Nevada
|
333-114564
|
98-0550699
|
(State or other jurisdiction of
incorporation)
|
(Commission file number)
|
(I.R.S. employer
identification no.)
|
c/o Xinghe Xingyong Carbon Co., Ltd.
787 Xicheng Wai
Chengguantown
Xinghe County
Inner Mongolia, China
(Address of Principal Executive Offices)
(Zip Code)
(+86) 474-7209723
(Registrant’s telephone number, including area code)
|
CHINA CARBON GRAPHITE GROUP, INC. | |||
By:
|
/s/ Donghai Yu | ||
Donghai Yu | |||
Chief Executive Officer, President and Director | |||
(Principal Executive Officer) |
•
|
For the three months ended September 30, 2011, revenue increased 36%, from $10.0 million in Q3 2010 to $13.6 million in Q3 2011; for the nine months ended September 30, 2011, compared to the same period last year, revenue increased 106%, from $18.1 million to $37.2 million
|
•
|
For the three months ended September 30, 2011 gross profit rose 25%, from $2.5 million in Q3 2010 to $3.1 million in Q3 2011; for the nine months ended September 30, 2011, compared to the same period last year, gross profit rose 124%, from $3.7 million to $8.3 million
|
•
|
Finished construction of 30,000 ton facilities that will specialize in the production of China Carbon higher margin fine grain and high purity graphite products
|
Q3 2011
|
Q3 2010
|
CHANGE
|
||
Revenue
|
$13.6 million
|
$10.0 million
|
+36%
|
|
EBIDTA*
|
$2.1 million
|
$2.7 million
|
-
|
|
Gross profit
|
$3.1 million
|
$2.5 million
|
+25%
|
|
Net Income
|
$0.7 million
|
$1.9 million
|
-
|
|
Adjusted Net Income*
|
$1.0 million
|
$2.0 million**
|
-
|
|
EPS (Diluted)***
|
$0.03
|
$0.09
|
-
|
|
Adjusted EPS*
|
$0.05
|
$0.09
|
-
|
|
* Please see the accompanying Non-GAAP EBITDA and Adjusted Net measurements below the “Business Outlook Section.”
** Includes $556,038 of other income in the third quarter of 2010.
*** Earnings per diluted share of $0.03 on 22.7 million shares. For the third quarter of 2010, China Carbon reported fully diluted earnings per share of $0.09 on 21.4 million shares.
|
Non-GAAP Financial Measures
|
||||||||
Quarter Ended September 30
|
||||||||
2011
|
2010
|
|||||||
Net income
|
$ | 668,134 | $ | 1,917,168 | ||||
Interest expense
|
$ | 957,433 | $ | 308,490 | ||||
Adjusted Net
|
$ | 1,024,976 | $ | 2,000,639 | ||||
The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
|
||||||||
Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
|
||||||||
China Carbon Graphite Group, Inc.and subsidiaries
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
September 30,
2011
|
December 31,
2010
|
|||||||
ASSETS
|
||||||||
(Unaudited)
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
1,051,238
|
$
|
296,312
|
||||
Restricted cash
|
14,617,100
|
-
|
||||||
Accounts receivable, net of allowance of $2,585,156
|
12,011,759
|
6,222,112
|
||||||
Notes receivable
|
486,560
|
460,856
|
||||||
Advance to suppliers
|
12,417,346
|
10,198,602
|
||||||
Inventories
|
34,036,911
|
26,432,217
|
||||||
Prepaid expenses
|
808,819
|
573,094
|
||||||
Other receivables
|
2,454,325
|
335,986
|
||||||
Total current assets
|
77,884,058
|
44,519,179
|
||||||
Property And Equipment, Net
|
23,728,121
|
24,127,189
|
||||||
Construction In Progress
|
17,812,013
|
10,265,888
|
||||||
Land Use Rights, Net
|
10,669,555
|
10,496,930
|
||||||
Total Assets
|
$
|
130,093,747
|
$
|
89,409,186
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
2,901,435
|
$
|
5,452,743
|
||||
Advance from customers
|
4,168,361
|
1,060,147
|
||||||
Short term bank loans
|
45,228,500
|
33,298,150
|
||||||
Long term bank loan - current portion
|
-
|
-
|
||||||
Notes payable
|
19,953,750
|
-
|
||||||
Taxes payable
|
-
|
|||||||
Other payables
|
3,855,557
|
2,584,589
|
||||||
Dividends payable
|
21,654
|
32,996
|
||||||
Total current liabilities
|
76,129,257
|
42,428,625
|
||||||
Amount Due To A Related Party
|
6,243,371
|
4,744,634
|
||||||
Long term bank loan
|
-
|
-
|
||||||
Warrant Liabilities
|
4,914
|
73,121
|
||||||
Total Liabilities
|
82,377,542
|
47,246,380
|
||||||
Stockholders' Equity
|
||||||||
Convertible series A preferred stock, par value $0.001 per share,
|
||||||||
authorized 20,000,000 shares, none issued and outstanding
|
||||||||
at September 30, 2011 and December 31, 2010
|
-
|
-
|
||||||
Convertible series B preferred stock, par value $0.001 per share,
|
||||||||
authorized 3,000,000 shares, issued and outstanding 442,010 and
|
||||||||
1,225,000 shares at September 30, 2011 and December 31, 2010, respectively.
