NEW YORK, Aug., 23, 2011
/PRNewswire/ -- Gushan Environmental Energy Limited ("Gushan" or
the "Company"; NYSE: GU), a leading producer of biodiesel in
China, today announced its
unaudited consolidated financial results for the second quarter of
2011.
As of November 12, 2010, the ratio
for Gushan's ADSs representing ordinary shares has changed from one
(1) ADS representing two (2) ordinary shares to one (1) ADS
representing ten (10) ordinary shares. Gushan presents all per ADS
data and number of ADSs in this announcement as if the ratio change
was effective as of the beginning of the earliest period presented.
Highlights for the Second Quarter of
2011 (Note 1)
- Total revenues increased by 443.0% year-to-year and by 32.0%
quarter-on-quarter to RMB327.1
million (US$50.6
million).
- Gross profit amounted to RMB5.8
million (US$0.9 million),
compared to a gross loss of RMB33.6
million for the second quarter of 2010 and a gross profit of
RMB4.4 million for the first quarter
of 2011.
- Loss from operations amounted to RMB23.2
million (US$3.6 million),
compared to a loss from operations of RMB112.7 million for the second quarter of 2010
and a loss from operations of RMB14.5
million for the first quarter of 2011.
- Net loss attributable to the Company amounted to RMB26.4 million (US$4.1
million), compared to a net loss of RMB108.5 million for the second quarter of 2010
and a net loss of RMB17.5 million for
the first quarter of 2011.
- Non-GAAP net loss attributable to the Company amounted to
RMB21.9 million (US$3.4 million), compared to a non-GAAP net loss
attributable to the Company of RMB57.8
million for the second quarter of 2010 and a non-GAAP net
loss attributable to the Company of RMB20.9
million for the first quarter of 2011. (Note
2)
- Sales volume of biodiesel decreased by 73.8% year-to-year and
by 25.8% quarter-on-quarter to 3,361 tons. (Note
3)
- Average selling price of biodiesel increased by 38.7%
year-to-year and by 14.6% quarter-on-quarter to RMB6,156 (US$952.4)
per ton. (Note 3)
- Sales volume of recycled copper products increased by 33.9%
quarter-on-quarter to 4,958 tons.
- Average selling price of recycled copper products increased by
1.8% quarter-on-quarter to RMB60,638
(US$9,381.6) per ton.
- Cash balance amounted to RMB115.7
million (US$17.9 million) as
of June 30, 2011.
Note 1: Translation from RMB into US$ at
RMB6.4635 to US$1.00,
see "Currency Convenience Translation" below.
Note 2: GAAP represents Generally
Accepted Accounting Principles in the
United States of America ("U.S. GAAP" or "GAAP") in this
press release. All non-GAAP measures exclude share-based
compensation expenses, impairment loss of and loss on
disposal of property, plant and equipment, change in fair value of
contingent consideration liability, provision for consumption tax
and income tax effect thereof. For further details on
non-GAAP measures, please refer to the reconciliation table and a
detailed discussion of management's use of non-GAAP information set
forth elsewhere in this announcement.
Note 3: Sales volume of biodiesel includes
biodiesel sold as a refined oil product to the fuel market and
biodiesel sold as fatty acid methyl ester, an intermediate product
to the chemical industry. Average selling price of biodiesel
represents total average selling price of biodiesel sold as a
refined oil product to the fuel market and biodiesel sold as an
intermediate product to the chemical industry.
"Strong revenue growth in the second quarter of 2011 was driven
by Gushan's diversification into the recycled copper products
business with the acquisition of Mianyang Jin Xin Copper Company
Limited in late 2010," said Jianqiu
Yu, Chairman and Principal Executive Officer of Gushan, " We
are continuing to grow our recycled copper products business, most
recently through the acquisition of a controlling interest in
recycled copper producer Hunan Yin Lian Xiangbei Copper Company
Limited in August 2011. In relation
to our biodiesel business, inflation in raw material costs remains
a significant challenge and we are continuing to seek ways to
control raw material costs and to restore our biodiesel business to
profitability."
Financial Results for the Second Quarter
of 2011
Revenues
The Company's revenues amounted to RMB327.1 million (US$50.6
million) for the second quarter of 2011, representing an
increase of 443.0% from RMB60.2
million for the second quarter of 2010 and an increase of
32.0% from RMB247.8 million for the
first quarter of 2011.
The increase in revenues on a year-to-year basis was mainly due
to revenue contribution from the recycled copper products business
of Mianyang Jin Xin Copper Company Limited ("Jin Xin") of RMB304.8
million (US$47.2 million). As
a result of the Company's initial acquisition of a 67% beneficial
ownership interest in Jin Xin, from
November 2010, the Company began
consolidating Jin Xin's operating
results into its operating results. In January 2011, the Company acquired an additional
8% beneficial ownership interest in Jin
Xin, increasing its ownership in Jin
Xin to 75%. The increase in revenues on a sequential
quarterly basis was mainly due to the increase in revenues from the
recycled copper products business.
The Company's revenue from its biodiesel business totaled
RMB22.3 million (US$3.4 million) for the second quarter of 2011,
representing a decrease of 63.0% from RMB60.2 million for the second quarter of 2010
and a decrease of 12.9% from RMB25.6
million for the first quarter of 2011. The decrease in
revenue from the biodiesel business on both a year-to-year and
sequential quarterly basis was mainly due to a decrease in the
sales volume of both biodiesel and biodiesel by-products.
The sales volume of biodiesel amounted to 3,361 tons for the
second quarter of 2011, representing a decrease of 73.8% from
12,833 tons for the second quarter of 2010 and a decrease of 25.8%
from 4,532 tons for the first quarter of 2011. The average selling
price of biodiesel was RMB6,156
(US$952.4) per ton for the second
quarter of 2011, representing an increase of 38.7% from
RMB4,439 per ton for the second
quarter of 2010 and an increase of 14.6% from RMB5,371 per ton for the first quarter of
2011.
The sales volume of biodiesel by-products amounted to 580 tons
for the second quarter of 2011, representing a decrease of 65.5%
from 1,682 tons for the second quarter of 2010, and an increase of
5.6% from 549 tons for the first quarter of 2011. The average
selling price of biodiesel by-products was RMB2,700 (US$417.7)
per ton for the second quarter of 2011, representing an increase of
39.3% from RMB1,938 per ton for the
second quarter of 2010 and an increase of 21.6% from RMB2,221 per ton for the first quarter of
2011.
