China Shen Zhou Mining & Resources, Inc. Announces third Quarter Financial Results
(All figures are in U.S. dollars)
· | Press Release |
· | Source: China Shen Zhou Mining & Resources, Inc. |
· | On 7:00 am EST, Thursday November 12, 2009 |
BEIJING, Nov. 12 /PRNewswire-Asia-FirstCall/ -- China Shen Zhou Mining & Resources, Inc. (NYSE Amex: SHZ) ("China Shen Zhou," or the "Company"), a leading company engaged in the exploration, development, mining and processing of fluorite, zinc, lead, copper, and other nonferrous metals in China, today announced its financial results for the quarter ended September 30, 2009.
Third Quarter 2009 Financial Results
Net revenues for the three months ended September 30, 2009 were $1.72 million, representing a $1.21 million or 41% decrease as compared to the same period of 2008. The decrease in net revenues is mainly because (i) Qianzhen Mining ceased its zinc processing operation as a result of a shortage of ore supplies, and (ii) Xingzhen Mining's processing plant was in trial production, and had a limited number of qualified products for the three months ended September 30, 2009.
For the three months ended September 30, 2009, gross profit was $246,000, which decreased by approximately 50% from $495,000 in gross profit for the same period of 2008. Gross profit margin dropped from approximately 17% for the three months ended September 30, 2008 to approximately 14% for the same period of 2009. The decrease was mainly due to the significant decrease in the price of fluorite products.
For the three months ended September 30, 2009, general and administrative expenses decreased by approximately $1.17 million to $1.38 million as compared to $2.55 million for the same period of 2008. The decrease in general and administrative expenses was primarily due to the Company's tightening of its control of expenses in the current economic crisis.
Interest expenses increased approximately $0.85 million for the three months ended September 30, 2009 as compared to the same period of 2008. The increase in interest expenses was mainly due to the difference in revaluation of the warrant liability.
Net loss for the three months ended September 30, 2009 was $2.15 million, a difference of $0.12 million compared to net loss of $2.03 million for the same period of 2008. Basic losses per share were $0.10 and $ 0.09 for the three months ended September 30, 2009 and 2008, respectively.
Net revenues for the nine months ended September 30, 2009 were $3.06 million, representing a $1.79 million or 37% decrease as compared to the same period of 2008.
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For the nine months ended September 30, 2009, gross profit was $467,000 which decreased by approximately 27% from $639,000 gross profit for the same period of 2008. Gross profit margin rose from 13% for the nine months ended September 30 2008 to 15% for the same period of 2009.
For the nine months ended September 30, 2009, general and administrative expenses decreased by approximately $3.29 million to $3.65 million in 2009 as compared to $6.94 million for the same period of 2008.
Net loss for the nine months ended September 30, 2009 was $6.19 million, a decrease of $1.33 million compared to net loss of $7.52 million for the same period of 2008. Basic losses per share were $0.28 and $ 0.34 for the nine months ended September 30, 2009 and 2008, respectively.
Cash and cash equivalents were $1.12 million as of September 30, 2009, an increase of $0.91 million as compared to the balance at December 31, 2008 of $0.21 million.
About China Shen Zhou Mining & Resources, Inc.
China Shen Zhou Mining & Resources, Inc., through its subsidiary, American Federal Mining Group ("AFMG"), is engaged in the exploration, development, mining, and processing of fluorite and nonferrous metals such as zinc, lead and copper in China. The Company has the following principal areas of interest in China: (a) fluorite extraction and processing in the Sumochaganaobao region of Inner Mongolia; (b) zinc/copper/lead exploration, mining and processing in Wulatehouqi of Inner Mongolia; and (c) zinc/copper exploration, mining and processing in Xinjiang. In addition, AFMG owns 100% of Kichi-Chaarat Closed Joint Stock Company, whose major assets include a copper-gold mine located in the Kuru-Tegerek region of western Kyrgyzstan.
For more information, please visit http://www.chinaszmg.com/
Safe Harbor Statement
Certain of the statements made in the press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in the People's Republic of China, variations in cash flow, fluctuation in mineral prices, risks associated with exploration and mining operations, and the potential of securing additional mineral resources, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
For more information, please contact:
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In China:
Fulun Song
Office of the Board of Directors
China Shen Zhou Mining & Resources, Inc.
