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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gulf Resources Inc | NASDAQ:GURE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.58 | 1.55 | 1.63 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2016
|
|
Or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _________ to _________
|
Delaware
|
13-3637458
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
Level 11,Vegetable Building, Industrial Park of the East
Shouguang City, Shandong,
|
262700
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer (Do not check if a smaller reporting company)
o
|
Smaller reporting company
x
|
1
|
|
20
|
|
42
|
|
42
|
|
42
|
|
43
|
|
43
|
|
43
|
|
43
|
|
43
|
|
43
|
|
44
|
GULF RESOURCES, INC.
|
AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Expressed in U.S. dollars)
|
September 30, 2016
Unaudited
|
December 31, 2015
Audited
|
|||||||
Current Assets
|
||||||||
Cash
|
$
|
141,083,587
|
$
|
133,606,392
|
||||
Accounts receivable
|
71,396,808
|
49,980,358
|
||||||
Inventories, net
|
5,772,072
|
7,180,800
|
||||||
Prepayments and deposits
|
70,086
|
-
|
||||||
Prepaid land leases
|
372,203
|
49,833
|
||||||
Other receivable
|
559
|
599
|
||||||
Deferred tax assets
|
-
|
3,173
|
||||||
Total Current Assets
|
218,695,315
|
190,821,115
|
||||||
Non-Current Assets
|
||||||||
Property, plant and equipment, net
|
122,424,766
|
127,871,323
|
||||||
Property, plant and equipment under capital leases, net
|
657,249
|
927,218
|
||||||
Prepaid land leases, net of current portion
|
4,881,908
|
5,197,216
|
||||||
Deferred tax assets
|
2,304,937
|
2,367,180
|
||||||
Goodwill
|
28,743,418
|
29,559,174
|
||||||
Total non-current assets
|
159,012,278
|
165,922,111
|
||||||
Total Assets
|
$
|
377,707,593
|
$
|
356,743,226
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
10,492,195
|
$
|
9,929,700
|
||||
Retention payable
|
771,395
|
1,135,956
|
||||||
Capital lease obligation, current portion
|
153,310
|
196,778
|
||||||
Taxes payable
|
6,099,471
|
4,814,003
|
||||||
Total Current Liabilities
|
17,516,371
|
16,076,437
|
||||||
Non-Current Liabilities
|
||||||||
Capital lease obligation, net of current portion
|
2,373,726
|
2,555,914
|
||||||
Total Liabilities
|
$
|
19,890,097
|
$
|
18,632,351
|
||||
|
||||||||
Stockholders’ Equity
|
||||||||
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding
|
$
|
-
|
$
|
-
|
||||
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 47,052,940 and 46,276,269 shares issued; and 46,793,791 and 46,007,120 shares outstanding as of September 30, 2016 and December 31, 2015, respectively
|
23,525
|
23,139
|
||||||
Treasury stock; 259,149 and 269,149 shares as of September 30, 2016 and December 31, 2015 at cost
|
(577,141
|
)
|
(599,441
|
)
|
||||
Additional paid-in capital
|
94,133,779
|
94,124,065
|
||||||
Retained earnings unappropriated
|
243,172,187
|
215,286,395
|
||||||
Retained earnings appropriated
|
22,634,340
|
20,340,436
|
||||||
Accumulated other comprehensive loss/ income
|
(1,569,194
|
)
|
8,936,281
|
|||||
Total Stockholders’ Equity
|
357,817,496
|
338,110,875
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
377,707,593
|
$
|
356,743,226
|
Three-Month Period Ended
September 30,
|
Nine-Month Period Ended
September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
NET REVENUE
|
||||||||||||||||
Net revenue
|
$
|
38,811,622
|
$
|
42,601,598
|
$
|
120,907,839
|
$
|
126,862,497
|
||||||||
OPERATING INCOME (EXPENSES)
|
||||||||||||||||
Cost of net revenue
|
(23,107,921
|
)
|
(27,000,576
|
)
|
(76,184,822
|
)
|
(84,761,554
|
)
|
||||||||
Sales, marketing and other operating expenses
|
(83,087
|
)
|
(91,919
|
)
|
(269,357
|
)
|
(294,095
|
)
|
||||||||
Research and development cost
|
(68,115
|
)
|
(69,403
|
)
|
(198,330
|
)
|
(181,108
|
)
|
||||||||
Exploration cost
|
-
|
-
|
-
|
(325,840
|
)
|
|||||||||||
Write-off/Impairment on property, plant and equipment
|
(90,395
|
)
|
(819,701
|
)
|
(90,395
|
)
|
(819,701
|
)
|
||||||||
General and administrative expenses
|
(1,613,933
|
)
|
(831,955
|
)
|
(4,539,845
|
)
|
(5,247,318
|
)
|
||||||||
Other operating income
|
108,029
|
115,114
|
328,550
|
342,317
|
||||||||||||
(24,855,422
|
)
|
(28,698,440
|
)
|
(80,954,199
|
)
|
(91,287,299
|
)
|
|||||||||
INCOME FROM OPERATIONS
|
13,956,200
|
13,903,158
|
39,953,640
|
35,575,198
|
||||||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||||||
Interest expense
|
(42,012
|
)
|
(46,675
|
)
|
(134,150
|
)
|
(148,541
|
)
|
||||||||
Interest income
|
120,054
|
113,311
|
356,828
|
348,454
|
||||||||||||
INCOME BEFORE TAXES
|
14,034,242
|
13,969,794
|
40,176,318
|
35,775,111
|
||||||||||||
INCOME TAXES
|
(3,518,529
|
)
|
(3,290,372
|
)
|
(9,996,622
|
)
|
(9,005,158
|
)
|
||||||||
NET INCOME
|
$
|
10,515,713
|
$
|
10,679,422
|
$
|
30,179,696
|
$
|
26,769,953
|
||||||||
COMPREHENSIVE INCOME:
|
||||||||||||||||
NET INCOME
|
$
|
10,515,713
|
$
|
10,679,422
|
$
|
30,179,696
|
$
|
26,769,953
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
- Foreign currency translation adjustments
|
(2,637,763
|
)
|
(14,565,025
|
)
|
(10,505,475
|
)
|
(14,199,993
|
)
|
||||||||
COMPREHENSIVE INCOME/(LOSS)
|
$
|
7,877,950
|
$
|
(3,885,603
|
)
|
$
|
19,674,221
|
$
|
12,569,960
|
|||||||
EARNINGS PER SHARE:
|
||||||||||||||||
BASIC
|
$
|
0.23
|
$
|
0.23
|
$
|
0.65
|
$
|
0.60
|
||||||||
DILUTED
|
$
|
0.23
|
$
|
0.23
|
$
|
0.65
|
$
|
0.58
|
||||||||
WEIGHTED AVERAGE NUMBER OF SHARES:
|
||||||||||||||||
BASIC
|
46,301,217
|
46,007,120
|
46,106,194
|
44,884,268
|
||||||||||||
DILUTED
|
46,309,250
|
46,905,362
|
46,560,937
|
45,854,130
|
GULF RESOURCES, INC.