The year-to-year decrease in the sales volume of biodiesel was
mainly due to the suspension of operations at the Company's
Sichuan plant since August 2010. The Company suspended production at
its old plant in San Tai County in Sichuan in August
2010 in preparation for the relocation of the production
lines to its new plant in Qin Dong Bei Industrial Park. The
relocation of the Sichuan plant,
together with the new plant, resulted in a combined annual
biodiesel production capacity of 100,000 tons for Sichuan Gushan.
The new plant has been conducting a trial run since early
June 2011. The decrease in sales
volume of biodiesel on a quarterly sequential basis was due to a
decrease in production and sales volume at Beijing Gushan and Hebei
Gushan as a result of the Company's strategy to avoid negative
operating cash flows caused by the increasingly high raw material
input costs.
The year-to-year and sequential quarterly increase in the
average selling price of biodiesel was mainly attributable to
improved conditions in the refined oil market in China following the decline in the market
price of diesel in China, which
began in the fourth quarter of 2008 and continued throughout the
third quarter of 2009, resulting from a decrease in global oil
prices and weaker industrial production in China amid the global financial crisis. The
average selling price of biodiesel began to increase gradually from
the fourth quarter of 2009 to 2011.
The Company's revenue from its recycled copper business totaled
RMB304.8 million (US$47.2 million) for the second quarter of 2011,
representing an increase of 37.2% from RMB222.2 million for the first quarter of 2011.
The increase in revenue on a sequential quarterly basis was mainly
due to an increase in sales volume of recycled copper products by
34.0% from 3,701 tons for the first quarter of 2011 to 4,958 tons
for the second quarter of 2011. The increase was mainly due to the
fact that in the first quarter of 2011, sales volume of recycled
copper products was lower during the Chinese
New Year holiday in February, and because the Company's
business operations experienced a temporary contraction during the
period of significant market volatility immediately following the
earthquake in Japan in
March 2011. The average selling price
of recycled copper products increased by 1.8% from RMB59,558 per ton for the first quarter of 2011
to RMB60,638 (US$9,381.6) per ton for the second quarter of
2011.
Cost of Revenues
Cost of revenues for the second quarter of 2011 totaled
RMB321.3 million (US$49.7 million), representing an increase of
242.5% from RMB93.8 million for the
second quarter of 2010 and an increase of 32.0% from RMB243.4 million for the first quarter of 2011.
The increase on a year-to-year basis was mainly due to cost of
revenues of RMB294.9 million
(US$45.6 million) from Jin Xin. The increase on a sequential quarterly
basis was mainly due to the increase in sales volume of recycled
copper products.
The cost of revenues of the Company's biodiesel business totaled
RMB26.4 million (US$4.1 million) for the second quarter of 2011,
representing a decrease of 71.9% from RMB93.8 million for the second quarter of 2010
and a decrease of 16.5% from RMB31.6
million for the first quarter of 2011. Excluding the
provision for consumption tax, cost of revenues of the Company's
biodiesel business for the second quarter of 2011 decreased by
70.7% from the second quarter of 2010.
Cost of revenues of the Company's biodiesel business included a
provision for consumption tax of RMB3.8
million for the second quarter of 2010. The provision was
subsequently reversed in the fourth quarter of 2010. The reversal
of the provision for consumption tax was made as a result of the
issuance of Caishui [2010] No. 118, Notice Regarding the
Exemption from Consumption Tax on Pure Biodiesel Made from Waste
Animal Fats or Vegetable Oils ("Caishui 118") by the Ministry
of Finance and the State Administration of Taxation of the PRC
("SAT") which clarified that, subject to fulfillment of certain
conditions, pure biodiesel made from waste animal fat or vegetable
oil is exempt from consumption tax in China.
The decrease in cost of revenues of the Company's biodiesel
products on both a year-to-year and sequential quarterly basis was
primarily attributable to a decrease in the Company's sales volume
of both biodiesel and biodiesel by-products. This was partially
offset by an increase in the overall average unit cost of used
cooking oil, which increased by 32.5% from RMB3,600 per ton for the second quarter of 2010
and by 16.3% from RMB4,100 per ton
for the first quarter of 2011 to RMB4,770 (US$738.0)
per ton in the second quarter of 2011. The increases in the cost of
used cooking oil were caused by an increase in the Company's
suppliers' costs, which are primarily affected by general cost
inflation, particularly in labor and transportation in China, as well as a general increase in prices
charged by the their upstream suppliers.
The cost of revenues of the Company's recycled copper business
totaled RMB294.9 million
(US$45.6 million) for the second
quarter of 2011, representing an increase of 39.2% from
RMB211.8 million for the first
quarter of 2011. The increase was mainly due to an increase in the
unit cost of raw materials by 4.4% from RMB56,173 per ton for the first quarter of 2011
to RMB58,657 (US$9,075.1) per ton for the second quarter of
2011 and an increase in sales volume by 34.0% from 3,701 tons for
the first quarter of 2011 to 4,958 tons for the second quarter of
2011.
Gross profit (loss)
The Company's gross profit for the second quarter of 2011
totaled RMB5.8 million (US$0.9 million), compared to a gross loss of
RMB33.6 million for the second
quarter of 2010 and a gross profit of RMB4.4
million for the first quarter of 2011. The Company's gross
profit for the second quarter of 2011 was composed of a gross loss
of RMB4.1 million (US$0.6 million) from its biodiesel business,
representing a gross loss margin of 18.6%, and a gross profit of
RMB9.9 million (US$1.5 million) from its recycled copper products
business, representing a gross profit margin of 3.3%.
The Company's gross loss for the second quarter of 2010 was
derived from its biodiesel business, with a gross loss margin of
55.8%. Excluding the provision for the consumption tax, the gross
loss margin of the Company's biodiesel business would have been
49.4% for the second quarter of 2010. The Company's gross profit
for the first quarter of 2011 was composed of a gross loss of
RMB6.0 million from its biodiesel
business, representing a gross loss margin of 23.7%, and a gross
profit of RMB10.4 million from its
recycled copper products business, representing a gross profit
margin of 4.7%.
