China Gerui Advanced Materials Group Limited Announces Revisions to Guidance and a Strategic Update
ZHENGZHOU, China, Aug. 13, 2012 /PRNewswire-Asia-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high precision, cold-rolled strip steel producer in China, today announced that it will be revising its fiscal 2012 revenue and earnings per share guidance and providing a strategic update as to its recent export activities.
2012 Guidance Revision
For the fiscal year 2012, China Gerui has lowered its revenue guidance to be in the $290 million to $305 million range, below its previously announced revenue guidance range of $395 million to $410 million. The Company has also lowered its earnings per share guidance for 2012 to be in the $0.75 to $0.85 range, below its previously announced earnings per share guidance range of $1.32 to $1.37.
Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui, commented, "Our lowered guidance reflects the industry wide reduction in steel prices which has led to a decrease in the Company's average selling price primarily due to slowing macroeconomic conditions in China. Although the Company's sales volume, a key indicator of demand, has been sustainable so far in 2012, our cost-plus pricing methodology was unable to offset raw material cost declines which has caused our average selling price to decline significantly."
"Despite the currently challenging market environment, we are confident that our value-added capabilities in the high-end specialized steel segment will enable us to succeed in our segment in the long-term as we leverage our new production capabilities to develop new market opportunities over time," Mr. Lu continued.
2012 Strategic Update
As noted in the Company's first quarter earnings release, the Company experienced a contraction in its average selling price relative to previous quarters attributable to the slowing growth of the Chinese economy. Among several strategies that the Company intends to deploy to address the current market environment is to diversify its customer base and revenue on a global basis and pursue opportunities to penetrate the high-end cold-rolled steel sector worldwide. As a step in this direction, the Company recently announced that it began to export its high end specialized steel products to customers located in Turkey and India in the second quarter.
In today's further announcement, China Gerui recently received a purchase order from a leading U.S. packaging company for its high precision cold-rolled steel strip products. The order stipulates that the finished wide-strip steel will have a width up to 915 mm and thickness of approximately 0.155 mm which is intended to be used as cable wrap after further value-added processing by the U.S. customer. We note that the purchase order is for testing and trial purposes by the customer, which is a fairly standard buying procedure, and the Company believes that the purchase order, while not immediately having a material impact on operating results, will lead to regular and continuous orders going forward.
"The leading industry position of this U.S. company is testimony to China Gerui's growing reputation in terms of both our product quality and enhanced specialization capabilities," Mr. Lu stated. "Our adoption by a wider customer base fits our strategy of being a global specialized steel producer with the objective to reach new markets and fully optimize our new capacity and technologies."
Second Quarter 2012 Conference Call Information
The Company plans to host a conference call to discuss its second quarter financial results ended June 30, 2012 at 10:00 am ET on August 15, 2012. The Company will release its financial results prior to the conference call. Listeners may access the call by dialing +1 (866) 395-5819 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (706) 643-6986. The conference call participant pass code is 17679169.
A replay of the conference call will be available for 14 days starting from 1:00 pm ET on Wednesday, August 15, 2012. To access the replay, dial +1 (855) 859-2056. International callers should dial at +1 (404) 537-3406. The passcode is 17679169.
A live and archived webcast of the call will be available on the Company's website at http://www.geruigroup.com/Investors.html. To listen to the live webcast, please go to the Company's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software.
About China Gerui Advanced Materials Group Limited
China Gerui Advanced Materials Group Limited is a leading niche and high value-added steel processing company in China. The Company produces high-end, high-precision, ultra-thin, high- strength, cold-rolled steel products that are characterized by stringent performance and specification requirements that mandate a high degree of manufacturing and engineering expertise. China Gerui's products are not standardized commodity products. Instead, they are tailored to customers' requirements and subsequently incorporated into products manufactured for various applications. The Company sells its products to domestic Chinese customers in a diverse range of industries, including the food packaging, telecommunication, electrical appliance, and construction materials industries. For more information, please visit http://www.geruigroup.com.
Safe Harbor Statement
Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended December 31, 2011 and otherwise in our SEC reports and filings, including the final prospectus for our offering. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.
SOURCE China Gerui Advanced Materials Group Limited