China Gerui Advanced Materials Group Limited Announces Third Quarter 2013 Results and Reiterates Full-Year 2013 Revenue Guidance PR Newswire ZHENGZHOU, China, Nov. 27, 2013 ZHENGZHOU, China, Nov. 27, 2013 /PRNewswire-FirstCall/ --China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) ("China Gerui," or the "Company"), a leading high-precision, cold-rolled steel producer in China, today announced its unaudited financial results for the three and nine months ended September 30, 2013. "Although the third quarter's results were below expectations due to the continued challenging macroeconomic conditions impacting China's steel sector, we are confident that our previously issued guidance for the full fiscal year ended 2013 will be met," commented Mr. Mingwang Lu, Chairman and Chief Executive Officer of China Gerui. "We continue to be highly attentive to market conditions and we are being especially disciplined and strategic in terms of how we deploy our specialized steel lines so as to balance our well-earned market share with overcapacity in the sector resulting from intense competition.We continue to be well-positioned to bring to market a portfolio of new steel products in a strategic manner that we believe will optimize our return on investment." "Our revenue guidance for the full fiscal year 2013 was $165 million to $170 million and we expect our financial results for the year to fall within these parameters.Despite our third quarter results which reflected lower margins than that recorded historically, stemming from overcapacity that negatively impacted pricing in the sector, and which substantially lowered our average selling price, we believe that steel pricing could be at an inflection point due to likely changing fundamentals in our sector. In addition, based on the Company's preliminary operating results for the fourth quarter 2013, we believe that market demand for our products is gradually ramping, although it may still be some time before we see substantial margin improvement." "We achieved another quarter of positive cash flow with $0.7 million in EBITDA with reasonably stable volume given this highly challenging environment.Revenue from the sale of approximately 8,000 tons of cold-rolled steel was not recognized in the third quarter as two customers delayed their third quarter pickup which will now fall into the fourth quarter.The China Iron and Steel Association ("Association") reported that for the first nine months of 2013, its members reported an average gross margin of only 0.41%while for the month of September, 34% of members of the Association reported net losses due to decreasing steel prices." "The Company estimates that the utilization of its wide- and narrow-strip cold-rolled steel capacity was 44% in the third quarter of 2013 compared with approximately 47% during the second quarter of 2013. The Company's utilization of its chromium-plating production lines was approximately 38% in the 2013 third quarter compared to 43% during the second quarter of 2013. Based on the preliminary production schedule for the fourth quarter of 2013, the Company will see overall capacity utilization at approximately 65% on a blended basis, more similar to how the Company performed in the first quarter of 2013.The Company plans to deploy its more specialized steel lines as market conditions dictate." "Our investment thesis continues to be strong as we offer a greater range of cold-rolled steel products to the market that can compete with higher-priced imports, and we can now provide steel solutions to new customers we could not service before. Our more comprehensive steel product line differentiates us from many smaller steel producers who do not have the technology, financial resources, or customer relationships to effectively compete with us," concluded Chairman Mingwang Lu. Third Quarter 2013 Results Revenue decreased 44.9% to $30.9 million in the third quarter of 2013 from $56.1 million in the third quarter of 2012. The decrease in revenue was primarily due to a 3.4% decrease in the Company's average selling price to $674 per ton for the third quarter of 2013 as compared to an average selling price of $698 for the third quarter of 2012 as well as a 43.0% decrease in sales volume to approximately 45,797 tons for the third quarter of 2013 