ANHUI, China, Dec. 4, 2008 (GLOBE NEWSWIRE) -- China Runji Cement Inc. (OTCBB:CRJI) ("Runji" or "the Company"), a leading cement manufacturing and distribution company headquartered in Anhui Province, People's Republic of China ("PRC"), today announced its results for the year ended August 31, 2008.
2008 Key Financial Highlights
* Revenue for the twelve-month period ended August 31, 2008 was
$40,467,123, up 31.9% comparing to $30,672,474 for the same
corresponding period in year 2007.
* Gross profit increased by $6,229,087 or 177.4% to $9,740,424 for
the year ended August 31, 2008 from $3,511,338 for the same
corresponding period in year 2007.
* The gross margin for the twelve month ended August 31,
2008 increased to 24.1% from 11.4% for the same period last year.
Gross margin for the nine months ended May 31, 2008 were 22.6%,
compared with 9.9% of the same period last year.
* Net income for the twelve month ended August 31, 2008
was $6.96 million, or $0.09 per fully diluted share,
compared with net income of $0.78 million, or $0.01 per
fully diluted share in the same period in 2007.
"We are glad to announce our substantial increase in revenue and net income in the past year. In particular we are excited to see a significantly higher margin in 2008," stated Mr. Shouren Zhao, President & CEO of China Runji Cement Inc. "In the past year, we experienced the market demand and cement price increase in the China cement industry. We have completed the construction of the second cement clinker production line, which had been put into production in October 2008. Furthermore, Chinese government has publicized its 4,000 billion RMB investment plan to stimulate the economic growth in China, and most of these investments will be put into fundamental and transportation facilities, which indicates that the cement market demand will continue to be strong in the next several years. We will commit to maintain our production status and marketing efforts to capture this historical development opportunity."
12 Month Ended Fiscal Year 2008 Results
Revenues. Consolidated operating revenues for the twelve-month period ended August 31, 2008 was $40,467,123, compared to $30,672,474 for the same corresponding period in year 2007, an increase of $9,794,649 or 31.9%. The increase is mainly the result of increased sales of cement, which amounted to 20,000 tons or 1.8%. The increase is also attributable to an increase in unit price of cement from $27 per ton to $35 per ton in the year 2008, which represents a growth in unit price of 29.6%.
Gross Profit. Gross profit increased by $6,229,087 or 177.4% to $9,740,424 for the year ended August 31, 2008, from $3,511,338 for the same corresponding period in year 2007. The significant increase is mainly due to the growth in unit price of cement, which exceeds the growth of cost of sales. The unit price of cement increased $6 per ton in 2008 compared year over year; while the growth of cost of sales only increased $2.60 per ton in the same corresponding period.
Selling Expense. Selling expenses for the 2008 and 2007 fiscal years were $182,539 and $231,004, respectively, a decrease of $48,465. The decrease is mainly attributable to a decrease in transportation fees of $35,492.
General and Administrative Expenses. General and administrative expenses for the 2008 fiscal year was $1,624,449, compared to $1,404,031 for the 2007 fiscal year, an increase of $220,418 or 16%. Among the increased General and Administrative Expenses was the cost incurred in Repairs & Maintenance, which increased by $194,853.
Net Income. Net income for the 2008 fiscal year was $6,962,683, compared to $777,877 for the 2007 fiscal year. The increase is attributable to increased gross profit.
Financial Condition
As of August 31, 2008, the Company has $0.42 million in cash and cash equivalents. During the 2008 fiscal year, the Company obtained a total of $2.6 million from financing activities. The Company's cash flows from operations in the nine months of financial year 2008 were $13.23 million. To date, Runji has funded most of its cash needs with loans from related parties, which totaled $27.8 million as of August 31, 2008. During the 2008 fiscal year, the Company used a total $17.14 million in investing activities in the construction of the second cement clinker production line and the waste heat Generator.
Business Outlook
As the cement demand and market price are growing quickly in China, Runji's operation has experienced high growth in the past year. In October 2008, the Chinese government announced a giant investment plan to invest 4,000 billion RMB to stimulate economic development nationwide, which will be mainly invested in transportation and infrastructural facilities with high demand for cement. Furthermore, Anhui's economic growth was 14% in 2007, surpassing the national average.
In Anhui province, huge infrastructure investment is boosting cement demand, e.g. Hefei Xinqiao International Airport -- 4 billion RMB, 675 hectare of area, expected completion by 2010; major highway expansion -- 3 billion RMB to expand 60 miles of highway from four lanes to six lanes, expected completion by 2010; Anhui government plans to invest 83 billion RMB in transportation and infrastructure construction during the "11th Five Year" period (2006 - 2010).
"Our current cement output is 2,500 tons per day in full capacity currently, and our newly constructed second cement clinker production line with 2,500 tons per day output had been put into production in October 2008," said Mr. Zhao. "We will build up a new waste heat power generator in 2009, which will generate electricity of around 63 million KW annually and further reduce our production costs and increasing margins. We will maintain our best status to fulfill the strong cement market demand in coming years."
Current Capacity
* Currently have one cement production line with designed
capacity of 2,500 tons per day or 775,000 tons per year.
* Has been producing at around 120% capacity in the past two
years to meet with the high cement demand.
* The second cement clinker production line with 2,500 tons
daily output had been put into production in October 2008.
* The Company has started to construct a waste heat generator
to further reduce our electric costs.
About China Runji Cement, Inc.
Founded in 2003, China Runji Cement, Inc. is one of the leading players in cement production and distribution. In November 2007, the Company became a U.S. public company following the completion of a share exchange with Fitmedia Inc. The Company's certified manufacturing facilities containing cutting-edge technology and advanced equipment are capable of producing as much as 1 million tons of cement annually. Furthermore, the Company's solid distribution network and customer-orientated services have earned Runji's products a superior reputation among its customers. Headquartered in Anhui Province, the Company's markets include major local cities such as Hefei, Nanjing, and Liu'an.
For more information on the Company and its products, please visit http://www.chinarunji.com/index.asp.
Safe Harbor Statement
This press release contains certain statements that may include 'forward-looking statements' as defined in the Securities Act of 1933, and the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included herein are 'forward-looking statements.' 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. You 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 and available from the Securities and Exchange Commission. 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.
China Runji Cement Inc.
Consolidated Balance Sheets
2008 2007
----------- -----------
August 31 August 31
ASSETS
Current Assets
Cash and cash equivalents $ 415,031 $ 1,400,479
Accounts receivable, net (Note 3) 2,231,363 3,327,492
Notes receivable (Note 3) 868,593 583,765
Due from related parties (Note 10) 53,516 82,419
Inventory (Note 4) 3,275,570 1,698,579
Advances (Note 5) 3,772,367 4,002,720
Prepaid expenses and other
receivables 1,530,022 800,955
----------- -----------
Total Current Assets 12,146,462 11,896,409
Property, plant and equipment, net
(Note 6) 51,499,895 31,060,882
Intangible Assets & Deferred
Charges (Note 7) 4,615,689 2,807,587
----------- -----------
Total Assets $68,262,046 $45,764,878
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payables and accrued
liabilities (Note 8) $14,627,928 $ 7,101,028
Customer deposit 1,001,178 753,293
Short-term loans (Note 9) 438,570 1,588,188
Due to related parties (S/T) 3,279 3,309
Taxes payable 2,042,701 1,318,789
Wages payable 331,341 212,982
----------- -----------
Total Current Liabilities 18,444,997 10,977,589
Due to Related Parties (L/T)
(Note 10) 27,801,846 21,527,985
----------- -----------
Total Liabilities 46,246,843 32,505,574
----------- -----------
Commitments and Contingencies
(Note 11) -- --
Stockholders' Equity
Preferred Stock, 20,000,000
shares authorized, $0.0001 par
value, 0 shares issued and
outstanding at August 31, 2008
and 2007 -- --
Common Stock, 200,000,000 and
80,000,000 shares authorized,
$0.0001 par value, 78,832,064
and 73,500,000 shares issued and
outstanding at August 31, 2008
and 2007, respectively 7,883 7,350
Additional paid in capital 12,327,962 12,339,455
Accumulated other comprehensive
income 2,595,790 791,614
Retained earnings 7,083,568 120,885
----------- -----------
Total Stockholders' Equity 22,015,203 13,259,304
----------- -----------
Total Liabilities and
Stockholders' Equity $68,262,046 $45,764,878
=========== ===========
China Runji Cement Inc.