The improvement in the gross margin of the Company's biodiesel
business on a year-to-year basis was mainly due to a decrease in
depreciation expenses as a result of a lower cost base for certain
of the Company's property, plant and equipment after these assets
were impaired in 2010. The improvement in the gross margin of the
Company's biodiesel business on a sequential quarterly basis was
mainly due to a change in the product mix where the Company sold a
higher proportion of crude glycerine, which yields a higher
margin.
The decrease in gross profit margin of the Company's recycled
copper business on a sequential quarterly basis was mainly caused
by a narrowing spread between the average selling price of recycled
copper products and the average unit cost of raw materials. The
average unit costs of raw materials increased by 4.4%, while the
average selling price of its recycled copper products increased by
1.8%.
Research and Development Expenses
Research and development expenses totaled RMB0.1 million (less than US$0.1 million) in the second quarter of 2011, as
compared to RMB1.0 million for the
second quarter of 2010 and RMB0.2
million for the first quarter of 2011. The decrease on a
year-to-year basis was mainly due to a decrease in depreciation
expenses as a result of a lower cost base for certain of the
Company's property, plant and equipment after these assets were
impaired in 2010.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the second
quarter of 2011 totaled RMB17.7
million (US$2.7 million),
representing an increase from RMB17.2
million for the second quarter of 2010 and from RMB16.4 million for the first quarter of
2011.
The increase on a year-to-year basis was mainly due to
miscellaneous selling, general and administrative expenses incurred
by Jin Xin, a subsidiary acquired in
November 2010 and an increase in
professional fees in relation to the acquisition of Hunan Yin Lian
Xiangbei Copper Company Limited ("Xiangbei"), a PRC-based company
that is engaged in the recycled copper products business. The
increase was offset by a decrease in share-based compensation as a
result of the cancellation of certain share options in the fourth
quarter of 2010 and a decrease in miscellaneous selling, general
and administrative expenses incurred by our biodiesel business.
The increase on a sequential quarterly basis was mainly due to
an increase in professional fees in relation to the acquisition of
Xiangbei. The increase was partly offset by a decrease in
share-based compensation, the amounts of which recognized are
declining as the options become vested.
Other Operating Expenses
Other operating expenses for the second quarter of 2011 amounted
to RMB8.9 million (US$1.4 million), compared to RMB19.2 million for the second quarter of 2010
and RMB8.9 million for the first
quarter of 2011. The expenses mainly consisted of depreciation of
buildings and machinery and other amortization and salary paid to
factory workers during the periods in which certain plants
suspended production.
The decrease on a year-to-year basis was mainly due to a
decrease in depreciation expenses as a result of a lower cost base
for certain of the Company's property, plant and equipment after
these assets were impaired in 2010.
As previously announced in 2009 and 2010, the Company suspended
or deferred biodiesel production in certain plants due to the
consumption tax issue, traffic controls pursuant to government
directives and a relocation of production facility in 2009 and
2010. The Company suspended production in Fujian Gushan beginning
April 2009 due to road maintenance
which restricted access to the plant by the Company's suppliers and
customers and had not resumed production due to the consumption tax
issue. The Company suspended production in Shanghai Gushan since
April 2010 due to heightened
enforcement of control measures relating to poisonous, hazardous
and flammable chemicals adopted by the Shanghai municipal government during the
hosting of the Expo 2010 and has not resumed production as a result
of an ongoing lawsuit brought against it by a construction
contractor of Shanghai Gushan's plant. Although construction of the
production facilities for Chongqing Gushan and Hunan Gushan was
completed in 2009, the Company deferred the commencement of
production at these plants due to the consumption tax issue. The
Company suspended production at its old plant in San Tai County in
Sichuan in August 2010 in preparation for the relocation of
the production lines to its new plant in Qin Dong Bei Industrial
Park. The new plant in Sichuan has
been conducting a trial run since early June
2011. If these suspensions and deferrals had not occurred,
the depreciation of the buildings and machinery and other
amortization and salary paid to factory workers of these plants
would have been classified as cost of revenues.
Although the consumption tax issue has been resolved with the
issuance of Caishui 118, as a result of increasingly high raw
material input costs in 2011, the Company is currently evaluating
the profitability of each of its biodiesel plant. The Company will
evaluate the appropriateness of continuing, commencing or resuming
production of biodiesel at each of its biodiesel plants and will
continue, commence or resume production only if the biodiesel plant
is able to operate on a positive cash flow basis in order to
minimize the financial burden on the Company as a whole.
Impairment loss on property, plant and equipment
As previously announced, the impairment loss on property, plant
and equipment incurred in the second quarter of 2010 was due to the
relocation of Sichuan Gushan's production lines from San Tai County
to its new plant in Qin Dong Bei Industrial Park.
Change in Fair Value of
Contingent Consideration
Liability
In November 2010, the Company
acquired a 67% beneficial ownership interest in Jin Xin through a series of transactions in
exchange for up to 24 million of its newly issued ordinary shares
("Contingent Consideration Shares"). The Contingent Consideration
Shares are subject to an earn-out arrangement whereby 6 million
ordinary shares were delivered to the selling shareholder at the
closing of the transactions, while the remaining 18 million
ordinary shares were placed into escrow ("Additional Contingent
Consideration Shares") to be released in stages upon the
determination of Jin Xin's net
income under U.S. GAAP for the year ended December 31, 2010 and the three years ending
December 31, 2012.
Under U.S. GAAP, the Additional Contingent Consideration Shares
should be classified as a liability and stated at their fair value
at the acquisition date and each reporting date. The subsequent
change in the fair value of the Additional Contingent Consideration
Shares at each reporting date would be recognized in the statement
of operations. The Company recognized a decrease in fair value of
RMB6.6 million for the first quarter
of 2011 and an increase in fair value of RMB2.4 million (US$0.4
million) for the second quarter of 2011. The decrease in the
fair value of the outstanding Additional Contingent Consideration
Shares in the first quarter of 2011 was mainly due to a decrease in
the market price of the Company's ADSs and a decrease in the
estimated probability-weighted number of ordinary shares to be
further issued. The increase in the fair value of the outstanding
Additional Contingent Consideration Shares in the second quarter of
2011 was mainly due to the release of 6 million ordinary shares
from escrow to the selling shareholder of Jin Xin, but the increase was partly offset by a
decrease caused by a further decrease in the market price of the
Company's ADSs and a further decrease in the estimated
probability-weighted number of ordinary shares to be further
issued.
Other Income (Expense)
Other income (expense) primarily consists of interest income,
interest expenses, foreign currency exchange losses and other
income (expenses), net. Interest income for the second quarter of
2011 amounted to RMB0.2 million (less
than US$0.1 million). Interest
expenses for the second quarter of 2011 amounted to RMB1.4 million (US$0.2
million) mainly incurred by Jin
Xin in respect of short term loans. Foreign currency
exchange loss for the second quarter of 2011 amounted to
RMB0.3 million (less than
US$0.1 million). Other income
(expenses), net for the second quarter of 2011 included, among
others, income from the Company's depositary bank, a provision for
business tax on intercompany advances among companies in
China, VAT refunds, government
subsidy income and a loss which resulted from copper futures
contracts. Starting from the first quarter of 2011, Jin Xin sought to diversify risks associated
with the market prices for copper by using standard futures
contracts of copper traded on the Shanghai Futures Exchange. From
investing in such copper futures contracts, Jin Xin incurred a loss of RMB0.4 million (less than US$0.1 million) in the second quarter of 2011 and
a profit of RMB35,000 in the first
quarter of 2011.
Income Tax Benefit (Expense)
Income tax benefit (expense) primarily consisted of corporate
income tax ("CIT"), a provision for dividend withholding tax and
other overseas withholding tax.
CIT for the second quarter of 2011 amounted to RMB1.8 million (US$0.3
million), as compared to nil for the second quarter of 2010
and RMB0.5 million for the first
quarter of 2011.
According to the CIT law, which came into effect from
January 1, 2008, and relevant
regulations promulgated thereunder, PRC-resident enterprises are
levied withholding tax at a rate of 10% on dividends to their
non-PRC-resident corporate investors for earnings accumulated
beginning on January 1, 2008.
Undistributed earnings generated prior to January 1, 2008 are
exempt from such withholding tax. Under the Arrangement between the
Mainland of China and Hong Kong
Special Administration Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on
Income (the "Mainland China/HKSAR DTA") and Guoshuihan [2009] No.
601 on "How to understand and recognize the "Beneficial Owner"
in Double Taxation Agreements" ("Circular 601"), a qualified
Hong Kong tax resident which is
the "beneficial owner" and holds 25% or more of the equity interest
in a PRC resident enterprise is entitled to a reduced withholding
tax rate of 5%. Pursuant to Circular 601, a beneficial owner under
a tax treaty is not purely determined by its place of legal
registration but also by other factors which depend on specific
facts and circumstances, and significant judgment may be
involved.
Although the Company intends to apply for the reduced
withholding tax rate of 5% in the future when dividends for
earnings accumulated from January 1,
2008 by its PRC operating subsidiaries are wired out of
China, the Company made a 10%
provision on such undistributed earnings for such withholding tax.
If the local SATs approve a reduced withholding tax rate of 5% when
such dividends are actually wired out of China, any excess provision will be reversed
in subsequent financial statements.
In respect of its biodiesel business, the Company reduced the
provision for withholding tax by RMB0.3
million (less than US$0.1
million) for the second quarter of 2011, RMB4.7 million for the second quarter of 2010 and
RMB0.6 million for the first quarter
of 2011. The decrease was due to the losses incurred in the
biodiesel business. In respect of its recycled copper products
business, the Company made a provision for withholding tax of
RMB0.5 million (US$0.1 million) and RMB0.6
million for the second quarter and the first quarter of
2011, respectively. Other overseas withholding tax amounted to
RMB0.3 million (less than
US$0.1 million), RMB0.3 million and RMB0.3
million for the second quarter of 2011, the second quarter
of 2010 and the first quarter of 2011, respectively.
Net Loss Attributable to the
Company
Net loss attributable to the Company amounted to RMB26.4 million (US$4.1
million) for the second quarter of 2011, compared to
RMB108.5 million for the second
quarter of 2010 and RMB17.5 million
for the first quarter of 2011.
Non-GAAP net loss attributable to the Company amounted to
RMB21.9 million (US$3.4 million) for the second quarter of 2011,
compared to RMB57.8 million for the
second quarter of 2010 and RMB20.9
million for the first quarter of 2011.
Financial Condition
As of June 30, 2011, the Company
had working capital of RMB154.0
million (US$23.8 million),
reflecting total current assets of RMB416.8
million (US$64.5 million) and
total current liabilities of RMB262.8
million (US$40.7 million). Of
the total current assets, the Company had RMB115.7 million (US$17.9
million) in cash, represented by RMB18.9 million, HK$22.7
million and US$4,000 deposited
in licensed commercial banks in China and HK$0.7
million and US$11.9 million
deposited in licensed commercial banks in Hong Kong.
Recent Events
Acquisition of Xiangbei
As of the date of this press release, the Company had
consummated its acquisition of a controlling interest in Xiangbei,
a PRC-based company that is engaged in recycled copper products
business in Hunan province.
Xiangbei is engaged in the manufacturing of copper rods, copper
bars and copper plates from recycled copper and electrolytic copper
in Boluo, Hunan. Xiangbei mainly
sells its products to producers of power wires and cables in
various provinces in China. As of
the date of this press release, Xiangbei has a daily production
capacity of approximately 50 tons of recycled copper products.
Business Outlook for Fiscal Year
2011
During the second quarter of 2011, the Company's average
biodiesel selling prices continued to improve over the previous
quarter as demand for diesel in China continued its recovery in conjunction
with the economic recovery in China and globally. Going forward, the Company
expects this trend to continue so long as the global economy and
China's economy continue to
improve. However, inflationary pressures in China continue to be high, which continues to
adversely affect the Company's raw material input costs, which are
increasing at a rate higher than the rate of increase in the
Company's average biodiesel selling prices. As a result, the
production and sale of biodiesel in the current business
environment is not profitable for the Company. In order to minimize
the financial burden on the Company as a whole, the Company will
evaluate the appropriateness of continuing, commencing or resuming
production of biodiesel at each of its biodiesel plants and will
continue, commence or resume production only if the biodiesel plant
is able to operate on a positive cash flow basis. The Company does
not expect each of its biodiesel plants to be able to operate,
achieve and maintain positive cash flows given the current trend of
raw material input costs increasing at a higher rate than average
biodiesel selling prices. While the Company continues with its
efforts to control its raw material input costs, it is expected
that the production and sales volume of biodiesel will continue to
be low in the near term until positive results are achieved from
the Company's efforts in controlling raw material input costs.
