GONGYI, China, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- China GengSheng Minerals, Inc. ("CGM" or the Company) (OTC Bulletin Board: CHGS) announced financial results for the three-month period ended on September 30, 2007.
Quarter to Quarter Comparison
For the three-month period ended on September 30, 2007, the Company reported revenues of $10.3 million, an increase of 46.5%, compared to $7.0 million reported for the same period last year. Gross profit for the three months ended September 30, 2007 was $4.5 million, or 43.8% of net revenues, compared to gross profit of $2.9 million, or 41.2% of net revenues for the same period last year. Total operating expenses were $1.9 million for the three-month period ended on September 30, 2007, or 18.6% of net revenues, compared to $1.6 million in total operating expenses, or 23% of net revenues for the same period last year. Net income for the three-month period ended on September 30, 2007 was $2.1 million, or 20.7% of net revenues, compared to $1.2 million, or 17.4% of net revenues for the same period last year.
Nine Month to Nine Month Comparison
For the nine-month period ended on September 30, 2007, the Company reported revenues of $28.8 million, an increase of 52.6%, compared to $18.9 million reported for the same period last year. Gross profit for the nine months ended September 30, 2007 was $11.7 million, or 40.7% of net revenues, compared to gross profit of $7.5 million, or 40% of net revenues for the same period last year. Total operating expenses were $5.7 million for the nine-month period ended on September 30, 2007, or 19.7% of net revenues, compared to $4.3 million in total operating expenses, or 23% of net revenues for the same period last year. Net income for the nine-month period ended on September 30, 2007 was $5.0 million, or 17.2% of net revenues, compared to $3.1 million, or 16.3% of net revenues for the same period last year.
The Company fell short of it sales goal for Fracture Proppant a new product launched in Q2 this year. However, the Company’s cost containment efforts and higher than expected sales for its other products made up the shortfall in net income created by lower Fracture Proppant sales. The Company expects that new Q4 purchase commitments for Fracture Proppant combined with its cost containment efforts along with continued demand for its other products and other business activities will enable it to meet its net income goal for 2007.
Balance Sheet Items
The Company had $5.3 million in unrestricted cash and cash equivalents as of September 30, 2007, compared to $0.4 million on December 31, 2006. Working capital as of September 30, 2007 was $24.3 million compared to $11.5 on December 31, 2006.
The Company
CGM is a mineral-based manufacturer whose products include monolithic refractories, industrial ceramics and fracture proppant. Monolithic refractories serve as heat resistant protective linings in industrial furnaces and other heavy machinery used in the steel, iron, cement, glass and aluminum industries. Ceramic products are heat and erosion resistant which are used to house high voltage switches and fuses and to transfer liquids, solids and gases. Fracture proppant is used in operating oil wells to release trapped oil allowing it to be extracted to the earth’s surface. CGM conducts business through Gengsheng International Corporation and its Chinese subsidiaries: Henan Gengsheng Refractories Co., Ltd., ZhengZhou Duesail Fracture Proppant Co., Ltd. and Henan Gengsheng High-Temperature Materials Co., Ltd.
FORWARD LOOKING STATEMENTS
This release may contain certain "forward-looking statements" relating to the business of China GengSheng Minerals, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding the ability of the Company to achieve its commercial objectives, and any other statements of non-historical information. These forward looking statements are often identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For More Information, please contact:
Mr. Denis Tontodonato
Tel: +1-704-562-0082