|
AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
|
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2016
|
(Expressed in U.S. dollars)
|
Common stock
|
Accumulated
|
|||||||||||||||||||||||||||||||||||||||
Number
|
Number
|
Number
|
Additional
|
Retained
|
Retained
|
other
|
||||||||||||||||||||||||||||||||||
of shares
|
of shares
|
of treasury
|
Treasury
|
paid-in
|
earnings
|
earnings
|
comprehensive
|
|||||||||||||||||||||||||||||||||
issued
|
outstanding
|
stock
|
Amount
|
stock
|
capital
|
unappropriated
|
appropriated
|
income
|
Total
|
|||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2015
Audited
|
46,276,269 | 46,007,120 | 269,149 | $ | 23,139 | $ | (599,441 | ) | $ | 94,124,065 | $ | 215,286,395 | $ | 20,340,436 | $ | 8,936,281 | $ | 338,110,875 | ||||||||||||||||||||||
Translation adjustment
|
-
|
- | - |
-
|
-
|
-
|
-
|
(10,505,475 | ) | (10,505,475 | ) | |||||||||||||||||||||||||||||
Common stock
issued
|
- | 10,000 | (10,000 | ) | - | 22,300 | (7,300 | ) | - | - | - | 15,000 | ||||||||||||||||||||||||||||
Cashless exercise of stock options
|
776,671 | 776,671 | - | 386 | - | (386 | ) | - | - | - | - | |||||||||||||||||||||||||||||
Issuance of stock options to employees and directors
|
- | - | - | - | - | 17,400 | - | - | - | 17,400 | ||||||||||||||||||||||||||||||
Net income for nine-month period ended September 30, 2016
|
-
|
- | - |
-
|
- |
-
|
30,179,696
|
- |
-
|
30,179,696 | ||||||||||||||||||||||||||||||
Transfer to statutory common reserve fund
|
- | - | - | - | - | - | (2,293,904 | ) | 2,293,904 | - | - | |||||||||||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2016
Unaudited
|
47,052,940 | 46,793,791 | 259,149 | $ | 23,525 | $ | (577,141 | ) | $ | 94,133,779 | $ | 243,172,187 | $ | 22,634,340 | $ | (1,569,194 | ) | $ | 357,817,496 |
GULF RESOURCES, INC.
|
AND SUBSIDIARIES
|
CONDENED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Expressed in U.S. dollars)
|
(UNAUDITED)
|
Useful life
(in years)
|
||
Buildings (including salt pans)
|
8 - 20
|
|
Plant and machinery (including protective shells, transmission channels and ducts)
|
3 - 8
|
|
Motor vehicles
|
5
|
|
Furniture, fixtures and equipment
|
3-8
|
|
Three-Month Period Ended
September 30,
|
Nine-Month Period Ended
September 30,
|
||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Numerator
|
||||||||||||||||
Net income
|
$
|
10,515,713
|
$
|
10,679,422
|
$
|
30,179,696
|
$
|
26,769,953
|
||||||||
Denominator
|
||||||||||||||||
Basic: Weighted-average common shares outstanding during the period
|
46,301,217
|
46,007,120
|
46,106,194
|
44,884,268
|
||||||||||||
Add: Dilutive effect of stock options
|
8,033
|
898,242
|
454,743
|
969,862
|
||||||||||||
Diluted
|
46,309,250
|
46,905,362
|
46,560,937
|
45,854,130
|
||||||||||||
Earnings per share
|
||||||||||||||||
Basic
|
$
|
0.23
|
$
|
0.23
|
$
|
0.65
|
$
|
0.60
|
||||||||
Diluted
|
$
|
0.23
|
$
|
0.23
|
$
|
0.65
|
$
|
0.58
|
Cash
|
$ | 14,074,720 | ||
Accounts receivable
|
19,365,259 | |||
Inventories
|
1,646,196 | |||
Other current assets
|
82,562 | |||
Property, plant and equipment, net
|
17,891,360 | |||
Prepaid land leases, net of current portion
|
4,800,404 | |||
Goodwill
|
28,743,418 | |||
Accounts payable and accrued expenses
|
(8,670,568 | ) | ||
Taxes payable
|
(963,458 | ) | ||
Cumulative translation adjustment
|
2,708,853 | |||
Total purchase price
|
$ | 79,678,746 |
For the nine months ended
|
||||||||
September 30, 2016
|
September 30, 2015
|
|||||||
Actual
|
Pro forma
|
|||||||
Net Revenue
|
$ | 120,907,839 | $ | 132,576,760 | ||||
Net Income
|
$ | 30,179,696 | $ | 28,239,987 | ||||
EARNINGS PER SHARE
|
||||||||
-Basic
|
$ | 0.65 | $ | 0.61 | ||||
-Diluted
|
$ | 0.65 | $ | 0.60 |
September 30, 2016
|
December 31, 2015
|
|||||||
Raw materials
|
$
|
879,085
|
$
|
1,014,917
|
||||
Finished goods
|
4,161,087
|
5,486,970
|
||||||
Work-in-process
|
744,241
|
691,604
|
||||||
Allowance for obsolete and slow-moving inventory
|
(12,341
|
)
|
(12,691
|
)
|
||||
$
|
5,772,072
|
$
|
7,180,800
|
September 30, 2016
|
December 31, 2015
|
|||||||
At cost:
|
||||||||
Mineral rights
|
$
|
5,962,024
|
$
|
6,131,230
|
||||
Buildings
|
67,954,932
|
68,510,164
|
||||||
Plant and machinery
|
203,242,535
|
195,295,877
|
||||||
Motor vehicles
|
8,603
|
8,847
|
||||||
Furniture, fixtures and office equipment
|
4,730,368
|
4,864,619
|
||||||
Construction in process
|
172,925
|
57,596
|
||||||
Total
|
282,071,387
|
274,868,333
|
||||||
Less: Accumulated depreciation and amortization
|
(159,646,621
|
)
|
(146,997,010
|
)
|
||||
Net book value
|
$
|
122,424,766
|
$
|
127,871,323
|
September 30, 2016
|
December 31, 2015
|
|||||||
At cost:
|
||||||||
Buildings
|
$
|
123,231
|
$
|
126,729
|
||||
Plant and machinery
|
2,316,398
|
2,382,139
|
||||||
Total
|
2,439,629
|
2,508,868
|
||||||
Less: Accumulated depreciation and amortization
|
(1,782,380
|
)
|
(1,581,650
|
)
|
||||
Net book value
|
$
|
657,249
|
$
|
927,218
|
September 30, 2016
|
December 31, 2015
|
|||||||
Accounts payable
|
$
|
9,654,778
|
$
|
8,835,442
|
||||
Salary payable
|
266,482
|
271,369
|
||||||
Social security insurance contribution payable
|
128,798
|
114,370
|
||||||
Other payables
|
442,137
|
708,519
|
||||||
Total
|
$
|
10,492,195
|
$
|
