updated 11/16/2010 7:17:05 AM ET 2010-11-16T12:17:05

ZIBO CITY, China, Nov. 16, 2010 (GLOBE NEWSWIRE) -- China Chemical Corp. (OTCQB:CHCC) ("China Chemical" or the "Company"), a manufacturer of organic chemicals for broad consumer goods applications, today announced its financial results for the third quarter ended September 30, 2010. A summary of the financial data is provided below (in millions, except EPS and share data):

Financial Highlights

For the nine months ended September 30, 2010 and 2009, respectively, the Company reported:

  • Revenue of $51.7 million, which represents an increase of 30.44% from $39.7 million;
     
  • Gross profit of $10.5 million, which represents an increase of 58.34% from $6.7 million;
     
  • Gross margin of 20.38% compared to a gross margin of 16.79%;
     
  • Net income of $9.0 million, which represents an increase of 42.44% from $6.3 million;
     
  • Diluted EPS of $0.30 compared to $0.21;
     
  • EBITDA of $16.3 million compared to $12.8 million;
     
  • EBITDA per diluted share of $0.54 compared to $0.43

Lu Feng, China Chemical Corp.'s Chief Executive officer, stated: "We are pleased to release these third quarter results. Our revenue numbers strongly reflect the growing demand for our chemical products in China. With demand being fuelled by the high growth rates of various downstream industries, these results are in line with our current projections for the 2010 fiscal year. For example, China's automobile industry, a major user of our products, sold 13.6 million cars in 2009 and is expected to sell 17 million in 2010, which will support our strategic plan to double our maleic anhydride capacity this year."

Third Quarter 2010 Results of Operations

Revenues

The Company's revenue for the three months ended September 30, 2010 was $19.0 million, which represented an increase of 16.29% from the same period last year. The increase was due to the increase in sales price of maleic anhydride and phthalic anhydride as compared to the same period last year.

Gross Profit

Gross profit for the three months ended September 30, 2010 was $4.1 million as compared to $4.0 million for the three months ended September 30, 2009. The increase of $84,582, or 2.09%, was primarily due to to an increase in sales volume compared to the same period last year. Costs of goods sold for the three-month period were $14.9 million, as compared to $12.4 million for the same period a year ago. The Company's gross margin was 21.65% and 24.66% for the three months ended September 30, 2010 and 2009, respectively.

Income from Operations

Operating income for the three months ended September 30, 2010 amounted to $3.8 million as compared to $3.6 million for the three months ended September 30, 2009. The increase of $168,352 was primarily due the increase in sales prices as compared to the same period last year. Operating expenses for the three months ended September 30, 2010 totaled $351,400 as compared to $435,170 for the same period a year ago. The decrease was due to a decrease in a consulting fee of $96,215 for the same period last year.

Net Income

Net income for the three months ended September 30, 2010 was $3.4 million as compared to $3.5 million for the three months ended September 30, 2009, due to the reasons set forth above. Earnings per diluted share were $0.11 for the quarter, compared with diluted EPS of $0.12 for the same period last year.

Including comprehensive income, the Company currently has comprehensive income per share of $0.34. The current component of the Company's other comprehensive income is the foreign currency translation adjustment.

Other Notable Announcements

  • China Chemical has retained a new independent auditing firm, Weinberg & Company, P.A. Weinberg & Company provides audit and advisory services to public and privately held entities. It has undergone a peer review performed by an AICPA-approved CPA firm, is a member of the AICPA Division of Firms SEC and Private Companies Practices Sections, and is registered with the Public Company Accounting Oversight Board (PCAOB).
     
  • The Company announced that it has changed its fiscal year for reporting purposes from a fiscal year ending August 31 to a fiscal year ending December 31 to bring it more in line with industry standards.

About China Chemical Corp.

China Chemical Corp. is a Zibo City, China-based manufacturer of organic chemical compounds used in high-performance plastics, PVC, elastic fibers, paints, tires, insulation, flooring, adhesives, medicines, food processing, ink, and paper. The Company's primary products are Phthalic Anhydride (PA) and Maleic Anhydride (MAH), which have a wide variety of applications in the construction, automotive, aviation, marine, and consumer goods industries. China Chemical currently has the capacity to produce 30,000 tons of MAH and 50,000 tons of PA annually. In addition the Company expects to expand its MAH capacity by an additional 30,000 tons during the fourth quarter of 2010. The Company began site development in October 2010 for a 50,000-ton-capacity 1,4-butanediol (BDO) co-generation plant.

For more information about China Chemical Corp., please visit the Company's website at http://www.chinachemicalcorp.com .

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. For additional information, readers should carefully review reports or documents the Company files periodically with the Securities and Exchange Commission.

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com