Armco Metals Holdings Announces Second Quarter 2013 Financial Results
(firmenpresse) - SAN MATEO, CA -- (Marketwired) -- 08/14/13 -- Armco Metals Holdings, Inc. (NYSE MKT: AMCO) ("Armco Metals" or the "Company"), a distributor of imported metal ore and metal recycler with a new state-of-the-art scrap metal recycling facility in China, today announced its financial results for the second quarter 2013 and first half year 2013.
For the quarter ended June 30, 2013, net revenue increased 545% to $27.7 million, of which the metal recycling sales increased 548% to $18.8 million from $2.9 million and the metal ores trading sales increased by 539% to $8.9 million from $1.4 million, respectively, compared to the same period of 2012. The Company sold 42,592 metric tons ("MT") of recycled scrap metal compared to 6,719MT sold in the second quarter of 2012, and the production of recycled scrap metal increased by 383% to 52,749 MT from 10,915 MT in the second quarter of 2012. The increase in the trading business sales mainly consisted of a $3.8 million increase in sales of chromium ore, and a $1.9 million increase in sales of manganese ore. Recycling business sales continued to be the major source of our revenue, accounting for approximately 70% of total net revenue for the quarter ended June 30, 2013.
"While overall profits of China steel industry has improved over the first quarter of 2013, the momentum was losing in the second quarter due to oversupply and economy slowdown," explained Mr. Kexuan Yao, Chairman and CEO of Armco Metals. "However, although the market was sluggish, our revenue and gross margin in our recycling business continued to grow steady; the output and sales from our recycling facility in the second quarter increased significantly compared to the same period of 2012. We believe the continued growth in our recycling business was primarily a result of the overall improvement of our operation in recycling business. In the second quarter, we continued to optimize our products structure by processing high-value-added product such as recycled nonferrous metal scraps which further improved our profit margin. Through the past two and half years' operation, we have achieved many major goals such as optimizing production process, improving cost control and management, developing and streamlining supply chain, establishing long term strategic partnership with key clients, obtaining various qualifications and licenses, and building our brand in the industry. All of these are valuable intangible assets of the Company and has contributed and will continue to contribute to our development and growth."
Gross profit for the second quarter of 2013 was $2.4 million compared to $0.7 million in the second quarter of 2012. Gross margin was 8.5% compared to 17% for same period of last year. A $0.5 million inventory lower of cost or market adjustment was included in cost of goods sold for the quarter which decreased gross profit for the quarter by $0.5 million. The profit margin decrease was primarily due to an abnormally high margin for trading business in the same period of last year that was led by an adjustment for invoicing changes.
Operating expenses decreased to $1.2 million from $1.9 million a year ago. The decrease in operating expenses was primarily due to decreases in general and administrative expenses and operating cost of idle manufacturing facility as a result of significantly increase in output in recycling production.
Operating income for the second quarter of 2013 totaled $1.1 million compared to $1.2 million loss in the second quarter of 2012.
Net income for the second quarter of 2013 was $0.95 million, or $0.04 per diluted share, compared to a net loss of $1.7 million, or $0.09 per share in loss, in the same period of last year. The weighted average diluted shares outstanding increased from 18.5 million in the second quarter of 2012 to 24.0 million in the second quarter of 2013.
The Company ended the second quarter of 2013 with $1.2 million in cash, compared to $1.4 million at the end of 2012. Working capital was 3.0 million and a current ratio of 1.07:1 at June 30, 2013 compared to $0.3 million and 1.01:1 at December 31, 2012. The increase in working capital from end of 2012 was mainly a result of capital raised by sales of our common stock in January of 2013 and operating income generated since year end 2012. Total accounts receivable decreased $6.3 million to $9.4 million at the end of the second quarter of 2013 compared to $15.7 million at the year end of 2012 primarily due to the payment we received after the year-end of 2012 for our scrap metal sales made during 2012. Inventories increased $8.0 million at June 30, 2013 from December 31, 2012, primarily due to the increase of scrap metal inventories from increased production with expanded customer base. As of June 30, 2013, shareholders' equity increased to $43.7 million from $41.8 million at December 31, 2012, primarily due to capital raised by sales of our common stock and net income generated from operation after the year-end of 2012.
The Company had $2.08 million net cash outflow from operations during the first half of 2013 and spent $0.17 million on capital expenditures. Net cash inflow from financing activities was $8.26 million. Armco Metals had approximately $40 million of credit available from seven bank lines with an aggregate capacity of $61 million at June 30, 2013.
Armco Metals' sales decreased in the first half of 2013, from $53.6 million for the same period of last year to $42.0 million, primarily due to the decrease in trading business sales in first quarter of 2013. Sales in the metal recycling business were $27.8 million, an increase of $16.1 million from the same period of last year. Metal ores trading business generated $14.2 million of sales compared to $41.9 million in the comparable period a year ago. The decline in trading sales was primarily a result of a decrease in the sales of iron ore of $35 million, partially offset by the increase in the sales of manganese ore of $3.2 million, chrome ore of $1.2 million, and titanium ore of $0.7 million.
Gross profit increased by $0.8 million to $3.0 million, with a gross margin of 7%, compared to $2.2 million with a gross margin of 4% for the first six months of 2012.
