Annec Green Refractories Corporation Reports Financial Results for the Second Quarter of 2011

Achieves 53.2% Increase in Revenues to $24 Million and 19.3% Increase in Net Income to $1.39 Million for the Second Quarter of 2011 compared to the same period of 2010

Aug 17, 2011, 00:27 ET from Annec Green Refractories Corporation

ZHENGZHOU, China, Aug. 17, 2011 /PRNewswire-Asia/ -- ANNEC GREEN REFRACTORIES CORPORATION (OTCBB: ANNC), one of leading refractory enterprises in China, today announced financial results for the second quarter of 2011:

Second Quarter 2011 Highlights

  • Revenue increased 53.2% to $24.3 million compared to $15.8 million for Q2 2010
  • Gross profit increased 59.3% to $8.5 million versus $5.3 million for Q2 2010
  • Net income for increased 19.3% to $1.39 million versus $1.16 million for Q2 2010

Mr. Fuchao Li, Chairman, commented, "We are very pleased to report a 53.2 percent increase in revenues and a 19.3 percent increase in net income for the second quarter of 2011 compared to the same period of 2010. Our strategy is to increase our presence in overseas markets while consolidating market share based on established distribution channels in China in 2011."

In the second quarter of 2011, one of the Company's R&D programs was awarded the first prize of Zhengzhou progress prize in scientific and collective technology, another R&D program was honored with a scientific achievement second prize by Henan industry and information technology.

ABOUT ANNEC GREEN REFRACTORIES CORPORATION

We indirectly control through subsidiaries, Zhengzhou Annec Industrial Co., Ltd. ("Annec"), a PRC wholly-Foreign Owned Enterprise, which is engaged in the business of design, manufacturing 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 –


ANNEC GREEN REFRACTORIES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

____________





June 30,

December 31,


2011

2010 (1)




 ASSETS 






 Current assets: 



 Cash 

$          1,044,785

$          1,504,971

 Restricted cash 

5,415,555

4,425,167

 Bank notes receivable 

1,468,582

1,056,569

 Accounts receivable (net of allowance of $803,385 and $572,793 at  



 June 30, 2011 and December 31, 2010, respectively) 

18,187,504

16,130,117

 Retentions receivable 

8,771,042

4,553,071

 Prepaid expenses and deposits 

12,173,860

5,604,102

 Other receivables 

4,782,949

5,420,233

 Inventories 

30,377,388

25,703,214




 Total current assets 

82,221,665

64,397,444




 Long-term retentions receivable 

4,971,764

5,425,110

 Deposits for capital expenditure 

3,170,386

3,235,272

 Plant and equipment, net 

12,651,927

12,093,625

 Land use rights, net 

2,210,017

2,193,823

 Long-term investment 

154,703

151,722




 Total assets 

$       105,380,462

$        87,496,996




 LIABILITIES AND STOCKHOLDERS' EQUITY 






 Current liabilities: 



 Short-term loans 

9,569,926

8,475,193

 Bank notes payable 

6,961,634

5,310,272

 Accounts payable and accrued expenses 

18,126,525

11,271,228

 Advances from customers 

28,254,389

23,105,778

 Salaries payable 

493,795

436,635

 Taxes payable 

1,838,959

2,535,965

 Related party payable 

1,383,663

917,008

 Loans payable to employees 

1,920,593

2,154,409

 Loans payable to other individuals 

2,784,653

1,972,387

 Other payable 

2,193,531

1,918,056




 Total current liabilities 

73,527,668

58,096,931




 Deferred income 

2,855,312

2,884,600

 Long-term loans 

1,061,262

1,189,501




 Total liabilities 

77,444,242

62,171,032




 Commitments and contingencies (Note 13) 






 Stockholders' equity: 



 Series A preferred stock, $0.0001 par value; 20,000,000 shares authorized; zero shares   



 issued and outstanding 

-

-

 Common stock, $0.0001 par value; 100,000,000 shares authorized; 19,995,701 issued  



 and outstanding 

2,000

2,000

 Additional paid-in capital 

4,046,992

4,046,992

 Retained earnings 

22,792,112

20,700,451

 Accumulated other comprehensive income  

1,095,116

576,521




 Total stockholders' equity 

27,936,220

25,325,964




 Total liabilities and stockholders' equity 

$  105,380,462.00

$    87,496,996.00




(1) Derived from the consolidated audited financial statements for the year ended December 31, 2010 contained in our amended current report on Form 8-K/A filed with the SEC on May 11, 2011.





ANNEC GREEN REFRACTORIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

____________


Three Months Ended

Six Months Ended


June 30,

June 30,


2,011

2,010

2,011

2,010






Revenues

24,271,294

15,839,082

37,329,323

23,811,563






Cost of revenues

15,791,816

10,516,874

23,365,232

15,558,446






Gross profit

8,479,478

5,322,208

13,964,091

8,253,117






Operating expenses:





Selling  

4,540,047

1,742,207

6,637,934

2,923,093

General and administrative

1,329,832

1,563,140

2,681,962

2,827,785






Total operating expenses

5,869,879

3,305,347

9,319,896

5,750,878






Income from operations

2,609,599

2,016,861

4,644,195

2,502,239






Other income (expense):





Interest income

85,808

26,981

184,644

51,492

Interest expense

(1,087,524)

(340,310)

(1,692,784)

(619,466)

Other income (expense), net

105,213

(303,228)

241,763

(378,130)






Total other income (expense), net

(896,503)

(616,557)

(1,266,377)

(946,104)






Income before provision for  





income taxes

1,713,096

1,400,304

3,377,818

1,556,135






Provision for income taxes

326,020

237,494

587,891

265,617






Net income  

1,387,076

1,162,810

2,789,927

1,290,518






Net income per share–basic

0.07

0.06

0.14

0.06

Net income per share–diluted

0.07

0.06

0.14

0.06

Shares used in computing net income  





per share–basic

19,995,701

19,995,701

19,995,701

19,995,701

Shares used in computing net income  





per share–diluted

19,995,701

19,995,701

19,995,701

19,995,701



For more information, please contact:

Yolanda Li

Tel:     +86-371-6999-9012

Mobile: +86-152-1012-1018

Email: annecyolanda@annec.com.cn



SOURCE Annec Green Refractories Corporation