Earnings Call Excerpt
Puda Coal, Inc. (OTC : PUDC)
F2Qo6 Earnings Call
August 30, 2006 4:30 p.m. EDT
Executives
Mr. Wenwei Tian - Vice-President of Investor Relations.
Zhao Ming - Chairman and Chief Executive Officer
Ms. Jin Zia - Chief Financial Officer
Mr. Zhao Yao -Vice-President of Operating Investments
Analysts
Stuart Flink - Crestview Capital
Greg Goldberg - Professional Traders Management
Wenwei Tian
Good afternoon and welcome to Puda Coal’s second quarter 2006 earnings conference call. My name is Wenwei Tian, and I am Vice-President of Investor Relations for Puda Coal Inc. The purpose of this conference call is to augment the information provided in the company’s Q2 2006 quarterly report issued on August 3, 2006. After completing the financial report, we will open the call to a few questions from the audience.
At this time, I would like to introduce the following individuals: Mr. Zhao, Chairman and Chief Executive Officer; Ms. Jin Zia, Chief Financial Officer; Mr. Zhao Yao, Vice-President of Operating Investments, and in this call he will also serve as interpreter of Mr. Zhao.
Revenue for the quarter ended June 30, 2006 was approximately $30.9 million, as compared to approximately $8.7 million for the quarter ended June 30, 2005, a 254% increase. Revenue for the six months ended June 30, 2006 was approximately $51.7 million, as compared to approximately $13 million for the six months ended June 30, 2005, a 297% increase.
Gross profit for the quarter ended June 30, 2006 was approximately $6 million, as compared to approximately $1.9 million for the quarter ended June 30, 2005, a 222% increase. Gross profit margins for the quarter ended June 30, 2006 were 19%, as compared to 21% for the quarter ended June 30, 2005, a decrease of 2% as a result of a slight increase in the purchase price of raw coal. Gross profit for the six months ended June 30, 2006 was approximately $10.5 million, as compared to approximately $2.7 million for the six months ended June 30, 2005, a 286% increase. Gross profit margins for the six months ended June 30, 2006 were 20%, as compared to 21% for the six months ended June 30, 2005, a one percent decrease as a result of a slight increase in the purchase price of raw coal.
The company reported a net loss for the three months ended June 30, 2006 of approximately $363,000, as compared to a net income of approximately $1.1 million for the three months ended June 30, 2005, a 133% decrease. Net income was reduced by non-cash charges totaling approximately $2.8 million incurred with debt financing in November 2005. These consisted of approximately $0.2 million in the amortization of debt issuance cost, approximately $0.8 million in the discount of converted notes and exercised warrants, approximately $2.3 million in the amortization of a discount on convertible notes and warrants, and approximately $0.5 million as a derivative on realized fair value gain. Excluding these non-cash charges incurred with the November 2005 debt financing, net income for the three months ended June 30, 2006 would have been approximately $2.5 million on an as adjusted basis.
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