as compared to approximately 80,386 tons for the same quarter of 2012. Gross profit decreased to $0.7 million in the third quarter of 2013 from $8.8 million in the same quarter of 2012. Gross margin was 2.4% in the third quarter of 2013 compared to 15.7% in the third quarter of 2012.The decrease in gross profit compared with a year ago was due to lower sales as the economic slowdown in China continued and domestic consumption declined in the third quarter of 2013. Excess capacity and reduced steel demand continued to create the intense competition and pricing pressures currently in the marketplace during the quarter. The operating loss was $2.3 million in the third quarter of 2013 compared to operating income of $5.9 million for the third quarter of 2012. The decrease in operating income in the third quarter of 2013 was primarily due to a 91.5% decrease in gross profit. Net loss was $4.4 million in the third quarter of 2013, or nil per fully diluted share, compared to a net profit of $2.4 million, or $0.04 per share in the third quarter of 2012. Non-GAAP EBITDA was $0.7 million in the third quarter of 2013, or 2.3% of revenue, compared to $8.7 million, or 15.4% of revenue, in the third quarter of 2012. Non-GAAP EBITDA is defined as earnings before net interest expense, taxes, depreciation, and amortization incurred in the third quarter of fiscal year 2013.* * Please see the section below entitled "Use of Non-GAAP Adjusted Financial Measures" and the reconciliation table at the end of this press release for an explanation and quantitative comparison of the non-GAAP measures used in this press release to their GAAP equivalents. Nine Months 2013 Results Revenue for the nine months ended September 30, 2013 was $119.6 million, a decrease of 40.7% as compared to $201.6 million from the nine months ended September 30, 2012.Gross profit was $9.5 million, down 81.1% from $50.1 million in the nine months ended September 30, 2012.Gross margin was 7.9% compared to 24.9% in the same period of 2012.Non-GAAP EBITDA was $9.8 million adjusting for non-cash stock compensation expense, down 80.5% from $50.3 million in the same period of 2012. Financial Condition As of September 30, 2013, the Company had $192.9 million in unrestricted cash, $26.9 million in current certificates of deposit, and an additional $156.7 million in restricted cash, as compared to $228.9 million in unrestricted cash, $16.4 million in current certificates of deposit and an additional $145.4 million in restricted cash as of December 31, 2012. The Company's short-term debt consisted of notes payable, term loans and the short-term portion of the secured long-term loan, totaled $348.6 million at September 30, 2013, compared to $317.0 million as of December 31, 2012. The Company had $14.6 million in a secured long-term loan, net of current portion. Shareholders' equity was $304.3 million at September 30, 2013 as compared to $330.1 million as of December 31, 2012. Net cash used in operating activities for the first nine months ended September 30, 2013 was $25.5 million compared with $29.4 million of net cash flow used during the first nine months of 2012. 2013 Financial Guidance Update The Company is pleased to reiterate its full year 2013 revenue guidance in the range of $165 million to $170 million given the currently challenging market conditions.These conditions are characterized primarily by the volatility of raw material costs, overcapacity in the steel sector and slower than anticipated price recovery for premium processed steel. However, the Company may adjust such guidance as changing macroeconomic conditions and operational and competitive challenges dictate. Recent Developments Since the launch of the share repurchase program in April 2011, as of September 30, 2013 the Company had repurchased a total of 2,010,918 ordinary shares at an average price of $3.06 per share for a total repurchase price of approximately $6.2 million. Approximately $3.8 million remains from the $10.0 million for the share repurchase program as authorized by the Company's Board of Directors. Industry and Business Update The Chinese economy grew 7.8% in the third quarter, its fastest pace of the year and in-line with current expectations.The third quarter's GDP kept China on-track to achieve the government's growth