China Shen Zhou Mining & Resources, Inc.
Announces Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2009
(All figures are in U.S. dollars)
Press Release Source: China Shen Zhou Mining & Resources, Inc. On Wednesday March 31, 2010, 2:41 pm EDT
BEIJING, March 31 /PRNewswire-Asia-FirstCall/ -- China Shen Zhou Mining & Resources, Inc. (NYSE:SHZ - - News) ("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 the financial results for the fourth quarter and fiscal year ended December 31, 2009.
China Shen Zhou will file its annual report on Form 10-K for the fiscal year ended December 31, 2009 on March 31, 2010.
Fourth Quarter 2009 Highlights:
| -- | Net sales were $1.1 million, representing a decrease of approximately$1.2 million as compared to $2.3 million for the fourth quarter in 2008. |
| -- | Gross profit was -$0.21 million, representing a decrease ofapproximately 132% as compared to $0.66 million of the fourth quarter in 2008. |
| -- | Gain of convertible debt cancellation was $14.0 million. Thetransaction of redemption of convertible notes was closed in December 2009. |
| -- | Net income for the fourth quarter in 2009 was $9.2 million,representing an increase of approximately $14 million as compared to net loss of $4.6 million for the fourth quarter in 2008. |
Full Year 2009 Highlights:
| -- | Net sales were $4.2 million, representing a decrease of approximately$2.9 million as compared to $7.1 million for fiscal year 2008. |
| -- | Gross profit was $0.26 million, representing a decrease ofapproximately 80% as compared to $1.31 million of fiscal year 2008. |
| -- | Net income for 2009 was $3.0 million, or $0.13 per diluted share,representing an increase of approximately 15.1 million as compared to net loss of $12.1 million, or -$0.55 per diluted share, for the fiscal year 2008. |
"Though the commodities market is still terrible at this moment, we have many reasons to be optimistic in 2010. For example, the price of non-ferrous metals has risen. Coupled with the extreme scarcity and non-renewable nature of fluorite, the new policy of restricting the excessive exploitation of fluorite mineral resources and higher entrance limitation of fluorite enterprises from China's government will stimulate the increase of fluorite price. As the world economy had passed over the most difficult time in 2009, the demand for fluorite and non-ferrous metals will increase gradually in 2010," said Ms. Xiaojing Yu, China Shen Zhou's Chairwoman and CEO. "We are very encouraged by the news from Xiangzhen Mining about approval of RMB 50 million yuan of credit from a local bank in Inner Mongolia on March 30, 2010. We believe we will have a better operational performance in 2010."
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:
In China:
Fulun Song
Office of the Board of Directors
China Shen Zhou Mining & Resources, Inc.
Tel: +86-10-8890-9976
Fax: +86-10-8890-6927
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
CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
| | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 333 | | | $ | 200 | |
| Accounts receivable, net | | | 302 | | | | 561 | |
| Other deposits and prepayments, net | | | 855 | | | | 1,111 | |
| Inventories | | | 3,721 | | | | 2,958 | |
| Restricted assets | | | 740 | | | | -- | |
| Assets - Discontinued operations | | | -- | | | | 10,915 | |
| Total current assets | | | 5,951 | | | | 15,745 | |
| | | | | | | | | |
| Prepayment for office rent | | | 280 | | | | 505 | |
| Available for sale investment | | | 146 | | | | 146 | |
| Property, machinery and mining assets, net | | | 34,902 | | | | 36,862 | |
| Deferred debt issuance costs | | | -- | | | | 1,755 | |
| Total assets | | $ | 41,279 | | | $ | 55,013 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 4,694 | | | $ | 3,470 | |
| Fair value of detachable warrants liability | | | -- | | | | 33 | |