Meanwhile, the Company's recycled copper products business
continued to contribute positively to the Company's overall
financial performance and this trend is expected to continue. The
Company believes that the recently completed acquisition of
Xiangbei will also provide additional positive contribution. The
Company continues to explore the possibility of acquiring more
businesses in the recycled copper products industry that will
complement its existing businesses and strengthen its overall
recycled copper products business portfolio.
Unaudited Financial Statements
The unaudited condensed consolidated statements of operations,
balance sheets and cash flow statements accompanying this
announcement have been prepared by management using U.S. GAAP.
These unaudited financial statements are not intended to fully
comply with U.S. GAAP because they do not present all of the
disclosures required by U.S. GAAP. The December 31, 2010
balance sheet was derived from audited consolidated financial
statements of the Company.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars in this earnings
release, made solely for the reader's convenience, is based on the
H.10 statistical release of the Federal Reserve Board as of
June 30, 2011, which was RMB6.4635 to US$1.00. No representation is intended to imply
that the Renminbi amounts could have been, or could be, converted,
realized or settled into U.S. dollars at such rate, or at any other
rate. The percentages stated in this earnings release are
calculated based on Renminbi.
Conference Call
Gushan's management will hold its second quarter of 2011
earnings conference call at 8:30am
U.S. Eastern Time (8:30pm
Beijing / Hong Kong Time) on
August 23, 2011.
Dial-in details for the earnings conference call are as
follows:
|
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US Toll Free Number
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1.866.356.3095
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US Toll Number: (for
international callers)
|
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1.617.597.5391
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Hong Kong Toll Number
|
|
852 3002
1672
|
|
Hong Kong Toll Free
Number
|
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800 96
3844
|
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China Toll Free
Number
|
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10 800 130
0399
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UK Toll Free Number
|
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08082347616
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UK Toll Number (for
international callers)
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44 207 365
8426
|
|
Passcode:
|
|
80144602
|
|
|
|
|
|
|
A replay of the call will be available on the same day at
10:30 a.m. U.S. Eastern Time (or
10:30 p.m. Hong Kong Time) until
August 30, 2011 and may be accessed
by phone at the following numbers.
|
|
US Toll Free Number:
|
|
1 888
286.8010
|
|
US Toll Number: (for
international callers)
|
|
1 617
801.6888
|
|
Passcode:
|
|
95187237
|
|
|
|
|
|
|
In addition, a live and archived webcast of this conference call
will be available on the Investor Relations section of Gushan's
website at www.chinagushan.com.
About Gushan Environmental Energy Limited
Gushan is a leader in the PRC biodiesel industry, in terms of
annual production capacity, and one of the leading biodiesel
producers in Asia, in terms of
nominal capacity. Gushan produces biodiesel, a renewable,
clean-burning and biodegradable fuel and a raw material used to
produce chemical products, primarily from used cooking oil, and
by-products from biodiesel production, including glycerine and
plant asphalt. Gushan sells biodiesel directly to users, such as
marine vessel operators and chemical factories, as well as to
petroleum wholesalers and individual retail gas stations. The
Company has seven biodiesel production facilities, located in the
Sichuan, Hebei, Fujian
and Hunan provinces and in
Beijing, Shanghai and Chongqing, with a combined annual production
capacity of 490,000 tons. Gushan's Sichuan production facility is currently in
operation. Gushan also operates a recycled copper products business
through its PRC subsidiaries, Mianyang Jin Xin Copper Company
Limited ("Jin Xin") and Hunan Yin
Lian Xiangbei Copper Company Limited ("Xiangbei"), which
manufacture copper rods, copper wires, copper granules, copper bars
and copper plates primarily from recycled copper and some
electrolytic copper, in Sichuan
and Hunan, respectively.
Jin Xin has one plant in
Sichuan, with a daily production
capacity of approximately 160 tons of recycled copper products and
Xiangbei has one plant in Hunan,
with a daily production capacity of approximately 50 tons of
recycled copper products.
Safe Harbor Statement
This announcement contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by words such as "will," "may," "expect,"
"anticipate," "aim," "target," "intend," "plan," "believe,"
"estimate," "potential," "continue," and other similar statements.
Statements other than statements of historical facts in this
announcement are forward-looking statements, including but not
limited to, the Company's expectations regarding the expansion of
its production capacities, its future business development, and its
beliefs regarding its production output. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about the Company and the industry. Important risks and
uncertainties that could cause the Company's actual results to be
materially different from expectations include but are not limited
to the effect of any applicable government policy, law or
regulation, of natural disasters, and of intensifying competition
in the biodiesel and alternative energy industries, the
availability of suitable raw materials to the Company, and the
risks set forth in the Company's filings with the U.S. Securities
and Exchange Commission
("SEC"), including on
Form 20-F. The Company undertakes no obligation to
update forward-looking statements, except as may be required by
law. Although the Company believes that the expectations expressed
in these forward-looking statements are reasonable, it cannot
assure you that its expectations will turn out to be correct, and
investors are cautioned that actual results may differ materially
from the anticipated results.
About Non-GAAP Financial Measures
To supplement Gushan's consolidated financial results presented
in accordance with U.S. GAAP, Gushan uses the following measures
defined as non-GAAP financial measures by the SEC: net loss
excluding share-based compensation, impairment loss and loss on
disposal of property, plant and equipment, change in fair value of
contingent consideration liability, provision for consumption tax
and the tax effect thereof ("non-GAAP net loss"), basic and diluted
net loss per ADS excluding share-based compensation, impairment
loss of property, plant and equipment, change in fair value of
contingent consideration liability, provision for consumption tax
and the tax effect thereof ("basic and diluted non-GAAP net loss
per ADS"). The presentation of these non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for
the financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures,
please see the table captioned "Reconciliation of GAAP measures to
non-GAAP measures" set forth at the end of this release.
Gushan believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding share-based compensation, impairment loss
and loss on disposal of property, plant and equipment, change in
fair value of contingent consideration liability, provision for
consumption tax and the tax effect thereof that may not be
indicative of its operating performance from a cash perspective.
Gushan believes that both management and investors benefit from
these non-GAAP financial measures in assessing its performance and
when planning and forecasting future periods. Gushan computes its
non-GAAP financial measures using the same consistent method from
quarter to quarter. Gushan believes these non-GAAP financial
measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using non-GAAP net loss and basic and diluted
non-GAAP net loss per ADS is that these non-GAAP measures exclude
share-based compensation, impairment loss and loss on disposal of
property, plant and equipment, change in fair value of contingent
consideration liability, provision for consumption tax and the tax
effect thereof, that have been and may will continue to be for the
foreseeable future a significant recurring expense in its business.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures to non-GAAP
financial measures.
|
|
|
|
|
|
US
|
|
Asia
|
|
Elizabeth Cheek
|
|
Rico Ngai
|
|
Hill & Knowlton (New
York)
|
|
Hill & Knowlton (Hong
Kong)
|
|
Tel: (1) 212 885
0682
|
|
Tel: (852) 2894
6204
|
|
Email: elizabeth.cheek@hillandknowlton.com
|
|
Email: rico.ngai@hillandknowlton.com.hk
|
|
|
|
|
|
|
- FINANCIAL TABLES FOLLOW -
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts
expressed in thousands, except per share
data, per ADS data
and number of
shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30, 2010
|
|
|
March 31,
2011
|
|
|
June
30, 2011
|
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
Revenues
|
|
60,230
|
|
|
247,768
|
|
|
327,078
|
|
|
50,604
|
|
|
Cost of
revenues
|
|
(93,842)
|
|
|
(243,405)
|
|
|
(321,282)
|
|
|
(49,707)
|
|
|
Gross profit
(loss)
|
|
(33,612)
|
|
|
4,363
|
|
|
5,796
|
|
|
897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
(1,012)
|
|
|
(159)
|
|
|
(137)
|
|
|
(21)
|
|
|
Selling,
general and administrative
|
|
(17,153)
|
|
|
(16,437)
|
|
|
(17,670)
|
|
|
(2,734)
|
|
|
Other
operating expenses
|
|
(19,238)
|
|
|
(8,854)
|
|
|
(8,862)
|
|
|
(1,371)
|
|
|
Impairment
loss of property, plant and equipment
|
|
(41,669)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss on
disposal of property, plant and
equipment
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Change in
fair value of contingent consideration liability
|
|
—
|
|
|
6,561
|
|
|
(2,356)
|
|
|
(365)
|
|
|
Total
operating expenses
|
|
(79,074)
|
|
|
(18,889)
|
|
|
(29,025)
|
|
|
(4,491)
|
|
|
Loss from
operations
|
|
(112,686)
|
|
|
(14,526)
|
|
|
(23,229)
|
|
|
(3,594)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
310
|
|
|
141
|
|
|
217
|
|
|
33
|
|
|
Interest expense
|
|
—
|
|
|
(1,409)
|
|
|
(1,454)
|
|
|
(225)
|
|
|
Foreign
currency exchange loss, net
|
|
(101)
|
|
|
(54)
|
|
|
(278)
|
|
|
(43)
|
|
|
Other
income
(expense),
net
|
|
(758)
|
|
|
473
|
|
|
1,346
|
|
|
208
|
|
|
Loss before
income tax
|
|
(113,235)
|
|
|
(15,375)
|
|
|
(23,398)
|
|
|
(3,621)
|
|
|
Income
tax (expense)
benefit
|
|
4,743
|
|
|
(775)
|
|
|
(2,276)
|
|
|
(352)
|
|
|
Net loss
|
|
(108,492)
|
|
|
(16,150)
|
|
|
(25,674)
|
|
|
(3,973)
|
|
|
Less: Net
income attributable to non-controlling interest
|
|
—
|
|
|
(1,332)
|
|
|
(731)
|
|
|
(113)
|
|
|
Net loss
attributable to the
Company
|
|
(108,492)
|
|
|
(17,482)
|
|
|
(26,405)
|
|
|
(4,086)
|
|
|
Net loss per
ordinary share attributable to the
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
(0.65)
|
|
|
(0.11)
|
|
|
(0.16)
|
|
|
(0.02)
|
|
|
-
Diluted
|
|
(0.65)
|
|
|
(0.11)
|
|
|
(0.16)
|
|
|
(0.02)
|
|
|
Net
loss per ADS attributable
to the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
(6.50)
|
|
|
(1.08)
|
|
|
(1.57)
|
|
|
(0.24)
|
|
|
-
Diluted
|
|
(6.50)
|
|
|
(1.08)
|
|
|
(1.57)
|
|
|
(0.24)
|
|
|
Weighted
average ordinary shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
166,831,943
|
|
|
162,686,743
|
|
|
162,225,205
|
|
|
162,225,205
|
|
|
-
Diluted
|
|
166,831,943
|
|
|
162,686,743
|
|
|
162,225,205
|
|
|
162,225,205
|
|
|
Weighted
average ADS outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
16,683,194
|
|
|
16,268,674
|
|
|
16,222,521
|
|
|
16,222,521
|
|
|
-
Diluted
|
|
16,683,194
|
|
|
16,268,674
|
|
|
16,222,521
|
|
|
16,222,521
|
|
|
Share-based
compensation expense included in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
144
|
|
|
79
|
|
|
60
|
|
|
9
|
|
|
Research and
development expenses
|
|
45
|
|
|
16
|
|
|
10
|
|
|
2
|
|
|
Selling,
general and administrative expenses
|
|
5,614
|
|
|
3,093
|
|
|
2,119
|
|
|
328
|
|
|
Provision of
consumption tax of biodiesel included in:-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
3,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
UNAUDITED
SEGMENT
INFORMATION
(Amounts
expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June
30, 2010
|
|
|
March 31,
2011
|
|
|
June
30, 2011
|
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
60,230
|
|
|
25,560
|
|
|
22,255
|
|
|
3,443
|
|
|
Recycled
copper business
|
|
—
|
|
|
222,208
|
|
|
304,823
|
|
|
47,161
|
|
|
|
|
60,230
|
|
|
247,768
|
|
|
327,078
|
|
|
