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SmartHeat Inc. Announces First Quarter 2012 Financial Results

NEW YORK, May 15, 2012 /PRNewswire-Asia/ -- SmartHeat Inc. (NASDAQ: HEAT; website: www.smartheatinc.com), a market leader in China's clean technology, energy savings industry, today announced financial results for the quarter ended March 31, 2012.

Financial Summary

Net sales in the three months ended March 31, 2012, were $6.75 million, while net sales in the three months ended March 31, 2011, were $7.89 million, an overall decrease of $1.15 million or 15%. The decrease in sales was due primarily to the decrease in sales volume in the three months ended March 31, 2012, compared to the same period of 2011. Sales volume of PHEs, PHE Units, heat meters and heat pumps decreased 17%, 21%, 72% and 19%, respectively, in the first quarter of 2012 compared to 2011.

Gross profit was $1.67 million in the three months ended March 31, 2012, compared to $2.56 million in the same period of 2011, or gross profit margins of 25% and 32%, respectively. The decreased gross profit was due primarily to our decreased sales, production volume and average selling price.

Operating expenses totaled $9.55 million in the three months ended March 31, 2012, compared to $7.08 million in the same period of 2011, an increase of $2.47 million or 35%. Operating expenses as a percentage of sales were 142% in the three months ended March 31, 2012, compared to 90% in the three months ended March 31, 2011. The increase in operating expenses mainly resulted from: bad debt allowance for other receivables of $0.39 million for the three months ended March 31, 2012, compared with $0 for the same period of 2011; provision for inventory allowance of $0.13 million for the three months ended March 31, 2012, compared with $0 for the same period of 2011; and an after-sales service expense of $1.63 million for the three months ended March 31, 2012, compared with $0.66 million for the same period of 2011 for equipment installation and modifications of products under warranty as part of our continued process of improving product quality and introducing newly-developed technology to maintain existing customers and attract new contracts.

Our net loss for the three months ended March 31, 2012, was $6.9 million compared to net loss of $3.9 million for the same period of 2011, an increase of $2.98 million or 75%. Net loss as a percentage of sales was 103% in the three months ended March 31, 2012, and net loss as a percentage of sales was 50% in the comparable period of 2011. This increase in net loss was attributable to decreased net sales and increased bad debt allowance and inventory provision reserve in the first quarter of 2012.

About SmartHeat Inc.

Founded by James Jun Wang, a former executive at Honeywell China, SmartHeat Inc. (www.smartheatinc.com) is a NASDAQ Global Select Market listed (NASDAQ: HEAT) U.S. company with its primary operations in China. SmartHeat is a market leader in China's clean technology energy savings industry. SmartHeat manufactures heat exchangers, custom plate heat exchanger units (PHE Units), heat meters and heat pumps. SmartHeat's products directly address air pollution problems in China where massive coal burning for cooking and heating is the only source of economical heat energy in China. With broad product applications, SmartHeat's products significantly reduce heating costs, increase energy use and reduce air pollution. SmartHeat's customers include global Fortune 500 companies, municipalities and industrial/residential users. China's heat transfer market is currently estimated at approximately $2.4 billion with double-digit annual growth according to the 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.

Contact Corporate Communications:

Ms. Jane Ai, Corporate Secretary
SmartHeat Inc.
Tel: 011-86-24-25363366
Email: info@SmartHeatinc.com

SMARTHEAT INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 

 

March 31, 2012

 

 

December 31, 2011

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

     Cash & equivalents

 

$

15,853,549

 

 

$

12,419,922

 

     Restricted cash

 

 

4,595,887

 

 

 

2,688,691

 

     Accounts receivable, net

 

 

40,103,024

 

 

 

47,055,517

 

     Retentions receivable

 

 

3,213,372

 

 

 

3,583,898

 

     Advances to suppliers

 

 

14,013,756

 

 

 

17,603,984

 

     Other receivables (net), prepayments and deposits

 

 

6,184,693

 

 

 

6,663,330

 

     Taxes receivable

 

 

585,654

 

 

 

-

 

     Inventories, net

 

 

54,391,322

 

 

 

53,648,549

 

     Notes receivable - bank acceptances

 

 

1,083,269

 

 

 

1,916,320

 

 

 

 

 

 

 

 

 

 

        Total current assets

 

 

140,024,526

 

 

 

145,580,211

 

 

 

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

 

 

 

     Restricted cash

 

 

243,464

 

 

 

204,991

 

     Retentions receivable

 

 

501,419

 

 

 

670,291

 

     Advance to supplier for equipment

 

 

2,087,183

 

 

 

1,122,914

 

     Construction in progress

 

 

1,338,051

 

 

 

522,876

 

     Property and equipment, net

 

 

11,091,109

 

 

 

11,348,601

 

     Intangible assets, net

 

 

15,287,187

 

 

 

15,419,805

 

     Goodwill

 

 

2,161,368

 

 

 

2,098,332

 

     Other noncurrent asset

 

 

5,027

 

 

 

10,044

 

 

 

 

 

 

 

 

 

 

       Total noncurrent assets

 

 

32,714,808

 

 

 

31,397,854

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

172,739,334

 

 

$

176,978,065

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

     Accounts payable

 

$

9,631,362

 

 

$

12,660,100

 

     Advance from customers

 

 

4,964,406

 

 

 

4,585,218

 

     Taxes payable

 

 

23,644

 

 

 

1,178,712

 

     Accrued liabilities and other payables

 

 

3,993,972

 

 

 

4,136,298

 

     Notes payable - bank acceptances

 

 

1,971,908

 

 

 

3,278,232

 

     Loans payable

 

 

18,588,247

 

 

 

10,633,402

 

 

 

 

 

 

 

 

 

 

         Total current liabilities

 

 

39,173,539

 

 

 

36,471,962

 

 

 

 

 

 

 

 

 

 

DEFERRED TAX LIABILITY

 

 

164,904

 

 

 

189,516

 

 

 

 

 

 

 

 

 

 

LONG-TERM PAYABLE

 

 

2,065,361

 

 

 

2,281,023

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

     Common stock, $0.001 par value; 75,000,000
        shares authorized, 3,955,774 shares issued and
        outstanding at March 31, 2012, and December 31, 2011,
        respectively

 

 

3,956

 

 

 

3,956

 

     Paid-in capital

 

 

103,004,904

 

 

 

102,985,737

 

     Statutory reserve

 

 

5,396,014

 

 

 

5,396,014

 

     Accumulated other comprehensive income

 

 

11,389,924

 

 

 

11,119,887

 

     Retained earnings

 

 

10,513,268

 

 

 

17,445,733

 

 

 

 

 

 

 

 

 

 

         Total Company stockholders' equity

 

 

130,308,066

 

 

 

136,951,327

 

 

 

 

 

 

 

 

 

 

         NONCONTROLLING INTEREST

 

 

1,027,464

 

 

 

1,084,237

 

 

 

 

 

 

 

 

 

 

         TOTAL EQUITY

 

 

131,335,530

 

 

 

138,035,564

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

172,739,334

 

 

$

176,978,065

 

 

 

 

 

 
Copyright © SmartHeat, Inc. 2008
 
 
 
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