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Gulf Resources Provides 2007 Financial Guidance
Published May 29th, 2007
Management Expects to Report Revenues of $45 Million and Net Income of $11 Million
LOS ANGELES and SHENZHEN, China, May 29 /Xinhua-PRNewswire/ -- Gulf Resources, Inc. (the "Company") (OTC Bulletin Board: GUFR - News) today announced financial guidance for 2007.
Management expects to report 2007 revenues of $45 million, an increase of approximately 150 percent from $17.8 million reported for calendar 2006. Net income is expected to increase approximately 820 percent to $11 million from the $1.2 million reported in 2006, which included a $5.3 million non-cash equity compensation charge. These estimates do not include any potential future non-cash charges related to the amortization of goodwill from previously completed acquisitions.
The guidance provided today includes the February 2007 acquisition of Shuoguang Yuxin Chemical Industry Company Limited ("SYCI") and the recent asset purchase of a bromine producer named Shouguang City Qinshuibo Area by the Company's subsidiary Shuoguang City Haoyuan Chemical Company Limited "SCHC". Management expects that its core bromine business will grow approximately 8.6 percent year over year and that it will process, produce and ship approximately 10,900 tons of bromine for the 2007 calendar year, equating to $29 million in total revenue. Through new product introductions, a targeted sales approach, and extensive customer support, the Company expects its "SYCI" subsidiary to contribute revenue of $16 million, which equates to 13.4 percent organic growth compared to 2006.
"Management has identified several incremental bromine acquisition opportunities located in close proximity to its current operations. With a number of these production facilities not maintaining the appropriate governmental licenses, this represents an ideal time for "SCHC" to purchase, consolidate and increase production output and manufacturing efficiencies. Any contemplated acquisition is expected to be incremental to this guidance," stated Gulf Resources Inc. CEO Mr. Ming Yang.
"We are experiencing growth in both of our operating subsidiaries, which is being driven through organic expansion and targeted acquisitions. In our "SCHC" subsidiary, we anticipate significantly increasing the number of bromine wells and convey trench lines and leveraging a new integrated production process to improve yield. Given the supply and demand characteristics in the domestic market, we are in a position to sell everything we can produce. Further, we believe "SYCI" was a complementary addition, and given its broad chemical product portfolio and recent entry into the Power Generation Market we are optimistic about further growth in this business. We will continue to prudently manage costs by leveraging purchasing power for raw materials, utilizing our work force over an expanded production field while passing shipping costs to our customers, which we anticipate will collectively enable us to further enhance profit margins on a go forward basis."