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 Cd Intl Entrprise (PINK:CDII)

Friday, October 17, 2014
Disposal of Assets

Item 1.01 Entry into a Material Definitive Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets. 


On September 30, 2014,  CD International Enterprises, Inc. ( the "Company") entered into a Share Exchange Agreement with Yuwei Huang (the "Agreement") disposing the Company's magnesium segment. Pursuant to the terms of the Agreement, the Company sold its 51% ownership interest of Taiyuan Changxin Magnesium Co., Ltd.,  100% ownership interest of Taiyuan Changxin YiWei Trading Co., Ltd., 100% ownership interest of  Asia Magnesium Corporation Limited, 51% ownership interest of Baotou Changxin Magnesium Co., Ltd., 100% ownership interest of  International Magnesium Trading Corp., 80% ownership interest of  Taiyuan Ruiming Yiwei Magnesium Co., Ltd., 100% ownership interest of  Marvelous Honor Holdings Inc., 100% ownership interest of  Golden Trust Magnesium Industry Co., Ltd. and 100% ownership interest of  Lingshi Xinghai Magnesium Industry Co., Ltd.

Under the terms of the Agreement, as purchase price of the magnesium facilities, the Company shall cancel 8,325,949 shares of Mr. Huang's common stock held by different individuals related to Mr. Huang, and Mr. Huang's rights to receive 41,524 shares of Convertible Series D Preferred Stock (1:1000) convertible to 41,524,000 shares of common stock.

We are currently analyzing  the expected gain or loss related to the disposition of the magnesium facilities for fiscal 2014.


Investor Alert

Item 2.06 Material Impairments


On September 10, 2014, the Board of Directors of CD International Enterprises, Inc. ( the "Company") authorized the impairment of the Company's long-lived assets, including land use rights and intangible assets, in the magnesium segment. In addition to the asset impairments disclosed in the Company's 2012 Form 10-K, the Company currently owns majority interests in Taiyuan Ruiming Yiwei Magnesium Co., Ltd., Golden Trust Magnesium Industry Co., Ltd., and Lingshi Xinghai Magnesium Industry Co., Ltd., all companies organized under the laws of People's Republic of China operating in manufacturing of magnesium ingots and alloys. In the past two years, these magnesium facilities have been idle or in minimal production capacity due to insufficient material resources and restrictions of the Laws and Regulations of the PRC. The Board of Directors deem it not economically viable of these facilities to resume full production, and determined to be in the best interest of the Company to impair the long-lived assets of these facilities.

As a result of the foregoing, the Company will record an impairment of assets totaling approximately $32.4 million, including impairment of approximately $5.4 million in Taiyuan Ruiming assets, $11.3 million in Golden Trust assets, and $15.7 million in Lingshi Xinghai assets. The Company does not anticipate that such impairment charge will result in future cash expenditures by the Company relating to these magnesium facilities. The Company intends to sell these magnesium facility assets in the future.


Friday, September 19, 2014
Deal Flow

Item 1.01 Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.


On September 12, 2014, CD International Enterprises, Inc. (the "Company") entered into Addendums to Promissory Notes for two Secured Promissory Note one dated February 14, 2013 for the principal amount of $300,000 due by December 31, 2013 and one dated September 30, 2013 for the principal amount of $30,000 due by September 30, 2014 (together refer to as the "Notes" )with our Chief Executive Officer Yuejian (James) Wang. Under the terms of the Addendums, the maturity date for the Notes may be extended to September 30, 2015 and the Company shall have the option to repay Dr. Wang the unpaid principal amounts of the Notes and accrued interest owed in (i) cash or (ii) shares of our common stock valued at $0.05 per share.

The foregoing descriptions of the Addendums to the Promissory Notes are qualified in their entirety by reference to these agreements which are filed as Exhibits 10.69, 10.70, 10.71 and 10.72, respectively.


Item 3.02  Unregistered Sales of Equity Securities.


On September 12, 2014, the Company's Board of Directors approved the issuance of 1,360,000 shares of our common stock, valued at 0.05 per share, to Ms. Qingchen Zhao, 510,400 shares of our common stock, valued at 0.05 per share, to Ms. Liang Xu, key employees of the Company, 72,000 shares of our common stock, valued at 0.05 per share, to Ms. Peisha Shen, key employees of the Company, and 42,000 shares of our common stock, valued at 0.05 per share, to Mr. Siqi Wu, key employees of the Company as repayment for salaries owed in years 2012 and 2013. The recipients were sophisticated investors who had access to business and financial information concerning the Company. The issuances were exempt from registration under the Securities Act of 1933, as amended, in reliance exemptions provided by Section 4(a)(2) of that act.


Thursday, August 7, 2014
Deal Flow

Item 1.01 Entry into a Material Definitive Agreement.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.


On July 30, 2014, CD International Enterprises, Inc. closed a Senior Secured Revolving Credit Facility Agreement (the “Credit Agreement”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”) which had an effective date of July 30, 2014. Pursuant to the Credit Agreement, TCA agreed to loan us up to a maximum of $5 million for working capital purposes. The initial credit line is $2,000,000 subject to funding in the discretion of TCA. In connection with the closing, an initial take down of $650,000 was funded by TCA. Any increase in the amount of the credit line from the initial amount up to the maximum amount is at the discretion of TCA.

The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured by a first position security interest in substantially all of our assets in favor of TCA as evidenced by a Security Agreement (the “Security Agreement”). The loan is additionally secured by the pledge of the stock of the Company’s operating subsidiaries. The initial Revolving Note in the amount of $650,000 is due and payable along with interest thereon on January 31, 2015, and bears interest at the rate of 10% per annum. TCA will collect in reserve an amount which is held in a lock box account equal to 20% of the revolving loan commitment on such date.

TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of our common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of our common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion.

We have the right to prepay the Revolving Note, in whole or in part. If we prepay the Revolving Note in excess of 80% of the principal within 90 to 180 days prior to the maturity date of the note, we are obligated to pay TCA an amount for liquidated damages and for the costs of being prepared to make funds available under the Credit Agreement equal to 2.5% of the outstanding Revolving Note Commitment.

An event of default under the Credit Agreement as described in that agreement includes (i) any non-payment of the obligations, (ii) material misrepresentations by us in the Credit Agreement or any related document, (iii) a default by us of our obligations under the terms of the Credit Agreement or any other related agreement, (iv) a default by us under any other obligation, (v) a bankruptcy of our company or other assignment for the benefit of creditors, (vi) a judgment against us in excess of a specified amount, (vii) the occurrence of a “Material Adverse Effect” as described in the Credit Agreement, (vii) a change of control of our company, (viii) an impairment of any of the collateral we have pledged, (ix) a material adverse change in our financial condition or value of the collateral, or (x) a determination by TCA that the prospect for the repayment by us of the obligation is impaired. Upon the occurrence of an event of default under the Credit Agreement or the Revolving Note, all amounts become immediately due and payable.
 
We also agreed to pay TCA various fees during the term of the Credit Agreement, including (i) a commitment fee at closing of the 2% of the initial credit line commitment, (ii) an advisory fee of $100,000, payable in eight monthly installments starting December 31, 2014; (iii) facility fees consisting of our common stock equal to the $175,000; and (iv) asset monitoring and due diligence fees. In total, we paid $50,010 in cash fees, expenses and closing costs in connection with the closing and as such, netted $599,990 in connection with the closing. We also provided TCA with certain make whole rights with regard to our common stock used as fees or upon conversion of the convertible promissory notes.

During the term of the Credit Agreement, we are prohibited from (i) incurring any indebtedness, other than in connection with the Credit Agreement or as otherwise approved by TCA, (ii) making any new investments, (iii) creating any encumbrances on our assets, (iv) making any capital expenditures not in the ordinary course of business or without TCA’s prior consent, (v) permitting a change in control of our company, (vi) repurchase or redeeming any shares, or making any distributions, (vii) affecting any transactions with our affiliates or increasing the salary of our officers, and (vii) certain other actions as described in greater detail in the Credit Agreement.
 
