SmartHeat Inc. Reports Record 2nd Quarter Financial Results, Reaffirms 2008 Sales and Earnings Guidance
Thursday August 14, 7:05 am ET
NEW YORK, NY--(MARKET WIRE)--Aug 14, 2008 -- SmartHeat Inc. (OTC BB:SMHT.OB - News)
-- Earnings per Share of $0.04, increased approximately 400% from Q2 in
2007.
-- Net Income of $0.73 Million, Increased 2270% from Q2 in 2007.
-- Record Revenue of $5.56 Million, Increased 380% from Q2 in 2007.
-- Expects strong earnings growth to continue in the second half of 2008
which is SmartHeat's two strongest quarters of the year.
-- Reaffirms 2008 revenue guidance of approximately $42 million, net income
between $7.4 million and $7.7 million.
SmartHeat Inc. (Website: www.smartheatinc.com) (OTC BB:SMHT.OB - News), a market leader in China's "green" technology heat energy saving industry, today announced record financial results for the quarter ended June 30, 2008.
SmartHeat generated revenues of $5.56 million, compared to $1.16 million in the same period in 2007, an increase of approximately 380%. The sales increase was primarily due to the expansion of the company's sales force, growth of SmartHeat's existing sales channels which developed new customers and the extension of the company's customer base into new markets in China. SmartHeat expects its growth momentum to continue through the remainder of 2008.
Net income for the quarter was $732,412, compared to approximately $3,219 for the same period in 2007. This increase is attributed to greater economies of scale combined with rapid growth in revenues and significantly improved operating efficiency. SmartHeat believes that net income growth momentum will continue in the second half of 2008.
James Jun Wang, SmartHeat's CEO, commented: "We are very pleased with the 2nd quarter financial results. Our strong financial performance reflects implementation of our growth strategies in a favorable market environment as China embraces more energy efficient products. SmartHeat stands to benefit greatly from China's 'green' movement towards clean environment as our efficient energy saving products reduce heat energy use by as much as 50%. We look forward to continued execution of our growth plan as we enter two of SmartHeat's strongest quarters."
About SmartHeat Inc.
SmartHeat Inc. is a US company with its primary operations in China. SmartHeat is a market leader in China's "green" technology heat energy saving industry. SmartHeat manufactures plate heat exchangers and compact plate heat exchanger units -- the technology that helps to capture and recycle waste heat thus reduces fossil fuel related costs and pollution. SmartHeat's products and technology have broad residential and industrial applications. China's heat transfer market is currently estimated at approximately $2.4 billion with double digit annual growth according to China Heating Association. Additional information about SmartHeat is available at its corporate website: www.smartheatinc.com
Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. SmartHeat's actual results may differ from its projections. Further, preliminary results are subject to normal year-end adjustments. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect SmartHeat's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in SmartHeat's filings with the Securities and Exchange Commission.
SMARTHEAT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(Unaudited)
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Net sales $8,637,283 $2,457,967 $5,558,232 $1,159,098
Cost of goods sold 6,228,156 1,598,789 4,115,200 756,368
---------- ---------- ---------- ----------
Gross profit 2,409,127 859,178 1,443,032 402,730
Operating expenses
Selling expenses 608,028 484,893 410,607 267,682
General and
administrative
expenses 446,470 298,842 162,325 141,397
---------- ---------- ---------- ----------
Total operating
expenses 1,054,498 783,735 572,932 409,079
---------- ---------- ---------- ----------
Income (loss) from
operations 1,354,629 75,443 870,100 (6,349)
Non-operating income
(expenses)
Interest income 260,683 164,421 113,545 95,396
Interest expense (163,040) (87,966) (96,412) (57,854)
Other income 8,290 12,000 6,116 10,923
Subsidy income 9,141 51,830 134 272
---------- ---------- ---------- ----------
Total non-operating
income 115,074 140,285 23,383 48,737
---------- ---------- ---------- ----------
Income before income tax 1,469,703 215,728 893,483 42,388
Income tax expense 266,028 52,486 161,071 39,178
---------- ---------- ---------- ----------
Income after income tax 1,203,675 163,242 732,412 3,210
Less: minority interest - (1,846) - (9)
---------- ---------- ---------- ----------
Net income 1,203,675 165,088 732,412 3,219
Other comprehensive item
Foreign currency
translation 410,896 77,254 168,802 39,842
---------- ---------- ---------- ----------
Comprehensive Income $1,614,571 $ 242,342 $ 901,214 $ 43,061
========== ========== ========== ==========
Basic and diluted weighted
average shares outstanding 20,213,419 21,926,838 18,500,000 18,500,000
---------- ---------- ---------- ----------
Basic and diluted earnings
per share $ 0.06 $ 0.01 $ 0.04 $ 0.00
========== ========== ========== ==========
SMARTHEAT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AS OF AS OF
JUNE 30, DECEMBER 31,
2008 2007
(Unaudited)
ASSETS
CURRENT ASSETS
Cash & cash equivalents $ 207,495 $ 393,147
Restricted cash 807,709 537,098
Accounts receivable, net 7,954,078 4,762,822
Retentions receivable 26,552 191,319
Advances to suppliers 2,111,461 158,750
Other receivables 1,100,950 766,231
Inventories 5,474,046 7,928,408
Due from related party 224,710 118,560
--------------- ---------------
Total current assets 17,907,001 14,856,335
NON-CURRENT ASSETS
Property and equipment, net 2,133,803 2,040,809
Construction in progress 40,696 -
Accounts receivable, net - 949,998
Retentions receivable - 169,309
Intangible assets, net 620,801 534,208
--------------- ---------------
Total noncurrent assets 2,795,300 3,694,324
--------------- ---------------
TOTAL ASSETS $ 20,702,301 $ 18,550,659
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,724,904 $ 3,128,585
Unearned revenue 1,565,208 3,125,406
Tax payable 362,121 503,010
Other payables 1,294,697 807,700
Due to related party 526,772 445,990
Loans payable 4,693,917 4,619,856
--------------- ---------------
Total current liabilities 13,167,619 12,630,547
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST - -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value;
75,000,000 shares authorized,
22,549,900 and 18,500,000 shares
issued and outstanding at June 30, 2008
and December 31, 2007, respectively 22,550 18,500
Paid in capital 3,098,082 3,102,132
Statutory reserve 627,722 506,532
Accumulated other comprehensive income 884,755 473,859
Retained earnings 2,901,573 1,819,089
--------------- ---------------
Total stockholders' equity 7,534,682 5,920,112
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 20,702,301 $ 18,550,659
=============== ===============
Contact Information:
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