9,929,700
|
Taxes payable consists of the following:
|
September 30, 2016
|
December 31, 2015
|
|||||||
Income tax payable
|
$
|
3,549,990
|
$
|
2,400,400
|
||||
Mineral resource compensation fee payable
|
358,910
|
255,984
|
||||||
Value added tax payable
|
1,092,008
|
1,030,664
|
||||||
Land use right tax payable
|
879,397
|
904,354
|
||||||
Other tax payables
|
219,166
|
222,601
|
||||||
Total
|
$
|
6,099,471
|
$
|
4,814,003
|
Imputed
|
September 30,
|
December 31,
|
|||||||
Interest rate
|
2016
|
2015
|
|||||||
Total capital lease obligations
|
6.7%
|
$
|
2,527,036
|
$
|
2,752,692
|
||||
Less: Current portion
|
(153,310
|
)
|
(196,778
|
)
|
|||||
Capital lease obligations, net of current portion
|
$
|
2,373,726
|
$
|
2,555,914
|
(a)
|
Authorized shares
|
(b)
|
Retained Earnings - Appropriated
|
Number of Option
and Warrants
Outstanding and exercisable
|
Weighted- Average Exercise price of Option
and Warrants
|
Range of
Exercise Price per Common Share
|
|||||||||
Balance, January 1, 2016
|
2,399,000 | $ | 1.39 | $0.95 - $12.60 | |||||||
Granted and vested during the period
Ended September 30, 2016
|
37,500 | $ | 1.59 | $1.45-1.78 | |||||||
Exercised during the period ended
September 30, 2016
|
(1,831,500 | ) | $ | 1.11 | $0.95-1.45 | ||||||
Expired during the period ended
September 30, 2016
|
(450,000 | ) | $ | 2.25 | $0.95-12.60 | ||||||
Balance, September 30, 2016
|
155,000 | $ | 2.21 | $1.54 - $4.80 |
Stock and Warrants Options Exercisable and Outstanding
|
|||||||
Weighted Average
|
|||||||
Remaining
|
|||||||
Outstanding at September 30, 2016
|
Range of
Exercise Prices
|
Contractual Life
(Years)
|
|||||
Exercisable and outstanding
|
155,000
|
$1.54 - $4.80
|
1.64
|
Three-Month Period
Ended September 30,
|
Nine-Month Period
Ended September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Current taxes – PRC
|
$
|
3,518,529
|
$
|
3,290,372
|
$
|
9,996,622
|
$
|
9,086,618
|
||||||||
Deferred taxes – PRC
|
-
|
-
|
-
|
(81,460
|
)
|
|||||||||||
$
|
3,518,529
|
$
|
3,290,372
|
$
|
9,996,622
|
$
|
9,005,158
|
Three-Month Period
Ended September 30,
|
Nine-Month Period
Ended September 30,
|
|||||||||||||||
Reconciliations
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Statutory income tax rate
|
25
|
%
|
25
|
%
|
25
|
%
|
25
|
%
|
||||||||
Non-taxable item
|
-
|
(1
|
%)
|
-
|
(1
|
%)
|
||||||||||
Change in valuation allowance - US federal net operating loss
|
-
|
0
|
%
|
-
|
1
|
%
|
||||||||||
Effective tax rate
|
25
|
%
|
24
|
%
|
25
|
%
|
25
|
%
|
September 30, 2016
|
December 31, 2015
|
|||||||
Deferred tax liabilities
|
$ | - | $ | - | ||||
Deferred tax assets:
|
||||||||
Allowance for obsolete and slow-moving inventories
|
$ | 3,085 | $ | 3,173 | ||||
Impairment on property, plant and equipment
|
437,465 | 449,879 | ||||||
Exploration costs
|
1,864,387 | 1,917,301 | ||||||
Compensation costs of unexercised stock options
|
106,586 | 629,162 | ||||||
US federal net operating loss
|
11,485,000 | 10,835,000 | ||||||
Total deferred tax assets
|
13,896,523 | 13,834,515 | ||||||
Valuation allowance
|
(11,591,586 | ) | (11,464,162 | ) | ||||
Net deferred tax asset
|
$ | 2,304,937 | $ | 2,370,353 | ||||
Current deferred tax asset
|
$ | - | $ | 3,173 | ||||
Long-term deferred tax asset
|
$ | 2,304,937 | $ | 2,367,180 |
Three-Month
Period Ended
September 30, 2016
|
Bromine*
|
Crude
Salt*
|
Chemical
Products
|
Natural Gas
|
Segment
Total
|
Corporate
|
Total
|
|||||||||||||||||||||
Net revenue
(external customers)
|
$ | 15,971,847 | $ | 2,310,799 | $ | 20,528,976 | $ | - | $ | 38,811,622 | $ | - | $ | 38,811,622 | ||||||||||||||
Net revenue
(intersegment)
|
2,008,397 | - | - | - | 2,008,397 | - | 2,008,397 | |||||||||||||||||||||
Income from operations before taxes
|
7,898,302 | (382,917 | ) | 6,442,708 | (2,476 | ) | 13,955,617 | 583 | 13,956,200 | |||||||||||||||||||
Income taxes
|
1,974,576 | (97,982 | ) | 1,641,935 | - | 3,518,529 | - | 3,518,529 | ||||||||||||||||||||
Income from operations after taxes
|
5,923,726 | (284,935 | ) | 4,800,773 | (2,476 | ) | 10,437,088 | 583 | 10,437,671 | |||||||||||||||||||
Total assets
|
150,950,225 | 32,757,666 | 192,128,326 | 1,687,960 | 377,524,177 | 183,416 | 377,707,593 | |||||||||||||||||||||
Depreciation and amortization
|
3,121,243 | 1,315,140 | 1,080,975 | - | 5,517,358 | - | 5,517,358 | |||||||||||||||||||||
Capital expenditures
|
12,890,713 | 2,336,309 | - | 651,295 | 15,878,317 | - | 15,878,317 | |||||||||||||||||||||
Goodwill
|
- | - | 28,743,418 | - | 28,743,418 | - | 28,743,418 | |||||||||||||||||||||
Three-Month
Period Ended
September 30, 2015
|
Bromine*
|
Crude
Salt*
|
Chemical
Products
|
Natural Gas
|
Segment
Total
|
Corporate
|
Total
|
|||||||||||||||||||||
Net revenue
(external customers)
|
$ | 14,940,666 | $ | 3,032,201 | $ | 24,628,731 | $ | - | $ | 42,601,598 | $ | - | $ | 42,601,598 | ||||||||||||||
Net revenue
(intersegment)
|
2,330,808 | - | - | - | 2,330,808 | - | 2,330,808 | |||||||||||||||||||||
Income from operations before taxes
|
4,307,709 | 351,251 | 8,393,184 | - | 13,052,144 | 851,014 | 13,903,158 | |||||||||||||||||||||
Income taxes
|
1,076,927 | 86,638 | 2,126,807 | - | 3,290,372 | - | 3,290,372 | |||||||||||||||||||||
Income from operations after taxes
|