target of 7.5% with GDP for the first nine months at 7.7%. The central government is taking actions to encourage consolidation in the steel industry to create a more balanced steel production and price environment to alleviate the current market conditions over time.Therefore, the Company believes that smaller steel companies or those with older technologies may be forced to merge or cease operations. At the Third Plenary Session of the Eighteenth Central Committee, the central government has determined to further open up a number of key domestic industries including steel-making, chemical and automobile manufacturing to foreign capital.This demonstrates the Chinese government's resolution to deepen reform and transform key domestic industries by leveraging foreign capital.Introducing foreign capital to the traditionally capital-intensive steel industry would help further more of a market-driven steel environment in China resulting in enhanced competiveness of domestic players without traditional Government support, an increased implicit technological content of steel products and an improved overall balanced demand and supply equation. As the steel processing market in China has continued to be depressed for nearly two years, forcing many companies competing on price to incur heavy losses or go out of business, beginning in the fourth quarter of 2013 China Gerui has determined to revise its strategy and act to more aggressively fulfill customer orders. This will enable the Company to solidify its market share, although profit margins will likely continue to be mediated in the short term. China Gerui is also planning to work with potential customers to better improve their production processes in order to utilize the Company's new laminated steel products thereby optimizing more throughput.To sustain a key competitive edge, the Company will continue to invest in R&D and ramp up its new product pipelines as market conditions dictate.China Gerui also plans to continue to expand its international sales in 2014 with the addition of international sales representatives, a global corporate business-to-business marketing and advertising strategy and the formation of an internal strategy and business development group. As we have previously disclosed, the Company also continues to explore strategic, cost-effective opportunities through the retention of Cambelle-Inland that will complement China Gerui's long-term growth strategy. "The third quarter saw an improvement in investment in real estate and fixed assets as well as relatively steady demand from certain industries such as automotive and heavy-duty equipment. We are further positioning China Gerui to become a substantial player in the global steel industry with a much larger global customer base through our comprehensive product mix and potential future opportunistic acquisitions to further our diversification and quickly build market share. To support our revised strategy of being more aggressive in the marketplace in order to sustain our market position and expand internationally, we have bolstered our sales and marketing efforts to expedite this strategy in 2014.In addition, by improving our production efficiency we expect to become an even more effective competitor and benefit from the next recovery in the Chinese steel market," Mr. Lu concluded. Conference Call Information The Company will also host a conference call at 8:00 am EST (9:00 pm Beijing Time) on Wednesday, November 27, 2013. Listeners may access the call by dialing +1 (877) 407-8133 five to ten minutes prior to the scheduled conference call time.International callers should dial +1 (201) 689-8040.A replay of the conference call will be available for 14 days starting from 12:00 pm EST on Wednesday, November 27, 2013. To access the replay, dial +1 (877) 660-6853.International callers should dial at +1 (201) 612-7415.The conference ID is 13573025. A live and archived webcast of the call will be available on the Company's website at http://www.geruigroup.com/Investors.html.To listen to the live webcast, please go to the Company's website at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. 