- 3rd Quarter revenue reaches $63.4 million up 45% from 3rd Quarter
of 2007 DEERFIELD BEACH, Fla., Nov. 13 /PRNewswire-FirstCall/ --
China Direct, Inc. (NASDAQ:CDS), a U.S. company that owns
controlling stakes in a diversified portfolio of Chinese entities
and provides advisory services to Chinese businesses, announced
today the Company's financial results for the third quarter of
2008. Financial Highlights Revenues for the third quarter ended
September 30, 2008 increased to $63.4 million as compared to
revenues of $43.6 million in the third quarter ended September 30,
2007. The increase in revenues was mainly attributable to increased
sales from our magnesium segment as a result of acquisitions and
our investment to expand production capacity. Gross profit for the
third quarter of 2008 was $10.6 million as compared to $4.6 million
in the third quarter ended September 30, 2007. Total operating
expenses for the third quarter of 2008 increased to $3.17 million
as compared to $1.03 million in the third quarter of 2007. The
increase in operating expenses reflects the costs associated with
our expanded operations both in the U.S. and China associated with
the financial management and integration of our expanding
operations. The Company also experienced increases in professional
fees, travel expenses, as well as non-cash option charges.
Operating income was $7.4 million and $3.6 million for the third
quarter of 2008 and 2007 respectively, yielding operating margins
of 11.7% and 8.1% over the relevant periods. The increase in
operating margins was largely a result of a shift in the company's
business mix in its magnesium operations towards higher margin
production sales as compared to largely distribution sales in the
third quarter of 2007. Results were also strengthened by a strong
performance from the consulting segment in the third quarter of
2008. Net income for the third quarter of 2008 was $5.9 million as
compared to $3.0 million in the third quarter of 2007. Non-GAAP
earnings were $0.28 per basic share, excluding non-cash items, as
compared to $0.21 per basic share in the third quarter of 2007. On
a GAAP basis, earnings were $0.25 per basic share, as compared to
$0.18 per basic share in the third quarter of 2007. On a diluted
basis, excluding non-cash items, non-GAAP earnings for the third
quarter of 2008 were $0.26 per share as compared to $0.18 per share
in the third quarter of 2007. For the first nine months of 2008
earnings on a non-GAAP basis were $0.83 per basic share, excluding
certain non-cash items, as compared to $0.53 per basic share for
the same period in 2007. On a GAAP basis, earnings were $0.52 per
basic share, as compared to $0.49 per basic share in the first nine
months of 2007. On a diluted basis, non-GAAP earnings for the first
nine months of 2008 were $0.75 per share as compared to $0.48 per
share for the same period in 2007. Non-cash items excluded in all
non-GAAP calculations are set forth in the reconciliation of GAAP
to non-GAAP net income set forth below. Our results for the first
nine months of 2008 were driven by a strong performance in our
magnesium operations and advisory services. Both revenue and net
income for the first nine months of 2008 have surpassed that of the
full year of 2007. In the third quarter of 2008, we began to ramp
production of our new magnesium facility in Baotou, launched our
steel and wood distribution business in our Basic Materials segment
and acted as an advisor to China Armco Metals, Inc., a metal ore
distributor in China that raised over $7 million in capital in
August 2008 to launch a scrap steel recycling facility in 2009.
Balance Sheet At September 30, 2008, total assets were $131.0
million, an increase of 48.4% from $88.3 million at December 31,
2007. At September 30, 2008, shareholder equity was $69.4 million,
an increase of 62.9% from $42.6 million at December 31, 2007. At
September 30, 2008, cash and equivalents were $19.6 million and
working capital was $68.1 million as compared to cash and
equivalents of $19.0 million and working capital of $40.7 million
at December 31, 2007, respectively. 2008 Financial Guidance Our
business outlook reflects a balance of risks and the likelihood of
a continued economic slowdown. The trends seen late in the third
quarter are now expected to continue in the fourth quarter. As we
near the end of 2008, the Company now sees its expected net income
ranging between $23 to $25 million on expected revenue ranging
between $255 and $270 million. The Company will further discuss its
outlook for the remainder of 2008 during its conference call today,
November 13, 2008 at 4:30 PM EST. Commenting on the quarter, Mr.