3,230,782 | 264,613 | 6,266,377 | - | 9,761,772 | 851,014 | 10,612,786 | |||||||||||||||||||||
Total assets
|
142,874,828 | 42,858,017 | 181,468,875 | - | 367,201,720 | 38,165 | 367,239,885 | |||||||||||||||||||||
Depreciation and amortization
|
3,961,290 | 1,680,827 | 1,405,726 | - | 7,047,843 | - | 7,047,843 | |||||||||||||||||||||
Capital expenditures
|
2,365,417 | 427,283 | - | - | 2,792,700 | - | 2,792,700 | |||||||||||||||||||||
Goodwill
|
- | - | 30,173,391 | - | 30,173,391 | - | 30,173,391 |
Nine-Month
Period Ended
September 30, 2016
|
Bromine*
|
Crude
Salt*
|
Chemical
Products
|
Natural Gas
|
Segment
Total
|
Corporate
|
Total
|
|||||||||||||||||||||
Net revenue
(external customers)
|
$ | 47,621,980 | $ | 6,383,095 | $ | 66,902,764 | $ | - | $ | 120,907,839 | $ | - | $ | 120,907,839 | ||||||||||||||
Net revenue
(intersegment)
|
6,501,530 | - | - | - | 6,501,530 | - | 6,501,530 | |||||||||||||||||||||
Income (loss) from operations before taxes
|
19,103,472 | (165,403 | ) | 20,698,116 | (2,501 | ) | 39,633,684 | 319,956 | 39,953,640 | |||||||||||||||||||
Income taxes
|
4,775,868 | (46,369 | ) | 5,267,123 | - | 9,996,622 | - | 9,996,622 | ||||||||||||||||||||
Income (loss) from operations after taxes
|
14,327,604 | (119,034 | ) | 15,430,993 | (2,501 | ) | 29,637,062 | 319,956 | 29,957,018 | |||||||||||||||||||
Total assets
|
150,950,225 | 32,757,666 | 192,128,326 | 1,687,960 | 377,524,177 | 183,416 | 377,707,593 | |||||||||||||||||||||
Depreciation and amortization
|
11,633,581 | 3,847,502 | 3,550,567 | - | 19,031,650 | - | 19,031,650 | |||||||||||||||||||||
Capital expenditures
|
12,943,491 | 2,340,817 | - | 1,464,884 | 16,749,192 | - | 16,749,192 | |||||||||||||||||||||
Goodwill
|
- | - | 28,743,418 | - | 28,743,418 | - | 28,743,418 |
Nine-Month
Period Ended
September 30, 2015
|
Bromine*
|
Crude
Salt*
|
Chemical
Products
|
Natural Gas
|
Segment
Total
|
Corporate
|
Total
|
|||||||||||||||||||||
Net revenue
(external customers)
|
$ | 41,066,776 | $ | 7,905,274 | $ | 77,890,447 | $ | - | $ | 126,862,497 | $ | - | $ | 126,862,497 | ||||||||||||||
Net revenue
(intersegment)
|
6,355,047 | - | - | - | 6,355,047 | - | 6,355,047 | |||||||||||||||||||||
Income (loss) from operations before taxes
|
8,950,595 | 534,760 | 26,205,578 | - | 35,690,933 | (115,735 | ) | 35,575,198 | ||||||||||||||||||||
Income taxes
|
2,237,649 | 133,956 | 6,633,553 | - | 9,005,158 | - | 9,005,158 | |||||||||||||||||||||
Income (loss) from operations after taxes
|
6,712,946 | 400,804 | 19,572,025 | - | 26,685,775 | (115,735 | ) | 26,570,040 | ||||||||||||||||||||
Total assets
|
142,874,828 | 42,858,017 | 181,468,875 | - | 367,201,720 | 38,165 | 367,239,885 | |||||||||||||||||||||
Depreciation and amortization
|
13,198,194 | 4,671,613 | 4,084,705 | - | 21,954,512 | - | 21,954,512 | |||||||||||||||||||||
Capital expenditures
|
2,365,417 | 427,283 | - | - | 2,792,700 | - | 2,792,700 | |||||||||||||||||||||
Goodwill
|
- | - | 30,173,391 | - | 30,173,391 | - | 30,173,391 |
Three-Month Period
Ended September 30,
|
Nine-Month Period
Ended September 30,
|
|||||||||||||||
Reconciliations
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Total segment operating income
|
$
|
13,955,617
|
$
|
13,052,144
|
$
|
39,633,684
|
$
|
35,690,933
|
||||||||
Corporate costs
|
(180,447
|
)
|
(210,707
|
)
|
(409,808
|
)
|
(1,153,164
|
)
|
||||||||
Unrealized translation difference
|
181,030
|
1,061,721
|
729,764
|
1,037,429
|
||||||||||||
Income from operations
|
13,956,200
|
13,903,158
|
39,953,640
|
35,575,198
|
||||||||||||
Other income, net of expense
|
78,042
|
66,636
|
222,678
|
199,913
|
||||||||||||
Income before taxes
|
$
|
14,034,242
|
$
|
13,969,794
|
$
|
40,176,318
|
$
|
35,775,111
|
Number
|
Customer
|
Bromine
(000’s)
|
Crude Salt
(000’s)
|
Chemical Products
(000’s)
|
Total
Revenue
(000’s)
|
Percentage of
Total Revenue (%)
|
||||||||||||||||
1
|
Shandong Morui Chemical Company Limited
|
$
|
2,538
|
$
|
747
|
$
|
1,324
|
$
|
4,609
|
11.9%
|
Number
|
Customer
|
Bromine
(000’s)
|
Crude Salt
(000’s)
|
Chemical Products
(000’s)
|
Total
Revenue
(000’s)
|
Percentage of
Total Revenue (%)
|
||||||||||||||||
1
|
Shandong Morui Chemical Company Limited
|
$
|
8,230
|
$
|
1,919
|
$
|
4,321
|
$
|
14,470
|
12.0%
|
Number
|
Customer
|
Bromine
(000’s)
|
Crude Salt
(000’s)
|
Chemical Products
(000’s)
|
Total
Revenue
(000’s)
|
Percentage of
Total Revenue (%)
|
||||||||||||||||
1
|
Shandong Morui Chemical Company Limited
|
$
|
2,059
|
$
|
852
|
$
|
2,085
|
$
|
4,996
|
11.7%
|
Number
|
Customer
|
Bromine
(000’s)
|
Crude Salt
(000’s)
|
Chemical Products
(000’s)
|
Total
Revenue
(000’s)
|
Percentage of
Total Revenue (%)
|
||||||||||||||||
1
|
Shandong Morui Chemical Company Limited
|
$
|
6,130
|
$
|
2,047
|
$
|
5,769
|
$
|
13,946
|
11.0%
|
Capital Lease Obligations
|
Operating Lease Obligations
|
Property Management Fees
|
Capital Expenditure
|
|||||||||||||
Payable within:
|
||||||||||||||||
the next 12 months
|
$ | 281,081 | $ | 948,380 | $ | 93,424 | $ | 267,154 | ||||||||
the next 13 to 24 months
|
281,081 | 967,599 | 23,356 | - | ||||||||||||
the next 25 to 36 months
|
281,081 | 990,595 | - | - | ||||||||||||
the next 37 to 48 months
|
281,081 | 1,011,702 | - | - | ||||||||||||
the next 49 to 60 months
|
281,081 | 1,036,821 | - | - | ||||||||||||
