Gulf Resources, Inc. (GUFR.OB) announced financial results for the third quarter ended September 30, 2007.
Net Revenues for the third quarter of 2007 increased 81.3 percent to $16.4 million. Compared to the $9.1 million reported for the third quarter of 2006, this represents a significant increase. Much of this increase can be attributed to a strong growth in sales of bromine and crude salt; increasing more than 132.1 percent from $4.7 million in the third quarter of 2006 to $10.9 million in the third quarter of 2007.
Furthermore, cost of revenue for the third quarter of 2007 totaled $9.6 million. This cost of revenue yielded a gross profit of $6.9 million and gross margins of 41.8 percent, another tremendous increase when comparing this gross profit to the $3.0 million in gross profit recorded during the third quarter of 2006.
The Company also reported $11.4 million in cash and equivalents and $6 million in notes payable and debt on September 30, 2007. For the first nine months of 2007, the Company generated $11.8 million in cash flow from operations, the main variance from net income relating to a decrease in accounts receivable.
Mr. Ming Yang, CEO of Gulf Resources, stated “The third quarter showed continued momentum in all our product lines as we brought additional bromine and crude salt production capacity online through our recent asset purchases and made further improvements in existing facilities. Additionally, our wholly-owned SYCI subsidiary made two significant steps during the quarter. The first related to a partnership with East China University to build a Co-Op Research and Development Center for the purpose of creating new refined bromide compounds and end products.”
He continued to say, “To date, the Center has tested two compounds that carry the names 3.4.5- Trimethoxybenzaldehyde (T.M.B.) and Mbromoanisole, which are utilized as raw materials by pharmaceutical manufacturers to produce various antibiotics. We estimate that global demand for T.M.B.’s is 5,000 tons annually while current supply is 3,500 to 4,000 tons.”
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