The foregoing descriptions of the Credit Agreement, Revolving Note, Security Agreement and the subordination agreements are qualified in their entirety by reference to these agreements which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively.


Item 3.02 Unregistered Sales of Equity Securities.


On July 30, 2014, we issued TCA 3,154,115 shares of our common stock valued at $0.06 representing a portion of the aforedescribed Commitment Shares. TCA is an accredited investor and the shares were issued in a private transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on an exemption provided by Section 4(2) of that act.


Monday, April 21, 2014
Deal Flow

Item 8.01 Other Events.


On November 1, 2013 China Direct Investments, Inc. and CDI Shanghai Management Co., Ltd., both wholly owned subsidiaries of CD International Enterprises, Inc., entered into a Consulting Agreement with Armco Metals Holdings, Inc. (NYSE MTK: AMCO), pursuant to which we will provide a variety of consulting services to Armco Metals Holdings under the terms of an agreement which expires on October 31, 2014. As compensation for these services, we received 1,000,000 shares of Armco Metals Holdings common stock valued at approximately $400,000. We are responsible for the payment of our fees and costs which we may incur in rendering these services.


Monday, January 6, 2014
Auditor trail
Item 4.01                      Changes in Registrant’s Certifying Accountant.

On December 27, 2013, CD International Enterprises, Inc. informed HHC that it was terminating HHC as our independent registered public accounting firm effective immediately. While HHC had served as our independent registered public accounting firm since October 2013, it had never issued a report on our financial statements.  During the period of time that HHC served as our independent registered public accounting firm we had no disagreements with the firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreement if not resolved to the satisfaction of HHC would have caused it to make reference to the subject matter of the disagreement in connection with any report it might issue.

On December 30, 2013 we engaged MaloneBailey LLP as our independent registered public accounting firm.  During our two most recent fiscal years and the subsequent interim period prior to retaining MaloneBailey LLP (1) neither we nor anyone on our behalf consulted MaloneBailey LLP regarding (a) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements or (b) any matter that was the subject of a disagreement or a reportable event as set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K, and (2) MaloneBailey LLP did not provide us with a written report or oral advice that they concluded was an important factor considered by us in reaching a decision as to accounting, auditing or financial reporting issue.


Friday, December 27, 2013
Deal Flow
 
On December 19, 2013 China Direct Investments, Inc. and CDI Shanghai Management Co., Ltd., both wholly owned subsidiaries of CD International Enterprises, Inc., entered into a Consulting Agreement with Armco Metals Holdings, Inc. (NYSE MTK: AMCO), pursuant to which we will provide a variety of consulting services to Armco Metals Holdings under the terms of an agreement which expires on October 31, 2014.  As compensation for these services, we received 1,000,000 shares of Armco Metals Holdings common stock valued at approximately $300,000.  We are responsible for the payment of our fees and costs which we may incur in rendering these services, as well as the payment of certain third party expenses of Armco Metals Holdings including audit fees, press release, transfer agent, insurance and listing fees, web and social network maintenance and EDGAR and XBRL fees.


Tuesday, May 21, 2013
Comments & Business Outlook
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 
(Unaudited)
 
                         
   
For the Three Months ended March 31,
   
For the Six Months ended March 31,
 
   
2013
   
2012
   
2013
   
2012
 
Revenues:
                       
Revenues
  $ 16,967,151     $ 31,462,032     $ 33,753,368     $ 54,058,587  
Revenue-related parties
    5,439       23,568       -       570,999  
Total revenues
    16,972,590       31,485,600       33,753,368       54,629,586  
Cost of revenues
    16,327,448       25,470,017       33,052,413       43,392,778  
Gross profit
    645,142       6,015,583       700,955       11,236,808  
Operating expenses:
                               
Selling, general, and administrative
    (2,696,275 )     (2,395,972 )     (4,817,608 )     (4,980,743 )
Total operating expenses
    (2,696,275 )     (2,395,972 )     (4,817,608 )     (4,980,743 )
Operating (loss) income
    (2,051,133 )     3,619,611       (4,116,653 )     6,256,065  
Other income (expenses):
                               
Other income
    9,534       (50,897 )     153,540       487,673  
Interest income (expense)
    (255,549 )     81,355       (445,490 )     173,910  
Realized gain on available-for-sale marketable securities
    (13,686 )     (30,878 )     116,034       83,403  
Total other income (expenses)
    (259,700 )     (420 )     (175,916 )     744,986  
(Loss) income before income taxes
    (2,310,833 )     3,619,191       (4,292,569 )     7,001,051  
Income tax benefit (expense)
    (4,548 )     (1,600,076 )     92,304       (1,631,798 )
(Loss) income from continuing operations
    (2,315,381 )     2,019,115       (4,200,265 )     5,369,253  
Discontinued operations:
                               
Gain (loss) from discontinued operations, net of tax
    614,088       (56,981 )     237,603       (665,604 )
Net (loss) income
    (1,701,293 )     1,962,134       (3,962,662 )     4,703,649  
Net loss attributable to noncontrolling interests
    (210,253 )     47,454       111,717       436,646  
Net (loss) income attributable to CD International
    (1,911,546 )     2,009,588       (3,850,945 )     5,140,295  
Deduct dividends on Series A Preferred Stock
    (20,130 )     (20,130 )     (40,260 )     (40,260 )
Net (loss) income attributable to common stockholders
  $ (1,931,676 )   $ 1,989,458     $ (3,891,205 )   $ 5,100,035  
      -                          
COMPREHENSIVE (LOSS) INCOME:
    -                          
Net (loss) income
  $ (1,701,293 )   $ 1,962,134     $ (3,962,662 )   $ 4,703,649  
Foreign currency translation adjustments
    (83,693 )     (399,353 )     168,416       115,630  
Unrealized loss gains on available-for-sale securities
    1,230,866       (1,972,195 )     1,705,902       1,236,371  
Comprehensive (loss) income
    (554,120 )     (409,414 )     (2,088,343 )     6,055,650  
Net loss attributable to non-controlling interests
    (210,253 )     47,454       111,717       436,646  
Foreign currency translation adjustments - non-controlling interests
    (30,617 )     142,474       (32,159 )     89,543  
Comprehensive (loss) income attributable to CD International
    (794,990 )     (219,486 )     (2,008,785 )     6,581,839  
Preferred stock dividend
    (20,130 )     (20,130 )     (40,260 )     (40,260 )
Comprehensive (loss) income attributable to common stockholders
  $ (815,120 )   $ (239,616 )   $ (2,049,045 )   $ 6,541,579  
                                 
Basic and diluted net (loss) income per common share - basic:
                               
Net income (loss) from continuing operations
  $ (0.04 )   $ 0.05     $ (0.08 )   $ 0.14  
Net loss from discontinued operations
  $ 0.01     $ (0.00 )     -     $ (0.02 )
         Net Income (Loss) per Common Share
  $ (0.03 )   $ 0.05     $ (0.08 )   $ 0.12  
Basic and diluted net (loss) income per common share - diluted:
                               
Net income (loss) from continuing operations
  $ (0.04 )   $ 0.05     $ (0.08 )   $ 0.14  
Net loss from discontinued operations
  $ 0.01     $ (0.00 )   $ 0.00     $ (0.02 )
         Net Income (Loss) per Common Share
  $ (0.03 )   $ 0.05     $ (0.07 )   $ 0.12  
Basic weighted average common shares outstanding
    55,378,453       41,493,611       53,908,147       41,027,226  
Diluted weighted average common shares outstanding
    55,378,453       42,174,672       53,908,147       41,708,287  

Monday, February 25, 2013
Joint Venture

DEERFIELD BEACH, Fla., Feb. 25, 2013 /PRNewswire/ -- CD International Enterprises, Inc. ("CD International") (OTCQB:CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, today announced that its wholly owned subsidiary, CDII Minerals, has entered into a framework agreement with Minera MAPSA S.A.("MAPSA"), a Peruvian mining and exploration company,  to establish a joint venture to explore iron ore mining, distribution and production facilities opportunities in Peru. The companies will hold a joint press conference to discuss their plans on February 28, 2013 at 10:00 AM at the Swissotel in Lima Peru.

