China Shen Zhou Mining & Resources, Inc. Announces Financial Results for the Second Quarter Ended June 30, 2010
(All figures are in U.S. dollars)
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Press Release Source: China Shen Zhou Mining & Resources, Inc. On Tuesday August 10, 2010, 8:00 am EDT
BEIJING, Aug. 10 /PRNewswire-Asia-FirstCall/ -- China Shen Zhou Mining & Resources, Inc. ("China Shen Zhou", or the "Company") (Amex:SHZ.a - News), 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 second quarter ended June 30, 2010.
Second Quarter 2010 Highlights:
Total net revenues increased by 210% in the second quarter of 2010 as compared to the same period in 2009 to US$2.2 million from US$0.7 million.
Gross profit increased by approximately 180% in the second quarter of 2010 as compared to the same period in 2009 to US$0.45 million from US$0.16 million.
Net loss attributable to the Company and subsidiaries decreased by approximately 70% in the second quarter of 2010 as compared to the same period in 2009 to US$0.5 million from US$1.7 million.
Net Loss from operations decreased by approximately 69% in the second quarter of 2010 as compared to the same period in 2009 to US$0.5 million from US$1.6 million.
Basic and diluted net loss per share from continuing operations was US$0.02 in the second quarter of 2010 and US$0.07 in the second quarter of 2009.
"I am proud of how our team executed our plans in the second quarter and first half of 2010. While global economic conditions continue to appear sluggish, we posted good results in the second quarter," said Ms. Xiaojing Yu, the Chairwoman and CEO of the Company. "We remain focused on executing our growth strategy by increasing the production of fluorite and exploration of new resources to achieve our financial target of 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.
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
2
CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 463 | $ | 333 | ||||
Accounts receivable, net | 274 | 302 | ||||||
Other deposits and prepayments, net | 1,026 | 855 | ||||||
Inventories | 6,594 | 3,721 | ||||||
Restricted assets | 8 | 740 | ||||||
Total current assets | 8,365 | 5,951 | ||||||
Prepayment for office rent | 198 | 280 | ||||||
Available for sale investment | 147 | 146 | ||||||
Property, machinery and mining assets, net | 34,098 | 34,902 | ||||||
Total assets | $ | 42,808 | $ | 41,279 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,163 | $ | 4,694 | ||||
Short term bank loans | 7,931 | 3,603 | ||||||
Other payables and accruals | 6,135 | 6,667 | ||||||
Taxes payable | 379 | 333 | ||||||
Total current liabilities | 17,608 | 15,297 | ||||||
Due to related parties | 2,047 | 2,297 | ||||||
Total liabilities | 19,655 | 17,594 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Common stock ($0.001 par value; 50,000,000 shares authorized; 27,974,514 | ||||||||
shares and 27,214,514 shares issued and outstanding as of June 30, 2010 and | ||||||||
December 13, 2009 respectively) | 28 | 27 | ||||||
Additional paid-in capital | 29,270 | 28,518 | ||||||
Statutory reserves | 1,672 | 1,672 | ||||||
Accumulated other comprehensive income | 3,885 | 3,839 | ||||||
Accumulated deficit | (11,658 | ) | (10,342 | ) | ||||
Stockholders' equity - China Shen Zhou Mining & | ||||||||
Resources, Inc. and Subsidiaries | 23,197 | 23,714 | ||||||
Noncontrolling interest | (44 | ) | (29 | ) | ||||
Total stockholders' equity | 23,153 | 23,685 | ||||||
Total liabilities and stockholders' equity | $ | 42,808 | $ | 41,279 |
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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 Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2010 (Unaudited) | 2009 (Unaudited) | 2010 (Unaudited) | 2009 (Unaudited) | |||||||||||||
Net revenue | $ | 2,182 | $ | 726 | $ | 3,103 | $ | 1,345 | ||||||||
Cost of sales | 1,729 | 566 | 2,577 | 1,123 | ||||||||||||
Gross profit | 453 | 160 | 526 | 222 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and distribution expenses | 38 | 14 | 51 | 18 | ||||||||||||
General and administrative expenses | 834 | 793 | 1,911 | 2,184 | ||||||||||||
Total operating expenses | 872 | 807 | 1,962 | 2,202 | ||||||||||||
Net loss from operations | (419 | ) | (647 | ) | (1,436 | ) | (1,980 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (108 | ) | (997 | ) | (194 | ) | (1,959 | ) | ||||||||
Other, net | 13 | 22 | 300 | 117 | ||||||||||||
