Here ya go Rick.
Friday November 14, 4:43 pm Eastern Time
Company Press Release
China Pacific Announces Results for the Third Quarter
LOS ANGELES--(BUSINESS WIRE)--Nov. 14, 1997--China Pacific Inc. (Nasdaq/Small
Cap:CHNA) Friday reported the results for the third quarter of fiscal 1997, which ended Sept. 30,
1997.
Net sales for the first nine months of 1997 were $91.4 million, compared with $86.8 million in the
first nine months of the previous year. Net earnings for the current year's first nine months were $4.3
million (48 cents per share), compared with $8.1 million (93 cents per share) in the first nine months
of 1996.
During the third quarter of 1997, net sales were $31.3 million, compared with $31,6 million in the
corresponding quarter of 1996. Net earnings for the third quarter of 1997 were $1.4 million (15
cents per share), compared with $2.8 million (32 cents per share) in the same quarter of last year.
Despite the loss of $1.1 million in guaranteed profit payments made to the company during the third
quarter of 1996, such payments having ended on Dec. 31, 1996, the company posted operating
profit of $1.4 million for the third quarter of 1997, a slight drop from $1.8 million for the same
quarter of 1996.
Gross profit decreased by 0.8 percent from $12.33 million for the period ended Sept. 30, 1996, to
$12.25 million during 1997. The slight decrease was primarily caused by heavy maintenance of the
No. 1 blast furnace and increases of direct material costs, but was partly relieved by the
implementation of a cost-reduction program and the improvement in the efficiency and the capacity
of steel production upon the completion of the new No. 3 blast furnace and No. 1 continuous casting
machine.
''The nine month's steel production for the current year was 300,000 tons, as compared to 280,000
tons last year,'' said Clement Mak, the president and chief executive officer of the company.
''However, the company will suffer high operating costs in the coming months due to the rotating
maintenance of certain inefficient production facilities.''
Mak continued: ''We are facing significant competition from import and domestic mills.
Nevertheless, the company intends to further intensify its marketing networks to take advantage of
the stable growth in demand for infrastructure products in China, and expects steel production to
reach 370,000 tons by end of this year.''
China Pacific is a leading producer of steel and iron products in Sichuan Province, the People's
Republic of China, through its majority interest in Chengdu Chengkang Iron and Steel. Additional
corporate information is available at the company's Web site -- www.chinapacific.com
China Pacific Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended Sept. 30
(Amounts in thousands, except share and per-share data)
(Unaudited)
July-September 1997 July-September 1996
RMB USD RMB USD
Net sales 260,103 31,375 262,254 31,635
Cost of goods sold (224,065) (27,028) (227,055) (27,389)
Gross profit 36,038 4,347 35,199 4,246
Selling, general and
administrative
expenses (20,627) (2,488) (15,104) (1,822)
Interest income/
(expenses), net (1,879) (227) 381 46
Other income, net 5,728 691 8,079 975
Share of income of an
associated company 2,552 308 5,115 617
Income before income
taxes 21,812 2,631 33,670 4,062
Provision for income
taxes (4,118) (497) -- --
Income before minority
interests 17,694 2,134 33,670 4,062
Minority interests (6,486) (782) (10,139) (1,223)
Net income 11,208 1,352 23,531 2,839
Primary earnings per common share:
Net income 1.24 0.15 2.61 0.32
Weighted average number
of shares
outstanding 9,039,645 9,039,645 8,998,901 8,998,901
Fully dilutive
earnings per common
share 1.02 0.12
Weighted average number
of shares outstanding
used in fully dilutive
calculation 13,680,889 13,680,889
China Pacific Inc. and Subsidiaries
Consolidated Statements of Operations
For the Nine Months Ended Sept. 30
(Amounts in thousands, except share and per-share data)
(Unaudited)
January-September 1997 January-September 1996
RMB USD RMB USD
Net sales 757,627 91,390 719,605 86,804
Cost of goods sold (656,046) (79,137) (617,340) (74,468)
Gross profit 101,581 12,253 102,265 12,336
Selling, general and
administrative
expenses (48,312) (5,828) (45,603) (5,501)
Interest income/
(expenses), net (4,966) (599) 1,675 202
Other income, net 8,751 1,056 29,670 3,579
Share of income of an
associated company 7,236 873 7,444 898
Income before income
taxes 64,290 7,755 95,451 11,514
Provision for income
taxes (4,533) (547) -- --
Income before minority
interests 59,757 7,208 95,451 11,514
Minority interests (23,918) (2,885) (28,617) (3,452)
Net income 35,839 4,323 66,834 8,062
Primary earnings per common share:
Net income 3.96 0.48 7.71 0.93
Weighted average number
of shares
outstanding 9,039,645 9,039,645 8,673,156 8,673,156
Fully dilutive
earnings per common
share 3.20 0.39
Weighted average number
of shares outstanding
used in fully dilutive
calculation 13,680,889 13,680,889
China Pacific Inc. and Subsidiaries
Consolidated Balance Sheets
As of Sept. 30, 1997
(Amounts in thousands)
(Unaudited)
Sept. 30, 1997 Dec. 31, 1996
RMB USD RMB USD
Assets
Current assets
Cash 31,810 3,837 61,296 7,394
Accounts receivable,
net 151,346 18,256 112,006 13,511
Due from related
companies 7,783 939 2,031 245
Due from CISP,
current portion 35,395 4,270 12,999 1,568
Prepayments, deposits
and other current
assets 43,887 5,294 48,264 5,822
Inventories, net 324,888 39,190 316,919 38,229
Total current assets 595,109 71,786 553,515 66,769
Investment properties 75,333 9,087 -- --
Due from CISP, long-
term portion 126,947 15,313 38,192 4,607
Investment in an
associated company 66,225 7,989 58,992 7,116
Investments and notes
receivable 30,494 3,678 30,789 3,714
Deferred value-added
tax recoverable 23,766 2,867 35,050 4,228
Property, plant and
equipment, net 206,318 24,888 214,222 25,841
Construction in
progress -- -- -- --
Goodwill, net 16,734 2,019 17,061 2,058
Total assets 1,140,926 137,627 947,821 114,333
Liabilities and shareholders' equity
Current liabilities
Short-term borrowings 16,003 1,930 49,715 5,997
Long-term debt,
current portion 668 81 10,603 1,279
Accounts payable 120,369 14,520 164,159 19,802
Deposits from
customers 136,586 16,476 132,798 16,019
Accrued liabilities 144,592 17,442 103,882 12,531
Value-added tax
payable 42,713 5,152 22,449 2,708
Due to related
companies 5,793 699 9,368 1,130
Total current
liabilities 466,724 56,300 492,974 59,466
Long-term debt 42,660 5,146 -- --
Total liabilities 509,384 61,446 492,974 59,466
Minority interests 171,372 20,672 147,454 17,787
Shareholders' equity
Preferred stock, par
value $0.001 -- -- -- --
Series A convertible -- -- -- --
Series B convertible
and redeemable -- -- -- --
Common stock, par
value $0.001 75 9 75 9
Treasury stock,
27,500 shares (1,420) (171) (1,420) (171)
Additional paid-in
capital 181,651 21,912 189,418 22,849
7 percent convertible
debentures -- -- -- --
9 percent debenture
notes 124,290 14,993 -- --
Dedicated capital 32,592 3,931 23,245 2,804
Retained earnings 118,726 14,322 92,235 11,126
Cumulative translation
adjustments 4,256 513 3,840 463
Total shareholders'
equity 460,170 55,509 307,393 37,080
Total liabilities,
minority interests
and shareholders'
equity 1,140,926 137,627 947,821 114,333
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