DEERFIELD BEACH, FL - December 23, 2011 (InvestorIdeas.com Newswire) - China Direct Industries, Inc. (the "Company") ( NASDAQ:CDII), a U.S. based company that sources, produces and distributes industrial products in China and the Americas in two core business segments, announced today its financial results for the fiscal year ended September 30, 2011.

     Fiscal 2011 revenue reaches $187.8 million up 66.6% from fiscal 2010

    Fiscal 2011 net income attributable to China Direct Industries rises to $9.3 million up from a loss of ($3.2 million) in fiscal 2010

    Fiscal 2011 Diluted EPS climbs to $0.25 compared to a loss of ($0.11) in fiscal 2010

 

 Financial Highlights

 For the full year of fiscal 2011 total revenues increased to $187.8 million, an increase of 66.6% compared to total revenues of $112.7 million recorded in fiscal 2010. Our gross profit reached $19.5 million, up 171.1% compared to gross profit of $7.2 million recorded in the prior fiscal year. Gross profit margins improved to 10.4% in fiscal 2011, an increase of 63% compared to gross margins of 6.4% in fiscal 2010. For fiscal 2011, our operations resulted in net income attributable to China Direct Industries of $9.3 million compared to a net loss of ($3.2 million) recorded in fiscal 2010. Earnings per basic share reached $0.26 in fiscal 2011 on 36.1 million weighted average shares outstanding. Earnings per diluted share were $0.25 in fiscal 2011 on 36.8 million weighted average shares. This compares to a net loss of ($0.11) per basic and diluted share in fiscal 2010 on 29.6 million weighted average shares outstanding.

 

 

Balance Sheet

 

At September 30, 2011, total assets were $116.0 million and shareholder equity was $68.0 million with 40.4 million shares outstanding. At September 30, 2010, total assets were $95.9 million and shareholder equity of $50.2 million with 31.7 million shares outstanding. At September 30, 2011 cash and cash equivalents were $12.6 million with prepaid expenses of $14.4 million as compared to cash and cash equivalents of $10.1 million with $8.6 million in prepaid expenses at September 30, 2010. Working capital improved to $44.5 million compared to $30.3 million at September 30, 2010. 

About China Direct Industries, Inc

 

China Direct Industries, Inc. (NASDAQ:CDII), is a U.S. based company that sources, produces and distributes industrial commodities in China and the Americas and provides business and financial consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, China Direct Industries' unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit http://www.cdii.net.

 

DISCLOSURE NOTICE:

 

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Direct Industries, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding revenues, margins, net income and earnings, magnesium prices and demand, our expectations regarding acquisition of additional magnesium facilities, the consummation of transactions involving potential new consulting business clients and our ability to complete expected deliveries of iron ore in our international trading business. In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations:

 

    Fluctuations in the pricing and availability of magnesium and in levels of customer demand.

    Changes in the prices of magnesium and magnesium-related products.

    Our ability to implement our expansion plans for growing our business through increased magnesium production capacity and acquisitions and development of our industrial commodities business.

    Fluctuations in the cost or availability of coke gas and coal.

    Loss of orders from any of our major customers.

    Impact of proposed acquisition of Golden Trust and Lingshi Magnesium and interest of our directors and executive officers in such transaction.

    Our ability to effectively integrate our acquisitions and to manage our growth and our inability to fully realize any anticipated benefits of acquired business.

    The value of the equity securities we accept as compensation is subject to adjustment which could result in losses to us in future periods.

    Our need for additional financing which we may not be able to obtain on acceptable terms, the dilutive effect additional capital raising efforts in future periods may have on our current shareholders and the increased interest expense in future periods related to additional debt financing.

    Our dependence on certain key personnel.

    Difficulties we have in establishing adequate management, cash, legal and financial controls in the PRC.

    Our ability to maintain an effective system of internal control over financial reporting.

    The lack various legal protections in certain agreements to which we are a party and which are material to our operations which are customarily contained in similar contracts prepared in the United States.

    Potential impact of PRC regulations on our intercompany loans.

    Our ability to assure that related party transactions are fair to our company.

    Yuwei Huang, our executive vice president - magnesium, director and an officer of several of our magnesium subsidiaries his daughter Lifei Huang and Kong Tung is also an owner and executive officer of several companies which directly compete with our magnesium business.

    The impact of a loss of our land use rights.

    Our ability to comply with the United States Foreign Corrupt Practices Act which could subject us to penalties and other adverse consequences.

    The impact of Chinese economic reform policies.

    The influence of the Chinese government over the manner in which our Chinese subsidiaries must conduct our business activities.

    The impact on future inflation in the PRC on economic activity in the PRC.

    The impact of any natural disasters and health epidemics in China.

    The impact of labor laws in the PRC may adversely affect our results of operations.

    The limitation on our ability to receive and use our revenues effectively as a result of restrictions on currency exchange in the PRC.

    Fluctuations in the value of the RMB.

    Delisting of our securities from trading by NASDAQ.

    The market price for shares of our common stock has been and may continue to be highly volatile and subject to wide fluctuations.

 

Contact Information:

 

China Direct Industries, Inc.

Richard Galterio or Lillian Wong

Investor Relations

Phone: 1-877- China -57

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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