Under the terms of the framework agreement the joint venture will focus on the distribution and further exploration of MAPSA's mining concessions in southern Peru as well as the further distribution of iron ore from third party mining concessions. The two companies will each own 50% of the joint venture whereby profits derived through these efforts in Peru will be shared.  In addition, the joint venture will seek to partner with other entities to secure financing for its operations and to construct a Pig Iron processing plant with an expected annual capacity of 500,000 metric tons near MAPSA's Sama mining concession in Peru. CD International has entered into early stage talks with potential investment partners in China for these opportunities.

Commenting on the announcement, Mr. Ross Friedman , Vice President of CDII Minerals, stated, "We are excited to partner with MAPSA in Peru to help them distribute iron ore and further explore the potential of their mining concessions in Peru.  As CDII Minerals continues to build momentum in Latin America, this joint venture gives CD International the ability to leverage on its relationships and expertise in China to potentially expand into pig iron processing.  With large Chinese steel companies and other industrial businesses looking to build a footprint in Latin America, our companies are well positioned to capitalize on this unique opportunity.  We intend to work quickly to build a strong mineral distribution business with MAPSA and exploit every aspect of these potentially lucrative opportunities as we continue to expand our efforts in Latin America."


Monday, January 7, 2013
CFO Trail

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Item 8.01 Other Events.

As part of CD International Enterprises, Inc.’s (the “Company”) ongoing realignment plan to reduce its overall expenses, the Company has retained Adam Wasserman’s CFO Oncall, Inc. to support the Company’s accounting and finance group and its client consulting operations. CFO Oncall, Inc. is a provider of accounting services specializing in Securities and Exchange Commission financial reporting, budgeting and planning, mergers and acquisitions, audit preparation services, accounting, automated systems, banking relations and internal controls. Through CFO Oncall, Mr. Wasserman has served as the chief financial officer of a number of private and publicly held companies.

As part of this realignment, Hernan Grant Welch resigned his position as the Company’s Chief Financial Officer and a director as of December 31, 2012 and Mr. Wasserman resigned his position as a director of the Company as of December 31, 2012.


Wednesday, October 10, 2012
Comments & Business Outlook

DEERFIELD BEACH, Fla., Oct. 10, 2012 /PRNewswire/ -- CD International Enterprises, Inc. ("CD International") (OTCQB: CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, announced today the sale of our 51% interest in CDI Beijing International Trading Co., Ltd., a PRC company ("CDI Beijing") pursuant to the terms of an Equity Transfer Agreement for approximately $1.6 million. The sale of CDI Beijing will enable us to focus our operations in China solely on its magnesium production and distribution operations.

CD International acquired its stake in CDI Beijing in 2008 for approximately $1.5 million.  Under the terms of the October 8, 2012 Equity Transfer Agreement, Mr. Huijuan Chen, Vice President and a minority owner of CDI Beijing, acquired our 51% interest in CDI Beijing.  The purchase price of $1.6 million, comprised of cash and other consideration, is payable in five installments over a four year period from September 30, 2012 to September 30, 2016, with 9% per annum interest accruing on the residual payments beginning on October 1, 2012 and payable on the final installment. The Equity Transfer Agreement and a further description of that agreement is contained in our October 9, 2012 Form 8-K filed with the Securities and Exchange Commission. CDI Beijing recorded revenue of less than $1 million for the first nine months of fiscal 2012 and we anticipate this disposition will result in a negligible loss.

Commenting on the sale, Dr. James Wang, Chairman and CEO of CD International, stated, "We are pleased to complete the sale of CDI Beijing which will allow us to focus all of our operational efforts in China on our magnesium segment.  We believe that magnesium production and distribution as a pure play in China will be a much more valuable asset to our company in the future as we look to solidify a leading position in this industry.  We intend to continue on our geographic diversification plan by building our commodities distribution operations South America and focusing our U.S. based efforts on corporate management and consulting. We believe that by effectively growing these clearly defined operations, we can maximize the value of our operations in a number of strategic ways for the benefit of our company and its stockholders."


Tuesday, October 9, 2012
Comments & Business Outlook

DEERFIELD BEACH, FL--(Marketwire - Oct 8, 2012) - CD International Enterprises, Inc. ("CD International") (OTCQB: CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, announced today the sale of our 51% interest in Shanghai Lang Chemical Co., Ltd., a PRC company ("Lang Chemical") for $1.2 million as part of management's strategic plan to focus our operations in China on magnesium production and distribution.

CD International acquired its stake in Lang Chemical in 2006 for approximately $700,000. Under the terms of the September 28, 2012 Equity Transfer Agreement, Black Stone Chemical Limited purchased 2% of CD International's interest in Lang Chemical and Mr. Jingdong Chen, CEO of Lang Chemical, and his wife Ms. Qian Zhu purchased the remaining 49% interest for an aggregate purchase price of $1,221,532. Of this amount $600,000 was tendered at closing and the balance is payable over one year at an annual interest rate of 6%. Management intends to focus CD International's industrial efforts in China solely on the production and distribution of pure magnesium through its current magnesium production facilities within our magnesium segment. 

Commenting on the sale, Dr. James Wang, Chairman and CEO of CD International, stated, "As we enter fiscal 2013 management is focused on executing our strategic plan of geographic diversification and clear definition of our business segments. We believe that by clearly defining our magnesium operations as our China based business, commodities distribution as our business in South America, and our consulting services in the U.S., we can have more flexibility to maximize the value of our company. We are dedicated to building each of our segments for future growth and position our businesses to provide the greatest possible return for our company and its shareholders."

We anticipate this disposition will result in a loss of approximately $1 million in the fourth quarter of fiscal 2012 based on the current carrying value of our 51% equity interest in Lang Chemical on our balance sheet.


Tuesday, July 10, 2012
Investor Alert

DEERFIELD BEACH, FL--(Marketwire - Jul 10, 2012) -  CD International Enterprises, Inc. ("CD International") (NASDAQ: CDII), a U.S.-based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, announced today that its common stock will begin trading on the OTCQB Marketplace, under its current symbol "CDII" effective July11, 2012.

OTC Markets Group Inc. operates the world's largest electronic marketplace for broker-dealers to trade stocks not listed on a major exchange. The OTCQB is a market tier for OTC traded companies that are registered and reporting with the Securities and Exchange Commission. According to 2011 year-end market statistics published by OTC Markets Group Inc., there were 3,625 companies listed on the OTCQB with a total market capitalization of approximately $152 billion. Investors will be able to view real time stock quotes for CD International at http://www.otcmarkets.com under the ticker symbol CDII.

The transition to the OTCQB Marketplace comes after the ASDAQ Listing Qualifications Panel notified CD International on July 9, 2012 that the Panel has determined to delist CD International's common stock from the NASDAQ Global Market based on public interest concerns and will suspend trading of the stock effective at the open of trading on Wednesday, July 11, 2012.

The transition to the OTCQB Marketplace does not change CD International's obligation to file periodic and other reports with the Securities and Exchange Commission under applicable federal securities laws. In addition, the transition of CD International's stock to the OTCQB Marketplace will have no effect on CD International's shares or its shareholders ability to trade shares of CD International's stock. 

"While we disagree with the decision of the panel, we believe our stock's change in trading platform will not deter management and our whole team from achieving our goal of becoming the industry leader in the production and distribution of pure magnesium," stated Dr. James Wang, Chairman and CEO of CD International. "We remain committed to advancing our commodities distribution business as we look to reduce corporate expenditures to further improve our overall financial performance. We also intend to explore every alternative available to us to maximize future shareholder value."


Friday, May 11, 2012
Comments & Business Outlook

Second Quarter 2012 Results

  • For the second quarter of fiscal 2012, total revenues were $41.9 million, this compares to revenues of $42.3 million second quarter of fiscal 2011.
  • Our operations resulted in net income of $0.05 per basic and diluted share in the second quarter of fiscal 2012 on 41.5 million basic weighted average shares and 42.2 million diluted weighted average shares outstanding. This compares to a net loss of $(0.00) per basic and diluted share in the second quarter of fiscal 2011 on 34.7 million basic and diluted weighted average shares outstanding.

Commenting on our results for the second quarter of fiscal 2012, Dr. James Wang, Chairman and CEO of CD International, stated, "We are pleased with the overall performance of our operations thus far in fiscal 2012. With the completion of our two magnesium acquisitions now behind us, we believe we are poised to experience significant future growth in this segment as the market continues to solidify. While we face a number of challenges for our business, we are confident that we will emerge as a stronger organization, delivering future growth for the benefit of our stockholders."


Tuesday, May 1, 2012
Investor Alert
 
Other Events.

As previously disclosed in a Current Report of Form 8-K filed on April 27, 2012, on April 23, 2012, the Staff of The NASDAQ Stock Market LLC issued a letter to CD International Enterprises, Inc. (the “Company”) advising that it had determined to initiate proceedings to delist the Company’s securities from The NASDAQ Stock Market. Accordingly, on April 30, 2012, the Company requested a hearing before a NASDAQ Listing Qualifications Panel (the “Panel”) at which it intends to address each of the Staff’s allegations and request continued listing on The NASDAQ Stock Market.  NASDAQ has advised the Company that the hearing will be held on June 14, 2012, and that the delisting action will be stayed and the Company’s listing will continue pending the issuance of a final decision by the Panel following the hearing. NASDAQ generally advises issuers that the Panel intends to issue its decision in up to 30 calendar days following the hearing date. No assurance can be given that the Panel will grant the Company’s request for continued listing.
 

Tuesday, March 6, 2012
Acquisition Activity

DEERFIELD BEACH, Fla., March 6, 2012 /PRNewswire/ -- CD International Enterprises, Inc. ("CD International") (NASDAQ: CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides cross border corporate advisory services, announced today the results of a special shareholder meeting held on February 29, 2012.  Following the February 29, 2012 special meeting of shareholders approving the issuance of our common stock with approximately 96% of the votes cast, CD International completed the acquisition of 100% of Golden Trust Magnesium Industry Co., Ltd. "Golden Trust" and 80% of Lingshi Xinghai Magnesium Industry Co., Ltd. "Lingshi Magnesium" for an aggregate of $26.7 million payable by a combination of $6.5 million in cash or assignment of intercompany loans, $15.5 million in shares of our common stock, and $4.7 million by way of transferring our interest in our Excel Rise Technology Co., Ltd. subsidiary. In addition, our shareholders approved an amendment to our articles of incorporation to change our corporate name from China Direct Industries, Inc. to CD International Enterprises, Inc.

Golden Trust and Lingshi Magnesium are both engaged in the production of pure magnesium ingots.  CD International adds approximately 20,000 metric tons of annual production capacity from Golden Trust and 12,000 metric tons of annual production capacity from Lingshi Magnesium, bringing our total magnesium production capacity to approximately 90,000 metric tons, making us one of the largest magnesium producers in the world. In conjunction with the acquisition of Golden Trust and Lingshi Magnesium, we entered into a Management Agreement with Yuwei Huang and Kong Tung, members of our Board of Directors, to consolidate and manage the business operations for all of our magnesium production facilities.     

Commenting on the results of the special shareholder meeting, Dr. James Wang, Chairman and CEO of CD International, stated "We are pleased that our shareholders have overwhelmingly voted to allow us to complete the acquisitions as well as our new corporate name to reflect our business direction.  With the addition of Golden Trust and Lingshi Magnesium, we expect to benefit from a more streamlined organization, improving our overall cost structure and positioning our company to become the industry leader in pure magnesium production and distribution.  We expect to see a strong improvement in performance out of this segment in the coming quarters as we generate significantly larger sales opportunities, ramp revenue and improve cash flow and profitability for fiscal 2012 and beyond."


Wednesday, February 15, 2012
Comments & Business Outlook

First Quarter 2012 Results

For the first quarter of fiscal 2012, total revenues reached $36.9 million with net income attributable to common stockholders of $3.1 million. This resulted in net income of $0.08 per basic and diluted share on 40.6 million basic weighted average shares and 41.1 million diluted weighted average shares. This compares to revenues of $45.8 million with net income attributable to common stockholders of $3.4 million recorded in the first quarter of fiscal 2011. Net income per basic and diluted share in the first quarter of fiscal 2011 was $0.11 on 31.8 million basic and diluted weighted average shares.

While we experienced some softness in magnesium demand toward the end of calendar 2011, prices have stabilized in the beginning of calendar 2012 and magnesium prices are significantly higher than in the early part of fiscal 2011. Management continues to believe that we have positioned our company to take a major step forward in this segment in 2012 through our magnesium consolidation plan as well as through our use of cleaner more efficient waste gas. We anticipate that overall supply in China will be constricted later in fiscal 2012 and into fiscal 2013, as competitors using coal for fuel remain under pressure from environmental regulations and higher energy costs. We have also begun to ramp our efforts in our industrial commodities business which we anticipate will lead to progressive revenue growth throughout fiscal 2012 as we have cleared regulatory hurdles in Mexico and South America to deliver commodities on a continuous basis into China. We believe our corporate repositioning to emphasize the international expansion of our business will strengthen our business and broaden our exposure to the investment community in the quarters and years to come. We continue to anticipate an improvement in our performance in fiscal 2012 as we continue to build our company for the future. We will further discuss our operating results as well as our outlook for fiscal 2012 during the conference call today

Our Outlook

During the first quarter of fiscal 2012, the overall economic environment continued to improve, but certain segments of our business, primarily our Basic Materials segment, and to some extent our Magnesium segment, struggled with slower customer demand and a declining trend in prices due to tightened credit conditions in China impacting customer financing needs to purchase our products as well as domestic competitors in the magnesium industry liquidating inventories to raise cash balances prior to calendar 2011 year end. However, we still face a number of challenges in continuing the growth of our business, which is primarily tied to the overall health of the global economy. For the remaining quarters in fiscal 2012, we plan to continue adding our magnesium production capacity internally and through the planned strategic acquisitions of Golden Trust and Lingshi Xinghai Magnesium which have a combined production capacity of 32,000 metric tons per year in anticipation of improving markets in the coming years. We also intend to realign our investments in our Basic Material segment as we shift our business focus to the expansion of our industrial commodities sourcing and distribution business in the Americas. We have deployed approximately $3.3 million in the Americas as of the end of the first quarter of fiscal 2012 to begin to meet current market demand.

China’s Gross Domestic Product growth rate slowed to approximately 8.9% in the quarter ending December 31, 2011 as compared to the same period in 2010, the lowest rate within the last two years as the European debt crisis and weaker demand has put the global economic recovery in jeopardy and pushed China’s export-driven manufacturing activities to its lowest levels in the past three years. Furthermore, China’s housing market and particularly its real estate construction market experienced a significant correction due to a tighter regulatory environment, bank lending curbs, and slower demand during the fiscal period. In response to this slowdown, China’s Central Bank cut the nation’s commercial banks’ reserve requirement ratio by 0.5 percentage point, the first such cut since December 2008, in order to provide additional liquidity for commercial lending. This represents a significant shift in China’s economic policy signaling that China has put economic growth at the top of its agenda, rather than concerns about inflation.


Monday, January 23, 2012
Shareholder Letters

Dear Fellow Shareholders:

As we begin this New Year, I would like to thank each and every shareholder for your continued support and to extend our best wishes to you for a very happy and prosperous 2012. Over the course of this past year our company has achieved a great deal that will help us set the stage for future growth in fiscal 2012 and beyond. We have built a solid foundation for our company to enable us to move forward with our transformation into a truly global organization. In an effort to reflect this exciting global focus for our future, our board of directors has approved changing our corporate name to CD International Enterprises which we will adopt effective January 23, 2012. Our whole team is dedicated to our global effort and we intend to work diligently to make our company a vibrant and growing organization with a geographically diversified revenue base for the benefit of our shareholders.

As we move forward into our exciting future I think it is important to look back at the steps we have taken over the past two fiscal years as well as our future plans to position our company for this exciting new chapter in our corporate history. Full Story


Thursday, January 12, 2012
CFO Trail
Effective January 6, 2012, Hernan Grant Welch, was appointed as Executive Vice President and Chief Financial Officer of China Direct Industries, Inc.’s ("we”, "us” or “our”). Mr. Welch, age 62, has served as our Vice President of Finance and SEC Reporting since October, 2011. For over the past 30 years, Mr. Welch has been a certified public accountant working in international finance and auditing for both public companies and major auditing firms. Mr. Welch’s recent public company experience includes serving from 2007 to 2009 as Director of SEC reporting and SOX compliance for Core-Mark International, a NASDAQ listed international logistics services and distribution company. Prior to his position at Core-Mark, Mr. Welch was the Director of Financial Accounting and SEC reporting from for Longview Fibre Company, a public company engaged in forestry management and operations from 2006 until its privatization in 2007. Mr. Welch served as Director of Financial Reporting for Iowa Telecom from 2004 to 2006, where he helped manage the financial reporting process for the company’s initial public offering and listing on the NYSE. From 2002 to 2004, Mr. Welch was Director of Finance and SEC Reporting for Accuimage Diagnostics, Inc., a medical diagnostic software company serving multinational clients in the U.S., Europe and Asia. Mr. Welch assisted in the financial preparation for the sale of Accuimage to Merge Diagnostics which took place in January 2005. From 1999 to 2002, Mr. Welch was Vice President and SEC Reporting Director of Equus Entertainment, Inc., a NASDAQ listed entertainment, gaming and real estate company, serving multinational locations in the Caribbean and Latin America.

Wednesday, December 28, 2011
Contract Awards

DEERFIELD BEACH, Fla., Dec. 28, 2011 /PRNewswire/ -- China Direct Industries, Inc. ("China Direct Industries") (NASDAQ:CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides cross border corporate advisory services announced today that its magnesium segment operations received five new purchase contracts from existing customers, including major Fortune 500 companies, valued at approximately $11.0 million in December of 2011 for delivery over the next six months.   

Commenting on the contracts, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated "We are pleased to see an increase in orders and quoting activity as we head into calendar 2012.  We believe that our magnesium segment will strengthen further throughout the coming year as economic conditions which weakened short term demand begin to abate."


Friday, December 23, 2011
Comments & Business Outlook

Financial results for the fiscal year ended September 30, 2011.

DEERFIELD BEACH, FL--(Marketwire - Dec 22, 2011) - China Direct Industries, Inc. ("China Direct Industries") (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.

  • Revenue reaches $187.8 million up 66.6% from fiscal 2010
  • Net income attributable to China Direct Industries rises to $9.3 million up from a loss of ($3.2 million) in fiscal 2010
  • Diluted EPS climbs to $0.25 compared to a loss of ($0.11) in fiscal 2010

We experienced significant growth across all of our business segments reflecting stronger demand in the end markets we service as well as revenue contribution from our Ruiming Magnesium acquisition, our consulting segment and our international commodities business.

The overall environment in our various segments strengthened throughout fiscal 2011 and we now look to build on our momentum in fiscal 2012. While we experienced some cyclical softness in magnesium demand toward the end of calendar 2011, we entered fiscal 2012 with magnesium prices significantly higher than in the early part of fiscal 2011. Management believes that we have positioned our company to take a major step forward in this segment in 2012 through our planned acquisitions as well as through our use of cleaner more efficient waste gas. We anticipate that overall supply in China will be constricted later in fiscal 2012 and into fiscal 2013, as competitors using coal for fuel remain under pressure from environmental regulations and energy costs. We are also confident that our efforts in our industrial commodities business will lead to progressive revenue growth throughout fiscal 2012 as we have cleared regulatory hurdles in Mexico and South America to deliver commodities on a continuous basis into China. Through this business, along with our consulting and magnesium operations, we enter fiscal 2012, poised to build a more global company with revenue streams in China as well as the Americas. We intend to evaluate additional opportunities in the U.S. and abroad to further diversify our revenue base geographically. We anticipate an improvement in our performance in fiscal 2012 as we continue to build our company for the future. "


Wednesday, December 14, 2011
Investor Alert

DEERFIELD BEACH, Fla., Dec. 14, 2011 /PRNewswire/ -- 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 that it received a letter from the Nasdaq OMX Group on December 12, 2011 indicating that the Company no longer meets the minimum bid price requirement for continued listing set forth in Nasdaq Marketplace Rule 5450(a)(1). The letter gives China Direct Industries notice that bid price of the Company's common stock has closed under $1.00 for the last 30 business days.

The Nasdaq notice has no effect on the listing of the Company's common stock at this time.  Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has an initial period of 180 calendar days, or until June 11, 2012, to regain compliance. The letter states the Nasdaq staff will provide written notification that the Company has achieved compliance with Rule 5450(a)(1) if at any time before June 11, 2012, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days.


Wednesday, September 7, 2011
Acquisition Activity

DEERFIELD BEACH, Fla., Sept. 7, 2011 /PRNewswire/ -- China Direct Industries, Inc. ("China Direct Industries") (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 that it has entered into a series of agreements to acquire a 100% ownership interest in Golden Trust Magnesium Industry Co., Ltd. ("Golden Trust") and an 80% ownership interest in Lingshi Xinghai Magnesium Industry Co., Ltd. ("Lingshi Magnesium").  The acquisitions are part of management's ongoing plan to further consolidate its magnesium holdings as well as acquire additional facilities owned in whole or in part by Mr. Yuwei Huang, a member of the board of directors of China Direct Industries.  

Under the terms of the agreements China Direct Industries will issue up to 18.2 million shares of its common stock, transfer its $4.7 million interest in its subsidiary Excel Rise Technology Co., Ltd., and pay $4.8 million in cash or through the repayment of one of its intercompany loans to make the acquisitions in a deal totaling approximately $26.7 million.  Closing of the acquisitions is conditioned upon (i) approval of the issuance of the common stock constituting the stock consideration provided for in the agreements to acquire these companies  and in accordance with NASDAQ Market Place Rules and Regulations;  (ii) the absence of any order or injunction of a court of competent jurisdiction that prohibits the consummation of the acquisitions, (iii) the absence of certain governmental restraints, and (iv) the accuracy of the representations and warranties of each party. A summary of the agreements is provided in a Form 8-K China Direct Industries filed with the Securities and Exchange Commission on September 6, 2011. More


Monday, August 22, 2011
Analyst Reports

Rodman and Renshaw on CDII                        8/22/2011

CDII: 3Q FY11 Earnings Update

3Q FY11 Results: CDII reported its 3Q FY11 results (period ended June 30, 2011) of $57.0 MM in revenue, $4.3 MM of net income (after preferred stock dividends), and $011 in diluted EPS. Total revenue grew by 78.5% y-o-y and 34.9% sequentially. The company reported a gross margin of 13.3%, higher than 2Q FY11’s 7.6%, driven by larger contribution from the consulting segment, which bears a higher gross margin of 48.4%. For the bottom line, CDII delivered a net income of $4.29 MM (after preferred stock dividends), or $0.11 per diluted share, compared to net loss of $1.10 MM and $0.04 per diluted share a year ago. The company ended the quarter with cash balance of $10.26 MM and working capital of $55.5 MM.

