Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - KINGOLD JEWELRY, INC. | v239722_8-k.htm |
|
Company Contact:
Kingold Jewelry, Inc
Bin Liu, CFO
Phone: +86-27-6569-4977
Email: bl@kingoldjewelry.com
www.kingoldjewelry.com
|
Kingold Jewelry, Inc. Reports Third Quarter 2011 Results
WUHAN CITY, CHINA, November 9, 2011 – Kingold Jewelry, Inc. (“Kingold” or the “Company”) (NASDAQ: KGJI), one of China’s leading manufacturers and designers of 24-karat gold jewelry and ornaments, today announced financial results for the third quarter ended September 30, 2011.
Third Quarter 2011 Highlights
|
·
|
Revenue increased 24.2% to $210.7 million from $169.7 million in the third quarter 2010
|
|
·
|
Gross profit rose 62% to $14 million from $8.6 million in the third quarter 2010
|
|
·
|
Net income attributable to common stockholders grew 103.5% to $9.3 million, or $0.18 per diluted share, from $4.6 million, or $0.10 per diluted share, in the third quarter 2010
|
|
·
|
In the third quarter, Kingold started to roll out its investment related gold business across networks within China Merchant Bank as well as Bank of Communication.
|
|
·
|
Kingold completed testing at the end of September of its new e-commerce channel and successfully launched the new initiative in October.
|
“We have worked to maintain a smooth operation in the third quarter of 2011 despite a very volatile gold market during the period. After conducting successful trials of our investment-oriented gold line, we have been working closely with our partners in the banking sector to roll out investment related gold products across China. Our two new distribution centers in Shenzhen and Beijing have also started to perform well, helping us expand smoothly over major local markets in Southern and Northern China,” said Mr. Zhihong Jia, Kingold's Chairman and CEO. “Finally, we finished the testing and launch of our new e-commerce business, which will target new customers.”
Third Quarter 2011 Results
Third quarter 2011 revenue increased 24.2% to $210.7 million from $169.7 million for the same period of 2010. In the third quarter of 2011, the Company produced 6.61 metric tons of 24-karat gold products compared to 7.54 metric tons in the same period of 2010.
Third quarter 2011 gross profit grew to $14 million, up 62% from $8.6 million for the same period of 2010. Gross margin increased to 6.6% in the third quarter 2011 from 5.1% in the third quarter 2010.
Third quarter 2011 operating expenses decreased by 46.2% to $0.92 million, compared to $1.7 million in the same period last year. The decrease was primarily due to one-time expenses incurred in the third quarter of 2010 related to our public listing.
Net income attributable to common shareholders increased 103.5% to $9.3 million, or $0.18 per diluted share, as compared to $4.6 million, or $0.10 per diluted share, in the third quarter of 2010.
Nine Months 2011 Results
In the first nine months of 2011, our revenue increased 83.6% to $620.5 million from $338.1 million in the same period of 2010. During the first nine months of 2011, the Company produced 24.27 metric tons of 24-karat gold products compared to 19.26 metric tons in the same period of 2010.
Gross profit during the nine months ended September 30, 2011 grew 63.5% to $35.4 million from $21.6 million in the same period of 2010. Gross margin declined to 5.7% for the nine months ending September 30, 2011 from 6.4% in the same period of 2010.
Total operating expenses for the nine months ended September 30, 2011 were $2.915 million, an increase of $0.015 million, or 0.55%, from $2.9 million for the same period in 2010. In the nine months ended September 30, 2011, we incurred numerous one time expenses related to our public offering of 7.2 million shares, such as listing fees, advisory fees and related insurance costs.
Net income attributable to common stockholders increased 66.0% to $23 million, or $0.46 per diluted share, as compared to $12.8 million, or $0.29 per diluted share, in the first nine months of 2010.
Financial Condition
As of September 30, 2011, Kingold had $3.2 million in cash and cash equivalents, $108.1 million in working capital, or $2.13 per fully diluted share and has no long-term debt. Total stockholders’ equity was $118.8 million on September 30, 2011, up 65% from $72.1 million at the end of 2010. Accounts receivable totaled $0.18 million at September 30, 2011, compared to $1.2 million at December 31, 2010. The Company used $21.5 million in cash flow for operating activities for the nine months ended September 30, 2011.
Business Outlook
Based on the Company’s performance during the first nine months of 2011 and management’s current outlook for the remainder of the year, the Company has reassured its full year 2011 revenue guidance to a range of between $800 million and $850 million and net income guidance between $32 million and $34 million.
“Our performance in the first nine months of 2011 reinforces our optimism for another year of strong organic growth at Kingold,” commented Mr. Jia. “Domestic demand for 24-karat gold products is still robust and we have been well positioned to take advantage of surging consumer demand in China.”
About Kingold Jewelry, Inc.
Kingold Jewelry, Inc. (NASDAQ: KGJI), centrally located in Wuhan City, China's fourth largest city, was founded in 2002 and today is one of China's leading designers and manufacturers of 24-karat gold jewelry and ornaments sold by weight. The Company sells both directly to retailers as well as through major distributors across China. Kingold has received numerous industry awards and has been a member of the Shanghai Gold Exchange since 2003. Sales have grown from $29 million in FY 2006 to $523 million in FY 2010 with net income attributable to common stockholders growing from $1.3 million to $18.2 million over the same period. For more information, please visit www.kingoldjewelry.com.