2013 Second Quarter and First Six MonthsReclassification of Non-Cash Financial Information On February 26, 2013, the Company's subsidiary, Henan Green, entered into an equity/asset transfer agreement to acquire Zhengzhou Company via Henan Green. Zhengzhou Company owns a land use right totaling 24.94 acres, among which 6.69 acres of land has been leased to Henan Green. The Company accounted for this deal as an asset purchase and fully settled the payment on June 30, 2013, but the share transfer of Zhengzhou Steel and the land use right transfer are still in process. The predecessor's cost of US$17.4 million was included as part of the land use right, amortized over the life of the land use right and the difference was recorded in retained earnings as a dividend paid because it was acquired from a related party. (in U.S. AsstatedfortheSixMonths AfterreclassificationfortheSixMonths dollars) Ended June 30, 2013 Ended June 30, 2013 Loss before $(569,788) $(771,456) income tax EPS Nil Nil Dividend Nil $26,186,357 Paid Retained $162,536,868 $136,148,843 earnings The following table summarizes the carryover of the historical cost of the land use right of Zhengzhou Company at the acquisition date. Land use right $17,444,274 Cash consideration $43,630,631 Difference $26,186,357 Use of Non-GAAP Financial Measures This earnings release includes the use of non-GAAP EBITDA, which are financial measures that are not defined by U.S. generally accepted accounting principles, or U.S. GAAP. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has included with this press release a table which includes a reconciliation of non-GAAP EBITDA to the most directly comparable respective U.S. GAAP financial measures. Non-GAAP EBITDA is defined in this earnings release as earnings before interest, taxes, depreciation, and amortization that were incurred in the third quarter of 2013. The Company's management believes that the presentation of these non-GAAP financial measures provides useful information regarding the Company's results of operations because it assists in analyzing and benchmarking the performance and value of the Company's business. The Company's calculation of non-GAAP EBITDA may not be consistent with similarly titled measures of other companies. About China Gerui Advanced Materials Group Limited China Gerui Advanced Materials Group Limited is a leading niche and high value-added steel processing company in China. The Company produces high-end, high-precision, ultra-thin, high- strength, cold-rolled steel products that are characterized by stringent performance and specification requirements that mandate a high degree of manufacturing and engineering expertise. China Gerui's products are not standardized commodity products. Instead, they are tailored to customers' requirements and subsequently incorporated into products manufactured for various applications. The Company sells its products to domestic Chinese customers, with an emerging presence in international markets, in a diverse range of industries, including the food packaging, telecommunication, electrical appliance, and construction materials industries.For more information, please visit http://www.geruigroup.com. Safe Harbor Statement Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our Amendment No. 1 to annual report on Form 20-F for the year ended December 31, 2012 and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the SEC, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made. Company Contact: IR Contacts: Email: Vivian Chen Kevin Theiss firstname.lastname@example.org Website: Managing Director Account Director www.geruigroup.com Grayling Grayling Phone: 646-284-9427 Phone: 646-284-9409 Email: Email: email@example.com firstname.lastname@example.org - Financial Tables Follow - CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED BALANCE SHEETS (IN US DOLLARS) (Unaudited) September 30, 2013 December 31, 2012 Assets Current assets Cash $192,945,959 $228,861,009 Certificates of deposit 26,906,862 16,372,128 Restricted cash 156,692,625 145,413,726 Accounts receivable, net 5,335,510 2,276,153 Notes receivable 119,281 433,379 Inventories 48,374,321 22,762,545 Prepaid purchases 76,660,783 76,268,597 Prepaid expenses 1,527,993 382,569 Other receivables, net 10,901,012 2,270,073 Total current assets 519,464,346 495,040,179 Non-current assets Property, plant and equipment, net 135,958,517 134,110,657 Land use right, net 30,779,799 13,625,738 