HONG KONG--(BUSINESS WIRE)--April 1, 1997--
Year-End Net Income Rises 87% to Record $4.32 Million
China Resources Development, Inc. (Nasdaq: CHRB), a leading natural rubber distributor based in the People's Republic of China (PRC), today announced operating results for the year and fourth quarter ended December 31, 1996. Financial results are preliminary and unaudited; however, management believes that all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company has filed an extension with the Securities and Exchange Commission and expects to file its 1996 Form 10-K report, which will include audited financial results, on or before April 15, 1997. Results have been converted from Renminbi (the lawful currency of the PRC) to U.S. dollars (for information purposes), at the prevailing exchange rate on December 31, 1996 (U.S. $1.00=Rmb8.30).
For the year ended December 31, 1996, net sales were $220.2 million, compared to net sales of $235.8 million in 1995. The revenue decline in 1996 was primarily attributable to a decline in natural rubber sales and a drop in natural rubber prices, partially offset by an approximate 72% increase in year-over-year sales derived from other agricultural products, materials and supplies procurement.
Enhanced gross profit and operating margins resulting from the Company's diversification into the trading of other agricultural products in 1996 contributed to an 87% increase in net income to $4.32 million, or $1.18 per share, compared with net income of $2.31 million, or $1.87 per share, in the comparable 1995 period, reflecting the impact of shares converted pursuant to the Company's 1996 private placement via Series B Convertible Preferred Shares, and a one-for-ten reverse stock split that was effective on December 31, 1996 and implemented on January 16, 1997. Per share results are based on 3,670,000 and 1,233,000 weighted average shares and common stock equivalents outstanding in 1996 and 1995, respectively. As of April 1, 1997, China Resources had a total of approximately 5.78 million common shares outstanding.
For the three months ended December 31, 1996, net sales were $65.7 million, compared with $78.3 million during the year-ago fourth quarter. Fourth quarter net income increased 19% to $0.85 million, or $0.23 per share, compared with net income of $0.71 million, or $0.58 per share, in the comparable 1995 period. Per share results are based on 3,670,000 and 1,233,000 weighted average shares and common stock equivalents outstanding for the 1996 and 1995 periods, respectively.
