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At this time I would like to introduce Mr. Richard Galterio, Vice President of CD International. Mr. Galterio, you may begin your call.Richard Galterio Thank you operator and all of you who are joining us for our first quarter fiscal 2012 conference call. CD International recorded revenues of $36.9 million for the first quarter of fiscal 2012 with gross profit of $5.6 million and net income of $3.1 million. This compares to revenue of $45.8 million, with gross profit $6.5 million and net income of $3.5 million recorded in the same period of fiscal 2011. Earnings per basic and diluted shares were $0.08 in the first quarter of fiscal 2012 on 40.6 million basic weighted average shares and 41.1 million of diluted weighted average shares. Earnings per basic and diluted shares were $0.11 on 31.8 million weighted average shares in the first quarter of fiscal 2011. While overall sales declined as compared to the first quarter of fiscal 2011, we did see improvement in several key areas, including gross margins, which improved to 15.2% up from 14.3% and net margins, which improved to 8.4% compared to 7.5%. In our magnesium segment we witnessed a continued improvement in pricing in comparison to the first quarter of fiscal 2011, with average prices of $2,833 per metric ton as compared to $2,280 per metric ton. However, prices declined by about 9% during the course of the quarter as compared to our fiscal fourth quarter of 2011 and this was a rebuild of the short term demand declines due to global concerns of the European debt crisis, coupled with the tightening credit in China, which forces some undercapitalized competitors to liquidate inventory to raise year-end cash balances. Management elected to reduce it’s marketing efforts mainly in trading, resulting in a volume decrease of 32% and a revenue decrease of about 15.5% compared to the first quarter. Total magnesium revenue was approximately $18 million in the quarter as compared to $21.3 million recorded in the comparable period of fiscal 2011. It’s important to note that this segment remains profitable on an EBITDA basis despite the decline in volumes.
During the period we also began to build inventory in anticipation of the demand effect associated with the issues availing (ph). Prices have subsequently stabilized in the beginning of 2012 and we anticipate a firming of demand as we move into the second half of fiscal 2012.In our basic materials segment, revenues totaled $13.8 million, declining by $5.4 million compared to the same period in fiscal 2011. The decline in revenues was mainly a result of lower sales at our CDI Beijing subsidiary compared to the same period in fiscal 2011, due to reduced demand from slower urban infrastructure expansion and tightening credit in China. In our consulting segment we achieved strong performance with revenues reaching $5.2 million in the first quarter of fiscal 2012 and similar to the $5.3 million reported in the same period in fiscal 2011. We added one new client in the first quarter of fiscal 2012, bringing the total number of clients we service on a continuous basis to six and we are confident that we will continue to add additional clients leading to further growth in this segment. Overall, we continue to push forward with first quarter earnings improving from the fourth quarter of fiscal 2011 and having now reported three consecutive quarters of profitability for the first time since 2008. We are well positioned in all of our business segments to continue to build on that momentum as we move through fiscal 2012. Read the rest of this transcript for free on seekingalpha.com