Operating expenses decreased from $3.6 million to $ 2.9 million, primarily due to a decrease in general and administrative expenses of $0.46 million mainly resulting from a decrease of non-cash shares compensation to management and employees of $0.31 million and a decrease in operating cost of idle manufacturing facility of $0.25 million contributed by increased production. Net loss and per share loss were $0.14 million and $0.01, respectively, in the first half of 2013. The weighted average diluted shares outstanding were 24.0 million, a 37% increase from 17.6 million in the first six months of 2012.
The metal ore trading business decreased approximately 20% in net revenues during the first half of 2013 compared to the same period in 2012. The trading business sales from new customers for the first six months of 2013 were approximately $2.6 million. The decline in trading business sales was primarily due to the adjustment that the Company proactively made to the operation in response to the change in metal ore market where the Company slowed down its trading activities to manage risks. The company also optimized its trading business sales structure by diversifying its metal ore products and balancing different products sales to control market risks, which reduced sales of iron ore significantly and increased sales of manganese ore, chrome ore and titanium ore. During the difficult time for whole industry, the Company continued to firm business relationship with its suppliers and develop customer base while reducing metal ore purchase and inventory to lower ore market risk. Meanwhile, we continued to develop our new "Commodity Financing" model and have obtained support from several large banks. We expect to make some major progress later this year.
Our scrap metal recycling business continued to grow steady despite the slowdown in China's economy. Sales and production increased substantially by 181% and 168%, respectively, from the comparable period a year ago. Sales and production increased from approximately 23,471 MT and 35,986 MT in the first six months of 2012 to approximately 65,593 and 96,543 MT, respectively, in the first six months of 2013. The Company ended the second quarter with approximately 15,000 MT of recycled scrap steel yet to be delivered. As an effort to optimize products structure and maximize profit margin, in the second quarter of 2013 the company increased the production of recycled nonferrous metals scraps which has a higher added-value and profit. The company continued to develop new customers to expand its customer base for its recycling business. For the first half of 2013 the recycling business sales generated from new customers amounted to $7.8 million. The recycling business contributed 66% and 90% of our net revenue and gross profit, respectively, for six months ended June 30, 2013, and continued to be the major sources of our net revenue and gross profit. In the second quarter of 2013 the company's recycling subsidiary signed a long-term sales contract with an important customer under the pre-selling model and the company has started to deliver products to this customer. The contract is expected to increase recycled scrap metals sales and improve the Company's profit margin by lowering idle capacity cost accompanying the increased production. In the second quarter of 2013, the Company's recycling subsidiary was rated as AAA grade, the highest level, in credit rating by China Association of Metal Scrap Utilization. This recognized our development in recycling business in the past few years. The rating is very important to our brand building effort in the industry and market which is expected to improve and strengthen our supply chain, customer base and bank credit facilities.
The playback of the webcast can be accessed until 11/15/2013. 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:
Replay Number (Toll Free): 1-877-660-6853
Replay Number (International): 1-201-612-7415
Replay Passcodes (both required for playback):
Conference ID#419405
Teleconference will be available for replay until 11:59 PM 08/29/2013
Armco Metals Holdings, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals and the recycling business throughout China. Armco Metals' customers include some of the fastest growing steel producing mills and foundries in China. Raw materials are acquired from a global group of suppliers located in various countries, including, but not limited to, Brazil, India, Indonesia, Ukraine and the United States. Armco Metals' product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet and recycled scrap metals. For more information about Armco Metals, please visit .
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our operations, results of operations and other matters that are based on our current expectations, estimates, forecasts and projections. 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" "expect," "anticipate," "estimate," "intend," "plan," "believe," "project," "may", "potential," "opportunity" and "should") are intended to identify forward-looking statements and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding programs and policies announced by the PRC government on our operations or any forward looking statement in this press release.
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. Such factors include, but are not limited to: fluctuations in the prices of metals, ore and scrap metal, the growth rate of the Chinese and world economy and related economic factors, fluctuations in supply and demand of metals, ore and scrap metal, our ability to secure supplies of metals, ore and scrap metal upon favorable terms, our ability to resell metals and ores at current market prices and on favorable terms, our ability to finance the purchase price of metals, ore and scrap metal (and the continued willingness of our Chairman to personally guarantee such financing), our ability to repay our indebtedness, our ability to retain current customers and suppliers and attract new customers and suppliers, our ability to continue to improve production rates at our recycling facility, our ability to establish adequate management, legal and financial controls in the United States and China, the actions of government and regulatory bodies in China and the United States, the negative market and governmental reaction to "reverse merger" Chinese companies due to high profile frauds and other problems noted in the press, and the cautionary statements and risk factors contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2012, and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013. Most of these factors are beyond our ability to predict or control. New factors that could cause actual results to differ materially from those expressed in the forward-looking statements 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. Each 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 the occurrence of anticipated or unanticipated events or circumstances.
-- Financial Tables --
US Contact:
Christina Xiong
Office: 650.212.7620
Email:
Website:
China Contact:
Ripple Zhang
Investor Relations
Office: 86-021-62375286
Email:
Website:
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 14.08.2013 - 16:41 Uhr
Sprache: Deutsch
News-ID 1254908
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
SAN MATEO, CA
Phone:
Kategorie:
Alternative Energy
Anmerkungen:
Diese Pressemitteilung wurde bisher 76 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Armco Metals Holdings Announces Second Quarter 2013 Financial Results
"
steht unter der journalistisch-redaktionellen Verantwortung von
Armco Metals Holdings (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
