China Gerui Advanced Materials Group Limited Announces Third Quarter 2013 Results and Reiterates Full-Year 2013 Revenue

  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
investors@geruigroup.com
Website:                 Managing Director        Account Director
www.geruigroup.com
                         Grayling                 Grayling
                         Phone: 646-284-9427      Phone: 646-284-9409
                         Email:                   Email:
                         vivian.chen@grayling.com kevin.theiss@grayling.com



- 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
 
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