Lihua International Reports Fourth Quarter and Full-Year 2013 Financial Results

   Lihua International Reports Fourth Quarter and Full-Year 2013 Financial
                                   Results

Full-Year 2013 Revenue of $900.7 Million and Net Income of $56.2 Million

PR Newswire

DANYANG, China, March 17, 2014

DANYANG, China, March 17, 2014 /PRNewswire/ -- Lihua International, Inc.
(NASDAQ: LIWA) ("Lihua" or the "Company"), a leading Chinese developer,
designer, and manufacturer of low cost, high quality alternatives to pure
copper products, including refined copper products, copper wire and copper
clad aluminum ("CCA") cable and wire, today announced financial results for
the fourth quarter and full-year ended December 31, 2013.

"2013 was a transitional year for Lihua as we invested in critical upgrades
and process improvements to our facilities and prepared to launch a new higher
technology, higher quality CCA superfine wire product," said Mr. Jianhua Zhu,
founder, chairman and CEO. "Although these enhancements resulted in fewer
production days, and therefore, reduced sales and profitability, we believe
these developments will help to drive improvement on both the top and bottom
lines in the future."

"We remain modestly positive about the outlook for Lihua, despite relatively
weak infrastructure spending in China and persistent narrower spreads between
the purchase price of our raw materials and the average copper market price,"
Mr. Zhu continued. "During the year, we continued to strengthen our balance
sheet and cash flow from operations, and we have no debt. We plan to gradually
ramp up production and sales of our new CCA superfine wire product in 2014,
and expect this new, higher margin product to eventually replace our old CCA
product. Additionally, we have taken the production process for this new
product completely in-house, creating a one-stop-shop experience by adding the
ability to bind and draw pure copper and pure aluminum together ourselves. We
believe these changes, along with our strong cash position provide a solid
foundation on which to grow our business and improve market share in 2014."

2013 and Recent Business Highlights

  oIn March 2014, completed the modifications to the dust collection system.
  oCommenced pre-commercial marketing activities for the new CCA cable and
    wire product, installed production equipment and commenced batch
    production for this new product in the fourth quarter.
  oFinished construction of all production, warehousing and storage
    facilities on 30-acre campus, including facilities to house the production
    equipment for the new CCA cable and wire product.
  oCompleted construction of and launched production on the Company's third
    dedicated copper anode smelter.

Fourth Quarter 2013 Financial Results

Sales for the fourth quarter of 2013 were $217.3 million, compared with sales
of $254.9 million for the fourth quarter of 2012. The decrease in revenue was
primarily due to the suspension of production in December of the copper rod
smelter for the maintenance upgrade, and to lower average selling prices for
all Lihua products due to the decline in copper prices.

Lihua's copper wire, CCA wire, copper anode and copper rod products accounted
for sales of $76.7 million, $12.6 million, $112.7 million and $15.3 million,
respectively in the fourth quarter of 2013. This compares with copper wire
sales of $87.4 million, CCA wire sales of $15.1 million, copper anode sales of
$129.7 million and copper rod sales of $22.7 million in the fourth quarter of
2012. During the fourth quarter of 2013, the average selling price of Lihua's
products was $7,541 per ton, compared with $8,110 per ton in the same period
last year. The decline in the average selling price was primarily related to
the overall decline in copper prices compared with the same period last year.

Gross profit for the fourth quarter of 2013 was $20.5 million, a decrease of
17.9% from gross profit of $24.9 million for the fourth quarter of 2012. As a
percentage of total sales, gross margin was 9.4% in the fourth quarter of
2013, compared with 9.8% for the same period last year. The slight decrease in
gross margin was due to an increased copper anode component in the product
mix, which is a lower margin product relative to our other wire products, as
well as a narrower spread between the Company's raw material cost and the
products selling price.

Selling, general and administrative ("SG&A") expenses for the fourth quarter
of 2013 were $2.6 million, compared with $3.4 million in the same period of
2012. 

For the three months ended December 31, 2013, provision for income taxes was
$4.8 million, compared with $5.7 million for the three months ended December
31, 2012. The effective tax rate for the fourth quarter of 2013 was 26.5%,
compared with 26.7% for the fourth quarter of 2012.

Net income for the fourth quarter of 2013 was $13.2 million, or $0.44 per
share, compared with net income of $15.8 million, or $0.52 per share, for the
fourth quarter of 2012. Per share figures for both the 2013 and 2012 periods
are based on 30.0 million weighted average diluted shares outstanding.