Deposit on acquisition of future - 24,076,660 land use right Deposit on acquisition of property, 2,343,301 266,312 plant and equipment Other receivable 3,084,483 3,039,835 Certificates of deposit 3,267,973 3,210,221 Total non-current assets 175,434,073 178,329,423 Total assets $694,898,419 $673,369,602 Liabilities and stockholders' equity Current Liabilities Accounts payable $2,917,312 $2,279,246 Notes payable 293,246,732 259,546,395 Term loans 48,692,810 57,462,962 Secured long-term loan, current 6,632,179 - portion Land use right payable 1,444,848 1,419,314 Income tax payable 333,180 5,140,306 Customers deposits 17,658,941 11,635,999 Accrued liabilities and other 5,055,801 5,818,060 payables Total current liabilities 375,981,803 343,302,282 Non-current liabilities Secured long-term loan, net of $14,609,651 - current portion Total non-current liabilities $14,609,651 - Total liabilities $390,591,454 $343,302,282 Stockholders' equity Common stock, Common stock, 100,000,000 shares authorized with no par value; 59,823,730 and 59,823,730 shares issued, 59,522,910 and 59,561,899 140,418,118 140,418,118 shares outstanding as of September 30, 2013 and December 31, 2012, respectively Additional paid-in capital 5,011,589 4,978,698 Treasury stock, at cost, 300,820 and 261,831 shares, (498,799) (414,063) as of September 30, 2013 and December 31, 2012, respectively Retained earnings 131,776,484 163,276,046 27,599,573 21,808,521 Accumulated comprehensive income Total stockholders' equity 304,306,965 330,067,320 Total liabilities and stockholders' $694,989,419 $673,369 equity CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED STATEMENTS OF (LOSS) / INCOME (UNAUDITED) (IN U.S. DOLLARS) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Revenue $ 30,927,996 $ $ 119,617,291 $ 56,123,028 201,596,558 Cost of (30,178,989) (47,331,341) (110,140,847) (151,503,911) revenue Gross Profit 749,007 8,791,687 9,476,444 50,092,647 Operating expenses: General and administrative (2,618,166) (2,548,672) (7,553,542) (7,429,203) expenses Selling and marketing (446,488) (374,818) (1,254,501) (988,615) expenses Total operating (3,064,654) (2,923,490) (8,808,043) (8,417,818) expenses Operating (2,315,647) 5,868,197 668,401 41,674,829 (loss)/income Other income and (expense): Interest 1,369,269 1,233,910 3,451,426 2,484,739 income Interest (3,490,793) (3,105,412) (9,430,475) (6,164,788) expenses Sundry 36,500 21,310 138,521 204,958 income (Loss)/Income before income (4,400,671) 4,018,005 (5,172,127) 38,199,738 taxes Income tax 28,312 (1,636,419) (141,078) (11,532,267) expense Net (loss) / $ (4,372,359) $ $ (5,313,205) $ income 2,381,586 26,667,471 Earnings per share - Basic $ $ $ $ Nil 0.04 Nil 0.46 - Diluted $ $ $ $ Nil 0.04 Nil 0.46 Weighted average common shares outstanding - Basic 59,522,910 57,935,604 59,546,926 58,131,188 - Diluted 59,522,910 57,935,604 59,546,926 58,131,188 CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN US DOLLARS) For The Nine Months Ended September 30, 2013 2012 Cash flows from operating activities: Net (loss) / income $(5,313,205) $26,667,471 Adjustments to reconcile net (loss) / income to net cash provided by operating activities: Depreciation of property, plant and equipment 8,422,157 8,129,037 Amortization of land use right 554,520 246,801 Stock-based compensation 32,891 - Changes in assets and liabilities: Accounts receivable, net (2,998,029) 2,679,379 Notes receivable, net 319,722 165,625 Inventories (25,032,121) (973,858) Prepaid expenses (861,582) (3,822,113) Prepaid purchases 973,285 (50,790,330) Other receivable (4,450,344) 219,656 Accounts payable 593,031 (4,569,113) Income tax payable (4,866,521) 952,863 Customers deposit 5,774,358 (9,216,363) Accrued liabilities and other payables 1,354,381 896,983 Net cash used in operating activities (25,497,457) (29,413,962) Cash flows from investing activities: Cash paid for property, plant and equipment (9,494,339) (5,887,409) Advance to unrelated third parties (5,678,030) (3,686,625) Repayment of advance to unrelated third parties 774,455 5,233,632 Repayment of advance to related party 310,496 - Repayment of advance from unrelated third party (1,668,035) - Investment in certificates of deposit (10,171,059) (12,497,034) Changes in restricted cash (8,604,390) (47,406,917) Net cash used in investing