Armco Metals Holdings Announces Financial Results for the Third Quarter of 2015
(firmenpresse) - SAN MATEO, CA -- (Marketwired) -- 11/16/15 -- Armco Metals Holdings, Inc. ("Armco Metals Holdings") (NYSE MKT: AMCO), a U.S.-based company that engages in the import, sale, and distribution of metal ore and non-ferrous metals in the People''s Republic of China, recycles scrap metals used by steel mills in the production of recycled steel and provides sourcing and pricing services for various metals, wood and barley to its network of customers, today announced its financial results for the third quarter of 2015.
For the third quarter of 2015 ended September 30, 2015, net revenue was $48.5 million, a 51% increase compared to net revenue of $32.2 million recorded in the third quarter of 2014. The increase in revenue in the third quarter of 2015 was due to an increase of $31.6 million in revenue from our trading business partially offset by a decrease of $15.3 million in sales from our recycling business. Our recycling business generated revenue of $16.8 million while our trading business generated revenue of $31.7 million. Revenue from our recycling business continued to decline from Q2 2015 revenues of $25.7 million. Gross profit for the third quarter of 2015 was $1.7 million as compared to gross profit of $8.4 million in the third quarter of 2014. Gross margin in the third quarter of 2015 was 3.4% compared to 26.1% in the third quarter of 2014. The significant decrease in gross profit and gross margin was largely due to the market price decline on of our products and the increased sales on raw wood with lower margin.
Total operating expenses for the third quarter of 2015 were $1.1 million, remain flat as compared to the third quarter of 2014. We recorded income from operations of $0.54 million in the third quarter of 2015 compared to income from operations of $7.25 million in the third quarter of 2014. Our operations in the third quarter of 2015 resulted in net income of $0.4 million, or $0.05 per basic and diluted share on 8.03 million weighted average common shares outstanding. This compared to a net income of $4.8 million or $0.87 per basic and diluted share on 5.5 million weighted average shares outstanding in the same period of 2014.
Armco Metals'' revenues in the first nine months of 2015 were $128.4 million, an increase of 71% compared to revenues of $75.0 million recorded in the first nine months of 2014. The increase was primarily due to a significant increase in sales from our trading business partially offset by a decline in revenue from our recycling business. Gross (loss) for the first nine months of 2015 was ($10.3) million and gross margin was (-8.0)% compared to gross profit of $10.3 million and gross margin 13.7% in the 2014 period. The decrease in gross margin was mainly attributable to declined price and inventory write-down of $0.3 million in our recycling business, and the increased sales in raw wood and barley with lower margin as well.
Operating expenses for the first nine months of 2015 decreased to $3.7 million from $ 4.7 million in the comparable 2014 period, primarily due to decreased professional fees and general and administrative expenses. For the first nine months of 2015 our operations resulted in net (loss) of $(8.2) million or $(1.21) per basic and diluted share on 6.8 million weighted average common shares outstanding. This compares to a net income of $0.4 million or $0.09 per basic and diluted share recorded in the first nine months of 2014 on 4.5 million weighted average basic and diluted shares outstanding.
In reviewing the financial performance for the third quarter of 2015, Mr. Kexuan Yao, Chairman and CEO of Armco Metals, remarked that, "In the third quarter of 2015 we were able to make positive gross profit on both recycling and trading business despite a continued weak environment in our end markets. While the market is expected to remain weak, management believe that the implementation of our ''platform strategy'' sales model in this business is the right strategy for the company, where we can work with our customers more closely, lower our market risks by sharing them with our customers and increase our sales with less or without additional working capital. As an endeavor to the strategy, as disclosed before, we are creating an OTO platform for scrap recycling business which could lead the business transition for the company from solely selling steel scrap products in traditional methods to providing both services and products in the steel scrap business through the online platform. Once the platform grows to certain scale, we believe the greater sales revenue and profit for our steel scrap business could be expected."
As of September 30, 2015, the Company had $1.7 million in cash and cash equivalents, compared to $1.9 million at year-end 2014. The Company''s current ratio improved to 1.39:1 at September 30, 2015 as compared to 1.38:1 on December 31, 2014. As of September 30, 2015, shareholders'' equity was $48.1 million compared to $54.6 million at December 31, 2014.
The company continued to work on the OTO platform joint venture. As of the report date, we have received business certificates for the new joint venture created for operating OTO platform and we are currently working on obtaining the license for operating internet services in China for the new joint venture. The Joint Venture''s financials is expected to be reflected in our fourth quarter consolidated financials.
Management also is considering reorganization of our structure to improve effectiveness and efficiency of our operation while cut our operation cost. The company will make disclosure timely when change is made on our organization.
ABOUT ARMCO METALS HOLDINGS, INC. [RX: WOOD AND BARLEY HAS BEEN ADDED]
Armco Metals Holdings, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals throughout China and is in the recycling business in China. Armco Metals'' customers include some of the fastest growing steel producing mills and foundries throughout 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, recycled scrap metals, raw wood and barley. For more information about Armco Metals, please visit .
SAFE HARBOR STATEMENT
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Armco Metals Holdings, Inc., is hereby providing cautionary statements identifying certain important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). 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 likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") are forward-looking and involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our ability to generate a profit from our operations, expectations regarding our net revenues and production related to our scrap metal recycling operations, including our ability to operate the facility efficiently and profitability, the sufficiency of our working capital, pricing and volatile demand for our product lines, and the extent of government imposed energy and monetary policy restrictions and resulting blackouts and associated impact on our trading and recycling operations.
We caution that investors should not place undue reliance on any forward-looking statements herein. Further, any forward-looking statement speaks only as of the date on which such statement is made. We qualify all of our forward-looking statements in this press release by these cautionary statements including those made in Part II, Item 1A. Risk Factors appearing in our Quarterly Report on Form 10-Q for the period ended September 30, 2015, as well as in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2014 and our other filings with the Securities and Exchange Commission. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business 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. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
See accompanying notes to the unaudited consolidated financial statements.
See accompanying notes to the unaudited consolidated financial statements.
See accompanying notes to the unaudited consolidated financial statements.
CONTACT INFORMATION:
Armco Metals Holdings, Inc.
US Investor Relations Contact
Christina Xiong
Office: 650.212.7620
Email:
Website:
China
Ripple Zhang
Office: 86-21-62375286
Email:
Website:
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Datum: 16.11.2015 - 16:00 Uhr
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