Revenue Mix: During the quarter, Magnesium segment generated $25.0 MM in revenue, accounting for 44% of total revenue, while basic materials and consulting segments contributed $20.2 MM and $11.8 MM, or 35% and 21% of total. CDII shipped a total of 9,049 tons of magnesium products including ingot and powder, growing by 43.1% y-o-y from 5,967 tons in shipment a year ago but down 1.6% sequentially. ASP increased 15.2% y-o-y from $2,400/ton to $2,765.3/ton this quarter, compared to a 17.4% y-o-y increase in average cost per ton, which was up from $2,297/ton to $2,696/ton. Basic material business posted a 19.2% y-o-y growth from $16.9 MM to $20.2 MM this quarter. Consulting revenue reached $11.8 MM, up from $0.68 MM a year ago driven by fee revenue from two new clients.

Consulting Segment Accounts for 76% of Total Gross Profit: Although Magnesium and Basic Materials are the main revenue drivers for CDII, the majority of profit is generated from Consulting business, which recorded $5.7 MM in gross profit.

Selling 51% of Shanxi Pan Asia Magnesium for $3 MM Cash: CDII announced that it will sell 51% stake in one of its magnesium subsidiaries, Shanxi Pan Asia Magnesium Company to Bloomgain Investment, a BVI company for $3.05 MM cash.

Guidance Raised: Management raised its revenue guidance from previously announced $180 MM ~ $200 MM to at least $200 MM, with net income guidance unchanged at $12 MM.

Revising Estimates: We are raising our estimates for 4Q FY11 to $55.4 MM for top-line, $2.5 MM for bottom-line, and $0.06 for EPS. For full year FY11 and FY12, our projections are $200.5 MM and $241.8 MM for revenues, $9.5 MM and $11.5 MM for bottom-line, and $0.27 and $0.29 for EPS, respectively.

Valuation: The stock is currently trading at ~3.5x and ~3.2x to our FY11 and FY12 earnings estimates, compared to ~12.1x and ~10.4x for metals & mining peers listed in the US and ~37x and ~30x for peers listed in China. On Price-to-Sales, the company is trading at ~0.18x and ~0.15x to our FY11 and FY12 sales estimates, compared to ~3.6x for China listed comparables and ~1.9x for US listed comparables.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

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Notice Regarding Privacy and Confidentiality:

Rodman & Renshaw, LLC reserves the right to monitor and review the content of all e-mail communications sent and/or received by its employees.

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

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Wednesday, August 17, 2011
Comments & Business Outlook

CHINA DIRECT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
   
For the three months ended June 30,
   
For the nine months ended June 30,
 
   
2011
   
2010
   
2011
   
2010
 
                         
Revenues
  $ 55,154,956     $ 29,987,583     $ 141,588,028     $ 71,021,737  
Revenues-related parties
    1,860,644       1,956,931       3,465,187       6,545,831  
     Total revenues
    57,015,600       31,944,514       145,053,215       77,567,568  
Cost of revenues
    49,457,823       29,984,123       127,739,204       71,788,808  
     Gross profit
    7,557,777       1,960,391       17,314,011       5,778,760  
                                 
Operating income (expenses):
                               
   Selling, general, and administrative
    3,006,256       3,304,123       9,821,167       8,566,932  
   Other operating income-related party
    (3,919 )     -       (106,791 )     -  
   Other operating expense (income)
    1,180       -       (354,018 )     -  
       Operating income (expenses)
    4,554,260       (1,343,732 )     7,953,653       (2,788,172 )
Other (expenses) income:
                               
   Other (expense) income:
    (178,469 )     (43,961 )     86,892       4,524  
   Interest (expense) income
    (119,025 )     37,332       (186,069 )     40,944  
   Realized income (loss) on investment securities available for sale
    -       33,155       (379,969 )     2,134,344  
       Total other (expenses) income
    (297,494 )     26,526       (479,146 )     2,179,812  
        Income (loss) from continuing operations before income taxes
    4,256,766       (1,317,206 )     7,474,507       (608,360 )
   Income tax expense
    (53,078 )     (7,378 )     (120,719 )     (62,302 )
       Net income (loss)
    4,203,688       (1,324,584 )     7,353,788       (670,662 )
   Net (income) loss attributable to noncontrolling interests-continuing operations
    102,870       240,167       424,981       258,913  
      Net income (loss) attributable to China Direct Industries
  $ 4,306,558     $ (1,084,417 )   $ 7,778,769     $ (411,749 )
                                 
Deduct dividends on Series A Preferred Stock:
                               
   Preferred stock dividend
    (20,130 )     (20,125 )     (60,390 )     (80,433 )
   Deemed dividend - beneficial conversion feature
    -       -       (600,693 )     -  
   Dividend - warrant valuation
    -       -       (76,705 )     -  
      Net income attributable to common stockholders
  $ 4,286,428     $ (1,104,542 )   $ 7,040,981     $ (492,182 )
                                 
Basic and diluted income per common share
                               
   Basic
  $ 0.11     $ (0.04 )   $ 0.20     $ (0.02 )
   Diluted
  $ 0.11     $ (0.04 )   $ 0.20     $ (0.02 )
   Basic weighted average common shares outstanding
    37,567,331       28,828,887       34,694,215       28,940,495  
   Diluted weighted average common shares outstanding
    38,250,045       28,828,887       34,818,040       28,940,495  

Thursday, August 11, 2011
Deal Flow

DEERFIELD BEACH, Fla., Aug. 11, 2011 /PRNewswire/ -- China Direct Industries, Inc. ("China Direct Industries") (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 that as of August 8, 2011 it has entered into a definitive agreement to sell its 51% stake in Shanxi Pan Asia Magnesium Company ("Pan Asia") for $3.05 million in cash to Bloomgain Investment Company, Ltd. ("Bloomgain"), a privately held British Virgin Island company.


Wednesday, June 29, 2011
Comments & Business Outlook
Deerfield Beach, FL – June 29, 2011 - China Direct Industries, Inc. ("China Direct Industries") (NASDAQ:CDII), a U.S. based holding company with operations in China and the Americas, focusing on pure magnesium production, distribution of basic materials and metal ores, and cross-border corporate advisory services, announced today that it anticipates its wholly owned subsidiary, CDII Trading, will commence iron ore shipments from Bolivia into China beginning in the fourth quarter of fiscal 2011 ending September 30, 2011.
 
Management estimates that CDII Trading will ship in excess of 85,000 metric tons of iron ore in the fiscal fourth quarter, valued at approximately $10 million at current price levels, and progressively ramp shipment tonnage in fiscal 2012.   CDII Trading has iron ore supply agreements in Mexico, Chile and Bolivia for delivery into China and has already begun shipping iron ore out of Mexico.  Management estimates its Bolivian operations have the potential to reach quarterly iron ore shipment levels in excess of 180,000 metric tons, or approximately $21 million at current price levels, under its existing supply contracts and contracts under negotiation.
 
Dr. James Wang, Chairman and CEO of China Direct Industries, stated “We are excited to add Bolivia to our active locations for sourcing iron ore into the China markets.  We are confident that as shipment levels rise out of South America and Mexico, we will build a strong U.S. based revenue and income stream while taking advantage of our China expertise.  We look forward to providing additional information on this subsidiary as we continue to build our operations internationally and broaden our revenue base and profit drivers.”

