China Solar & Clean Energy, Inc. Reports Fiscal Second Quarter 2008 Financial Results
Fri Aug 15, 9:41 AMBEIJING, Aug. 15 /Xinhua-PRNewswire-FirstCall/ -- China Solar & Clean Energy, Inc. (OTC Bulletin Board: CSOL.OB) ("CSOL"), a premier manufacturer and distributor of solar water heaters, renewable energy solutions, and space heating devices in the People's Republic of China, today announced its financial results for the quarter ended June 30, 2008.
Revenue increased approximately $9.2 million, or 98%, to $18.6 million for the fiscal quarter ended June 30, 2008, from $9.4 million in the same period in 2007. The overall increase in revenue was primarily attributed to the acquisitions of Tianjin Huaneng and Shenzhen Pengsangpu Solar Industrial Products (SZPSP). Revenue from solar heater and boiler products increased 6.0% to approximately $10 million for the second quarter of 2008 from $9.4 million in the prior year period. Heat-pipe and energy-saving products were $5.8 million and $2.8 million for the second quarter of 2008, compared to no sales in both business segments in the prior year period. For the six months ended June 30, 2008, sales revenue increased 117% to $26.9 million, compared to $12.4 million in the prior year period.
Gross profit increased approximately $2.5 million, or 131%, to $4.5 million for the second quarter of 2008 from $1.9 million for the same period in 2007. The increase in gross profit was primarily due to the increase in sales volume of higher-margin businesses acquired through Tianjin Huaneng. Moreover, organic gross profit in the initial solar heater and boiler business grew 6% to $2.0 million in the second quarter of 2008, compared to the same period in the prior year. This increase in organic gross profit was mostly due to a growth in sales volume. Gross profit as a percentage of revenue was 23.9% for the second quarter of 2008, an increase of 340 basis points from 20.5% in the same period in 2007. For the six month period, gross profit increased 158% to $6.9 million, compared to $2.7 million in the prior year period.
Operating expenses increased 111% from $1.1 million in the second quarter of 2007 to $2.4 million in 2008. Operating expenses as a percentage of sales increased to 12.9% as compared to 12.1% in the prior year period. This increase was mainly due to increases in sales and promotion expenditures and acquisition costs of Tianjin Huaneng and SZPSP. For the six month period, operating expenses increased 126% to $3.7 million as compared to $1.6 million in the prior year period.
Operating Income increased 161% to $2.1 million for second quarter of 2008 from $0.8 million in the same period in 2007. As a percentage of sales, operating income was 11.0% as compared to 8.3% in the prior year period. For the six month period, operating income increased 207% to $3.3 million as compared to $1.1 million in the prior year period.
Net income for the three months ended June 30, 2008 was $1.1 million as compared to net income of $0.6 million in the prior year period. Earnings available to common shareholders, on a fully diluted basis, were negative ($0.05) for the second quarter of 2007 owing to a preferred stock beneficial conversion provision of approximately $1 million during that period. Excluding that provision earnings available to commons shareholders, on a fully diluted basis, were $0.10 in the second quarter of 2007. For the second quarter of 2008 earnings available to common shareholders on a fully diluted basis were $.07. Diluted shares outstanding increased 151% to 15.6 million in the second quarter of 2008 as compared to 6.2 million in the prior year period. For the six months ended June 30, 2008, net income increased 61% to $1.5 million as compared to $0.9 million in the prior year period. Earnings available to common shareholders on a fully diluted basis increased from a negative ($0.01) to $0.11 per share.
"We are pleased with our performance in the second quarter of 2008," stated Mr. Deli Du, Chief Executive Officer of China Solar & Clean Energy Solutions. "The heat pipe products division that we obtained via our acquisition of Tianjin Huaneng continued to perform well. Our energy savings product group, obtained via the acquisition of Shenzhen Pengsangpu Solar Industrial Products (SZPSP), also performed well in its first quarter as a part of our Company. Combining these two groups with our solar heater and boiler division we believe that we now have a broad, strong foundation of energy-related products upon which we can build significant growth in the future. We would continue to apply our experience to broadening the distribution of each of our product groups while also enhancing operating efficiencies. We believe that, in light of the increasing cost of energy in China and throughout the world, demand for our portfolio of products will continue to grow at a high rate. We think that we are well positioned to benefit from this trend and will continue to aggressively pursue growth in this market."
About China Solar & Clean Energy Solutions, Inc.