| Short term bank loans | | | 3,603 | | | | 1,756 | |
| Other payables and accruals | | | 6,667 | | | | 4,639 | |
| Taxes payable | | | 133 | | | | 415 | |
| Due to related parties | | | -- | | | | 2,490 | |
| Liabilities - Discontinued operations | | | -- | | | | 328 | |
| Total current liabilities | | | 15,097 | | | | 13,131 | |
| | | | | | | | | |
| Due to related parties | | | 2,297 | | | | -- | |
| Convertible notes payable | | | -- | | | | 24,251 | |
| Total liabilities | | | 17,394 | | | | 37,382 | |
| | | | | | | | | |
| STOCKHOLDERS' EQUITY: | | | | | | | | |
| Common Stock ($0.001 par value; 50,000,000 shares authorized; 27,214,514 shares and 22,214,514 shares issued and outstanding as of December 31, 2009 and 2008, respectively | | $ | 27 | | | $ | 22 | |
| Additional paid-in capital | | | 28,518 | | | | 25,251 | |
| PRC statutory reserves | | | 1,672 | | | | 1,672 | |
| Accumulated other comprehensive income | | | 3,839 | | | | 4,020 | |
| Accumulated deficit | | | (10,142 | ) | | | (13,356 | ) |
| Stockholders' equity - China Shen Zhou Mining & Resources, Inc. and Subsidiaries | | | 23,914 | | | | 17,609 | |
| Noncontrolling interest | | | (29 | ) | | | 22 | |
| Total stockholders' equity | | | 23,885 | | | | 17,631 | |
| Total liabilities and stockholders' equity | | $ | 41,279 | | | $ | 55,013 | |
CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
| | | For the Year Ended December 31, | |
| | | 2009 | | | 2008 | |
| Net revenue | | $ | 4,192 | | | $ | 7,137 | |
| Cost of sales | | | 3,934 | | | | 5,830 | |
| Gross profit | | | 258 | | | | 1,307 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| Selling and distribution expenses | | | 94 | | | | 146 | |
| General and administrative expenses | | | 5,853 | | | | 8,213 | |
| Total operating expenses | | | 5,947 | | | | 8,359 | |
| | | | | | | | | |
| Net income (loss) from operations | | | (5,689 | ) | | | (7,052 | ) |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense | | | (2,989 | ) | | | (2,744 | ) |
| Gain on convertible debt extinguishment | | | 13,959 | | | | -- | |
| Impairment of goodwill | | | -- | | | | (1,127 | ) |
| Other, net | | | 98 | | | | 380 | |
| Total other income (loss) | | | 11,068 | | | | (3,491 | ) |
| | | | | | | | | |
| Income (loss) from continuing operations before income taxes | | | 5,379 | | | | (10,543 | ) |
| | | | | | | | | |
| Income tax expenses | | | -- | | | | (544 | ) |
| | | | | | | | | |
| Income (loss) from continuing operations | | | 5,379 | | | | (11,087 | ) |
| | | | | | | | | |
| Discontinued operation: | | | | | | | | |
| Loss from operations of discontinued component, net of taxes | | | (740 | ) | | | (1,192 | ) |
| Loss on disposal of discontinued subsidiary, net of taxes | | | (1,476 | ) | | | -- | |
| Loss from discontinued operations | | | (2,216 | ) | | | (1,192 | ) |
| | | | | | | | | |
| Net income (loss) | | | 3,163 | | | | (12,279 | ) |
| Less: Noncontrolling interests attributable to the noncontrolling interests | | | 51 | | | | 130 | |
| Net loss - attributable to China Shen Zhou Mining & Resources, Inc. and Subsidiaries | | | 3,214 | | | | (12,149 | ) |
| | | | | | | | | |
| Other comprehensive income (loss): | | | | | | | | |
| Foreign currency translation adjustments | | | (181 | ) | | | 1,908 | |
| Comprehensive income (loss) | | $ | 3,033 | | | $ | (10,241 | ) |
| | | | | | | | | |
| Net income (loss) per common share – basic and diluted | | | | | | | | |
| From continuing operations | | $ | 0.21 | | | $ | (0.50 | ) |
| From discontinued operations | | | (0.09 | ) | | | (0.05 | ) |
| | | $ | 0.12 | | | $ | (0.55 | ) |
| | | | | | | | | |
| Weighted average common shares outstanding | | | | | | | | |
| – Basic and Diluted | | | 24,743 | | | | 22,215 | |
CHINA SHEN ZHOU MINING & RESOURCES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
| | | For the year Ended | |
| | | December 31 | |