Business Risks and Forward-Looking Statements
This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements, including our 2011 business outlook, are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties, and readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the risk factors contained in Kingold's SEC filings available at www.sec.gov, including Kingold's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Kingold undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
-Financial Tables Follow-
|
KINGOLD JEWELRY INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
(IN US DOLLARS)
|
|
(UNAUDITED)
|
|
For the three months ended
September 30,
|
For the nine months ended
September 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
NET SALES
|
$ | 210,710,516 | $ | 169,706,497 | $ | 620,533,358 | $ | 338,062,808 | ||||||||
|
COST OF SALES
|
||||||||||||||||
|
Cost of sales
|
(196,453,806 | ) | (160,792,165 | ) | (584,246,090 | ) | (315,574,745 | ) | ||||||||
|
Depreciation
|
(265,488 | ) | (277,204 | ) | (872,125 | ) | (832,288 | ) | ||||||||
|
Total cost of sales
|
(196,719,294 | ) | (161,069,369 | ) | (585,118,215 | ) | (316,407,033 | ) | ||||||||
|
GROSS PROFIT
|
13,991,222 | 8,637,128 | 35,415,143 | 21,655,775 | ||||||||||||
|
OPERATING EXPENSES
|
||||||||||||||||
|
Selling, general and administrative expenses
|
789,820 | 1,007,909 | 2,550,526 | 2,133,475 | ||||||||||||
|
Stock compensation expenses
|
62,500 | 670,440 | 257,500 | 670,440 | ||||||||||||
|
Depreciation
|
66,214 | 30,665 | 98,325 | 86,942 | ||||||||||||
|
Amortization
|
3,000 | 2,792 | 8,781 | 8,330 | ||||||||||||
|
Total Operating Expenses
|
921,533 | 1,711,806 | 2,915,133 | 2,899,187 | ||||||||||||
|
INCOME FROM OPERATIONS
|
13,069,689 | 6,925,322 | 32,500,010 | 18,756,588 | ||||||||||||
|
OTHER INCOME (EXPENSES)
|
||||||||||||||||
|
Other income
|
227 | 14,882 | 18,234 | 18,934 | ||||||||||||
|
Interest income
|
5,758 | 926 | 5,758 | 3,232 | ||||||||||||
|
Interest expense
|
- | (135,638 | ) | (120,811 | ) | (405,174 | ) | |||||||||
|
Other expenses
|
(1,469 | ) | - | (1,469 | ) | |||||||||||
|
Total Other Expenses, net
|
5,985 | (121,299 | ) | (96,818 | ) | (384,477 | ) | |||||||||
|
INCOME FROM OPERATIONS BEFORE TAXES
|
13,075,674 | 6,804,023 | 32,403,192 | 18,372,111 | ||||||||||||
|
PROVISION FOR INCOME TAXES
|
(3,353,879 | ) | (1,979,290 | ) | (8,347,773 | ) | (4,925,385 | ) | ||||||||
|
NET INCOME
|
$ | 9,721,795 | $ | 4,824,733 | $ | 24,055,419 | $ | 13,446,726 | ||||||||
|
OTHER COMPREHENSIVE INCOME
|
||||||||||||||||
|
Foreign currency translation gains
|
1,288,912 | 895,092 | 3,333,579 | 1,348,266 | ||||||||||||
|
COMPREHENSIVE INCOME
|
11,010,707 | 5,719,825 | 27,388,998 | 14,794,992 | ||||||||||||
|
Less: Comprehensive income attribute to the noncontrolling interest
|
(411,292 | ) | (266,989 | ) | (1,089,366 | ) | (645,228 | ) | ||||||||
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ | 10,599,415 | $ | 5,452,836 | $ | 26,299,632 | $ | 14,149,764 | ||||||||
|
Earnings per share
|
||||||||||||||||
|
Basic
|
$ | 0.19 | $ | 0.11 | $ | 0.47 | $ | 0.31 | ||||||||
|
Diluted
|
$ | 0.18 | $ | 0.10 | $ | 0.46 | $ | 0.29 | ||||||||
|
Weighted average number of shares
|
||||||||||||||||
|
Basic
|
49,998,706 | 41,861,457 | 49,391,647 | 41,798,205 | ||||||||||||
|
Diluted
|
50,744,359 | 44,248,740 | 50,480,880 | 44,185,488 | ||||||||||||
|
KINGOLD JEWELRY INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(IN US DOLLARS)
|
|
(UNAUDITED)
|
|
September 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
||||||||
|
Cash and cash equivalents
|
$ | 3,234,596 | $ | 9,151,536 | ||||
|
Accounts receivable
|
183,971 | 1,165,760 | ||||||
|
Inventories
|
103,944,981 | 55,426,830 | ||||||
|
Other current assets and prepaid expenses
|
21,373 | 72,215 | ||||||
|
Deferred offering costs
|
- | 666,364 | ||||||
|
Value added tax recoverable
|
5,528,161 | 3,853,647 | ||||||
|
Total Current Assets
|
112,913,082 | 70,336,352 | ||||||
|
PROPERTY AND EQUIPMENT, NET
|
12,871,691 | 13,332,416 | ||||||
|
OTHER ASSETS
|
||||||||
|