Marc Siegel, President of China Direct, Inc. stated, "We are
pleased with our strong performance for the first nine months of
2008. In this economic environment, the Company is focused on three
main initiatives: improving overall management efficiency,
strengthening our resources in China as we continue our migration
to an operating company, and acquiring substantially undervalued
operations in China." Mr. Siegel concluded, "We see China's $586
billion stimulus package as a catalyst for future expansion in
2009. We are confident that our business strategy, coupled with our
strong balance sheet which is virtually debt free, has positioned
us to continue to grow and thrive in a challenging worldwide
economy. We believe now, more than ever before in our history,
potential attractive targets in great need of our services exist.
CDS is poised to emerge as a major force in the Chinese and US
markets in the future." China Direct Conference Call to discuss the
Company's financial results for the third quarter of 2008 as well
as to discuss its business outlook for the remainder of 2008. The
conference call will take place at 4:30 p.m. EST on Thursday
November 13th, 2008. Anyone interested in participating should call
1-866 394-7735 if calling within the United States or
1-706-758-1915 if calling internationally approximately 5 to 10
minutes prior to 4:30 p.m. Participants should ask for the China
Direct 2008 Third Quarter Financial Results conference call/
Conference ID 72664979. This call is being webcast by ViaVid
Broadcasting and can be accessed at China Direct's website at
http://www.chinadirectinc.com/. The webcast may also be accessed at
ViaVid's website at http://www.viavid.net/ or directly at
http://viavid.net/dce.aspx?sid=00005919 . Individuals unable to
participate in the conference call may hear an audio webcast
replay. The audio webcast service is being provided by ViaVid
Broadcasting and can be accessed at China Direct's website at
http://www.chinadirectinc.com/ . The webcast may also be accessed
at ViaVid's website at http://viavid.net/dce.aspx?sid=00005919 .
The playback of the webcast can be accessed through November 13,
2009 on either site. 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:
http://www.microsoft.com/windows/windowsmedia/en/download/default.asp
. About China Direct, Inc. China Direct, Inc. (NASDAQ:CDS) is a
diversified management and advisory services organization
headquartered in the U.S. Our management services division acquires
a controlling interest in entities operating in China. Our
ownership control enables China Direct to provide management
advice, as well as financing to Chinese entities. This
infrastructure creates a platform to expand business opportunities
globally while accessing the U.S. capital markets. Our advisory
services division provides comprehensive advisory and consulting
services to Chinese entities. As a direct link to China, China
Direct serves as a vehicle allowing investors to directly
participate in the rapid growth of the Chinese economy in a
diversified and balanced manner. For more information about China
Direct, please visit http://www.chinadirectinc.com/. Q3 FY 2008
GAAP Reconciliation RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
The following table reconciles the calculation of net income per
share on a basic and fully diluted basis from the amounts reported
in accordance with generally accepted accounting principles
("GAAP") to such amounts before giving effect to employee
share-based compensation and the fair value of warrants granted for
services. This disclosure is being provided as we believe it is
meaningful to our investors and other interested parties to
understand our operating performance on a consistent basis without
regard to the anti- dilutive effects of the timing of the employee
share-based compensation and the fair value of warrants granted for
services. The presentation of the non- GAAP information titled "Net
income per share as adjusted" or "Net income per diluted share as
adjusted" is not meant to be considered in isolation or as a
substitute for net income or diluted income per share prepared in
accordance with GAAP. Q3 FY 2008 GAAP Reconciliation RECONCILIATION
OF GAAP to NON-GAAP NET INCOME Three Months Ended Nine Months Ended
September 30, September 30, 2008 2007 2008 2007 GAAP net income
$5,885,423 $2,980,577 $18,153,174 $7,119,188 Employee share- based
compensation expense (1) 720,191 380,547 1,568,555 576,557 Fair
value of warrants granted for services (2) - - 103,708 - Non-GAAP
net income $6,605,614 $3,361,124 $19,825,437 $7,695,745 GAAP
Earnings applicable to common stockholders $5,865,188 $2,980,577