|
442
|
1,225
|
||||||
Common stock, par value $0.001 per share, authorized 100,000,000
|
||||||||
shares, issued and outstanding 22,805,508 and 20,520,161 shares at
|
||||||||
September 30, 2011 and December 31, 2010, respectively
|
22,805
|
20,521
|
||||||
Deferred consulting fee
|
-
|
(57,500
|
)
|
|||||
Subscription receivable
|
-
|
-
|
||||||
Additional paid-in capital
|
17,461,111
|
15,158,291
|
||||||
Accumulated other comprehensive income
|
7,674,162
|
6,344,414
|
||||||
Retained earnings
|
22,557,685
|
20,695,855
|
||||||
Total stockholders' equity
|
47,716,205
|
42,162,806
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
130,093,747
|
$
|
89,409,186
|
China Carbon Graphite Group, Inc and subsidiaries
|
||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Sales
|
$ | 13,591,978 | $ | 9,979,707 | $ | 37,200,337 | $ | 18,074,914 | ||||||||
Cost of Goods Sold
|
10,515,933 | 7,505,623 | 28,855,956 | 14,348,021 | ||||||||||||
Gross Profit
|
3,076,045 | 2,474,084 | 8,344,381 | 3,726,893 | ||||||||||||
Operating Expenses
|
||||||||||||||||
Selling expenses
|
51,223 | 48,978 | 158,398 | 95,675 | ||||||||||||
General and administrative
|
1,316,048 | 706,235 | 3,919,776 | 2,097,959 | ||||||||||||
Depreciation and amortization
|
97,832 | 74,365 | 191,586 | 112,592 | ||||||||||||
1,465,103 | 829,578 | 4,269,760 | 2,306,226 | |||||||||||||
Operating Income Before Other Income (Expense)
|
||||||||||||||||
and Income Tax Expense
|
1,610,942 | 1,644,506 | 4,074,621 | 1,420,667 | ||||||||||||
Other Income (Expense)
|
||||||||||||||||
Interest expense
|
(957,434 | ) | (308,489 | ) | (2,364,238 | ) | (782,760 | ) | ||||||||
Interest income
|
- | - | - | - | ||||||||||||
Other expense
|
- | |||||||||||||||
Other income, net
|
14,118 | 556,022 | 89,902 | 553,097 | ||||||||||||
Change in fair value of warrants
|
508 | 25,129 | 83,200 | 588,147 | ||||||||||||
(942,808 | ) | 272,662 | (2,191,136 | ) | 358,484 | |||||||||||
Income Before Income Tax Expense
|
668,134 | 1,917,168 | 1,883,484 | 1,779,151 | ||||||||||||
Income Tax Expense
|
- | - | - | - | ||||||||||||
Net Income
|
$ | 668,134 | $ | 1,917,168 | $ | 1,883,485 | $ | 1,779,151 | ||||||||
Deemed Preferred Stock Dividend
|
- | - | - | (132,778 | ) | |||||||||||
Dividend Distribution
|
(13,525 | ) | (16,605 | ) | (21,654 | ) | (68,038 | ) | ||||||||
Net Income Available To Common Shareholders
|
$ | 654,609 | $ | 1,900,563 | $ | 1,861,831 | $ | 1,578,335 | ||||||||
Other Comprehensive Income
|
||||||||||||||||
Foreign currency translation gain
|
508,300 | 742,712 | 1,329,748 | 789,276 | ||||||||||||
Total Comprehensive Income
|
$ | 1,176,434 | $ | 2,659,880 | $ | 3,213,233 | $ | 2,568,427 | ||||||||
Share Data
|
||||||||||||||||
Basic earnings per share
|
$ | 0.03 | $ | 0.09 | $ | 0.08 | $ | 0.08 | ||||||||
Diluted earnings per share
|
$ | 0.03 | $ | 0.09 | $ | 0.08 | $ | 0.08 | ||||||||
Weighted average common shares outstanding,
|
||||||||||||||||
basic
|
22,307,980 | 20,160,161 | 22,231,842 | 19,577,342 | ||||||||||||
Weighted average common shares outstanding,
|
||||||||||||||||
diluted
|
22,749,990 | 21,435,161 | 22,766,260 | 20,852,342 |
China Carbon Graphite Group, Inc and subsidiaries
|