Total other loss | (95 | ) | (975 | ) | 106 | (1,842 | ) | |||||||||
Loss from continuing operations before income taxes | (514 | ) | (1,622 | ) | (1,330 | ) | (3,822 | ) | ||||||||
Income tax expenses | -- | -- | -- | -- | ||||||||||||
Loss from continuing operations | (514 | ) | (1,622 | ) | (1,330 | ) | (3,822 | ) | ||||||||
Discontinued operations: | ||||||||||||||||
Loss from operations of discontinued component, net of taxes | -- | (88 | ) | -- | (246 | ) | ||||||||||
Loss from discontinued operations | -- | (88 | -- | (246 | ) | |||||||||||
Net loss | (514 | ) | (1,710 | ) | (1,330 | ) | (4,068 | ) | ||||||||
Less: Noncontrolling interests attributable to the noncontrolling interests | 9 | 44 | 14 | 22 | ||||||||||||
Net loss - attributable to China Shen Zhou Mining & Resources, Inc. and Subsidiaries | (505 | ) | (1,666 | ) | (1,316 | ) | (4,046 | ) | ||||||||
Other comprehensive income: | ||||||||||||||||
Foreign currency translation adjustments | 66 | (5 | ) | 46 | 186 | |||||||||||
Comprehensive income (loss) | $ | (439 | ) | $ | (1,671 | ) | $ | (1,270 | ) | $ | (3,860 | ) | ||||
Net loss per common share - basic and diluted | ||||||||||||||||
From continuing operations | (0.02 | ) | (0.07 | ) | (0.04 | ) | (0.17 | ) | ||||||||
From discontinued operations | -- | (0.00 | ) | -- | (0.01 | ) | ||||||||||
$ | (0.02 | ) | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.18 | ) | |||||
Weighted average common shares outstanding | ||||||||||||||||
- Basic and Diluted | 27,975 | 22,215 | 27,852 | 22,215 |
4
CHINA SHEN ZHOU MINING & RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share data)
For the Six Months Ended | ||||||||
June 30, | ||||||||
2010 (Unaudited) | 2009 (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (1,316 | ) | $ | (4,046 | ) | ||
Adjustments to reconcile net loss to net cash | ||||||||
used in operating activities: | ||||||||
Loss from operations of discontinued | ||||||||
component, net of income tax benefits | -- | 246 | ||||||
Depreciation and amortization | 1,365 | 1,357 | ||||||
Fair value adjustment of warrants | -- | 60 | ||||||
Accrual of coupon interests and accreted | ||||||||
principal | -- | 774 | ||||||
Amortization of deferred financing costs | -- | 802 | ||||||
Amortization of debt issuance costs | -- | 211 | ||||||
Noncontrolling interests | (15 | ) | (22 | ) | ||||
Forgiveness of payroll payables | (300 | ) | -- | |||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in - | ||||||||
Accounts receivable | 28 | (224 | ) | |||||
Other deposits and prepayments | (171 | ) | (270 | ) | ||||
Prepayment for office rent | 82 | 105 | ||||||
Inventories | (2,873 | ) | (279 | ) | ||||
Restricted assets | 732 | (359 | ) | |||||
Increase (decrease) in - | ||||||||
Accounts payable | (1,531 | ) | 321 | |||||
Other payables and accruals | 528 | 514 | ||||||
Taxes payable | 46 | (264 | ) | |||||
Net cash used in operating activities | ||||||||
from continuing operations | (3,425 | ) | (1,075 | ) | ||||
Net cash used in operating activities | ||||||||
from discontinued operations | -- | 71 | ||||||
Net cash used in operating activities | (3,425 | ) | (1,004 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, machinery and | ||||||||
mining assets | (461 | ) | (385 | ) | ||||
Net cash used in investing activities from | ||||||||
continuing operations | (461 | ) | (385 | ) | ||||
Net cash provided by disposal of discontinued | ||||||||
operations | -- | -- | ||||||
Net cash provided by (used in) investing | ||||||||
activities | (461 | ) | (385 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayment at the convertible notes | -- | |||||||
Due to related parties | (250 | ) | (440 | ) | ||||
Repayment at short-term bank loans | (2,732 | ) | -- | |||||
Proceeds from short-term bank loans | 7,050 | 1,874 | ||||||
Net cash (used in) provided by financing | ||||||||
activities | 4,068 | 1,434 | ||||||
Foreign currency translation adjustment | (52 | ) | (3 | ) | ||||
Net increase in cash and cash equivalents | 130 | 42 | ||||||
Cash and cash equivalents at the beginning of | ||||||||
the period | 333 | 205 | ||||||
Cash and cash equivalents at the end of the | ||||||||
period | $ | 463 | $ | 247 | ||||
Non-cash investing and financing activities | ||||||||
Shares issued to employees as share based | ||||||||
compensation | $ | 752 | $ | -- | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest expenses | $ | 162 | $ | 47 | ||||
Cash paid for income tax | $ | -- | $ | -- |
5