Tel: +86-10-8890-6927
Fax: +86-10-6887-2811
Email: investors@chinaszky.com
Web: http://www.chinaszmg.com
In the U.S.:
David Elias
Investor Relations
DME Capital LLC
Tel: +1-516-967-0205
Email: dave@dmecapital.com
Financial Tables to Follow
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CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,121 | $ | 205 | ||||
Accounts receivable, net | 622 | 561 | ||||||
Other deposits and prepayments, net | 1,320 | 1,167 | ||||||
Inventories | 3,582 | 2,958 | ||||||
Total current assets | 6,645 | 4,891 | ||||||
Prepayment for office rent | 353 | 505 | ||||||
Available for sale investment | 148 | 146 | ||||||
Property, machinery and mining assets, net | 46,602 | 47,716 | ||||||
Deferred debt issuance costs | 1,437 | 1,755 | ||||||
Total assets | $ | 55,185 | $ | 55,013 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,723 | $ | 3,471 | ||||
Fair value of detachable warrants liability | 50 | 33 | ||||||
Short term bank loans | 3,602 | 1,756 | ||||||
Other payables and accruals | 6,189 | 4,794 | ||||||
Taxes payable | 314 | 411 | ||||||
Due to related parties | 2,046 | 2,666 | ||||||
Convertible notes payable | 26,627 | |||||||
Total current liabilities | 43,551 | 13,131 | ||||||
Convertible notes payable | 24,251 | |||||||
Total liabilities | $ | 43,551 | $ | 37,382 | ||||
Minority interests | -- | 22 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Common Stock, $0.001 par value: | ||||||||
Authorized - 50,000,000 shares (2008: 50,000,000 shares) | ||||||||
Issued and outstanding 22,214,514shares | $ | 22 | $ | 22 | ||||
Additional paid-in capital | 25,251 | 25,251 | ||||||
PRC statutory reserves | 1,672 | 1,672 | ||||||
Accumulated other comprehensive income | 4,236 | 4,020 | ||||||
Accumulated deficit | (19,547 | ) | (13,356 | ) | ||||
Total stockholders' equity | 11,634 | 17,609 | ||||||
Total liabilities and stockholders' equity | $ | 55,185 | $ | 55,013 |
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CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands, except per share data)
For the Three | For the Nine | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
September | September | September | September | |||||||||||||
30, 2009 | 30, 2008 | 30, 2009 | 30, 2008 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Net revenue | $ | 1,715 | $ | 2,924 | $ | 3,060 | $ | 4,845 | ||||||||
Cost of sales | 1,469 | 2,429 | 2,593 | 4,206 | ||||||||||||
Gross profit | 246 | 495 | 467 | 639 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and distribution expenses | 52 | 36 | 70 | 72 | ||||||||||||
General and administrative expenses | 1,379 | 2,550 | 3,650 | 6,942 | ||||||||||||
Total operating expenses | 1,431 | 2,586 | 3,720 | 7,014 | ||||||||||||
Net loss from operations | (1,185 | ) | (2,091 | ) | (3,253 | ) | (6,375 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (936 | ) | (87 | ) | (2,893 | ) | (1,932 | ) | ||||||||
Other, net | (25 | ) | 48 | (67 | ) | 590 | ||||||||||
Total other expense | (961 | ) | (39 | ) | (2,960 | ) | (1,342 | ) | ||||||||
Loss from operations before income taxes and minority interests | (2,146 | ) | (2,130 | ) | (6,213 | ) | (7,717 | ) | ||||||||
Income tax benefit | -- | 85 | -- | 129 | ||||||||||||
Loss from operations before minority interests | (2,146 | ) | (2,045 | ) | (6,213 | ) | (7,588 | ) | ||||||||
Minority interests | -- | 20 | 22 | 65 | ||||||||||||
Net loss | (2,146 | ) | (2,025 | ) | (6,191 | ) | (7,523 | ) | ||||||||
Other comprehensive income: | ||||||||||||||||
Foreign currency translation adjustments | 25 | 301 | 216 | 1,857 | ||||||||||||
Comprehensive loss | $ | (2,121 | ) | $ | (1,724 | ) | $ | (5,975 | ) | $ | (5,666 | ) | ||||
Net loss per common share - basic and diluted | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.34 | ) | ||||
Weighted average common shares outstanding - Basic and Diluted | 22,215 | 22,215 | 22,215 | 22,215 |
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CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
For the Nine Months Ended | ||||||||
September 30 | ||||||||
2009 | 2008 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Loss from operations | $ | (6,191 | ) | $ | (7,523 | ) | ||
Adjustments to reconcile net loss to net cash used in - | ||||||||
Depreciation and amortization | 1,868 | 3,288 | ||||||
Deferred income tax benefits | -- | (179 | ) | |||||
Fair value adjustment of warrants | 17 | (984 | ) | |||||
Accrual of coupon interests and accreted principal | 1,169 | 1,112 | ||||||
Amortization of deferred financing costs | 1,207 | 1,179 | ||||||
Amortization of debt issuance costs | 318 | 311 | ||||||
Minority interests | (22 | ) | (65 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in - | ||||||||
Accounts receivable | (61 | ) | 1,999 | |||||
Deposits and prepayments | (153 | ) | (443 | ) | ||||
Prepayment for office rent | 152 | (540 | ) | |||||
Inventories | (624 | ) | (2,871 | ) | ||||
Increase (decrease) in - | ||||||||
Accounts payable | 1,252 | 494 | ||||||
Other payables and accruals | 1,382 | 2,804 | ||||||
Taxes payable | (97 | ) | 57 | |||||
Due to related parties | (620 | ) | 1,032 | |||||
Net cash used in operating activities | (403 | ) | (329 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, machinery and mining assets | $ | (963 | ) | $ | (1,975 | ) | ||
Sales of property, machinery and mining assets | 241 | -- | ||||||
Net cash used in investing activities | (722 | ) | (1,975 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from short-term borrowings | $ | 1,846 | $ | 446 | ||||
Net cash provided by (used in) financing activities | 1,846 | 446 | ||||||
Foreign currency translation adjustment | 195 | (629 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 916 | (2,487 | ) | |||||
Cash and cash equivalents at the beginning of the period | 205 | 2,949 | ||||||
Cash and cash equivalents at the end of the period | $ | 1,121 | $ | 462 | ||||
Non-cash investing and financing activities | ||||||||
(None) | ||||||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid for interest expenses | $ | 166 | $ | 254 | ||||
Cash paid for income tax | $ | -- | $ | -- |
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