SmartHeat Inc. Announces Record 3rd Quarter Financial Results- Earnings Per Share (EPS) of $0.18, Increased 1700%, Energy Saving Equipment Sales Continue to Benefit from Rapid Growth Momentum
- Net Income increased 1865% to $4.3 million for the quarter ended September 30, 2008 compared to $0.22 million for the same period in 2007.
- Net Income for the first nine months in 2008 reached $5.53 million, an increase of 1335% over the $0.39 million reported for the comparable 2007 period.
- Earnings per Share were $0.18 and $0.26, respectively, for the three and nine months ended September 30, 2008, increases of approximately 1700% and 1200% as compared to $0.01 and $0.02 for the same periods in 2007.
- Revenues for the three and nine months ended September 30, 2008 were $20.7 million and $29.3 million, respective increases of 587% and 436% period to period.
Monday November 17, 2008, 6:55 am EST
NEW YORK, Nov. 17 /Xinhua-PRNewswire/ -- SmartHeat Inc. (Website: http://www.smartheatinc.com/) (OTC Bulletin Board: SMHT - News), a market leader in China's "green" technology, environmentally friendly energy savings industry, today announced record financial results for the quarter ended September 30, 2008.
SmartHeat generated revenue of $20.7 million in the quarter compared to $3.01 million in the same period in 2007, an increase of approximately 587%. This increase was primarily due to increased customer recognition and acceptance of SmartHeat brand quality products, deeper market penetration and strong customer demand as China mandates that businesses and municipalities adopt energy saving programs. SmartHeat expects this momentum to continue in 2008 and 2009.
Net income for the quarter was $4.3 million compared to $0.22 million for the corresponding 2007 period. The year to year increase in SmartHeat's earnings was attributable in large part to larger economies of scale, combined with the growth in revenues and significantly improved operating efficiency.
James Jun Wang, SmartHeat's CEO, commented: "We are pleased with our 3rd quarter financial results which demonstrate continued rapid growth in our business and the industry in general that we anticipated in early 2008. Our strong financial performance reflects execution of our growth strategies in a favorable market environment as China embraces more energy efficient products and mandates the use of environmentally friendly energy saving equipment. As a market leader, SmartHeat stands to benefit greatly from China's "green" movement towards a clean environment. Our products reduce heat consumption and lower heating bills by as much as 50%. We are committed to delivering quality products to customers while creating greater value for our shareholders."
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 reducing 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.
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.
Corporate Contact:
James Jun Wang
Chairman & CEO
SmartHeat Inc.
Tel: 011-86-13701368262
Email: info@smartheatinc.com
SMARTHEAT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(Unaudited)
FOR THE NINE MONTHS FOR THE THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2008 2007 2008 2007
Net sales $29,345,571 $5,473,573 $20,708,288 $3,015,606
Cost of goods sold 19,502,070 3,679,507 13,273,914 2,080,718
Gross profit 9,843,501 1,794,066 7,434,374 934,888
Operating expenses
Selling expenses 1,664,882 805,099 1,056,854 320,206
General and
administrative
expenses 1,470,577 528,215 1,024,107 229,373
Total operating
expenses 3,135,459 1,333,314 2,080,961 549,579
Income from
operations 6,708,042 460,752 5,353,413 385,309
Non-operating income
(expenses)
Interest income 318,070 142,583 57,387 -
Interest expense (257,116) (170,985) (94,076) (104,857)
Investment
expense (1,628) - (1,628) -
Non-operating
income 9,744 22,110 9,744 22,110
Non-operating
expense (2,990) (6,285) (11,280) (18,285)
Exchange loss (9,058) (11,855) (9,058) (11,855)
Subsidy income 16,141 52,193 7,000 363
Total non-operating
income (expenses) 73,163 27,761 (41,911) (112,524)
Income before income
tax 6,781,205 488,513 5,311,502 272,785
Income tax expense 1,246,935 105,256 980,907 52,770
Income after income
tax 5,534,270 383,257 4,330,595 220,015
Less: minority interest 5,934 (1,859) 5,934 (13)
Net income 5,528,336 385,116 4,324,661 220,028
Other comprehensive
item
Foreign currency
translation 578,670 147,335 167,774 70,081
Comprehensive Income $6,107,006 $532,451 $4,492,435 $290,109
Basic weighted
average shares
outstanding 21,503,588 18,500,000 24,055,878 18,500,000
Diluted weighted
average shares
outstanding 21,503,647 18,500,000 24,056,054 18,500,000
Basic earnings per
share $0.26 $0.02 $0.18 $0.01
Diluted earnings per
share $0.26 $0.02 $0.18 $0.01
SMARTHEAT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
2008 2007
(Unaudited)
ASSETS
CURRENT ASSETS
Cash & cash equivalents $1,702,938 $393,147
Restricted cash 678,642 537,098
Accounts receivable, net 11,797,010 4,762,822
Retentions receivable 271,173 191,319
Prepaid expenses 8,316 -
Advances to suppliers 154,290 158,750
Other receivables 3,351,498 766,231
Inventories 8,454,000 7,928,408
Due from related party 251,547 118,560
Notes receivable 203,696 -
Total current assets 26,873,110 14,856,335
NON-CURRENT ASSETS
Accounts receivable, net - 949,998
Retentions receivable - 169,309
Intangible assets, net 1,176,351 534,208
Property and equipment, net 2,349,147 2,040,809
Construction in progress 85,036 -
Total noncurrent assets 3,610,534 3,694,324
TOTAL ASSETS $30,483,644 $18,550,659
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $4,635,664 $3,128,585
Unearned revenue 2,282,353 3,125,406
Taxes payable 1,423,528 503,010
Accrued liabilities and other
payables 1,398,402 807,700
Due to related party - 445,990
Due to minority shareholder 5,274 -
Loans payable 3,548,746 4,619,856
Total current liabilities 13,293,967 12,630,547
DEFERRED TAX LIABILITY 39,112 -
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST - -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par
value; 75,000,000 shares
authorized, 24,179,900 and
18,500,000 shares issued and
outstanding at September 30, 2008
and December 31, 2007,
respectively 24,180 18,500
Paid in capital 8,219,898 3,102,132
Statutory reserve 1,064,768 506,532
Accumulated other
comprehensive income 1,052,529 473,859
Retained earnings 6,789,190 1,819,089
Total stockholders' equity 17,150,565 5,920,112
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $30,483,644 $18,550,659
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