Gross Profit Reaches 58% in 2009; Company Cash Position up 87% to $31.3 Million
CITY OF INDUSTRY, CA--(Marketwire - April 19, 2010) - Songzai International Holding Group, Inc. (
Full year revenues increased 14% to $64,998,456 for the year ended December 31, 2009 compared to $57,130,098 in 2008, primarily driven by an increase in improved pricing levels. Gross profit was $37,806,265 in 2009 versus $31,453,972 a year ago, an increase of over 20%. Gross profit as a percentage of sales was approximately 58% and 55% in 2009 and 2008, respectively. The increase in gross profit margin was mainly attributable to the high average selling price of coal for 2009, despite the lower sales volume as compared to 2008.
Operating expenses were $5,844,974 in 2009 as compared to $2,794,398 for the fiscal year ended December 31, 2008, an increase of $3.05 million or approximately 109%. This increase was primarily attributable to increased expense for maintenance costs and amortization expenses for mining rights. Income from operations in 2009 rose nearly 12% to $31,961,291 as compared to $28,659,574 in 2008.
Full year net income was $25,086,827 in 2009 versus $21,723,981 for the fiscal year ended December 31, 2008. Net income as a percentage of sales increased from 38% for 2008 to 39% for 2009. This is mainly attributable to the significant increase in the average selling price of coal. Basic and diluted net income per share was $1.63 for the year ended December 31, 2009 compared with $1.62 for the year ended December 31, 2008. As of December 31, 2009, the Company had cash and cash equivalents of $31.26 million and working capital was approximately $24.85 million.
Mr. Hongwen Li, CEO of Songzai International Holding Group, commented, "During 2009 we experienced strong top line growth based on several factors including increased demand for our coal production and improved pricing flexibility with per ton selling prices up over 30%. This pricing power allowed us to reach a record level of gross profit of nearly 58%. Our results were temporarily impacted by the one month closing of a major power plant customer in July and, during the latter part of the year, by our beginning maintenance and retrofit project at our Xing An mines, thereby decreasing our sales volume. We expect, however, these mine improvements will improve efficiencies and lower costs and greatly enhance our growth and profitability once completed in 2010." Mr. Li continued, "As we look ahead we expect to continue our top line growth and profitability in 2010 and take advantage of our strong balance sheet to actively pursue strategic opportunities to improve and grow business."
About Songzai International Holding Group, Inc.
Songzai International Holding Group, Inc. is a company engaged in coal production and sales by exploring, assembling, assessing, permitting, developing and mining coal properties in the People's Republic of China ("PRC"). After obtaining permits from the Heilongjiang Province National Land and Resources Administration Bureau and the Heilongjiang Economic and Trade Commission, we extract coal from properties to which we have the right to mine capped amounts of coal, and then sell most of the coal on a per metric ton ("ton") basis in cash on delivery, primarily to power plants, cement factories, wholesalers and individuals for home heating. We do not own the coal mines, but have mining rights to extract a capped amount of coal from a mine as determined by government authorized mining engineers and approved by the Heilongjiang Department of Land and Resources. Our business consisted of the operations of Tong Gong coal mine in northern PRC, located approximately 175 km southwest of the city of Heihe in the Heilongjiang Province and the Hong Yuan and Sheng Yu coal mines located in the city of Mohe in Heilongjiang Province.
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Songzai International Holding Group, Inc.