Non-GAAP net income for the fourth quarter of 2013 was $13.3 million, or $0.44
per diluted share, compared with non-GAAP net income of $15.9 million, or
$0.52 per diluted share, for the fourth quarter of 2012. Non-GAAP net income
excludes the aggregate impact of warrant-related non-cash loss of $0.05
million and $0.1 million in the fourth quarters of 2013 and 2012,
respectively.

Adjusted EBITDA for the three months ended December 31, 2013 was $19.1
million, compared with $22.9 million for the same period in the prior year.

Summary 2013 Financial Results

Revenue for 2013 was $900.7 million, compared with $853.8 million for the
full-year of 2012. For the full year of 2013, gross profit was $86.4 million,
net income was $56.2 million and diluted earnings per share were $1.87.
Non-GAAP net income was $56.3 million for 2013 and non-GAAP diluted earnings
per share were $1.88 for the year. Adjusted EBITDA for 2013 was $80.0 million.

Balance Sheet and Cash Flow

As of December 31, 2013, Lihua had $203.4 million, or $6.78 per diluted share,
in cash and cash equivalents, compared with $144.3 million, or $4.82 per
diluted share, as of December 31, 2012. Cash flow from operations for 2013 was
$61.0 million, compared with cash flow from operations of $48.7 million in
2012. As of December 31, 2013, Lihua had working capital of $274.6 million and
no debt.

Outlook

"Given the slowdown in China's economy and current infrastructure spending, we
expect modest growth on the top and bottom lines in 2014. We plan to gradually
ramp up production and sales of our new higher margin CCA superfine wire
product, but we don't expect to see substantial growth from the product in its
first full-year. We remain cautiously optimistic about the economic outlook
and copper supply and demand dynamics in China. As such, we expect full-year
2014 gross profit and non-GAAP net income to be in the range of $89-91 million
and $58-60 million, respectively, representing year-over-year improvement of
3.0-5.3% and 3.0-6.6%," concluded Mr. Zhu.

Conference Call and Webcast

Management of Lihua International will host a conference call today, March 17,
2014 at 8:00 a.m. Eastern time to discuss the fourth quarter and full-year
2013 financial results. Individuals interested in participating in the
conference may do so by dialing 1-877-941-2068 in the U.S. and Canada, or
1-480-629-9712 internationally.

Those interested in listening to the conference call live via the Internet may
do so by visiting the Investor Relations section of the Company's Web site at:
http://www.lihuaintl.com/Investor_Relations/Events_Presentations.html.

For those unable to participate, an audio replay of the call will be available
beginning approximately one hour after the conclusion of the live call and
through March 24, 2013. The audio replay can be accessed by dialing
1-800-406-7325 from the U.S or Canada, or 1-303-590-3030 internationally, and
entering access ID No. 4668435#. Following the live webcast, an online archive
will be available for 90 days.

About Non-GAAP Financial Measures

The Company uses non-GAAP net income and other non-GAAP metrics such as
Adjusted EBITDA to provide information about its operating trends. Investors
are cautioned that non-GAAP net income and Adjusted EBITDA are not measures of
liquidity or of financial performance under Generally Accepted Accounting
Principles ("GAAP").

The Company defines non-GAAP net income as net income excluding the change in
fair value of warrants and other one-time or non-recurring items that are
evaluated on an individual basis. The Company defines Adjusted EBITDA as net
income before depreciation and amortization, interest income/expense, income
taxes, change in fair value of warrants and non-cash share-based compensation
expenses. The non-GAAP net income and Adjusted EBITDA numbers presented may
not be comparable to similarly titled measures reported by other companies.
Non-GAAP net income and Adjusted EBITDA, while providing useful information,
should not be considered in isolation or as an alternative to net income or
cash flows as determined under GAAP. Consistent with Regulation G under the
U.S. federal securities laws, the non-GAAP measures in this press release have
been reconciled to the nearest GAAP measure, and this reconciliation is
located under the headings"Non-GAAP Net Income Calculation" and "Adjusted
EBITDA Calculation" below.