activities (34,530,902) (64,244,353) Cash flows from financing activities: Repayment of term loans (37,327,967) (31,638,061) Proceeds from term loans 27,590,236 39,547,576 Proceeds from secured long-term loan 21,098,416 - Proceeds from notes payable 458,268,956 403,068,892 Repayments from notes payable (429,433,913) (333,069,683) Purchase of treasury stock (84,736) (1,140,611) Dividend paid (19,214,984) - Net cash provided by financing activities 20,896,008 76,768,113 Net decrease in cash (39,132,351) (16,890,202) Effect on change of exchange rates 3,217,301 217,942 Cash as of January 1 228,861,009 246,600,917 Cash as of September 30 $192,945,959 $229,928,657 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest paid $9,357,242 $6,258,243 Income tax paid $5,007,600 $10,579,405 Net cash payment during the period for: Prepaid deposit of land use right as part of the dividend paid to acquire land $6,971,373 - use right from related company CHINA GERUI ADVANCED MATERIALS GROUP LIMITED RECONCILIATION OF NON-GAAP FINANCIAL DATA (UNAUDITED) (IN US DOLLARS) Non-GAAP EBITDA Third Quarter Ended September 30, 2013 2012 Net (Loss) / Income, GAAP amount per $(4,372,359) $2,381,586 consolidatedstatement of income Interest income (1,369,269) (1,233,910) Interest expenses 3,490,793 3,105,412 Income tax expense (28,312) 1,636,419 Depreciation of property, plant and equipment 2,819,417 2,683,372 Amortization of land use right 184,581 82,139 Non-GAAP EBITDA $724,851 $8,655,018 Non-GAAP EBITDA Nine Months Ended September 30, 2013 2012 Net(Loss)/Income,GAAPamountperconsolidatedstatementofincome $(5,313,205) $26,667,471 Interest income (3,451,426) (2,484,739) Interest expenses 9,430,475 6,164,788 Income tax expense 141,078 11,532,267 Depreciation of property, plant and equipment 8,422,157 8,129,037 Amortization of land use right 554,520 246,801 Stock based compensation 32,891 - Non-GAAP EBITDA $9,816,490 $50,255,625 2013 Second Quarter and First Six Months Reclassified Financials CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED BALANCE SHEETS (IN US DOLLARS) (Unaudited) June 30, 2013 December 31, 2012 Assets Current assets Cash $ 203,573,315 $ 228,861,009 Certificates of deposit 27,971,127 16,372,128 Restricted cash 169,845,051 145,413,726 Accounts receivable, net 7,528,934 2,276,153 Notes receivable - 433,379 Inventories 24,598,947 22,762,545 Prepaid purchases 120,454,584 76,268,597 Prepaid expenses 950,389 382,569 Other receivables 1,049,489 2,270,073 Total current assets 555,971,836 495,040,179 Non-current assets Property, plant and equipment, net 138,983,868 134,110,657 Land use right, net 30,921,978 13,625,738 Deposit on acquisition of future - 24,076,660 land use right Deposit on acquisition of 790,087 266,312 property, plant and equipment Other receivable 3,075,738 3,039,835 Certificates of deposit 3,258,708 3,210,221 Total non-current assets 177,030,379 178,329,423 Total assets $ 733,002,215 $ 673,369,602 Liabilities and stockholders' equity Current Liabilities Accounts payable $ 17,067,680 $ 2,279,246 Notes payable 315,878,059 259,546,395 Term loans 61,589,598 57,462,962 Land use right payable 1,440,751 1,419,314 Income tax payable 1,771,519 5,140,306 Customers deposits 20,467,262 11,635,999 Accrued liabilities and other 6,786,234 5,818,060 payables Total current liabilities 425,001,103 343,302,282 Total liabilities 425,001,103 343,302,282 Stockholders' equity Common stock, 100,000,000 shares authorized with no par value; 59,823,730 and 59,823,730 shares issued, 140,418,118 140,418,118 59,522,910 and 59,561,899 shares outstanding as of June 30, 2013 and December 31, 2012, respectively Additional paid-in capital 5,011,589 4,978,698 Treasury stock, at cost, 300,820 and 261,831 shares, (498,799) (414,063) as of June 30, 2013 and December 31, 2012, respectively Retained earnings 136,148,843 163,276,046 Accumulated comprehensive income 26,921,361 21,808,521 Total stockholders' equity 308,001,112 330,067,320 Total liabilities and stockholders' $ 733,002,215 $ equity 673,369,602 CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (IN US DOLLARS) (UNAUDITED) For the Three Months Ended For the Six Months Ended June 30, June 30, 2013 2012 2013 2012 Revenue $ 43,078,588 $ 76,783,963 $ 88,689,295 $ 145,473,530 Cost of revenue (39,557,743) (56,975,825) (79,961,858) (104,172,570) Gross