thereafter
|
2,529,726 | 17,119,230 | - | - | ||||||||||||
Total
|
$ | 3,935,131 | $ | 22,074,327 | $ | 116,780 | $ | 267,154 | ||||||||
Less: Amount representing interest
|
(1,408,095 | ) | ||||||||||||||
Present value of net minimum lease payments
|
$ | 2,527,036 |
Three-Month
Period Ended
September 30, 2016
|
Three-Month
Period Ended
September 30, 2015
|
Percent Change
Increase/
(Decrease)
|
||||||||||
Net revenue
|
$ | 38,811,622 | $ | 42,601,598 | (9 | %) | ||||||
Cost of net revenue
|
$ | (23,107,921 | ) | $ | (27,000,576 | ) | (14 | %) | ||||
Gross profit
|
$ | 15,703,701 | $ | 15,601,022 | 1 | % | ||||||
Sales, marketing and other operating expenses
|
$ | (83,087 | ) | $ | (91,919 | ) | (10 | %) | ||||
Research and development costs
|
$ | (68,115 | ) | $ | (69,403 | ) | (2 | %) | ||||
Write-off/Impairment on property, plant and equipment
|
$ | (90,395 | ) | $ | (819,701 | ) | (89 | %) | ||||
General and administrative expenses
|
$ | (1,613,933 | ) | $ | (831,955 | ) | 94 | % | ||||
Other operating income
|
$ | 108,029 | $ | 115,114 | (6 | %) | ||||||
Income from operations
|
$ | 13,956,200 | $ | 13,903,158 | - | |||||||
Other income, net
|
$ | 78,042 | $ | 66,636 | 17 | % | ||||||
Income before taxes
|
$ | 14,034,242 | $ | 13,969,794 | - | |||||||
Income taxes
|
$ | (3,518,529 | ) | $ | (3,290,372 | ) | 7 | % | ||||
Net income
|
$ | 10,515,713 | $ | 10,679,422 | (2 | %) |
Net Revenue by Segment
|
||||||||||||||||||||
Three-Month Period Ended
|
Three-Month Period Ended
|
Percent change
Increase/
(Decrease)
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
of Net Revenue
|
||||||||||||||||||
Segment
|
% of total
|
% of total
|
||||||||||||||||||
Bromine
|
$
|
15,971,847
|
41
|
%
|
$
|
14,940,666
|
35
|
%
|
7
|
%
|
||||||||||
Crude Salt
|
$
|
2,310,799
|
6
|
%
|
$
|
3,032,201
|
7
|
%
|
(24
|
%)
|
||||||||||
Chemical Products
|
$
|
20,528,975
|
53
|
%
|
$
|
24,628,731
|
58
|
%
|
(17
|
%)
|
||||||||||
Total sales
|
$
|
38,811,621
|
100
|
%
|
$
|
42,601,598
|
100
|
%
|
(9
|
%)
|
Bromine and crude salt segments
|
Three-Month Period Ended
|
Percentage Change
|
||||||||||
product sold in tonnes
|
September 30, 2016
|
September 30, 2015
|
(Decrease)
|
|||||||||
Bromine (excluded volume sold to SYCI and SCRC after acquisition in January 2015)
|
4,511
|
4,726
|
(5
|
%)
|
||||||||
Crude Salt
|
82,547
|
91,165
|
(9
|
%)
|
Three-Month Period Ended
|
Percentage Change
|
|||||||||||
Chemical products segment sold in tonnes
|
September 30, 2016
|
September 30, 2015
|
Increase/(Decrease)
|
|||||||||
Oil and gas exploration additives
|
2,914
|
3,748
|
(22
|
%)
|
||||||||
Paper manufacturing additives
|
835
|
1,127
|
(26
|
%)
|
||||||||
Pesticides manufacturing additives
|
606
|
824
|
(26
|
%)
|
||||||||
Pharmaceutical intermediates
|
388
|
379
|
2
|
%
|
||||||||
By products
|
3,045
|
3,368
|
(10
|
%)
|
||||||||
Overall
|
7,788
|
9,446
|
(18
|
%)
|
Three-Month Period
Ended September 30,
|
||||
Increase in net revenue of bromine as a result of:
|
2016 vs. 2015
|
|||
Increase in average selling price
|
$
|
1,751,461
|
||
Decrease in sales volume
|
$
|
(720,280
|
)
|
|
Total effect on net revenue of bromine
|
$
|
1,031,181
|
Three-Month Period
Ended September 30,
|
||||
Decrease in net revenue of crude salt as a result of:
|
2016 vs. 2015
|
|||
Dcrease in average selling price
|
$
|
(457,446
|
)
|
|
Decrease in sales volume
|
$
|
(263,956
|
)
|
|
Total effect on net revenue of crude salt
|
$
|
(721,402
|
)
|
Product Mix of Chemical Products Segment
|
Percent
|
|||||||||||||||||||
Three-Month Period Ended
|
Three-Month Period Ended
|
Change of
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Net Revenue
|
||||||||||||||||||
Chemical Products
|
% of total
|
% of total
|
||||||||||||||||||
Oil and gas exploration additives
|
$
|
5,362,309
|
26
|
%
|
$
|
7,271,644
|
30
|
%
|
(26
|
%)
|
||||||||||
Paper manufacturing additives
|
$
|
930,262
|
4
|
%
|
$
|
1,381,212
|
6
|
%
|
(33
|
%)
|
||||||||||
Pesticides manufacturing additives
|
$
|
3,010,391
|
15
|
%
|
$
|
4,145,946
|
17
|
%
|
(27
|
%)
|
||||||||||
Pharmaceutical intermediates
|
$
|
7,586,616
|
37
|
%
|
$
|
7,764,120
|
31
|
%
|
(2
|
%)
|
||||||||||
By products
|
$
|
3,639,397
|
18
|
%
|
$
|
4,065,809
|
16
|
%
|
(10
|
%)
|
||||||||||
Total sales
|
$
|
20,528,975
|
100
|
%
|
$
|
24,628,731
|
100
|
%
|
(17
|
%)
|
Decrease in net revenue,
for the three-month period ended
September 30,
2016 vs. 2015, as a result of:
|
Oil and gas exploration additives
|
Paper manufacturing additives
|
Pesticides manufacturing additives
|
Total
|
||||||||||||
Decrease in average selling price
|
$
|
(332,939
|
)
|
$
|
(109,361
|
)
|
$
|
(45,650
|
)
|
$
|
(487,950
|
)
|
||||
Decrease in sales volume
|
$
|
(1,576,397
|
)
|
$
|
(341,589
|
)
|
$
|
(1,089,905
|
)
|
$
|
(3,007,891
|
)
|
||||
Total effect on net revenue of chemical products
|
$
|
(1,909,336
|
)
|
$
|
(450,950
|
)
|
$
|
(1,135,555
|
)
|
$
|
(3,495,841
|
)
|
Decrease in net revenue,
for the three-month period ended
September 30, 2016 vs. 2015, as a result of:
|
Pharmaceutical intermediates
|
By products
|
Total
|
|||||||||
Decrease in average selling price
|
$
|
(357,679
|
)
|
$
|
(38,113
|
)
|
$
|
(395,792
|
)
|
|||
Increase/(Decrease) in sales volume
|
