch
News-ID 146555
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contact information:
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SAN MATEO, CA
Kategorie:
Mining & Metals
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