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China Armco Metals Reports Record Financial
Results for the Second Quarter of 2008
Aug 19, 2008
China Armco Metals, Inc. ("Armco") (OTCBB: CNAM), a distributor of
imported metal ores and scrap metal recycler, announced the
Company's financial results for the second quarter of 2008.
Financial Highlights
Revenues for the second quarter ended June 30, 2008 increased to $13
million as compared to revenues of $5.7 million in the second
quarter ended June 30, 2007. The increase in revenues was mainly
attributable to increased sales from its metals distribution
business in China. Net income for the second quarter of 2008 was
$1.8 million attributable primarily to increased sales and the
income generated from the favorable termination of a contract with
one of our customers, as compared to $588,000 in the second quarter
of 2007. On a diluted basis, earnings per share for the second
quarter of 2008 were $0.24 as compared to $0.08 in the second
quarter of 2007.
The record performance for the first six months of 2008 was driven
by a strong first half performance in our metals distribution
business as sales reached a record $22.8 million for the first six
months of 2008 as compared to $9 million for the same period in
2007. On a diluted basis, earnings per share for the first six
months of 2008 were $0.34 as compared to $0.04 in the same period in
2007.
Balance Sheet
At June 30, 2008, total assets were $18.7 million, an increase of
over 98% from the $9.9 million at June 30, 2008. At June 30, 2008,
shareholder equity reached $7.9 million and total current assets
reached $16.4 million with working capital of approximately $5.6
million.
2008 Financial Guidance
The company recently raised $7.4 million through a private equity
placement in July and August of 2008. Substantially all of the net
proceeds from the offering will be used to expand the company's
operations into scrap steel production through the construction of a
planned facility in China. The increased capital will also be used
to expand its metals distribution operations. Management expects to
see continued robust growth in both revenue and earnings for the
remainder of 2008. For the full year of 2008, management anticipates
that its net income will exceed $6 million.
Commenting on the quarter, Mr. Kexuan Yao, CEO and Chairman of China
Armco Metals, Inc., stated, "We are pleased with the strong growth
of our operations in the first half of 2008 and excited at the
prospects for the future. Our current business demonstrated strong
top line growth and the recently raised capital will enable us to
enter the scrap steel industry. Management believes scrap steel will
drive substantial growth in 2009 as the China steel industry has
made substantial investments to increase steel recycling
capabilities. We are in the best financial position in the history
of our company and are ready to take advantage of the vast
opportunities in front of us. We look forward to a strong second
half of the year as we build our new operations for the future."
About China Armco Metals, Inc.
China Armco Metals, Inc. (OTCBB: CNAM) is engaged in China in the
sale and distribution of metal ores and non-ferrous metals to the
metal refinery industry in China. Armco intends to enter into the
steel recycling industry by constructing a steel recycling facility
initially capable of recycling 1 million tons of steel scrap
annually. Armco supplies a range of raw materials and scrap metals
for various metal refining and steel manufacturing industries.
Through its U.S.-based operations, the company is a distributor of
organic fertilizer products used to improve soil and growing
conditions for the potato farmers of eastern Idaho. These products,
which are bio-based rather than petroleum-based, add nutrients to
the soil and serve as fungicides so as to increase the size and
quality of crops.
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