China Gerui Advanced Materials Group Limited Announces the Release of Audited Financial Statements for the Year Ended December 31, 2013

News provided by

China Gerui Advanced Materials Group Limited

Apr 30, 2014, 04:45 ET

ZHENGZHOU, China, April, 30, 2014 /PRNewswire-FirstCall/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high- precision, cold-rolled steel producer in China, today announced audited financial results for the twelve months ended December 31, 2013.

As of December 31, 2013, an adjustment under ASC 840-40-25-3c was made to the financial statements to account for machinery and equipment that were subject to a sale-leaseback financing transaction with a net carrying amount of approximately $23.9 million. An  impairment loss of $2.7 million was recognized at the transaction date.  The one-time, non-cash adjustment impacts the cost of goods sold and is also reflected under impairment of fixed assets in the statement of cash flows, which was not classified in the earnings release that was filed on March 20, 2014.  A description of the adjustment can be found in notes 8 and 12 to the audited financial statements for the year ended December 31, 2013, which were included in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission today and is available at the Company's website: www.geruigroup.com. 

Use of Non-GAAP Financial Measures

This release includes the use of non-GAAP EBITDA, which are financial measures that are not defined by U.S. generally accepted accounting principles, or U.S. GAAP. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has included with this press release a table which includes a reconciliation of non-GAAP EBITDA to the most directly comparable respective U.S. GAAP financial measures. Non-GAAP EBITDA is defined in this earnings release as earnings before interest, taxes, depreciation, and amortization that were incurred in the fiscal year ended December 31, 2013. The Company's management believes that the presentation of these non-GAAP financial measures provides useful information regarding the Company's results of operations because it assists in analyzing and benchmarking the performance and value of the Company's business. The Company's calculation of non-GAAP EBITDA may not be consistent with similarly titled measures of other companies.

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 and industrial packaging, construction and household decorations materials, electrical appliances, and telecommunications wires and cables. 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. 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, 2013 and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the SEC, 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.

Company Contact:

Investor Relations Contacts:

Email: [email protected]

Vivian Chen

Kevin Theiss

Website: www.geruigroup.com

Managing Director

Account Director

Grayling

Grayling

Phone: 646-284-9427

Phone: 646-284-9409

Email: [email protected]

Email: [email protected]

- Financial Tables Follow –

CHINA GERUI ADVANCED MATERIALS GROUP LIMITED

CONSOLIDATED BALANCE SHEETS

(IN US DOLLARS)





December 31, 2013


December 31, 2012

Assets








Current assets



    Cash

$           237,060,422

$             228,861,009

    Certificates of deposit

24,200,075

16,372,128

    Restricted cash

114,803,746

145,413,726

    Accounts receivable, net

2,693,510

2,276,153

    Notes receivable

446,008

433,379

    Inventories

17,496,675

22,762,545

    Prepaid purchases

52,772,830

76,268,597

    Prepaid expenses

1,465,287

382,569

    Other receivables, net

3,123,914

2,270,073





Total current assets

454,062,467

495,040,179





Non-current assets



    Property, plant and equipment, net

132,974,737

134,110,657

    Land use right, net

30,997,489

13,625,738

    Deposit on acquisition of future land use right

-

24,076,660

    Deposit on acquisition of property, plant and equipment

2,184,217

266,312

    Other receivable

6,339,434

3,039,835

    Certificates of deposit

-

3,210,221





Total non-current assets

172,495,877

178,329,423





Total assets

$           626,558,344

$             673,369,602





Liabilities and stockholders' equity



Liabilities



Current Liabilities



    Accounts payable

$               8,471,560

$                 2,279,246

    Notes payable

225,812,313

259,546,395

    Term loans

50,299,816

57,462,962

    Financing obligation, sale-leaseback, current portion

6,813,055

-

    Land use right payable

1,460,671

1,419,314

    Income tax payable

336,829

5,140,306

    Customers deposits

14,411,044

11,635,999

    Accrued liabilities and other payables

6,799,128

5,818,060





Total current liabilities

314,404,416

343,302,282





Non-current liabilities



    Financing obligation, sale-leaseback, net of current portion

13,025,260

-





Total non-current liabilities

13,025,260

-





Total liabilities

327,429,676

343,302,282





Commitments and Contingencies








Stockholders' equity



Common stock,





Common stock, 100,000,000 shares authorized with no par

value;





         59,823,730 shares issued,





         59,522,910 and 59,561,899 shares outstanding as of





         December 31, 2013 and December 31, 2012, respectively

140,418,118

140,418,118

    Additional paid-in capital

-

4,978,698

    Treasury stock, at cost, 300,820 and 261,831 shares,





as of December 31, 2013 and December 31, 2012,

respectively

(498,799)

(414,063)

    Retained earnings

127,963,861

163,276,046

    Accumulated comprehensive income

31,245,488

21,808,521





Total stockholders' equity

299,128,668

330,067,320





Total liabilities and stockholders' equity

$           626,558,344

$             673,369,602














CHINA GERUI ADVANCED MATERIALS GROUP LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN US DOLLARS)

 



 For the Three Months Ended
December 31,
(Unaudited)

 For the Years Ended
December 31,

 







2013

2012

2013

2012

 Revenue



$    46,211,805

$    63,889,524

$     165,829,096

$  265,486,082

 Cost of revenue


(51,624,916)

(57,037,147)

(161,765,763)

(208,541,058)

 Gross Profit


(5,413,111)

6,852,377

4,063,333

56,945,024

 Operating expenses:









General and

administrative expenses

(3,757,658)

(5,738,929)

(11,311,200)

(13,168,132)

Selling and

marketing expenses

(427,942)

(457,768)

(1,682,443)

(1,446,383)

Total operating expenses

(4,185,600)

(6,196,697)

(12,993,643)

(14,614,515)

Operating (loss)/income

(9,598,711)

655,680

(8,930,310)

42,330,509

Other income and (expense):









     Interest income

1,168,191

1,092,002

4,619,617

3,576,741

     Interest expenses

(1,187,391)

(2,063,684)

(10,617,866)

(8,228,472)

     Sundry income

794,168

146,525

932,689

351,483









(Loss)/Income before

income taxes

(8,823,743)

(169,477)

(13,995,870)

38,030,261

Income tax expense

(469)

(364,906)

(141,547)

(11,897,173)

Net (loss)/income


$    (8,824,212)

$       (534,383)

$   (14,137,417)

$ 26,133,088











(Net loss)/Earnings per share







    - Basic

$              (0.15)

$              (0.01)

$               (0.24)

$            0.45

    - Diluted

$              (0.15)

$              (0.01)

$               (0.24)

$            0.45











Weighted average common shares outstanding






    - Basic



59,522,910

59,769,786

59,540,872

58,543,076

    - Diluted

59,522,910

59,769,786

59,540,872

58,543,076














CHINA GERUI ADVANCED MATERIALS GROUP LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US DOLLARS)















For the Years Ended December 31,






2013

2012









Cash flows from operating activities:












Net (loss)/income

$        (14,137,417)

$          26,133,088









Adjustments to reconcile net (loss)/income to net


    cash from operating activities:



Depreciation of property, plant and equipment

11,524,981

10,899,049

Impairment of fixed asset

2,713,537

-

Gain on disposal of property, plant and equipment

-

(56,107)

Amortization of land use right

741,816

330,244

Stock-based compensation

32,891

3,705,109

Bad debts

695,244

-

Writedown of inventories

1,416,661

476,266









Changes in assets and liabilities:



Accounts receivable

(573,816)

4,126,206

Notes receivable, net

-

139,228

Inventories


4,428,013

1,453,507

Prepaid expenses



(1,056,729)

6,435

Prepaid purchases

25,351,739

(29,666,016)

Other receivable

778,709

(142,305)

Accounts payable

6,038,617

(5,813,580)

Income tax payable

(4,741,140)

(369,983)

Customers deposit

2,401,273

(11,856,194)

Accrued liabilities and other payables

1,921,977

(1,466,919)









Net cash provided by/(used in) operating activities

37,536,356

(2,101,972)









Cash flows from investing activities:



Cash paid for property, plant and equipment

(10,064,992)

(30,561,916)

Proceeds from disposal of property, plant and equipment

-

59,517

Payment of acquisition of future land use right

(19,214,984)

(11,112,875)

Advance to unrelated third parties

(2,521,616)

(4,017,304)

Repayment of advance to unrelated third parties

777,028

5,252,326

Repayment of advance to related parties

311,546

-

Investment in certificates of deposit, net

(3,989,448)

(16,193,047)









Net cash used in investing activities

(34,702,466)

(56,573,299)









Cash flows from financing activities:



Repayment of term loans

(63,179,835)

(50,484,204)

Proceeds from term loans



54,468,182

63,184,632

Repayment of financing obligations, sale-leaseback

(1,612,843)

-

Proceeds from sale-leaseback financing

17,993,226

-

Repayments of notes payable

(578,986,192)

(429,512,621)

Proceeds from notes payable

538,277,535

481,505,001

Purchase of treasury stock

(84,736)

(1,554,674)

Changes in restricted cash, net

34,350,716

(25,788,547)

Repayment of advance from unrelated third parties

(1,673,696)

-

Advance from unrelated third party

-

1,587,554









Net cash (used in)/provided by financing activities

(447,643)

38,937,141









Net increase/(decrease) in cash

2,386,247

(19,738,130)









Effect on change of exchange rates

5,813,166

1,998,222









Cash as of January 1

228,861,009

246,600,917









Cash as of December 31

$        237,060,422

$        228,861,009









Supplemental disclosures of cash flow information:











Cash paid during the year for:



Interest paid

$          10,617,869

$            8,322,263

Income tax paid

$            5,024,234

$          12,267,157









Net cash payment during the year for:



Prepaid deposit of land use right as part of the dividend paid

to acquire land use right from related company

$            6,971,373

$                            -





CHINA GERUI ADVANCED MATERIALS GROUP LIMITED

RECONCILIATION OF NON-GAAP FINANCIAL DATA (AUDITED)

(IN US DOLLARS)



Non-GAAP EBITDA

For the Year Ended December 31,

 

2013

2012

Net (Loss) / Income, GAAP amount
per consolidated statement of income

$                     (14,137,417)

$                       26,133,088

Interest income

(4,619,617)

(3,576,741)

Interest expenses

10,617,866

8,228,472

Income tax expense

141,547

11,897,173

Depreciation of property, plant and
equipment

11,524,981

10,899,049

Amortization of land use right

741,816

330,244

Impairment of fixed asset

2,713,537

-




Non-GAAP EBITDA

$                         6,982,713

$                       53,911,285

Stock based compensation

32,891

3,705,109

Non-GAAP Adjusted EBITDA

$                         7,015,604

$                       57,616,394

SOURCE China Gerui Advanced Materials Group Limited

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED