* 2nd Quarter Revenues Reach $40.45 Million BOCA RATON, Fla., Aug.
8 /PRNewswire-FirstCall/ -- China Direct, Inc. (OTC:CHND) (BULLETIN
BOARD: CHND) , a company maintaining active, majority stakes in a
diversified portfolio of Chinese companies as well as offering
consulting services for both private and publicly traded Chinese
entities, announced today the Company's financial results for the
second quarter of 2007 ended June 30, 2007. Financial Highlights
Revenues for the second quarter ended June 30, 2007 increased to
$40,452,970 as compared to revenues of $180,417 in the second
quarter ended June 30, 2006. The increase in revenues was primarily
attributable to the three Chinese entities acquired since October
2006, Chang Magnesium, Lang Chemical and CDI Wanda, as well as a
strong performance from our consulting division. Gross profit for
the second quarter of 2007 was $3,710,589 as compared to $46,883 in
the second quarter ended June 30, 2006. Total operating expenses
for the second quarter of 2007 increased to $847,417 compared to
$509,200 in the second quarter of 2006. The increase in operating
expenses in the second quarter of 2007 was primarily attributable
to increased staffing associated with the financial management and
integration of our expanded operations in China. The company also
experienced increases in travel expenses, professional consulting
fees, professional insurance premiums, as well as non- cash option
charges for employees, management, and professional advisors. Net
income for the second quarter of 2007 increased to $2,267,742 or
$0.16 per basic share, as compared to a loss of $(362,697) or a
loss of $(0.04) per basic share for the second quarter of 2006. On
a fully diluted basis, earnings per share for the second quarter of
2007 were $0.15 per share as compared to a loss of $(0.04) per
share for the second quarter of 2006. For the first six months,
revenues increased to $71,391,910 as compared to revenues of
$386,832 during the first six months of 2006. Gross profit for the
six months ended June 30, 2007 was $7,182,515 as compared to
$238,038 for the six months ended June 30, 2006. Total operating
expenses for the second quarter of 2007 increased to $1,684,926 as
compared to $853,340 for the six months ended June 30, 2006. Net
income for the six months ended June 30, 2007 increased to
$4,138,611 or $0.31 per basic share as compared to a loss of
$(180,268) or a loss of $(0.02) per basic share for the six months
of 2006. On a fully diluted basis, the earnings per share for the
six months of 2007 were $0.27 per share as compared to a loss of
$(0.02) per share for the six months of 2006. Balance Sheet As of
June 30, 2007, total assets were $37,263,534, an increase of 78.8%
from $20,835,405 as of December 31, 2006. As of June 30, 2007,
shareholder equity reached $12,526,930, an increase of 113.6% from
$5,864,324 as of December 31, 2006. As of June 30, 2007, cash and
cash equivalents were $8,132,795 and working capital was
approximately $14.45 million, compared to cash and cash equivalents
of $3,030,335 and working capital of approximately $6.8 million as
of December 31, 2006, respectively. 2007 Financial Guidance As a
result of stronger than expected performance in the first six
months in 2007 and its current outlook for the remainder of the
year, management anticipates that annual sales will now exceed $150
million as opposed to its previous 2007 estimate of $120 million.
This new guidance for 2007 does not take into consideration any
potential acquisitions that the company may be contemplating nor
does it include any revenues from the new magnesium facilities
currently under construction. Management also now believes that net
income will exceed $8.25 million in 2007 as opposed to its previous
guidance of net income of $6 million. Management evaluates its
outlook on a quarterly basis and will communicate any changes in
its business outlook following the third quarter results. Dr. James
Wang, CEO and Chairman of China Direct, stated "We are very pleased
with the financial performance of our four divisions during the
first six months of 2007. We anticipate that this strong
performance will carry over into the second half of the year.
Management is diligently working to improve profit margins across
all of our divisions by focusing on controlling operational
expenses and building new manufacturing facilities to increase
production in response to demand. Based on our strong cash flow and
the recent warrant exercise in which we received $4.2 million, the
company is in a strong financial and operational position to pursue
new acquisition opportunities. We are confident that our strong
balance sheet will enable management to effectively deploy capital
throughout our divisions to increase capacity and marketing
capabilities as we head into the second half of 2007 and beyond
into 2008. We look forward to building on this positive momentum as
we strive to achieve continued growth in both our top and bottom
line performance." China Direct Conference Call to discuss the
Company's financial results for the Second Quarter of 2007 ended
June 30, 2007. The conference call will take place at 4:30 p.m. EDT
on Wednesday, August 8, 2007. Anyone interested in participating
should call 1-800-936-9754 if calling within the United States or
1-973-935-2048 if calling internationally approximately 5 to 10
minutes prior to 4:30 p.m. Participants should ask for the China
Direct 2007 Second Quarter Financial Results conference call. There
will be a playback available until August 15, 2007. To listen to
the playback, please call 1-877-519-4471 if calling within the
United States or 1-973-341-3080 if calling internationally. Please
use the pass code 9081157 for replay. This call is being webcast by
ViaVid Broadcasting and can be accessed at China Direct's website
at http://www.cdii.net/. The webcast may also be accessed at
ViaVid's website at http://www.viavid.net/. The webcast can be