$11,726,080 $7,119,188 GAAP Basic EPS 0.25 0.18 0.52 0.49 GAAP
Diluted EPS 0.23 0.16 0.48 0.44 Non-GAAP net income reconciliation
total(1)+(2) 720,191 380,547 1,672,263 576,557 Non-cash deducted
related to Preferred Stock issuance: Relative Fair Value of
warrants - - 2,765,946 - Beneficial Conversion Feature - -
2,451,446 - NON-GAAP Earnings applicable to common stockholders
6,585,379 3,361,124 18,615,735 7,695,745 NON-GAAP Basic EPS 0.28
0.21 0.83 0.53 NON-GAAP Diluted EPS $0.26 $0.18 $0.75 $0.48 Shares
used in basic net income per-share calculation - GAAP 23,522,179
16,339,868 22,403,054 14,431,869 Shares used in basic net income
per-share calculation - Non-GAAP 23,522,179 16,339,868 22,403,054
14,431,869 Shares used in diluted net income per-share calculation
- GAAP 25,661,353 18,241,143 24,687,015 16,106,921 Shares used in
diluted net income per-share calculation - Non-GAAP 25,661,353
18,241,143 24,687,015 16,106,921 CHINA DIRECT, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31,
2008 2007 ASSETS Unaudited Current Assets: Cash and cash
equivalents $19,636,862 $19,024,604 Investment in marketable
securities available for sale 8,559,219 7,820,500 Investment in
marketable securities available for sale-related party 209,351
1,315,488 Accounts receivable, net of allowance 17,535,988
10,529,316 Accounts receivable-related parties 750,419 2,283,600
Inventories 15,416,872 5,270,388 Prepaid expenses and other current
assets 21,301,463 13,951,918 Prepaid expenses-related parties
9,420,705 4,150,943 Loans receivable-related parties 1,525,114 -
Due from related parties 14,588 1,287,877 Subsidiaries held for
sale 7,180,439 3,604,849 Total current assets 101,551,020
69,239,483 Restricted cash 1,420 646,970 Property, plant and
equipment, net of accumulated depreciation of $1,792,566 and
$509,247 at September 30, 2008 and December 31, 2007, respectively
28,618,127 17,413,489 Prepaid expenses and other assets 229,058
433,075 Property use rights, net 583,918 553,304 Total assets
$130,983,543 $88,286,321 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: Loans payable-short term $1,159,721 $1,909,781
Accounts payable and accrued expenses 9,986,741 9,524,411 Accounts
payable-related parties 3,285,754 964,114 Notes payable-related
party - 410,167 Accrued dividends payable 20,235 - Advances from
customers 6,848,069 6,891,788 Other payables 3,945,819 3,090,790
Income taxes payable 757,125 304,977 Due to related parties 734,996
3,137,233 Subsidiaries held for sale 6,668,981 2,303,405 Total
current liabilities 33,407,441 28,536,666 Loans payable-long term
198,392 166,573 Minority interest 27,977,974 16,957,503
Stockholders' Equity: Preferred Stock: $.0001 par value, stated
value $1,000 per share; 10,000,000 authorized, 1,006 shares and 0
shares issued and outstanding at September 30, 2008 and December
31, 2007, respectively 1,006,250 - Common Stock: $.0001 par value,
1,000,000,000 authorized, 23,545,236 and 20,982,010 issued and
outstanding at September 30, 2008 and December 31, 2007,
respectively 2,355 2,098 Additional paid-in capital 51,542,323
30,257,644 Deferred compensation (22,000) (55,000) Accumulated
comprehensive income (loss) (7,166,802) 54,688 Retained earnings
24,037,610 12,366,149 Total stockholders' equity 69,399,736
42,625,579 Total liabilities and stockholders' equity $130,983,543
$88,286,321 CHINA DIRECT, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) For the Three Months For the
Nine Months Ended September 30, Ended September 30, 2008 2007 2008
2007 Revenues $62,297,299 $43,013,630 $196,956,852 $111,298,794
Revenues-related parties 1,065,720 580,777 3,144,366 1,460,777
Total revenues 63,363,019 43,594,407 200,101,218 112,759,571 Cost
of revenues 52,772,513 39,009,589 166,080,439 101,426,722 Gross
profit 10,590,506 4,584,818 34,020,779 11,332,849 Operating
expenses: Selling, general, and administrative 3,168,049 1,031,238
7,265,630 2,351,485 Operating income 7,422,457 3,553,580 26,755,149
8,981,364 Other income (expense): Other income 126,635 9,723
423,127 382,981 Interest income 93,782 44,847 333,659 118,086
Realized gain (loss) on sale of marketable securities - 494,605
(35,705) 700,841 Realized loss on sale of marketable
securities-related party (2,400) (9,871) (2,400) (41,885) Total
other income 218,017 539,304 718,681 1,160,023 Income from
continuing operations before income taxes 7,640,474 4,092,884
27,473,830 10,141,387 Income tax benefit (expense) 567,272
(173,737) (473,152) (903,488) Income from continuing operations
before minority interest 8,207,746 3,919,147 27,000,678 9,237,899
Minority interest (2,303,585) (1,030,591) (8,902,123) (2,236,598)