Consolidated Statements of Operations
2008 2007
----------- -----------
August 31 August 31
Revenue $40,467,123 $30,672,474
----------- -----------
Cost of goods sold 30,726,699 27,161,136
----------- -----------
Gross Profit 9,740,424 3,511,338
----------- -----------
Operating Costs and Expenses:
Selling expenses 182,539 231,004
G & A expenses: 1,624,449 1,404,031
Depreciation of property, plant and
equipment 105,669 90,625
----------- -----------
Total operating costs and expenses 1,912,657 1,725,660
----------- -----------
Income From Operations 7,827,767 1,785,678
Interest income 8,140 2,564
Interest expenses (56,735) (628,878)
Government Subsidies/Grants 1,300,652 76,263
Other income (expenses) 99,363 (3,106)
----------- -----------
Income Before Income Taxes 9,179,187 1,232,521
Income taxes 2,216,504 454,644
----------- -----------
Net Income $ 6,962,683 $ 777,877
----------- -----------
Other Comprehensive Income
Foreign currency translation adjustment 1,804,176 672,481
----------- -----------
Comprehensive Income $ 8,766,859 $ 1,450,358
----------- -----------
Earnings Per Share, Basic and Diluted $ 0.09 $ 0.01
----------- -----------
Weighted Average Shares Outstanding,
Basic and Diluted 77,940,952 73,500,000
----------- -----------
China Runji Cement, Inc.
Consolidated Statements of Cash Flows
2008 2007
----------- -----------
August 31 August 31
Operating activities
Net income $ 6,962,683 $ 777,877
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Amortization 210,283 90,373
Depreciation, expense and cost 2,704,513 90,625
Impairment of assets -- 215,307
Changes in operating assets
and liabilities:
Accounts receivable, net 1,161,067 (1,552,710)
Advances to suppliers -- 306,217
Prepaid expenses and other receivables (668,322) 1,932,217
Inventory (1,338,284) 2,340,317
Loan to related parties -- (60,722)
Accounts payable and
accrued liabilities 3,473,218 (2,065,565)
Customer Deposit 161,732 (2,949,535)
Tax payable 560,420 1,182,267
----------- -----------
Net cash provided by (used in)
operating activities 13,227,310 306,668
----------- -----------
Investing activities
Collection of loans to related parties 35,884 --
Cash paid for intangible assets
and deferred expenses (1,658,672) --
Property, plant and
equipment additions (15,513,711) (15,080,403)
----------- -----------
Net cash provided by (used in)
investing activities (17,136,499) (15,080,403)
----------- -----------
Financing activities
Short term loan proceeds (payments) (1,258,290) 1,349,768
Long-term Loans Payable -- (67,984)
Proceeds from related party loans 3,843,432 14,182,406
Capital contribution (10,960) 12,243
----------- -----------
Net cash provided by (used in)
financing activities 2,574,182 15,476,433
----------- -----------
Effect of exchange rate changes on
cash and cash equivalents 349,559 635,077
----------- -----------
Increase (decrease) in cash and
cash equivalents (985,448) 1,337,775
Cash and cash equivalents, beginning
of year 1,400,479 62,704
----------- -----------
Cash and cash equivalents, end of year $ 415,031 $ 1,400,479
=========== ===========
Supplemental Disclosures of Cash
Flow Information:
Interest Paid $ 56,735 $ 628,878
Income taxes paid $ 2,216,504 $ 454,644
Non-Cash Investing Activity:
Accounting payable related to fixed
assets purchased $ 3,194,814 $ 1,926,555