||||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
Nine months ended
September 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities
|
||||||||
Net Income
|
$
|
1,883,485
|
$
|
1,779,151
|
||||
Adjustments to reconcile net cash provided by (used in)
|
||||||||
operating activities
|
||||||||
Depreciation and amortization
|
1,328,990
|
1,308,000
|
||||||
Bad debt expenses
|
-
|
-
|
||||||
Stock compensation
|
980,800
|
493,300
|
||||||
Change in fair value of warrants
|
(83,200
|
)
|
(588,147
|
)
|
||||
Convertible prefered stock value change
|
-
|
169,167
|
||||||
Change in operating assets and liabilities
|
||||||||
Accounts receivable
|
(5,507,003
|
)
|
(4,870,117
|
)
|
||||
Notes receivable
|
(10,951
|
)
|
(285,763
|
)
|
||||
Other receivable
|
(2,075,385
|
)
|
750,697
|
|||||
Advance to suppliers
|
(1,866,969
|
)
|
(15,686,872
|
)
|
||||
Inventories
|
(6,664,546
|
)
|
(4,729,792
|
)
|
||||
Prepaid expenses
|
231,613
|
(44,504
|
)
|
|||||
Accounts payable and accrued liabilities
|
(2,682,072
|
)
|
1,633,720
|
|||||
Amount due to a related party
|
1,327,928
|
3,066,461
|
||||||
Notes payable
|
19,647,750
|
7,355,000
|
||||||
Advance from customers
|
3,027,518
|
3,301,106
|
||||||
Taxes payable
|
||||||||
Dividends payable
|
-
|
16,604
|
||||||
Other payables
|
1,521,693
|
28,732
|
||||||
Net cash provided by (used in) operating activities
|
11,059,651
|
(6,303,257
|
)
|
|||||
Cash flows from investing activities
|
||||||||
Acquisition of property and equipment
|
(27,265
|
)
|
(2,942
|
)
|
||||
Acquisition of land use rights
|
-
|
(5,164,713
|
)
|
|||||
Construction in progress
|
(7,110,556
|
)
|
(3,707,297
|
)
|
||||
Net cash used in investing activities
|
(7,137,821
|
)
|
(8,874,952
|
)
|
||||
Cash flows from financing activities
|
||||||||
Proceeds from issuing common stock
|
160,000
|
166,400
|
||||||
Proceeds from issuing series B preferred stock
|
-
|
338,850
|
||||||
Proceeds from warrants exercise
|
371,714
|
-
|
||||||
Dividends paid for series B preferred stock
|
(32,996
|
)
|
-
|
|||||
Increase of restricted cash
|
(14,392,940
|
)
|
-
|
|||||
Proceeds from short-term bank loans
|
44,534,900
|
22,072,355
|
||||||
Reayment of short-term bank loans
|
(33,824,950
|
)
|
(1,618,100
|
)
|
||||
Proceeds from notes payable
|
-
|
-
|
||||||
Repayment of long term bank loans
|
-
|
-
|
||||||
Net cash (used in) provided by financing activities
|
(3,184,272
|
)
|
20,959,505
|
|||||
Effect of exchange rate fluctuation
|
17,369
|
601,585
|
||||||
Net increase in cash
|
754,927
|
6,382,881
|
||||||
Cash and cash equivalents at beginning of period
|
296,311
|
2,709,127
|
||||||
Cash and cash equivalents at end of period
|
$
|
1,051,238
|
$
|
9,092,008
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Interest paid
|
$
|
2,364,238
|
$
|
782,760
|
||||
Income taxes paid
|
$
|
-
|
$
|
-
|
||||
Non-cash activities:
|
||||||||
Deemed preferred dividend reflected in paid-in capital
|
$
|
-
|
$
|
(132,778
|
)
|
|||
Reclassfication of warrant liability with equity
|
$
|
14,993
|
$
|
169,167
|
||||
Issuance of common stock for consulting fee
|
$
|
1,787,600
|
$
|
493,300
|
||||
Deferred consulting fee reflected in paid-in capital
|
$
|
-
|
$
|
166,100
|