Non-GAAP Net Income Calculation
                 For Three Months Ended December  Twelve Months Ended December
                 31,                              31,
                 2013             2012            2013            2012
Net income       $  13,233,558    $  15,793,687   $  56,159,450   $ 57,942,003
Loss (Gain)
on
extinguishment
of                  11,889           -               8,369          (73,291)

Warrant
Liabilities
Change in
fair value of       41,536           101,000         106,536        124,000
warrants
Non-GAAP Net   $  13,286,983    $  15,894,687   $  56,274,355   $ 57,992,712
Income
Adjusted EBITDA Calculation
                 For Three Months Ended December  Twelve Months Ended December
                 31,                              31,
                 2013             2012            2013            2012
Net income       $  13,233,558    $  15,793,687   $  56,159,450   $ 57,942,003
Depreciation
and                 1,160,246        1,294,612       4,361,117      3,669,077
amortization
Share-based
compensation        93,796           68,780          343,513        382,089
expense
Loss (Gain)
on
extinguishment
of                  11,889           -               8,369          (73,291)

Warrant
Liabilities
Change in
fair value of       41,536           101,000         106,536        124,000
warrants
Interest          (169,130)        (129,444)       (660,326)      (547,679)
income
Provision for     4,763,087        5,745,058       19,724,917     20,730,844
income tax
Adjusted       $  19,134,982    $  22,873,693   $  80,043,576   $ 82,227,043
EBITDA

About Lihua International, Inc.

Lihua, through its two wholly owned subsidiaries, Lihua Electron and Lihua
Copper, is a leading value-added manufacturer of copper replacement products
for China's rapidly growing copper wire and copper replacement product market.
Lihua is one of the first vertically integrated companies in China to develop,
design and manufacture lower cost, high quality alternatives to pure copper
magnet wire and pure copper alternative products. Lihua's products include CCA
and refined copper products. Current product offerings include CCA and pure
copper cable and wire, copper rod and copper anode. Except for CCA wire, all
other products are produced from recycled scrap copper. Lihua's products are
sold in China either directly to manufacturers or through distributors in the
wire and cable industries and manufacturers in a wide variety of industries
including the consumer electronics, white goods, automotive, utility,
telecommunications and specialty cable industries. Lihua's corporate and
manufacturing headquarters are located in the heart of China's copper industry
in Danyang, Jiangsu Province. For more information, visit:
http://www.lihuaintl.com.

To be added to the Company's email distribution for future news releases,
please send your request to lihua@tpg-ir.com.

Safe Harbor Statement

This press release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All statements, other than statements of historical
facts, that address activities, events or developments that the Company
expects, projects, believes or anticipates will or may occur in the future,
including, without limitation, statements about its business or growth
strategy, general industry conditions including availability of copper or
recycled scrap copper, future operating results of the Company, capital
expenditures, expansion and growth opportunities, bank borrowings, financing
activities and other such matters, are forward-looking statements. Although
the Company believes that its expectations stated in this press release are
based on reasonable assumptions, actual results may differ from those
projected in the forward-looking statements.

Please note that information in this press release reflects management views
as of the date of issuance.

Contact:

The Piacente Group, Inc.
Investor Relations
Kathy Price
(212) 481-2050 / lihua@tpg-ir.com



LIHUA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)
                                                                               2013           2012
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                  $ 203,406,220  $ 144,300,290
Accounts receivable, net                                                     60,497,780     45,284,923
Prepayments for raw material purchases                                       17,143,138     19,569,239
Other receivables, deposits and prepayments                                  337,189        559,955
Prepaid land use right – current portion                                     418,502        406,026
Deferred income tax assets                                                   146,418        24,948
Inventories                                                                  12,140,696     17,844,405
Total current assets                                                  294,089,943    227,989,786
OTHER ASSETS
Property, plant and equipment, net                                           47,139,458     47,197,115
Construction in progress                                                     5,559,901      175,006
Prepaid land use right – long-term portion                                   18,701,959     18,546,658
Intangible assets                                                            42,195         3,332
Total non-current assets                                              71,443,513     65,922,111
Total assets                                                        $ 365,533,456  $ 293,911,897
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable                                                             7,415,370      3,891,110
Other payables and accruals                                                  7,143,964      4,937,404
Income taxes payable                                                         4,941,050      5,797,188
Warrant liabilities                                                          33,262         354,000
Total current liabilities                                             19,533,646     14,979,702
Total liabilities                                                     19,533,646     14,979,702
STOCKHOLDERS' EQUITY
Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none
issued                                                                           -              -

and outstanding
Common stock, $0.0001 par value: 75,000,000 shares authorized,

30,295,955sharesissuedand30,031,908sharesoutstandingasofDecember                   
                                                                                 3,029
31, 2013 (2012: 30,084,883 shares issued and 29,820,836 shares                              3,008

outstanding), respectively
Additional paid-in capital                                                   80,627,496     79,257,921
Treasury stock, at cost, 264,047 shares as of December 31, 2013 and                       
2012,                                                                            (2,126,597)
                                                                                                (2,126,597)
respectively
Statutory reserves                                                           18,723,836     14,566,846
Retained earnings                                                            222,165,580    170,163,120
Accumulated other comprehensive income                                       26,606,466     17,067,897
Total stockholders' equity                                            345,999,810    278,932,195
Total liabilities and stockholders' equity                          $ 365,533,456  $ 293,911,897
See accompanying notes to consolidated financial statements in the Company's corresponding Form 10-K.