accessed through August 31, 2007 on either site. To access the
webcast, you will need to have the Windows Media Player on your
desktop. For the free download of the Media Player, please visit:
http://www.microsoft.com/windows/windowsmedia/en/download/default.asp
CHINA DIRECT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET June
30, 2007 (Unaudited) ASSETS Current Assets: Cash and cash
equivalents $8,132,795 Notes receivable 192,031 Investment in
marketable securities held for sale 3,060,463 Investment in
marketable securities held for sale- related party 1,511,340
Accounts receivable, net of allowance for doubtful accounts $8,485
10,250,851 Inventories 1,634,963 Prepaid expenses and other assets
6,003,756 Prepaid expenses-related party 418,875 Other receivables
683,451 Due from related party 1,434,946 Total current assets
33,323,471 Property, plant and equipment, net of accumulated
depreciation of $292,239 3,577,621 Prepaid expenses 295,776
Property use rights, net 66,666 Total assets $37,263,534
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Loan
payable-short term $167,540 Accounts payable and accrued expenses
5,229,225 Accounts payable-related party 4,692,308 Liabilities in
connection with acquisitions-related party 368,272 Advances from
customers 3,395,088 Deferred revenues-short term 1,311,635 Other
payables 3,166,027 Income tax payable 528,099 Due to related party
17,336 Total current liabilities 18,875,530 Deferred revenues-long
term 248,950 Minority interest 5,612,124 Stockholders' Equity:
Preferred Stock: $.0001 par value, 10,000,000 authorized, no shares
issued and outstanding - Common Stock; $.0001 par value,
1,000,000,000 authorized, 14,900,433 issued and outstanding 1,490
Additional paid-in capital 8,232,472 Deferred compensation
(140,920) Accumulated comprehensive loss (334,878) Retained
earnings 4,768,766 Total stockholders' equity 12,526,930 Total
liabilities and stockholders' equity $37,263,534 CHINA DIRECT, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Un-audited)
For the Three For the Six Ended Months Months Ended June 30, June
30, 2007 2006 2007 2006 Revenues $40,012,970 $135,417 $70,511,910
$241,832 Revenues-related party 440,000 45,000 880,000 145,000
Total revenues 40,452,970 180,417 71,391,910 386,832 Cost of
revenues 36,742,381 133,534 64,209,395 148,794 Gross profit
3,710,589 46,883 7,182,515 238,038 Operating expenses: Selling,
general, and administrative 847,417 503,648 1,684,926 842,088
Selling, general, and administrative-related party - 5,552 - 11,252
Total operating expenses 847,417 509,200 1,684,926 853,340
Operating income (loss) 2,863,172 (462,317) 5,497,589 (615,302)
Other income (expense): Other income 371,433 - 381,369 - Interest
income 41,855 - 71,021 - Unrealized gain (loss) on trading
securities - (138,175) - 273,500 Realized gain on sale of
marketable securities 206,236 - 206,236 43,345 Realized gain on
sale of marketable securities- related party (16,041) - (32,014) -
Net income (loss) before income taxes 3,466,655 (600,492) 6,124,201
(298,457) Income taxes (expenses) benefits (522,159) 237,795
(754,731) 118,189 Net income before minority interest 2,944,496
(362,697) 5,369,470 (180,268) Minority interest in income of
subsidiary (676,754) - (1,230,859) - Net income (loss) $2,267,742
$(362,697) 4,138,611 $(180,268) Foreign currency translation gain
167,891 - 248,049 - Unrealized gain (loss) on marketable securities
held for sale, net of income taxes 48,315 - (559,224) - Unrealized
gain (loss) on marketable securities held for sale-related party,
net of income taxes (214,624) 253,680 (556,082) 1,395,240
Comprehensive income (loss) $2,269,324 $(109,017) $3,271,354
$1,214,972 Basic earnings (loss) per common share $0.16 $(0.04)
$0.31 $(0.02) Diluted earnings (loss) per common share $0.15
$(0.04) $0.27 $(0.02) Basic weighted average common shares
outstanding 13,882,955 10,000,000 13,464,666 10,000,000 Diluted
weighted average common shares outstanding 15,380,420 10,000,000
15,174,110 10,000,000 About China Direct, Inc. China Direct, Inc.
(OTC:CHND) (BULLETIN BOARD: CHND) maintains active, majority stakes
in a diversified portfolio of Chinese companies as well as offering
consulting services for both private and publicly traded Chinese
entities. China Direct provides a platform to develop and nurture
these entities as they expand their businesses globally. As a
direct link to China, our Company serves as a vehicle to allow
investors to directly participate in the rapid growth of the
Chinese economy in a diversified and balanced way. For more
information about China Direct, please visit http://www.cdii.net/.
Safe Harbor Statement This news release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward- looking statements are based on
current expectations or beliefs, including, but not limited to,
statements concerning the Company's operations, financial
performance and, condition. For this purpose, statements that are
not statements of historical fact may be deemed to be
forward-looking statements. The Company cautions that these
statements by their nature involve risks and uncertainties, and
actual results may differ materially depending on a variety of
important factors, including, but not limited to, the impact of
competitive products, pricing and new technology; changes in
consumer preferences and tastes; and effectiveness of marketing;
changes in laws and regulations; fluctuations in costs of
production, and other factors as those discussed in the Company's
reports filed with the Securities and Exchange Commission from time
to time. In addition, the company disclaims any obligation to
update any forward-looking statements to reflect events or
circumstances after the date hereof. DATASOURCE: China Direct, Inc.
CONTACT: Investor Relations, Alan Sheinwald, Partner of HC
International, Inc., +1-914-669-0222, ; or Richard Galterio,
Executive Vice President of China Direct, Inc., +1-877-China-57,
Web site: http://www.cdii.net/
Copyright