- Fiscal 2011 revenue reaches $187.8 million up 66.6% from fiscal 2010
- Fiscal 2011 net income attributable to China Direct Industries rises to $9.3 million up from a loss of ($3.2 million) in fiscal 2010
- Fiscal 2011 Diluted EPS climbs to $0.25 compared to a loss of ($0.11) in fiscal 2010
For the full year of fiscal 2011 total revenues increased to $187.8 million, an increase of 66.6% compared to total revenues of $112.7 million recorded in fiscal 2010. Our gross profit reached $19.5 million, up 171.1% compared to gross profit of $7.2 million recorded in the prior fiscal year. Gross profit margins improved to 10.4% in fiscal 2011, an increase of 63% compared to gross margins of 6.4% in fiscal 2010. For fiscal 2011, our operations resulted in net income attributable to China Direct Industries of $9.3 million compared to a net loss of ($3.2 million) recorded in fiscal 2010. Earnings per basic share reached $0.26 in fiscal 2011 on 36.1 million weighted average shares outstanding. Earnings per diluted share were $0.25 in fiscal 2011 on 36.8 million weighted average shares. This compares to a net loss of ($0.11) per basic and diluted share in fiscal 2010 on 29.6 million weighted average shares outstanding.
We experienced significant growth across all of our business segments reflecting stronger demand in the end markets we service as well as revenue contribution from our Ruiming Magnesium acquisition, our consulting segment and our international commodities business. In our magnesium segment, revenue reached $99.9 million, an increase of 95.3% from fiscal 2010 where revenue was $55.1 million. The increase in revenues is attributable to both an increase in shipment volume as well as an increase in the average sale price of our magnesium products. We shipped 36,637 metric tons during fiscal 2011, up 68.2% from shipments of 21,786 metric tons of magnesium products in fiscal 2010. Average sale price of our magnesium products per ton increased to $2,703 in fiscal 2011, up 15.1% from $2,348 in fiscal 2010 as magnesium prices incrementally improved throughout fiscal 2011. The improvement in average sales price and volumes enabled our magnesium segment to achieve net income attributable to China Direct Industries of approximately $243,000 in the fourth quarter of fiscal 2011. For fiscal 2011, gross profit for this segment was $3.2 million, inclusive of $2.5 million in depreciation expenses, an increase of 81.9% compared to gross profit of $1.8 million, inclusive of $1.3 million in depreciation, recorded in fiscal 2010. Our magnesium operations resulted in an operating loss of ($865,000), inclusive of $4.3 million in depreciation related expenses. This compares to fiscal 2010 operating loss of ($897,000), inclusive of $2.6 million in depreciation related expenses. In our basic materials segment overall revenue increased to $68.9 million, a 17.2% improvement from the $58.8 million recorded in fiscal 2010. Gross profit for this segment reached $3.8 million, an increase of 22.5% from fiscal 2010. The increase in revenues and gross profit was largely driven by sales of iron ore from our U.S. based industrial commodities business. Operating income for our basic materials segment in fiscal 2011 was $129,000, compared to $174,000 recorded in the same period of prior year. Total revenues in our consulting segment in fiscal 2011 rose to $19.0 million, up from $2.8 million in fiscal 2010. Gross profit for this segment totaled $12.5 million compared to $2.3 million recorded in the fiscal 2010. The increase in revenues and gross profit for this segment was mostly attributable to fees earned for consulting services provided to two new clients during fiscal 2011. Operating income for our consulting segment improved to $7.3 million from an operating loss of ($3.5 million) recorded in fiscal 2010.
Balance Sheet
At September 30, 2011, total assets were $116.0 million and shareholder equity was $68.0 million with 40.4 million shares outstanding. At September 30, 2010, total assets were $95.9 million and shareholder equity of $50.2 million with 31.7 million shares outstanding. At September 30, 2011 cash and cash equivalents were $12.6 million with prepaid expenses of $14.4 million as compared to cash and cash equivalents of $10.1 million with $8.6 million in prepaid expenses at September 30, 2010. Working capital improved to $44.5 million compared to $30.3 million at September 30, 2010.
The overall environment in our various segments strengthened throughout fiscal 2011 and we now look to build on our momentum in fiscal 2012. While we experienced some cyclical softness in magnesium demand toward the end of calendar 2011, we entered fiscal 2012 with magnesium prices significantly higher than in the early part of fiscal 2011. Management believes that we have positioned our company to take a major step forward in this segment in 2012 through our planned acquisitions as well as through our use of cleaner more efficient waste gas. We anticipate that overall supply in China will be constricted later in fiscal 2012 and into fiscal 2013, as competitors using coal for fuel remain under pressure from environmental regulations and energy costs. We are also confident that our efforts in our industrial commodities business will lead to progressive revenue growth throughout fiscal 2012 as we have cleared regulatory hurdles in Mexico and South America to deliver commodities on a continuous basis into China. Through this business, along with our consulting and magnesium operations, we enter fiscal 2012, poised to build a more global company with revenue streams in China as well as the Americas. We intend to evaluate additional opportunities in the U.S. and abroad to further diversify our revenue base geographically. We anticipate an improvement in our performance in fiscal 2012 as we continue to build our company for the future. We will further discuss our operating results as well as our outlook for fiscal 2012 during the conference call today, December 22, 2011 at 4:30 p.m. EST.
Commenting on our results for fiscal 2011, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "Fiscal 2011 marked a return to profitability for China Direct Industries. We achieved significant growth across all of our business segments and moved forward with consolidation plans in our magnesium segment and our international expansion into North and South America through our industrial commodities business. The progressive improvement in our magnesium segment, where shipments and average pricing increased throughout the fiscal year, enabled this segment to return to bottom line profitability in the fourth quarter. We added a new international revenue stream through the commencement of sales of iron ore, sourced from Mexico into China, and are working diligently to build on the relationships we have forged in Chile and Bolivia to rapidly grow our commodities business throughout fiscal 2012. The current environment for Chinese companies publicly trading in the U.S. has created opportunities for our consulting segment and we are currently aggressively marketing our services both in China and the U.S. We believe our efforts will enable this segment to continue to be a strong driver of growth for our company in fiscal 2012. As we move into the future, we continue to strengthen our balance sheet and look to improve performance through internal growth and international business expansion to position China Direct Industries to build on our strong performance in fiscal 2011."
Full news:http://finance.yahoo.com/news/China-Direct-Industries-iw-2114102811.html?x=0
China Direct Industries Inc, Inc. (NASDAQ:CDII), is a U.S. based company that sources, produces and distributes industrial commodities in China and the Americas and provides business and financial consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, China Direct Industries' unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets.
http://www.cdii.net
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