Income (loss) from discontinued operation, net of taxes (18,738)
92,021 54,619 117,887 Net income 5,885,423 2,980,577 18,153,174
7,119,188 Deduct dividends on Series A Preferred Stock: Preferred
stock dividend (20,235) - (1,209,702) - Relative fair value of
detachable warrants issued - - (2,765,946) - Preferred stock
beneficial conversion feature - - (2,451,446) - Income applicable
to common stockholders $5,865,188 $2,980,577 $11,726,080 $7,119,188
Basic and diluted income per common share after deduction in the
first quarter of 2008, of noncash deemed dividends attributable to
Series A Preferred Stock as described in Notes 3 & 11 of the
Notes to the unaudited consolidated Financial Statements: Basic
$0.25 $0.18 $0.52 $0.49 Diluted $0.23 $0.16 $0.48 $0.44 Basic
weighted average common shares outstanding 23,522,179 16,339,868
22,403,054 14,431,869 Diluted weighted average common shares
outstanding 25,661,353 18,241,143 24,687,015 16,106,921 Safe Harbor
Statement In connection with the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, China Direct,
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
guidance and expectations regarding revenues, net income and
earnings. 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: --
Continued global economic weakness is expected to reduce demand for
our products in each of our segments. -- Our ability to identify
and close acquisitions of operating companies in China in a cost
effective manner that enhance our financial condition. -- Our need
for additional financing which we may not be able to obtain on
acceptable terms, the dilutive effect additional capital raising
efforts in future periods may have on our current shareholders and
the increased interest expense in future periods related to
additional debt financing. -- Our ability to effectively integrate
our acquisitions and to manage our growth and our inability to
fully realize any anticipated benefits of acquired business. -- The
value of the equity securities we accept as compensation is subject
to adjustment which could result in losses to us in future periods.
-- The Investment Company Act of 1940 which limits the value of
securities we can accept as payment for our business consulting
services which may limit our future revenues. -- Our acquisition
efforts in future periods may be dilutive to our then current
shareholders. -- Our dependence on certain key personnel. -- The
lack various legal protections in certain agreements to which we
are a party and which are material to our operations which are
customarily contained in similar contracts prepared in the United
States. -- Our ability to assure that related party transactions
are fair to our company. -- Chang Magnesium's chief executive
officer is also chief executive officer of a group of companies
which directly compete with Chang Magnesium. -- The risks and
hazards inherent in the mining industry on the operations of our
basic materials segment. -- The effect of changes resulting from
the political and economic policies of the Chinese government on
our assets and operations located in the PRC. -- The influence of
the Chinese government over the manner in which our Chinese
subsidiaries must conduct our business activities. -- The impact on
future inflation in China on economic activity in China. -- The
impact of any recurrence of severe acute respiratory syndrome, or
SAR's, or another widespread public health problem. -- The
limitation on our ability to receive and use our revenues
effectively as a result of restrictions on currency exchange in
China. -- Our ability to enforce our rights due to policies
regarding the regulation of foreign investments in China. -- Our
ability to comply with the United States Foreign Corrupt Practices
Act which could subject us to penalties and other adverse
consequences. -- Our ability to establish adequate management,
legal and financial controls in the PRC. -- The provisions of our
articles of incorporation and bylaws which may delay or prevent a
takeover which may not be in the best 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 cautionary
statements and risk factor disclosure contained in our Securities
and Exchange Commission filings, including our Annual Report on
Form 10-K for the year ended December 31, 2007. DATASOURCE: China
Direct, Inc. CONTACT: Richard Galterio, , or Lillian Wong, , both
of Investor Relations of China Direct, Inc., +1-877-China(24462)-57
Web site: http://www.cdii.net/
http://viavid.net/dce.aspx?sid=00005919
Copyright
China Direct (MM) (NASDAQ:CDS)
Gráfico Histórico do Ativo
De Ago 2024 até Set 2024
China Direct (MM) (NASDAQ:CDS)
Gráfico Histórico do Ativo
De Set 2023 até Set 2024