| | | 2009 | | | 2008 | |
| Cash flows from operating activities: | | | | | | |
| Net loss | | $ | 3,214 | | | $ | (12,149 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | | | | |
| Loss from operations of discontinued component, net of income tax benefits | | | 740 | | | | 1,192 | |
| Write off deferred tax abilities of discontinued operations | | | -- | | | | (1,201 | ) |
| Loss on sale of discontinued operations, net of income taxes | | | 1,476 | | | | -- | |
| Gain on sale of repurchase convertible notes | | | (13,959 | ) | | | -- | |
| Provision for doubtful accounts | | | -- | | | | (2 | ) |
| Provision for deferred tax asset | | | -- | | | | 685 | |
| Impairment provision for inventories | | | 34 | | | | -- | |
| Impairment of goodwill | | | -- | | | | 1,127 | |
| Depreciation and amortization | | | 2,514 | | | | 4,343 | |
| Write off of deferred tax abilities | | | -- | | | | -- | |
| Loss from investments | | | -- | | | | -- | |
| Deferred income tax benefits | | | -- | | | | (178 | ) |
| Fair value adjustment of warrants | | | (33 | ) | | | (1,067 | ) |
| Loss on disposal of property, machinery and mining assets | | | 15 | | | | -- | |
| Accrual of coupon interests and accreted principal | | | 1,169 | | | | 1,489 | |
| Amortization of deferred financing costs | | | 1,207 | | | | 1,576 | |
| Amortization of debt issuance costs | | | 318 | | | | 415 | |
| Noncontrolling interests | | | (51 | ) | | | (122 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| (Increase) decrease in - | | | | | | | | |
| Accounts receivable | | | 259 | | | | 1,922 | |
| Other deposits and prepayments | | | 256 | | | | 40 | |
| Prepayment for office rent | | | 225 | | | | (505 | ) |
| Inventories | | | (797 | ) | | | (1,319 | ) |
| Due from related companies | | | -- | | | | (625 | ) |
| Restricted assets | | | (740 | ) | | | -- | |
| Increase (decrease) in - | | | | | | | | |
| Accounts payable | | | 1,224 | | | | 989 | |
| Other payables and accruals | | | 2,028 | | | | 1,200 | |
| Taxes payable | | | (282 | ) | | | 167 | |
| Net cash used in operating activities from continuing operations | | | (1,183 | ) | | | (2,023 | ) |
| Net cash used in operating activities from discontinued operations | | | (33 | ) | | | (213 | ) |
| Net cash used in operating activities | | | (1,216 | ) | | | (2,236 | ) |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Purchases of property, machinery and mining assets | | $ | (2,520 | ) | | $ | (1,894 | ) |
| Sales of property, machinery and mining assets | | | 1,987 | | | | -- | |
| Net cash used in investing activities from continuing operations | | | (533 | ) | | | (1,894 | ) |
| Net cash provided by disposal of discontinued operations | | | 8,200 | | | | -- | |
| Net cash provided by (used in) investing activities | | | 7,667 | | | | (1,894 | ) |
| Cash flows from financing activities: | | | | | | | | |
| Repayment at the convertible notes | | | (8,000 | ) | | | -- | |
| Due to related parties | | | (193 | ) | | | 604 | |
| Repayment at short-term bank loans | | | (2,518 | ) | | | | |
| Proceeds from short-term bank loans | | $ | 4,362 | | | $ | 442 | |
| Net cash (used in) provided by financing activities | | | (6,349 | ) | | | 1,046 | |
| Foreign currency translation adjustment | | | 31 | | | | 335 | |
| | | | | | | | | |
| Net decrease in cash and cash equivalents | | | 133 | | | | (2,749 | ) |
| | | | | | | | | |
| Cash and cash equivalents at the beginning of the period | | | 200 | | | | 2,949 | |
| Cash and cash equivalents at the end of the period | | $ | 333 | | | $ | 200 | |
| | | | | | | | | |
| Non-cash investing and financing activities | | | | | | | | |
| (None) | | | | | | | | |
| | | | | | | | | |
| Supplemental disclosures of cash flow information: | | | | | | | | |
| Cash paid for interest expenses | | $ | 241 | | | $ | 254 | |
| Cash paid for income tax | | $ | -- | | | $ | -- | |
