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Gulf Resources Reports Fourth Quarter And Fiscal Year 2012 Financial Results

Stocks in this article: GURE

To participate in this live conference call, please dial +1 (877) 275-8968 five to ten minutes prior to the scheduled conference call time. International callers should call +1 (706) 643-1666. The conference participant pass code is 25549431.

A replay of the conference call will be available for 14 days starting from 11:00 AM ET on Friday, March 22, 2012. To access the replay, call +1 (855) 859-2056. International callers should call +1 (404) 537-3406. The pass code is 25549431.

This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://www.gulfresourcesinc.com/events.html . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a 90-day replay will be available shortly after the call by accessing the same link.

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC") and Shouguang Yuxin Chemical Industry Co., Limited ("SYCI"). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil & gas field explorations and as papermaking chemical agents. For more information, visit www.gulfresourcesinc.cn .

The Gulf Resources, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=15631

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries' business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)
     
  As of December 31,
  2012 2011
Current Assets     
Cash  $ 65,241,035  $ 78,576,060
Accounts receivable 35,969,900 21,919,828
Inventories 5,993,598 4,437,972
Prepayments and deposits -- 307,600
Prepaid land leases 47,307 46,582
Deferred tax assets 6,973 228,702
Total Current Assets 107,258,813 105,516,744
Non-Current Assets    
Property, plant and equipment, net 165,942,542 147,200,740
Property, plant and equipment under capital leases, net 1,996,478 2,336,920
Prepaid land leases, net of current portion 748,502 763,814
Deferred tax assets 2,246,699 2,509,481
Total non-current assets 170,934,221 152,810,955
Total Assets  $278,193,034  $258,327,699
     
Liabilities and Stockholders' Equity    
Current Liabilities    
Accounts payable and accrued expenses  $ 6,533,236  $ 7,373,643
Retention payable 1,432,690 556,450
Capital lease obligation, current portion 193,164 189,742
Taxes payable 2,856,658 4,058,550
Total Current Liabilities 11,015,748 12,178,385
Non-Current Liabilities    
Capital lease obligation, net of current portion 2,952,902 3,036,558
Total Liabilities  $ 13,968,650  $ 15,214,943
     
Stockholders' Equity    
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding  $ -- $ --
COMMON STOCK; $0.0005 par value; 100,000,000 shares authorized; 38,552,070 and 34,745,342 shares issued; and 38,367,471 and 34,560,743 shares outstanding as of December 31, 2012 and 2011, respectively 19,276 17,373
Treasury stock; 184,599 shares as of December 31, 2012 at cost (500,000) (500,000)
Additional paid-in capital 79,489,188 74,107,979
Retained earnings unappropriated 146,745,754 133,314,581
Retained earnings appropriated 15,973,887 14,409,557
Cumulative translation adjustment 22,496,279 21,763,266
Total Stockholders' Equity 264,224,384 243,112,756
Total Liabilities and Stockholders' Equity  $278,193,034  $258,327,699
 
 
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Expressed in U.S. dollars)
     
  Years Ended December 31,
  2012 2011
NET REVENUE    
Net revenue  $ 101,700,882  $ 164,980,453
     
OPERATING EXPENSES / INCOME    
Cost of net revenue (73,439,341) (89,538,212)
Sales, marketing and other operating expenses (82,004) (86,936)
Research and development cost (164,586) (398,842)
Exploration costs -- (7,034,153)
Write-off / Impairment on property, plant and equipment (1,042,138) (7,570,566)
General and administrative expenses (6,792,110) (17,874,296)
Other operating income 304,152 1,821,010
  (81,216,027) (120,681,995)
     
INCOME FROM OPERATIONS 20,484,855 44,298,458
     
OTHER INCOME (EXPENSES)    
Interest expense (210,705) (212,441)
Interest income 312,806 269,614
  102,101 57,173
INCOME BEFORE TAXES 20,586,956 44,355,631
     
INCOME TAXES (5,591,453) (13,402,871)
     
NET INCOME  $ 14,995,503  $ 30,952,760
     
COMPREHENSIVE INCOME:    
NET INCOME 14,995,503 30,952,760
OTHER COMPREHENSIVE INCOME    
 - Foreign currency translation adjustments 733,013 12,493,402
     
COMPREHENSIVE INCOME  $ 15,728,516  $ 43,446,162
     
EARNINGS PER SHARE    
BASIC  $ 0.43  $ 0.89
DILUTED  $ 0.43  $ 0.89
     
WEIGHTED AVERAGE NUMBER OF SHARES    
BASIC 34,706,356 34,660,866
DILUTED 35,067,950 34,673,615
 
 
GULF RESOURCES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)
     
  Years Ended December 31,
  2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income  $ 14,995,503  $ 30,952,760
Adjustments to reconcile net income to net cash provided by operating activities:    
Interest on capital lease obligation  209,584  210,347
Amortization of prepaid land leases  493,849  424,467
Depreciation and amortization  23,317,594  17,697,439
Allowance for obsolete and slow-moving inventories  13,023  8,178
Write-off / Impairment loss on property, plant and equipment  1,042,138  7,570,566
Compensation income from local government for demolition of factory  --   (1,340,026)
Exchange loss on inter-company balances  61,090  1,398,574
Deferred tax asset  489,334  (2,569,647)
Stock-based compensation expense  510,500  7,481,400
Changes in assets and liabilities:    
Accounts receivable  (13,936,332)  995,713
Inventories  (1,550,213)  (1,621,118)
Prepayment and deposits  307,600  648,734
Accounts payable and accrued expenses  (850,229)  551,636
Retention payable  866,148  98,174
Due to related parties  --   -- 
Taxes payable  (1,204,287)  (3,459,768)
Net cash provided by operating activities 24,765,302 59,047,429
     
CASH FLOWS USED IN INVESTING ACTIVITIES    
Additions of prepaid land leases (477,678) (406,380)
Compensation received for demolition of factory -- 1,340,026
Purchase of property, plant and equipment (37,399,421) (52,907,374)
Net cash used in investing activities (37,877,099) (51,973,728)
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Repurchase of common stock -- (500,000)
Repayment of capital lease obligation (297,598) (288,739)
Net cash used in financing activities (297,598) (788,739)
     
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 74,370 3,796,618
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (13,335,025) 10,081,580
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 78,576,060 68,494,480
CASH AND CASH EQUIVALENTS - END OF YEAR  $ 65,241,035  $ 78,576,060
CONTACT: Gulf Resources, Inc.
         Web: http://www.gulfresourcesinc.com
         
         Max Ma, IR Manager
         Email: Max_vx@163.com
         
         Helen Xu, CEO Assistant
         Email: beishengrong@vip.163.com

Gulf Resources, Inc. logo

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