$
|
180,175
|
$
|
(388,298
|
)
|
$
|
(208,123
|
)
|
||||
Total effect on net revenue of chemical products
|
$
|
(177,504
|
)
|
$
|
(426,411
|
)
|
$
|
(603,915
|
)
|
Cost of Net Revenue by Segment
|
% Change
|
|||||||||||||||||||
Three-Month Period Ended
|
Three-Month Period Ended
|
of Cost of
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Net Revenue
|
||||||||||||||||||
Segment
|
% of total
|
% of total
|
||||||||||||||||||
Bromine
|
$
|
7,106,210
|
31
|
%
|
$
|
9,088,078
|
34
|
%
|
(22
|
%)
|
||||||||||
Crude Salt
|
$
|
2,498,817
|
11
|
%
|
$
|
2,268,976
|
8
|
%
|
10
|
%
|
||||||||||
Chemical Products
|
$
|
13,502,894
|
58
|
%
|
$
|
15,643,522
|
58
|
%
|
(14
|
%)
|
||||||||||
Total
|
$
|
23,107,921
|
100
|
%
|
$
|
27,000,576
|
100
|
%
|
(14
|
%)
|
Annual Production Capacity (in tonnes)
|
Utilization
Ratio (i)
|
|||||||
Three-month period ended September 30, 2015
|
47,347 | 49 | % | |||||
Three-month period ended September 30, 2016
|
47,347 | 46 | % | |||||
Variance of the three-month period ended September 30, 2016 and 2015
|
- | (3 | % ) |
Per tonne production cost
|
Three-Month Period Ended
|
Three-Month Period Ended
|
||||||||||||||||||
component of bromine segment
|
September 30, 2016
|
September 30, 2015
|
% Change
|
|||||||||||||||||
% of total
|
% of total
|
|||||||||||||||||||
Raw materials
|
$
|
819
|
46
|
%
|
$
|
1,055
|
51
|
%
|
(22
|
%)
|
||||||||||
Depreciation and amortization
|
$
|
593
|
33
|
%
|
$
|
704
|
34
|
%
|
(16
|
%)
|
||||||||||
Electricity
|
$
|
146
|
8
|
%
|
$
|
147
|
7
|
%
|
(1
|
%)
|
||||||||||
Others
|
$
|
237
|
13
|
%
|
$
|
183
|
8
|
%
|
30
|
%
|
||||||||||
Production cost of bromine per tonne
|
$
|
1,795
|
100
|
%
|
$
|
2,089
|
100
|
%
|
(14
|
%)
|
Per tonne production cost
|
Three-Month Period Ended
|
Three-Month Period Ended
|
||||||||||||||||||
component of crude salt segment
|
September 30, 2016
|
September 30, 2015
|
% Change
|
|||||||||||||||||
% of total
|
% of total
|
|||||||||||||||||||
Depreciation and amortization
|
$ | 21.2 | 70 | % | $ | 17.1 | 67 | % | 24 | % | ||||||||||
Resource tax
|
$ | 3.0 | 10 | % | $ | 3.2 | 12 | % | (6 | %) | ||||||||||
Electricity
|
$ | 2.3 | 7 | % | $ | 2.0 | 9 | % | 15 | % | ||||||||||
Others
|
$ | 3.8 | 13 | % | $ | 2.6 | 12 | % | 46 | % | ||||||||||
Production cost of crude salt per tonne
|
$ | 30.3 | 100 | % | $ | 24.9 | 100 | % | 22 | % |
Gross Profit (Loss) by Segment
|
Percent Change
|
|||||||||||||||||||
Three-Month Period Ended
|
Three-Month Period Ended
|
of Gross
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Profit Margin
|
||||||||||||||||||
Segment
|
Gross Profit (Loss) Margin
|
Gross Profit Margin
|
||||||||||||||||||
Bromine
|
$ | 8,865,637 | 56 | % | $ | 5,852,588 | 39 | % | 17 | % | ||||||||||
Crude Salt
|
$ | (188,018 | ) | (8 | %) | $ | 763,225 | 25 | % | (33 | %) | |||||||||
Chemical Products
|
$ | 7,026,082 | 34 | % | $ | 8,985,209 | 36 | % | (2 | %) | ||||||||||
Total Gross Profit
|
$ | 15,703,701 | 40 | % | $ | 15,601,022 | 37 | % | 3 | % |
Income by Segment
|
||||||||||||||||
Three-Month Period Ended
September 30, 2016
|
Three-Month Period Ended
September 30, 2015
|
|||||||||||||||
Segment:
|
% of total
|
% of total
|
||||||||||||||
Bromine
|
$ | 7,898,302 | 57 | % | $ | 4,307,709 | 33 | % | ||||||||
Crude Salt
|
(382,917 | ) | (3 | %) | 351,251 | 3 | % | |||||||||
Chemical Products
|
6,442,708 | 46 | % | 8,393,184 | 64 | % | ||||||||||
Natural Gas
|
(2,476 | ) | - | - | - | |||||||||||
Income from operations before corporate costs
|
13,955,617 | 100 | % | 13,052,144 | 100 | % | ||||||||||
Corporate costs
|
(180,447 | ) | (210,707 | ) | ||||||||||||
Unrealized translation difference
|
181,030 | 1,061,721 | ) | |||||||||||||
Income from operations
|
$ | 13,956,200 | $ | 13,903,158 |
Nine-Month
Period Ended
September 30, 2016
|
Nine-Month
Period Ended
September 30, 2015
|
% Change
|
||||||||||
Net revenue
|
$ | 120,907,839 | $ | 126,862,497 | (5 | %) | ||||||
Cost of net revenue
|
$ | (76,184,822 | ) | $ | (84,761,554 | ) | (10 | %) | ||||
Gross profit
|
$ | 44,723,017 | $ | 42,100,943 | 6 | % | ||||||
Sales, marketing and other operating expenses
|
$ | (269,357 | ) | $ | (294,095 | ) | (8 | %) | ||||
Research and development costs
|
$ | (198,330 | ) | $ | (181,108 | ) | 10 | % | ||||
Exploration cost
|
$ | - | (325,840 | ) | (100 | %) | ||||||
Write-off/Impairment on property, plant and equipment
|
$ | (90,395 | ) | $ | (819,701 | ) | (89 | %) | ||||
General and administrative expenses
|
$ | (4,539,845 | ) | $ | (5,247,318 | ) | (13 | %) | ||||
Other operating income
|
$ | 328,550 | $ | 342,317 | (4 | %) | ||||||
Income from operations
|
$ | 39,953,640 | $ | 35,575,198 | 12 | % | ||||||
Other income, net
|
$ | 222,678 | $ | 199,913 | 11 | % | ||||||
Income before taxes
|
$ | 40,176,318 | $ | 35,775,111 | 12 | % | ||||||
Income taxes
|
$ | (9,996,622 | ) | $ | (9,005,158 | ) | 11 | % | ||||
Net income
|
$ | 30,179,696 | $ | 26,769,953 | 13 | % |
Net Revenue by Segment
|
||||||||||||||||||||
Nine-Month Period Ended
|
Nine-Month Period Ended
|
Percent change Increase/(Decrease)
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
of Net Revenue
|
||||||||||||||||||
Segment
|
% of total
|
% of total
|
||||||||||||||||||
Bromine
|
