Gulf Resources Reports Third Quarter 2016 Financial Results

SHOUGUANG, China, Nov. 14, 2016 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced its financial results for the third quarter ended September 30, 2016.

Third quarter and year-to-date highlights

Year to Date
  • Income from operations increased 12% to $39,953,640
  • Net Income increased 1 3% to $30,179,696
  • Fully Diluted Earnings per share increased 12% to $0.65 from $0.58.

Third Quarter
  • Income from operations increased slightly to $13,956,200.
  • Net Income was almost flat at $10,515,713
  • Earnings per share were flat at $0.23.
  • Income from operations in the bromine segment increased 8 3%
  • Cash at the end of the quarter was $141,083,587 ($3.02 per share *)
  • Net Net Cash equaled $2.59 per share *
  • Working capital equaled $4.30 per share *
  • Shareholders equity reached $7.65 per share *              

Mr. Xiaobin Liu, Gulf's Chief Executive Officer stated, "Despite the continuing weakness in the Chinese economy, especially in industries related to our core business such as oil exploration in terms of money amount, we are pleased to report a quarter with improved income from operations and flat earnings per share. We are especially pleased with the strong performance of our bromine business. If the economy improves, as we believe it eventually will, we will have significant upside leverage in all of our core businesses."

"Our cash balances continue to increase," Mr. Liu continued. "We are now making good progress in building the infrastructure in Sichuan. We are very optimistic about the opportunities ahead of us."               Three Months Ended September 30, 2016

Comparison of the Three-Month Period Ended September 30, 20 16 and 201 5
  Three-MonthPeriod EndedSeptember 30, 2016   Three-MonthPeriod EndedSeptember 30, 2015   Percent Change Increase/(Decrease)
Net revenue $ 38,811,622     $ 42,601,598       (9 %)  
Cost of net revenue $ (23,107,921 )   $ (27,000,576 )     (14 %)  
Gross profit $ 15,703,701     $ 15,601,022       1 %  
Sales, marketing and other operating expenses $ (83,087 )   $ (91,919 )     (10 %)  
Research and development costs $ (68,115 )   $ (69,403 )     (2 %)  
Write-off/Impairment on property, plant and equipment $ (90,395 )   $ (819,701 )     (89 %)  
General and administrative expenses $ (1,613,933 )   $ (831,955 )     94 %  
Other operating income $ 108,029     $ 115,114       (6 %)  
Income from operations $ 13,956,200     $ 13,903,158       0.4 %  
Other income, net $ 78,042     $ 66,636       17 %  
Income before taxes $ 14,034,242     $ 13,969,794       0.5 %  
Income taxes $ (3,518,529 )   $ (3,290,372 )     7 %  
Net income $ 10,515,713     $ 10,679,422       (2 %)  

For the period ended September 30, 2016 compared to the period ended September 30, 2015, net revenues decreased 9% to $38,811,622 from $42,601,598. Cost of Goods Sold decreased 14% to $23,107,921 from $27,000,576. Gross profit increased 1% to $15,703,701 from $15,601,022. Gross margin increased 384 basis points to 40% from 37%. Sales and marketing expenses declined 10%. R&D costs declined 2%. Impairment of PP&E declined to $90,395 from $819,701. G&A expenses increased 94% to $1,613,933 from $831,955. However the increase was attributable to a decline in unrealized foreign exchange gains in 2016 compared to 2015. Excluding these gains, G&A actually declined by 5%.

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