Other assets
|
151,215 | 146,222 | ||||||
|
Intangible assets, net
|
512,149 | 503,824 | ||||||
|
Total other assets
|
663,364 | 650,046 | ||||||
|
TOTAL ASSETS
|
$ | 126,448,137 | $ | 84,318,814 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT LIABILITIES
|
||||||||
|
Short term loans
|
$ | - | $ | 6,058,486 | ||||
|
Related party Loan
|
410,508 | - | ||||||
|
Other payables and accrued expenses
|
990,281 | 1,715,431 | ||||||
|
Income tax payable
|
3,328,474 | 2,185,112 | ||||||
|
Other taxes payable
|
63,759 | 545,222 | ||||||
|
Total Current Liabilities
|
4,793,022 | 10,504,251 | ||||||
|
STOCKHOLDERS' EQUITY
|
||||||||
|
Preferred stock, $0.001 par value, 500,000 shares
|
||||||||
|
authorized, none issued or outstanding
|
||||||||
|
as of September 30, 2011 and December 31, 2010
|
- | - | ||||||
|
Common stock $0.001 par value, 100,000,000 shares
|
||||||||
|
authorized, 50,098,816 and 42,531,994 shares issued and outstanding
|
||||||||
|
as of September 30, 2011 and December 31, 2010
|
50,099 | 42,532 | ||||||
|
Additional paid-in capital
|
52,345,820 | 31,901,832 | ||||||
|
Retained earnings
|
||||||||
|
Unappropriated
|
56,655,477 | 33,744,244 | ||||||
|
Appropriated
|
1,071,974 | 967,543 | ||||||
|
Accumulated other comprehensive income
|
8,693,843 | 5,409,876 | ||||||
|
Total Stockholders' Equity
|
118,817,213 | 72,066,027 | ||||||
|
Noncontrolling interest
|
2,837,902 | 1,748,536 | ||||||
|
Total Equity
|
121,655,115 | 73,814,563 | ||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 126,448,137 | $ | 84,318,814 | ||||
|
KINGOLD JEWELRY INC.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(IN US DOLLARS)
|
|
(UNAUDITED)
|
|
For the nine months ended September 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net income
|
$ | 24,055,419 | $ | 13,446,726 | ||||
|
Adjusted to reconcile net income to cash provided by (used in)
|
||||||||
|
operating activities:
|
||||||||
|
Depreciation
|
970,450 | 919,230 | ||||||
|
Amortization of intangible assets
|
8,781 | 8,330 | ||||||
|
Share based compensation
|
257,500 | 670,440 | ||||||
|
Changes in operating assets and liabilities
|
||||||||
|
(Increase) decrease in:
|
||||||||
|
Accounts receivable
|
1,010,099 | 158,509 | ||||||
|
Inventories
|
(46,100,293 | ) | (17,902,549 | ) | ||||
|
Other current assets and prepaid expenses
|
51,215 | (348,268 | ) | |||||
|
Value added tax recoverable
|
(1,525,536 | ) | 1,603,596 | |||||
|
Increase (decrease) in:
|
||||||||
|
Other payables and accrued expenses
|
(740,083 | ) | 997,823 | |||||
|
Income tax payable
|
1,056,705 | 678,071 | ||||||
|
Other taxes payable
|
(494,451 | ) | (193,280 | ) | ||||
|
Net cash provided by (used in) operating activities
|
(21,450,194 | ) | 38,627 | |||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Purchase of property and equipment
|
(64,723 | ) | (24,862 | ) | ||||
|
Net cash (used in) investing activities
|
(64,723 | ) | (24,862 | ) | ||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Restricted cash
|
- | 1,469,160 | ||||||
|
Deferred offering costs
|
666,364 | (125,994 | ) | |||||
|
Proceeds from bank loans
|
- | 5,876,639 | ||||||
|
Repayments of bank loans
|
(6,194,845 | ) | (5,876,639 | ) | ||||
|
Proceeds from related party loan
|
2,574,082 | - | ||||||
|
Repayments of related party loan
|
(2,168,196 | ) | - | |||||
|
Net proceeds from stock issuance in public offering
|
20,144,255 | - | ||||||
|
Net proceeds from exercise of warrants
|
49,800 | - | ||||||
|
Net cash provided by financing activities
|
15,071,460 | 1,343,166 | ||||||
|
EFFECT OF EXCHANGE RATES ON CASH & CASH EQUIVALENTS
|
526,517 | 162,992 | ||||||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(5,916,940 | ) | 1,519,924 | |||||
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
9,151,536 | 7,964,120 | ||||||
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 3,234,596 | $ | 9,484,044 | ||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
|
Cash paid for interest expense
|
$ | 121,933 | $ | 357,198 | ||||
|
Cash paid for income tax
|
$ | 7,291,068 | $ | 4,267,965 | ||||
###