LIHUA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(AMOUNTS EXPRESSED IN US DOLLARS)
                                        Year Ended December 31,
                                        2013                 2012
NET REVENUE                             $   900,726,958      $  853,766,541
Cost of sales                               (814,327,740)       (764,218,167)
GROSS PROFIT                                86,399,218          89,548,374
Selling expenses                            (3,020,600)         (2,954,460)
General and administrative expenses         (8,073,172)         (8,621,494)
Income from operations                      75,305,446          77,972,420
Other income (expenses):
Interest income                             660,326             547,679
Interest expenses                           -                   -
Foreign exchange differences                (1,636)             109,638
Gain (Loss) on extinguishment of            (8,369)             73,291
warrant liabilities
Change in fair value of warrants            (106,536)           (124,000)
Other income (expenses)                     35,136              93,819
Total other income (expenses)               578,921             700,427
Income before income taxes                  75,884,367          78,672,847
Provision for income taxes                  (19,724,917)        (20,730,844)
NET INCOME                              $   56,159,450       $  57,942,003
OTHER COMPREHENSIVE INCOME:
Foreign currency translation                9,538,569           659,754
adjustments
COMPREHENSIVE INCOME                    $   65,698,019       $  58,601,757
Net income per share
Basic                                   $   1.88             $  1.94
Diluted                                 $   1.87             $  1.93
Weighted average number of shares
outstanding
Basic                                       29,858,880          29,815,943
Diluted                                     29,996,833          29,965,811
See accompanying notes to consolidated financial statements in the Company's
corresponding Form 10-K.



LIHUA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS EXPRESSED IN US DOLLARS)
                                                2013            2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                     $ 56,159,450    $ 57,942,003
Adjustments to reconcile net income to cash
provided by operating

activities:
Depreciation and amortization                 4,361,117       3,669,077
Loss on disposal of property, plant and       86,330          -
equipment
Share-based compensation                      343,513         382,089
(Gain) Loss on extinguishment of warrant      8,369           (73,291)
liabilities
Change in fair value of warrants              106,536         124,000
Deferred income tax benefits                  (118,821)       175,379
(Increase) decrease in assets:
Accounts receivable                           (13,597,256)    (14,065,887)
Bills receivable                              -               -
Prepayments for raw material purchases        2,984,314       2,357,227
Other receivables, deposits and               236,354         1,321,844
prepayments
Inventories                                   6,158,432       (2,294,323)
Increase (decrease) in liabilities:
Accounts payable                              3,350,965       (2,180,647)
Other payables and accruals                   1,987,001       198,772
Income taxes payable                          (1,019,365)     1,173,326
Net cash provided by operating activities     61,046,939      48,729,569
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and
construction in                                   (7,796,777)     (9,365,100)

progress
Deposits for plant and equipment                 -               -
Net cash used in investing activities             (7,796,777)     (9,365,100)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of common stock dividend                 -               (992,846)
Repayments of short-term bank loans              -               -
Repurchase of common stock                       -               -
Proceeds from exercise of share options          495,000         -
Proceeds from exercise of warrants               95,441          -
Net cash (used in) provided by financing          590,441         (992,846)
activities
Foreign currency translation adjustment           5,265,327       291,040
INCREASE IN CASH AND CASH EQUIVALENTS             59,105,930      38,662,663
CASH AND CASH EQUIVALENTS, at the beginning of    144,300,290     105,637,627
the year
CASH AND CASH EQUIVALENTS, at the end of the    $ 203,406,220   $ 144,300,290
year
MAJOR NON-CASH TRANSACTION:
Share-basedcompensation to employees and      $ 343,513       $ 382,089
directors
Issuance of common stock to settle warrant       435,643         311,709
liabilities
SUPPLEMENTAL DISCLOSURE INFORMATION
Cash paid for interest                         $ -             $ -
Cash paid for income taxes                     $ 20,743,750    $ 19,569,241
See accompanying notes to consolidated financial statements in the Company's
corresponding Form 10-K.

SOURCE Lihua International, Inc.

Website: http://www.lihuaintl.com
Website: http://www.lihuaintl.com/Investor_Relations/Events_Presentations.html
 
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