Friday, May 20, 2011
Analyst Reports

Rodman and Renshaw on CDII                                   5/20/2011

CDII: 2QFY11 Earnings Update

2QFY11 Results: CDII reported its 2Q FY11 results (period ended March 31, 2011) of $42.3 MM in revenue, $0.01 MM of net loss (after preferred stock dividends), and $0.00 in diluted EPS. Total revenue grew by 80.9% y-o-y but declined 7.7% sequentially. Magnesium segment generated $24.3 MM in revenue, accounting for 57% of total, while basic materials and consulting segments contributed $16.41 MM and $1.59 MM, or 39% and 4% of total. The company reported a gross margin of 7.6%, lower than 1Q FY11’s 14.3%, driven by larger contribution from the lower-margin magnesium segment, which bears a gross margin of 2.4%. Operating income was minimal in the quarter at $0.10 MM, compared to an operating loss of ($0.48) MM in 2Q FY10 and $3.3 MM profit in 1Q FY11. In the bottom line, CDII delivered a net loss of $0.01 MM (after preferred stock dividends), or ($0.00) per diluted share, compared to net earnings of $1.64 MM and $0.06 per diluted share a year ago.

Key Takeaways: We believe in the near-term, capacity should not be the constraint for the story since the company is not running at full utilization levels. In our view margins remain the key driver for the stock: magnesium business normally yields approximately 2%~4% gross margin, while basic material business generates 4.5%~6% and consulting business carries 80% or higher. On GM side, this quarter’s slowdown in consulting business has materially dragged CDII’s margin and bottom-line. On the EBIT side, we believe a higher capacity utilization level and shipment volume may allow some operating leverage to boost the bottom-line. However in the near-term, we are being cautiously optimistic given that the inflationary environment in China could potentially affect the demand therefore weigh on CDII’s shipment and margin.

Guidance Revised: Management continues to be confident on the magnesium market recovery in China and raised revenue guidance slightly to the range of $180 MM ~$200 MM from previously announced $180 MM, while maintaining its net income guidance of $12 MM, which indicates a lower margin expectation.

3QFY11 Estimates: For 3QFY11, we are projecting $52.5 MM for top-line, $2.91 MM for bottom-line, and $0.08 in diluted EPS. For full year FY11, we expect the company to generate revenue, net income, and diluted EPS of $193.8 MM, $8.2 MM, and $0.24 per share, respectively. For next fiscal year, our estimates are $233.8 MM, $12.2 MM, and $0.34, respectively.

Valuation: The stock is currently trading at ~4.7x and ~3.4x to our FY11 and FY12 earnings estimates, compared to ~12.3x and ~11.0x for metals & mining peers listed in the US and ~22.8x and ~19.3x for peers listed in China. On Price-to-Sales, the company is trading at ~0.20x and ~0.17x to our FY11 and FY12 sales estimates, compared to ~3x for China listed comparables and ~2x for US listed comparables. We are comfortable maintaining our $3.00 price target for CDII, which implies a ~9x P/E ratio to our FY12 earnings forecast.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.


Tuesday, May 17, 2011
Comments & Business Outlook

Second Quarter Results:

  • For the second quarter of fiscal 2011 total revenues increased to $42.3 million up 81% compared to total revenues of $23.4 million recorded in the second quarter of fiscal 2010.
  • EPS $0.00 vs. ($0.06)

As overall trends in our end-markets continue to improve and our revenue base has strengthened across all of our business segments, we see revenue for the full 2011 fiscal year of $180 to $200 million with net income of $12 million. We will further discuss our operating results as well as our outlook for fiscal 2011 during the conference call today, May 16, 2011 at 4:30 PM EST.

Commenting on our results for the second quarter of fiscal 2011, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "Our results continue to improve across all business segments in fiscal 2011, bolstered by a strengthening magnesium market, sales from our trading operations as well as sales of steel products and construction materials in China. While we experienced the short term negative effects of government imposed power restrictions limiting our magnesium production resulting in lower margin distribution sales, we believe that those conditions should not affect our operations in the second half of fiscal 2011. Demand for magnesium continues to strengthen and prices have risen since the end of the quarter. Additionally, the resumption of production at our Baotou facility and our consolidation of Golden Magnesium should further enhance our ability to grow revenue and profit in this segment. We are pleased to have completed a shipment of iron ore from Mexico into China and look forward to ramping up sales from our trading operations from Mexico and South America throughout the remainder of this fiscal year. Our Consulting segment revenue remains strong and we are diligently working on the addition of several new consulting clients to further strengthen our revenue. We also continue to strengthen our balance sheet as we build for the future and we expect to deliver a strong performance in the second half of fiscal 2011 and into 2012."


Monday, March 7, 2011
Deal Flow
On March 4, 2011, China Direct Industries, Inc. elected not to proceed with and discontinued its proposed offering of up to 4,516,629 shares of the Company’s common stock described in the prospectus supplement dated February 16, 2011, which the Company filed on February 16, 2011 with the Securities and Exchange Commission.

Tuesday, February 15, 2011
Comments & Business Outlook

First Quarter 2011 Results:

  • First Quarter 2011 revenue reaches $45.8 million up 105.7% from First Quarter of 2010 revenue of $22.3 million
  • Net income rises to $3.5 million up from a loss of ($985,000) in the First Quarter 2010
  • Basic and diluted EPS of $0.09 versus basic and diluted EPS of ($0.04) in the First Quarter of 2010

Commenting on our results for the first quarter of fiscal 2010, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "Our results have substantially improved in the first quarter as we build momentum for the remainder of fiscal 2011. We continue to ship more magnesium quarter over quarter as we work to add capacity on increasing demand and look to be opportunistic in our purchases of raw materials to improve performance. As our core operations in China have now stabilized and resumed a top line growth track, we will look to focus on expanding margins and operating efficiencies to achieve marked improvement in our operating margins.

Financial Guidance

As overall trends in our end-markets continue to improve and our revenue base has strengthened across all of our business segments, the Company sees

  • revenue for the full 2011 fiscal year of $180 million
  • net income of $12 million.

Commenting on our results for the first quarter of fiscal 2010, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "Our results have substantially improved in the first quarter as we build momentum for the remainder of fiscal 2011. We continue to ship more magnesium quarter over quarter as we work to add capacity on increasing demand and look to be opportunistic in our purchases of raw materials to improve performance. As our core operations in China have now stabilized and resumed a top line growth track, we will look to focus on expanding margins and operating efficiencies to achieve marked improvement in our operating margins. We have worked diligently to survive a prolonged downturn and now emerge with strengthening production and distribution businesses in China and a vastly improved environment for our consulting services as evidenced by the recent USChina Channel transaction. In addition, we believe our commodities trading business is poised for rapid growth as we look to begin shipments of iron ore from Mexico and parts of South America in the second quarter of fiscal 2011. We have strengthened our balance sheet to grow our business and we are confident that we can build on the success of the first quarter to forge a growing and profitable company for the remainder of fiscal 2011 and beyond."


Liquidity Requirements

The continued implementation of our business model, which includes providing investment capital to augment the growth of our portfolio companies, the operation of our commodity trading business and to expand our business through new acquisitions, will in all likelihood require additional capital. In addition, during fiscal 2011, we plan to use our magnesium holdings as a basis to raise capital and expand our magnesium holdings by acquiring additional operations owned or controlled by Yuwei Huang, an executive officer and director of our company, as contemplated in a non-binding letter of intent we have entered into with Mr. Huang during our 2009 transition period. While we do not anticipate any difficulties in raising the additional capital as needed, we do not presently have any firm commitment from any third parties and it is possible that we may not be able to raise the capital upon terms acceptable to us.


Monday, January 3, 2011
Comments & Business Outlook

DEERFIELD BEACH, FL--(1/3/11) - China Direct Industries, Inc. announced today that its wholly owned subsidiary CDII Trading, Inc. has entered into a contract with a privately held China-based trading company to supply iron ore from Bolivia.

