NEW YORK, May 18, 2010 - China Carbon Graphite Group, Inc. ("China Carbon" or the "Company"), one of China's leading non-state-owned producers and wholesale suppliers of fine grain and high purity graphite, announced today its first-quarter 2010 results.
Net revenue increased 68% year-over-year to $4.8 million in the first quarter 2010 from $2.9 million in the first quarter 2009; Net revenue increased 50% from $3.2 million in the fourth quarter 2009. The increase in revenue attributes to the slight recovery of the general graphite market, in particular the demand for graphite electrodes.
Gross profit increased 22% year-over-year to $1.0 million in the first quarter 2010 from $841,000 in the first quarter 2009; Gross profit increased 209% from $(942,000) in the fourth quarter 2009. Gross margin declined from 29% in the first quarter of 2009 to 21% for the first quarter 2010. The lower gross margin was primarily due to the change in the product mix. In the first quarter 2009, we had fewer sales of the low margin graphite electrodes, which led to the higher than average gross margin.
Operating expenses was $456,000 in the first quarter 2010 compared to $464,000 in the same quarter 2009. General administration expenses increased significantly in the first quarter 2010 due to higher public company expenses in respect to a private offering and related S-1 registration.
Income from operations was $568,000 in the first quarter 2010 compared to $377,000 in the same period last year, an increase of 51%.
GAAP net loss available to shareholders was $1.0 million, with diluted loss per share of $0.06, compared with net income of $471,000 and diluted earnings per share of $0.04 in the first quarter of 2009. Excluding non-cash charges reflecting the change in fair value of warrants issued and deemed preferred stock dividend of $1.4 million, non-GAAP net income was 325,000,a year-over-year decrease of 31% due to increased operating expenses. Non-GAAP diluted earnings per share were $0.02 compared to $0.04 for the same quarter in 2009. Diluted weighted average number of shares outstanding for the first quarter of 2010 was 18.5 million compared to 12.8 million in the first quarter of 2009.
About China Carbon Graphite Group, Inc.
China Carbon Graphite Group, through its affiliate, Xingyong Carbon Co., Ltd., manufactures carbon and graphite based products in China. The Company is the largest wholesale supplier of fine grain and high purity graphite in China and is one of the nation's top overall producers of carbon and graphite products. Fine grain graphite is widely used in smelting for colored metals and rare-earth metal smelting as well as the manufacture of molds. High purity graphite is used in metallurgy, mechanical industry, aviation, electronic, atomic energy, chemical industry, food industry and a variety of other fields. In September 2007, the Company was approved and designated by China's Ministry of Science & Technology as a "National Hi-tech Enterprise." Of the 400 plus carbon graphite producers in China, China Carbon is the only non-state-owned company which has received this honor.
