China Direct Industries Management Discusses F4Q2010 Results – Earnings Call Transcript
China Direct Industries, Inc. (CDII)
F4Q2010 Earnings Call Transcript
December 22, 2010 4:30 pm ET
Executives
Richard Galterio – VP, Public and IR
Andrew Wang – EVP and CFO
Analysts
Carl Dorf – Dorf Asset Management
Abraham Stubenhaus – KAT Exploration
Presentation
Operator
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China Direct Industries Q2 2009 Earnings Transcript
Welcome to the fiscal 2010 year-end earnings conference call for China Direct Industries. For those of you who may be new to the company, China Direct Industries trades on the NASDAQ global market under the symbol CDII. China Direct Industries is a U.S.-based company with operations in China in two core business segments; magnesium production and distribution of basic materials. The company also provides advisory services to other China-based companies to assist them in competing in the global economy. Headquartered in Deerfield Beach, Florida, China Direct Industries operates nine subsidiaries throughout China.
China Direct Industries provides a direct link between Western investors and companies in the People’s Republic of China. For more information on the company, please visit its website www.cdii.net.
Our call today is hosted by Mr. Andrew Wang, CFO; and Richard Galterio, Vice President. Additionally Dr. James Wang, CEO and Chairman, will also be available during the Q&A session that will follow management’s discussions of the year ended September 30, 2010.
At this time I would like to refer to the Safe Harbor Statements under the Private Securities Litigations Reform Act of 1995. During this conference call, management may discuss financial projections, information or expectations about the company's products or markets, or otherwise make statements about the future, which statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made.
These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission, including its most recent filings.
At this time, I would like to introduce Mr. Richard Galterio, Vice President of China Direct Industries. Mr. Galterio, you may begin your call.
Richard Galterio
Thank you, operator, and thank all of you for joining us for our fiscal 2010 year-end conference call. China Direct Industries recorded revenue of $112.7 million for the fiscal year ended September 30, 2010 compared to $68.6 million for our fiscal transition period ended September 30, 2009. Revenue for fiscal 10, 2010, was also up 5% when compared to revenue of $107.6 million recorded in the same 12 month period ended September 30, 2009.
The net loss attributable to common shareholders for fiscal 2010 narrowed to $3.3 million, inclusive of $3.1 million in non-cash related items compared to a net loss of $38.1 million in the 12 month period ended September 30, 2009. This resulted in a loss per basic and diluted share of $0.11 in fiscal 2010 a significant improvement from the loss of $1.56 in the comparable period in 2009. Our improvement in performance was evident across all of our business segments in fiscal 2011 [ph].
First in our magnesium segment, we witnessed a progressive improvement in the pricing and volumes throughout the course of the year. In the fourth quarter of fiscal 2010 we delivered 7718 metric tons of magnesium. This represents a 118% increase from the shipping volume in the first quarter of fiscal 2010, and average sequential increases of approximately 30% for each quarter over the course of the year. The total magnesium shipments in the fourth quarter of fiscal 2010 were the largest in this segment since September of 2008. We anticipate that as our restarted production works its way into our system in fiscal 2011, we will see continued positive trends in overall magnesium sales volume.
In our consulting segment we had a stronger performance when compared to our fiscal transition period, and a 5% improvement from the 12 month ended September 30, 2009. During the year, we hosted our first China CEO Roundtable conference in Florida, and we sponsored the fourth international CEO Roundtable of Chinese and Foreign Multinational Corporations held recently in Beijing. We anticipate adding several additional consulting clients through the contacts made from these conferences, and we intend to host additional conferences in fiscal 2011.
We are confident that the addition of new clients will mean [ph] substantial increases in transactional revenue for assistance in areas like mergers, capital formation and business development.
In our basic materials segment, we continued to see marked improvement in our chemicals operations, where revenue in fiscal 2010 was up 9% from the same period in 2009, and returned to slight profitability from a narrow loss in the same period in 2009. While CDI Beijing had a similar performance then it did to 2009 the subsidiary has greatly improved its prospects for 2011, after having signed a number of distribution agreements to service the construction industry.
We have also made significant inroads in our CDI trading operations in this segment, and we have secured iron ore supply contracts in Mexico and parts of South America, which I will discuss later in this call. Overall, we have navigated through a challenging, yet improving fiscal 2010, and we now begin 2011 with momentum building in all of our segments poised to grow in an improving global economy.
I would like to emphasize several key factors, which will help us to accelerate our growth in fiscal 2011. First we finished the year with a strong balance sheet. Having cash, including short-term restricted cash, totaling approximately $15 million compared to $12.8 million in cash at September 2009 year-end, and we still have negligible long-term debt.
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