$ | 47,621,980 | 40 | % | $ | 41,066,776 | 32 | % | 16 | % | ||||||||||
Crude Salt
|
$ | 6,383,095 | 5 | % | $ | 7,905,274 | 6 | % | (19 | %) | ||||||||||
Chemical Products
|
$ | 66,902,764 | 55 | % | $ | 77,890,447 | 62 | % | (14 | %) | ||||||||||
Total sales
|
$ | 120,907,839 | 100 | % | $ | 126,862,497 | 100 | % | (5 | %) |
Bromine and crude salt segments
|
Nine-Month Period Ended
|
Percentage Change
|
||||||||||
product sold in tonnes
|
September 30, 2016
|
September 30, 2015
|
(Decrease)
|
|||||||||
Bromine (excluded volume sold to SYCI and SCRC after acquisition in January 2015)
|
12,552 | 13,148 | (5 | %) | ||||||||
Crude Salt
|
222,124 | 244,367 | (9 | %) |
Nine-Month Period Ended
|
Percentage Change
|
|||||||||||
Chemical products segment sold in tonnes
|
September 30, 2016
|
September 30, 2015
|
(Decrease)
|
|||||||||
Oil and gas exploration additives
|
8,461 | 11,122 | (24 | %) | ||||||||
Paper manufacturing additives
|
2,435 | 3,217 | (24 | %) | ||||||||
Pesticides manufacturing additives
|
1,760 | 2,438 | (28 | %) | ||||||||
Pharmaceutical intermediates
|
1,225 | 1,231 | (0.5 | %) | ||||||||
By products
|
9,324 | 9,514 | (2 | %) | ||||||||
Overall
|
23,205 | 27,522 | (16 | %) |
Nine-Month Period
Ended September 30,
|
||||
Increase in net revenue of bromine as a result of:
|
2016 vs. 2015
|
|||
Increase in average selling price
|
$
|
8,615,177
|
||
Decrease in sales volume
|
$
|
(2,059,973
|
)
|
|
Total effect on net revenue of bromine
|
$
|
6,555,204
|
Nine-Month Period
Ended September 30,
|
||||
Decrease in net revenue of crude salt as a result of:
|
2016 vs. 2015
|
|||
Decrease in average selling price
|
$
|
(842,798
|
)
|
|
Decrease in sales volume
|
$
|
(679,381
|
)
|
|
Total effect on net revenue of crude salt
|
$
|
(1,522,179
|
)
|
Product Mix of Chemical Products Segment
|
Percent
|
|||||||||||||||||||
Nine-Month Period Ended
|
Nine-Month Period Ended
|
Change of
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Net Revenue
|
||||||||||||||||||
Chemical Products
|
% of total
|
% of total
|
||||||||||||||||||
Oil and gas exploration additives
|
$ | 16,125,700 | 24 | % | $ | 21,484,864 | 27 | % | (25 | %) | ||||||||||
Paper manufacturing additives
|
$ | 2,799,108 | 4 | % | $ | 3,839,123 | 5 | % | (27 | %) | ||||||||||
Pesticides manufacturing additives
|
$ | 9,062,903 | 14 | % | $ | 12,148,198 | 16 | % | (25 | %) | ||||||||||
Pharmaceutical intermediates
|
$ | 27,370,395 | 41 | % | $ | 28,882,132 | 37 | % | (5 | %) | ||||||||||
By products
|
$ | 11,544,658 | 17 | % | $ | 11,536,130 | 15 | % | 0.1 | % | ||||||||||
Total sales
|
$ | 66,902,764 | 100 | % | $ | 77,890,447 | 100 | % | (14 | %) |
Decrease in net revenue,
for the nine-month period ended September 30,
2016 vs. 2015, as a result of:
|
Oil and gas exploration additives
|
Paper manufacturing additives
|
Pesticides manufacturing additives
|
Total
|
||||||||||||
Increase/(Decease) in average selling price
|
$
|
(253,197
|
)
|
$
|
(123,936
|
)
|
$
|
349,530
|
$
|
(27,603
|
)
|
|||||
Decrease in sales volume
|
$
|
(5,105,967
|
)
|
$
|
(916,081
|
)
|
$
|
(3,434,826
|
)
|
$
|
(9,456,874
|
)
|
||||
Total effect on net revenue of chemical products
|
$
|
(5,359,164
|
)
|
$
|
(1,040,017
|
)
|
$
|
(3,085,296
|
)
|
$
|
(9,484,477
|
)
|
Increase/(Decrease) in net revenue,
for the nine-month period ended September 30,
2016 vs. 2015, as a result of:
|
Pharmaceutical intermediates
|
By products
|
Total
|
|||||||||
Increase /(Decrease)in average selling price
|
$
|
(1,374,320
|
)
|
$
|
241,034
|
$
|
(1,133,286
|
)
|
||||
Decrease in sales volume
|
$
|
(137,416
|
)
|
$
|
(232,505
|
)
|
$
|
(369,921
|
)
|
|||
Total effect on net revenue of chemical products
|
$
|
(1,511,736
|
)
|
$
|
8,529
|
$
|
(1,503,207
|
)
|
Decrease in net revenue,
for the nine-month period ended September 30,
2016 vs. 2015, as a result of:
|
Pharmaceutical intermediates
|
By products
|
Total
|
|||||||||
Increase /(Decrease)in average selling price
|
$
|
(1,476,698
|
)
|
$
|
276,959
|
$
|
(1,199,739
|
)
|
||||
Decrease in sales volume
|
$
|
(4,625,801
|
)
|
$
|
(1,721,845
|
)
|
$
|
(6,347,646
|
)
|
|||
Total effect on net revenue of chemical products
|
$
|
(6,102,499
|
)
|
$
|
(1,444,886
|
)
|
$
|
(7,547,385
|
)
|
Cost of Net Revenue by Segment
|
% Change
|
|||||||||||||||||||
Nine-Month Period Ended
|
Nine-Month Period Ended
|
of Cost of
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Net Revenue
|
||||||||||||||||||
Segment
|
% of total
|
% of total
|
||||||||||||||||||
Bromine
|
$ | 25,591,482 | 34 | % | $ | 28,257,737 | 33 | % | (9 | %) | ||||||||||
Crude Salt
|
$ | 6,119,665 | 8 | % | $ | 6,586,716 | 8 | % | (7 | %) | ||||||||||
Chemical Products
|
$ | 44,473,675 | 58 | % | $ | 49,917,101 | 59 | % | (11 | %) | ||||||||||
Total
|
$ | 76,184,822 | 100 | % | $ | 84,761,554 | 100 | % | (10 | %) |
Annual Production Capacity (in tonnes)
|
Utilization
Ratio (i)
|
|||||||
Nine-month period ended September 30, 2015
|
47,347
|
43%
|
||||||
Nine-month period ended September 30, 2016
|
47,347
|
40%
|
||||||
Variance of the nine-month period ended September 30, 2016 and 2015
|
-
|
(3%
|
)
|
Per tonne production cost
|
Nine-Month Period Ended
|
Nine-Month Period Ended
|
||||||||||||||||||
component of bromine segment
|
September 30, 2016
|