50,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
(93,842)
|
|
|
(31,608)
|
|
|
(26,393)
|
|
|
(4,083)
|
|
|
Recycled
copper business
|
|
—
|
|
|
(211,797)
|
|
|
(294,889)
|
|
|
(45,624)
|
|
|
|
|
(93,842)
|
|
|
(243,405)
|
|
|
(321,282)
|
|
|
(49,707)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
(33,612)
|
|
|
(6,048)
|
|
|
(4,138)
|
|
|
(640)
|
|
|
Recycled
copper business
|
|
—
|
|
|
10,411
|
|
|
9,934
|
|
|
1,537
|
|
|
|
|
(33,612)
|
|
|
4,363
|
|
|
5,796
|
|
|
897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biodiesel
business
|
|
(55.8%)
|
|
|
(23.7%)
|
|
|
(18.6%)
|
|
|
(18.6%)
|
|
|
Recycled
copper business
|
|
—
|
|
|
4.7%
|
|
|
3.3%
|
|
|
3.3%
|
|
|
|
|
(55.8%)
|
|
|
1.8%
|
|
|
1.8%
|
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts
expressed in thousands)
|
|
|
|
|
December 31,
2010
|
|
|
June 30,
2011
|
|
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
272,822
|
|
|
115,738
|
|
|
17,906
|
|
|
Pledged deposit for copper
future contracts
|
|
|
—
|
|
|
9,599
|
|
|
1,485
|
|
|
Accounts
receivable
|
|
|
48,639
|
|
|
108,792
|
|
|
16,832
|
|
|
Bills
receivable
|
|
|
9,550
|
|
|
—
|
|
|
—
|
|
|
Inventories
|
|
|
176,023
|
|
|
108,431
|
|
|
16,776
|
|
|
Prepaid expenses and other
current assets
|
|
|
53,706
|
|
|
71,109
|
|
|
11,002
|
|
|
Income tax
receivable
|
|
|
674
|
|
|
674
|
|
|
104
|
|
|
Deferred tax
assets
|
|
|
2,439
|
|
|
2,413
|
|
|
373
|
|
|
Total
current assets
|
|
|
563,853
|
|
|
416,756
|
|
|
64,478
|
|
|
Property, plant and
equipment, net
|
|
|
663,946
|
|
|
703,093
|
|
|
108,779
|
|
|
Land use rights
|
|
|
87,568
|
|
|
86,367
|
|
|
13,362
|
|
|
Deferred tax
assets
|
|
|
4,609
|
|
|
3,942
|
|
|
610
|
|
|
Goodwill
|
|
|
18,674
|
|
|
18,674
|
|
|
2,889
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Total
assets
|
|
|
1,338,650
|
|
|
1,228,832
|
|
|
190,118
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
-
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
-
|
|
|
Short term bank
loans
|
|
|
60,000
|
|
|
80,000
|
|
|
12,377
|
|
|
Accounts
payable
|
|
|
79,163
|
|
|
29,271
|
|
|
4,529
|
|
|
Accounts payable for property,
plant and equipment
|
|
|
47,153
|
|
|
75,129
|
|
|
11,624
|
|
|
Accrued expenses and other
payables
|
|
|
61,074
|
|
|
43,383
|
|
|
6,712
|
|
|
Amounts
due to related
parties
|
|
|
30,709
|
|
|
31,181
|
|
|
4,824
|
|
|
Income taxes
payable
|
|
|
10,075
|
|
|
3,788
|
|
|
586
|
|
|
Total
current liabilities
|
|
|
288,174
|
|
|
262,752
|
|
|
40,652
|
|
|
Deferred tax
liabilities
|
|
|
9,766
|
|
|
6,956
|
|
|
1,076
|
|
|
Income tax
payable
|
|
|
9,762
|
|
|
9,762
|
|
|
1,510
|
|
|
Contingent consideration
liability
|
|
|
13,585
|
|
|
—
|
|
|
—
|
|
|
Other non-current
liabilities
|
|
|
15,450
|
|
|
13,212
|
|
|
2,044
|
|
|
Total
liabilities
|
|
|
336,737
|
|
|
292,682
|
|
|
45,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
Additional paid-in
capital
|
|
|
1,547,035
|
|
|
1,529,947
|
|
|
236,706
|
|
|
Treasury stock
|
|
|
(32,972)
|
|
|
(32,972)
|
|
|
(5,101)
|
|
|
Accumulated other
comprehensive loss
|
|
|
(59,159)
|
|
|
(61,946)
|
|
|
(9,584)
|
|
|
Retained earnings
(Accumulated deficit)
|
|
|
(469,758)
|
|
|
(513,645)
|
|
|
(79,469)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
attributable to the Company
|
|
|
985,148
|
|
|
921,386
|
|
|
142,552
|
|
|
Non-controlling
interest
|
|
|
16,765
|
|
|
14,764
|
|
|
2,284
|
|
|
Total
shareholders' equity
|
|
|
1,001,913
|
|
|
936,150
|
|
|
144,836
|
|
|
Total
liabilities and shareholders'
equity
|
|
|
1,338,650
|
|
|
1,228,832
|
|
|
190,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts
expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June 30, 2010
|
|
|
March 31, 2011
|
|
|
June 30,
2011
|
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(108,492)
|
|
|
(16,150)
|
|
|
(25,674)
|
|
|
(3,973)
|
|
|
Adjustments to reconcile
net loss to net
cash used in
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based
compensation
|
|
5,803
|
|
|
3,188
|
|
|
2,189
|
|
|
339
|
|
|
Depreciation
|
|
36,788
|
|
|
10,804
|
|
|
11,101
|
|
|
1,717
|
|
|
Land use right
expense
|
|
370
|
|
|
387
|
|
|
386
|
|
|
60
|
|
|
Loss on disposal of property,
plant and equipment
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Impairment loss
of property, plant and
equipment
|
|
41,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Change in fair value of
contingent consideration
liability
|
|
—
|
|
|
(6,561)
|
|
|
2,356
|
|
|
365
|
|
|
Foreign currency exchange
losses, net
|
|
101
|
|
|
54
|
|
|
278
|
|
|
43
|
|
|
Deferred tax expense
(benefit)
|
|
(4,743)
|
|
|
254
|
|
|
505
|
|
|
78
|
|
|
Inventory write-back
(write-downs)
|
|
2,498
|
|
|
(152)
|
|
|
(14)
|
|
|
(2)
|
|
|
Change in assets and
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
730
|
|
|
(18,570)
|
|
|
(41,583)
|
|
|
(6,434)
|
|
|
Bills receivable
|
|
—
|
|
|
9,550
|
|
|
—
|
|
|
—
|
|
|
Inventories
|
|
4,225
|
|
|
50,334
|
|
|
17,424
|
|
|
2,696
|
|
|
Prepaid expenses and other
current assets
|
|
(2,219)
|
|
|
(24,259)
|
|
|
2,821
|
|
|
436
|
|
|