As previously stated in our Form 8-K filed with the Securities and Exchange Commission on December 22, 2010, CDII Trading has been finalizing several supply contracts and sales agreements for iron ore delivery into China from Mexico and parts of South America with shipments expected to begin in the second quarter of fiscal 2011.  CDII Trading has agreed to supply iron ore to its China based buyer over a 12 month period under an agreement with a Bolivian mineral ore mining and exporting company upon acceptance of purchase orders by the parties and fulfilment of other commercial terms in the agreement including the successful completion of an initial test shipment. The monthly revenue under this agreement is expected to be approximately $4.5 million at the current market price for iron ore.

Commenting on this contract, Dr. James Wang, CEO and Chairman of China Direct Industries, Inc., stated, “This agreement to provide iron ore to China is a significant step forward for our trading operations in South America as we secure sales of iron ore under our long-term supply agreement with our Bolivian partner.  We believe successful completion of shipments from Bolivia will lead to further success in this and other ore rich South American countries and Mexico.  If we are able to complete delivery of iron ore to China under this agreement and our other supply agreements in Chile and Mexico, our international trading business has the potential to be a major driving force in the growth of our revenue and earnings for years to come”.


Deal Flow
DEERFIELD BEACH, FL--(December 31, 2010) -- China Direct Industries, Inc. announced that it has entered into definitive agreements to sell 2,222,223 shares of its common stock and warrants to purchase up to 777,778 shares of its common stock to accredited investors

Saturday, December 25, 2010
Comments & Business Outlook
CHINA DIRECT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

   
2010
   
2009
 
             
Revenues
  $ 105,386,688     $ 57,088,400  
Revenues-related parties
    7,356,529       11,541,914  
     Total revenues
    112,743,217       68,630,314  
Cost of revenues
    105,560,695       66,349,604  
     Gross profit
    7,182,522       2,280,710  
                 
Operating expenses:
               
   Selling, general, and administrative
    11,374,137       10,938,867  
       Operating loss
    (4,191,615 )     (8,658,157 )
Other income (expense):
               
   Other income (expense):
    (20,986 )     (119,313 )
   Interest income
    43,546       283,288  
   Other impairment charges
    (1,282,546 )     (1,753,744 )
   Realized gain (loss) on sale of marketable securities
    2,140,781       (1,909,056 )
   Realized loss on other than temporary impairment
    (205,342 )     (9,466,329 )
       Total other income (expense)
    675,453       (12,965,154 )
        Loss from continuing operations before income taxes
    (3,516,162 )     (21,623,311 )
   Income tax (expense) benefit
    (56,674 )     21,165  
       Loss from continuing operations, net of income taxes
    (3,572,836 )     (21,602,146 )
   Loss from discontinued operations
    -       (1,194,767 )
  Provisional reserve on discontinued operations
    -       (7,362,039 )
       Net loss
  $ (3,572,836 )   $ (30,158,952 )
   Net loss attributable to noncontrolling interests-continuing operations
    358,911       585,436  
   Net loss attributable to noncontrolling interests-discontinued operations
    -       1,714,521  
      Net loss attributable to China Direct Industries, Inc.
  $ (3,213,925 )   $ (27,858,995 )
                 
Deduct dividends on Series A Preferred Stock:
               
   Preferred stock dividend
    (100,558 )     (80,925 )
      Net loss attributable to common stockholders
  $ (3,314,483 )   $ (27,939,920 )
                 
Basic and diluted loss per common share
               
   Basic
  $ (0.11 )   $ (1.13 )
   Diluted
  $ (0.11 )   $ (1.13 )
   Basic weighted average common shares outstanding
    29,574,749       24,802,730  
   Diluted weighted average common shares outstanding
    29,574,749       24,802,730  

GeoTeam® Note: Non-GAAP EPS was -0.10 vs. -0.27

Although we experienced short term shortages of electricity and coke gas during the fourth quarter of fiscal 2010 and the first quarter of fiscal 2011 at some of our magnesium facilities, we believe we will have access to sufficient electricity, dolomite, ferrosilicon and coke gas to meet our needs for the foreseeable future as the government imposed energy restrictions expire and demand for coke increases. See Item 1A – Risk Factors - Fluctuations in the cost or availability of electricity, coke, coal and/or natural gas would lead to higher manufacturing costs, thereby reducing our margins and limiting our cash flows from operations.

The overall environment in our various segments continues to improve and we see further momentum in fiscal 2011. The positive sales trends in our magnesium segment accelerated throughout the year and we expect further growth with additional production available through the staged restart of our Changxin and Bautou Changxin facilities coupled with production of magnesium powder from our recent acquisition of Ruiming Magnesium. We continue to market our magnesium products through our strengthening IMG brand. Our international commodity trading business is finalizing several supply contracts and sales agreements for iron ore delivery into China from Mexico and parts of South America scheduled to begin shipping early in the second quarter of fiscal 2011. We enter fiscal 2011 anticipating that we will return to net profitability during the year while growing our revenue by a minimum of 30%.

Commenting on our results for fiscal 2010, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "Our results for fiscal 2010 reflect a significant improvement in overall operating revenue and positive trends across all of our business segments when compared to the same twelve month period in 2009. The progressive improvement in our magnesium segment where shipments, average pricing and revenue increased each quarter has led us to restart facilities to further accelerate growth in fiscal 2011.We believe our basic materials segment is poised for continued improvement as we look to deliver on several key distribution contracts in the coming year and we begin shipments of iron ore to China. We believe our marketing efforts in consulting will lead to a near term transaction as well as the addition of new clients in fiscal 2011 and result in a much stronger performance in this business. We are more optimistic than ever with regard to our international commodity trading business with the beginning of shipments of iron ore to China in this new fiscal year. As we head into fiscal 2011, we maintain a strong balance sheet with sufficient cash to fund operations and negligible long term debt with an eye toward significant revenue growth and a return to profitability."


Thursday, September 16, 2010
Liquidity Requirements
Rodman and Renshaw Annual Global Investment Conference presentation.

Tuesday, September 14, 2010
Comments & Business Outlook
China Direct Industries, Inc. , announced that its subsidiary, CDI Beijing International Trading Co., Ltd., has received a contract from Beijing Tianrun Construction Co, Ltd. for the delivery of various types of reinforcing steel bars having the potential to generate over $70 million in revenue over the next 12 months. Delivery dates will be determined by parties over the term of the contract.

Thursday, May 13, 2010
Comments & Business Outlook

The overall environment in our various businesses improved in the second quarter as margins remained positive and volumes increased substantially at our magnesium and chemical operations, partially offset by a reduction in sales in our construction products distribution business. We see inflationary pressures mounting in magnesium and anticipate that growing volume trends will lead to price appreciation in the coming quarters. We are restarting facilities in response to improvements in demand and increased quoting activities. Activity in our consulting operations has increased substantially and we anticipate an acceleration of growth in both the number of clients we service as well as our overall revenue for the remainder of 2010. Additionally, we see our CDII Trading operations reaching contractual terms on several purchase and sale agreements for various metal ores for delivery into China from South America and Mexico in the second half of fiscal 2010. We continue to see our net income ranging between $8 to $10 million on revenue ranging from between $130 and $150 million.

Commenting on the second quarter, Dr. James Wang, Chairman and CEO of China Direct Industries, Inc., stated, "We are pleased to return to profitability in the second quarter as we see momentum building for the second half of fiscal 2010. We are also pleased that all of our business segments showed improvements in the quarter. We move into the remainder of fiscal 2010 poised to see a strong reacceleration of growth as our end-markets in our various business segments continue to strengthen. We are confident that the restart of our magnesium facilities coupled with a strong performance in our consulting operations and CDII Trading will boost our performance significantly in the coming quarters as our company emerges from the challenging environment we have faced since the fall of 2008."