Profit 3,520,845 19,808,138 8,727,437 41,300,960 Operating expenses: General and administrative (2,532,275) (2,511,170) (4,935,376) (4,880,531) expenses Selling and marketing (73,666) (506,711) (808,013) (613,797) expenses Total operating (2,605,941) (3,017,881) (5,743,389) (5,494,328) expenses Operating income 914,904 16,790,257 2,984,048 35,806,632 Other income and (expense): Interest income 845,618 624,578 2,082,157 1,250,829 Interest (2,580,151) (2,028,459) (5,939,682) (3,059,376) expenses Sundry income 3,423 24,911 102,021 183,648 (Loss)/Income before (816,206) 15,411,287 (771,456) 34,181,733 income taxes Income tax expense (29,566) (5,136,010) (169,390) (9,895,848) Net (loss) / income $ (845,772) $ 10,275,277 $ (940,846) $ 24,285,885 Earnings per share - Basic $ Nil $ 0.18 $ $ 0.42 Nil - Diluted $ $ 0.18 $ $ 0.42 Nil Nil Weighted average common shares outstanding - Basic 59,556,396 58,203,179 59,559,133 58,230,054 - Diluted 59,556,396 58,203,179 59,559,133 58,230,054 CHINA GERUI ADVANCED MATERIALS GROUP LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN US DOLLARS) (UNAUDITED) For The Six Months Ended 2013 2012 Cash flows from operating activities: Net (loss) / income $ (940,846) $ 24,285,885 Adjustments to reconcile net (loss) / income to net cash provided by operating activities: Depreciation of property, plant and 5,602,740 5,445,665 equipment Amortization of land use right 369,939 164,662 Amortization of intangible asset - 2,730 Stock-based compensation 32,891 - Changes in assets and liabilities: Accounts receivable, net (5,181,508) 2,688,177 Notes receivable, net 436,815 75,515 Inventories (1,482,042) 723,341 Prepaid expenses (1,074,146) (2,240,101) Prepaid purchases (42,729,770) (30,503,908) Other receivable 147,453 143,083 Accounts payable 14,649,698 26,426,165 Income tax payable (3,422,061) 3,329,166 Customers deposit 8,594,318 (5,288,776) Accrued liabilities and other payables 2,538,767 (276,963) Net cash (used in) / provided by (22,457,752) 24,974,641 operating activities Cash flows from investing activities: Cash paid for property, plant and (7,855,584) (1,646,177) equipment Payment of purchases intangible asset - (16,435) Advance to unrelated third parties - (3,689,485) Repayment of advance to unrelated third 772,012 5,237,692 parties Repayment of advance to related party 315,177 - Repayment of advance from unrelated (1,617,835) - third party Investment in certificates of deposit (11,271,457) (4,432,764) (22,077,780) (28,048,733) Changes in restricted cash Net cash used in investing activities (41,735,467) (32,595,902) Cash flows from financing activities: Repayment of term loans (14,560,515) (14,248,171) Proceeds from term loans 17,796,185 17,414,432 Proceeds from notes payable 313,644,821 247,601,558 Repayments from notes payable (261,603,922) (204,144,635) Purchase of treasury stock (84,736) (571,496) Dividend paid (19,214,984) - Net cash provided by financing 35,976,849 46,051,688 activities Net (decrease)/increase in cash (28,216,370) 38,430,427 Effect on change of exchange rates 2,928,676 (2,191,610) Cash as of January 1 228,861,009 246,600,917 Cash as of June 30 $ 203,573,315 $ 282,839,734 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest paid $ $ 5,895,801 3,153,604 Income tax paid $ $ 3,591,451 6,566,682 Net cash payment during the period for: Prepaid deposit of land use right as part of the dividend paid to $ $ 6,971,373 - acquire land use right from related company CHINA GERUI ADVANCED MATERIAL GROUP LIMITED RECONCILIATION OF NON-GAAP FINANCIAL DATA (UNAUDITED) (IN US DOLLARS) Non-GAAP EBITDA Second Quarter Ended June30, 2013 2012 Net (Loss) / Income, GAAP amount per $(845,772) $10, 275,277 consolidatedstatement of income Interest income (845,618) (624,578) Interest expenses 2,580,151 2,028,459 Income tax expense 29,566 5,136,010 Depreciation of property, plant and equipment 2,818,472 2,724,266 Amortization of land use right 286,288 82,110 Non-GAAP EBITDA $4,023,087 $19,621,544 SOURCE China Gerui Advanced Materials Group Limited Website: http://www.geruigroup.com Website: http://www.geruigroup.com/Investors.html
China Gerui Advanced Materials Group Limited Announces Third Quarter 2013 Results and Reiterates Full-Year 2013 Revenue
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