Income tax receivable
|
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Accounts payable
|
|
(1,780)
|
|
|
(59,390)
|
|
|
9,498
|
|
|
1,469
|
|
|
Accrued expenses and other
payables
|
|
(1,744)
|
|
|
(13,155)
|
|
|
2,344
|
|
|
363
|
|
|
Income taxes payable
|
|
214
|
|
|
(3,984)
|
|
|
(5,303)
|
|
|
(820)
|
|
|
Provision for consumption
tax
|
|
3,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other non-current
liabilities
|
|
(995)
|
|
|
(959)
|
|
|
(949)
|
|
|
(147)
|
|
|
Other assets
|
|
1,513
|
|
|
2,018
|
|
|
2,454
|
|
|
380
|
|
|
Net cash used in operating
activities
|
|
(22,134)
|
|
|
(66,591)
|
|
|
(22,167)
|
|
|
(3,430)
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(33,878)
|
|
|
(20,645)
|
|
|
(12,529)
|
|
|
(1,938)
|
|
|
Payments for land use
rights
|
|
(598)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Temporary receipt from
government in relation to relocation of property, plant and
equipment
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Acquisition of additional 8%
beneficial ownership interest in a subsidiary
|
|
—
|
|
|
(42,701)
|
|
|
—
|
|
|
—
|
|
|
Pledged deposit for copper
future contracts
|
|
—
|
|
|
(10,036)
|
|
|
—
|
|
|
—
|
|
|
Net cash used in investing
activities
|
|
(14,476)
|
|
|
(73,382)
|
|
|
(12,529)
|
|
|
(1,938)
|
|
|
Cash flows from
financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of bank
loans
|
|
—
|
|
|
—
|
|
|
(30,000)
|
|
|
(4,641)
|
|
|
Proceeds from new
bank loans
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
7,735
|
|
|
Repayment of the amount due
to related parties
|
|
—
|
|
|
(34,709)
|
|
|
(16,000)
|
|
|
(2,476)
|
|
|
Proceeds of advance from related
parties
|
|
—
|
|
|
46,214
|
|
|
5,000
|
|
|
774
|
|
|
Net cash
provided by
financing
activities
|
|
—
|
|
|
11,505
|
|
|
9,000
|
|
|
1,392
|
|
|
Effect of foreign exchange rate
changes on cash
|
|
(2,028)
|
|
|
(1,812)
|
|
|
(1,108)
|
|
|
(171)
|
|
|
Decrease in cash
|
|
(38,638)
|
|
|
(130,280)
|
|
|
(26,804)
|
|
|
(4,147)
|
|
|
Cash at beginning of
period
|
|
534,021
|
|
|
272,822
|
|
|
142,542
|
|
|
22,053
|
|
|
Cash at end of
period
|
|
495,383
|
|
|
142,542
|
|
|
115,738
|
|
|
17,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GUSHAN
ENVIRONMENTAL ENERGY LIMITED
RECONCILIATION OF GAAP MEASURES
TO NON-GAAP MEASURES
(Amounts
expressed in thousands, except per ADS data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
June 30,
2010
|
|
|
March 31,
2011
|
|
|
June 30,
2011
|
|
|
|
RMB
|
RMB
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss attributable to the
Company
|
|
(108,492)
|
|
|
(17,482)
|
|
|
(26,405)
|
|
|
(4,086)
|
|
|
Share-based
compensation
|
|
5,803
|
|
|
3,188
|
|
|
2,189
|
|
|
339
|
|
|
Impairment loss of
property, plant and equipment
|
|
41,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss on disposal of
property, plant and equipment
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Change in fair value of
contingent consideration liability
|
|
—
|
|
|
(6,561)
|
|
|
2,356
|
|
|
365
|
|
|
Provision for consumption
tax
|
|
3,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax effect of
reconciliation items
|
|
(624)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Non-GAAP net
loss attributable to the
Company
|
|
(57,804)
|
|
|
(20,855)
|
|
|
(21,860)
|
|
|
(3,382)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to the
Company per ADS – Basic
|
|
(6.50)
|
|
|
(1.08)
|
|
|
(1.57)
|
|
|
(0.24)
|
|
|
Share-based
compensation
|
|
0.35
|
|
|
0.20
|
|
|
0.13
|
|
|
0.02
|
|
|
Impairment loss of
property, plant and equipment
|
|
2.50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss on disposal of
property, plant and equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Change in fair value of
contingent consideration liability
|
|
—
|
|
|
(0.40)
|
|
|
0.14
|
|
|
(0.02)
|
|
|
Provision for consumption
tax
|
|
0.23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax effect of
reconciliation items
|
|
(0.04)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Non-GAAP net
loss attributable to the
Company per ADS - Basic
|
|
(3.46)
|
|
|
(1.28)
|
|
|
(1.30)
|
|
|
(0.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to the
Company per ADS – Diluted
|
|
(6.50)
|
|
|
(1.08)
|
|
|
(1.57)
|
|
|
(0.24)
|
|
|
Share-based
compensation
|
|
0.35
|
|
|
0.20
|
|
|
0.13
|
|
|
0.02
|
|
|
Impairment loss of
property, plant and equipment
|
|
2.50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss on disposal of
property, plant and equipment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Change in fair value of
contingent consideration liability
|
|
—
|
|
|
(0.40)
|
|
|
0.14
|
|
|
(0.02)
|
|
|
Provision for consumption
tax
|
|
0.23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax effect of
reconciliation items
|
|
(0.04)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Non-GAAP net
loss attributable to the
Company per ADS - Diluted
|
|
(3.46)
|
|
|
(1.28)
|
|
|
(1.30)
|
|
|
(0.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Gushan Environmental Energy Limited