September 30, 2015
|
% Change
|
|||||||||||||||||
% of total
|
% of total
|
|||||||||||||||||||
Raw materials
|
$
|
1,049
|
47
|
%
|
$
|
1,061
|
47
|
%
|
(1
|
%)
|
||||||||||
Depreciation and amortization
|
$
|
792
|
35
|
%
|
$
|
845
|
37
|
%
|
(6
|
%)
|
||||||||||
Electricity
|
$
|
153
|
7
|
%
|
$
|
157
|
7
|
%
|
(3
|
%)
|
||||||||||
Others
|
$
|
257
|
11
|
%
|
$
|
215
|
9
|
%
|
20
|
%
|
||||||||||
Production cost of bromine per tonne
|
$
|
2,251
|
100
|
%
|
$
|
2,278
|
100
|
%
|
(1
|
%)
|
Per tonne production cost
|
Nine-Month Period Ended
|
Nine-Month Period Ended
|
||||||||||||||||||
component of crude salt segment
|
September 30, 2016
|
September 30, 2015
|
% Change
|
|||||||||||||||||
% of total
|
% of total
|
|||||||||||||||||||
Depreciation and amortization
|
$
|
19.7
|
71
|
%
|
$
|
19.0
|
70
|
%
|
4
|
%
|
||||||||||
Resource tax
|
$
|
3.0
|
11
|
%
|
$
|
3.2
|
12
|
%
|
(6
|
%)
|
||||||||||
Electricity
|
$
|
1.6
|
6
|
%
|
$
|
1.9
|
7
|
%
|
(16
|
%)
|
||||||||||
Others
|
$
|
3.2
|
12
|
%
|
$
|
2.9
|
11
|
%
|
10
|
%
|
||||||||||
Production cost of crude salt per tonne
|
$
|
27.5
|
100
|
%
|
$
|
27.0
|
100
|
%
|
2
|
%
|
Gross Profit by Segment
|
% Point Change
|
|||||||||||||||||||
Nine-Month Period Ended
|
Nine-Month Period Ended
|
of Gross
|
||||||||||||||||||
September 30, 2016
|
September 30, 2015
|
Profit Margin
|
||||||||||||||||||
Segment
|
Gross Profit Margin
|
Gross Profit Margin
|
||||||||||||||||||
Bromine
|
$ | 22,030,498 | 46 | % | $ | 12,809,039 | 31 | % | 15 | % | ||||||||||
Crude Salt
|
$ | 263,430 | 4 | % | $ | 1,318,558 | 17 | % | (13 | %) | ||||||||||
Chemical Products
|
$ | 22,429,089 | 34 | % | $ | 27,973,346 | 36 | % | (2 | %) | ||||||||||
Total Gross Profit
|
$ | 44,723,017 | 37 | % | $ | 42,100,943 | 33 | % | 4 | % |
Income from Operations by Segment
|
||||||||||||||||
Nine-Month Period Ended
September 30, 2016
|
Nine-Month Period Ended
September 30, 2015
|
|||||||||||||||
Segment:
|
% of total
|
% of total
|
||||||||||||||
Bromine
|
$ | 19,103,472 | 48 | % | $ | 8,950,595 | 25 | % | ||||||||
Crude Salt
|
(165,403 | ) | - | 534,760 | 2 | % | ||||||||||
Chemical Products
|
20,698,116 | 52 | % | 26,205,578 | 73 | % | ||||||||||
Natural Gas
|
(2,501 | ) | - | - | - | |||||||||||
Income from operations before corporate costs
|
39,633,684 | 100 | % | 35,690,933 | 100 | % | ||||||||||
Corporate costs
|
(409,808 | ) | (1,153,164 | ) | ||||||||||||
Unrealized exchange difference
|
729,764 | 1,037,429 | ||||||||||||||
Income from operations
|
$ | 39,953,640 | $ | 35,575,198 |
Nine-Month Period Ended September 30,
|
||||||||
2016
|
2015
|
|||||||
Net cash provided by operating activities
|
$
|
29,191,981
|
$
|
34,915,819
|
||||
Net cash used in investing activities
|
$
|
(17,423,126
|
)
|
$
|
(55,706,715
|
)
|
||
Net cash used in financing activities
|
$
|
(265,087
|
)
|
$
|
(344,396
|
)
|
||
Effects of exchange rate changes on cash and cash equivalents
|
$
|
(4,026,574
|
)
|
$
|
(4,558,171
|
)
|
||
Net (Decrease)/Increase in cash and cash equivalents
|
$
|
7,477,195
|
$
|
(25,693,463
|
)
|
September 30, 2016
|
December 31, 2015
|
||||||||||||||||
% of total
|
% of total
|
||||||||||||||||
Aged 1-30 days
|
$
|
13,341,948
|
19
|
%
|
$
|
12,711,454
|
26
|
%
|
|||||||||
Aged 31-60 days
|
$
|
17,105,296
|
24
|
%
|
$
|
12,436,059
|
25
|
%
|
|||||||||
Aged 61-90 days
|
$
|
16,622,237
|
23
|
%
|
$
|
11,470,333
|
23
|
%
|
|||||||||
Aged 91-120 days
|
$
|
12,440,742
|
17
|
%
|
$
|
8,208,711
|
16
|
%
|
|||||||||
Aged 121-150 days
|
$
|
8,302,503
|
12
|
%
|
$
|
5,153,801
|
10
|
%
|
|||||||||
Aged 151-180 days
|
$
|
3,584,082
|
5
|
%
|
$
|
-
|
-
|
||||||||||
Total
|
$
|
71,396,808
|
100
|
%
|
$
|
49,980,358
|
100
|
%
|
September 30, 2016
|
December 31, 2015
|
|||||||||||||||
% of total
|
% of total
|
|||||||||||||||
Raw materials
|
$
|
879,085
|
15
|
%
|
$
|
1,014,917
|
14
|
%
|
||||||||
Finished goods
|
$
|
4,161,087
|
72
|
%
|
$
|
5,486,970
|
76
|
%
|
||||||||
Work-in-process
|
744,241
|
13
|
%
|
691,604
|
10
|
|||||||||||
$
|
5,784,413
|
100
|
%
|
$
|
7,193,491
|
100
|
%
|
|||||||||
Allowance for obsolete and slowing-moving inventory
|
$
|
(12,341
|
)
|
-
|
$
|
(12,691
|
)
|
-
|
||||||||
Total
|
$
|
5,772,072
|
100
|
%
|
$
|
7,180,800
|
100
|
%
|
Exhibit No.
|
Description
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.1
|
The following financial statements from Gulf Resources, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Other Comprehensive Income (Loss); (iii) the Consolidated Statements of Changes in Equity; (iv) the Consolidated Statement of Cash Flows; and, (v) the Notes to Consolidated Financial Statements, tagged as blocks of text.
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GULF RESOURCES, INC.
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||
Dated: November 14, 2016
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By:
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/s/ Xiaobin Liu
|
Xiaobin Liu
|
||
Chief Executive Officer
|
||
(principal executive officer)
|
||
Dated: November 14, 2016
|
By:
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/s/ Min Li
|
Min Li
|
||
Chief Financial Officer
|
||
(principal financial and accounting officer)
|
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