China Solar & Clean Energy Solutions, Inc. operates through its wholly owned subsidiaries Bazhou Deli Solar Energy Heating Co. Ltd. ("Deli Solar (Bazhou)"), Beijing Deli Solar Technology Development Co., Ltd. and its 51% ownership in Tianjin Huaneng Group, all located in the PRC. The Company manufactures and distributes hot water and space heating devices to customers in the PRC, in addition to waste heat recovery systems. For more information, please visit http://www.cn-sce.com .
Safe Harbor Statement:
Certain statements in this news release may contain forward-looking information about China Solar & Clean Energy Solutions and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, market and customer acceptance and demand for products, ability to market products, fluctuations in foreign currency markets, the use of estimates in the preparation of financial statements, the impact of competitive products and pricing, the ability to develop and launch new products on a timely basis, the regulatory environment, fluctuations in operating results, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Solar & Clean Energy Solutions undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
Financial Tables
CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
Currency expressed in United States Dollars ("US$"))
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
Revenue, net $18,630,198 $9,418,160 $26,930,274 $12,414,023
Cost of revenue 14,173,216 7,490,129 20,018,232 9,739,044
Gross profit 4,456,982 1,928,031 6,912,042 2,674,979
Operation Expenses
Depreciation and
amortization 132,216 35,630 281,383 70,966
Selling and distribution 1,118,041 237,502 1,620,604 281,532
General and administrative 1,155,736 870,084 1,757,389 1,264,041
Total operating expenses 2,405,993 1,143,216 3,659,376 1,616,539
Income from operations 2,050,989 784,815 3,252,666 1,058,440
Other income (expenses):
Other income 25,741 -- 66,831 --
Interest income 1,638 78 1,638 1,735
Other expense (45,266) -- (45,266) --
Interest expense (109,858) (97) (143,696) (97)
Total other (expense)
income (127,745) (19) (120,493) 1,638
Income before income taxes 1,923,244 784,796 3,132,173 1,060,078
Income tax expenses 441,015 137,976 787,278 137,976
Minority interest 386,016 -- 859,031 --
NET INCOME $1,096,213 $646,820 $1,485,864 $922,102
Computation of income available to common stockholders:
Net Income $1,096,213 $646,820 $1,485,864 $922,102
Preferred stock beneficial
conversion -- (975,807) -- (975,807)
NET INCOME AVAILABLE TO
COMMON STOCK HOLDERS $1,096,213 $(328,987) $1,485,864 $(53,705)
Net income (loss) per
share -- basic $0.08 $(0.05) $0.14 $(0.01)
Net income per share
-- diluted $0.07 $(0.05) $0.11 $(0.01)
Weighted average shares
outstanding -- basic 13,075,468 6,205,290 10,612,185 6,205,290
Weighted average shares
outstanding -- diluted 15,584,542 6,205,290 13,006,396 6,205,290
CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(Currency expressed in United States Dollars ("US$"),
except for number of shares)
June 30, December 31,
2008 2007
(Unaudited) (Note 1)
ASSETS
Current assets:
Cash and cash equivalents $ 6,689,173 $ 5,466,637
Accounts receivable, net 9,262,801 7,453,009
Inventories 6,256,439 3,875,658
Other receivables and prepayments 5,865,320 1,637,948
Total current assets 28,073,733 18,433,252
Property, plant and equipment, net 12,191,828 8,819,216
Goodwill 4,705,591 1,789,324
Intangible assets, net 1,673,660 1,597,921
Customer relationships, net 1,072,500 --
Intellectual property -- unpatented
technology, net 916,500 --
TOTAL ASSETS $ 48,633,812 $ 30,639,713
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 1,831,368 $ 2,111,028
Income tax payables 1,538,863 1,108,433
Other payables and accrued liabilities 10,158,585 8,552,452
Total current liabilities 13,528,816 11,771,913
Deferred tax liabilities 265,664 --
Minority interests 1,879,303 935,825
Stockholders' equity:
Convertible preferred stock: par value
$0.001; 25,000,000 shares authorized,
638,082 (unaudited) and 1,774,194 shares
issued and outstanding, respectively 638 1,774
Common stock, $0.001 par value; 66,666,667
shares authorized; 13,527,630 (unaudited) and
6,205,690 shares issued and outstanding,
respectively 13,527 6,205
Additional paid-in capital 22,288,728 9,260,607
Accumulated other comprehensive income 1,642,153 1,134,270
Retained earnings 9,014,983 7,529,119
Total stockholders' equity 32,960,029 17,931,975
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 48,633,812 $ 30,639,713
For more information please contact:
Dan Joseph
ICR, Inc.
Tel: +86-21-6122-1077
Bill Zima
ICR, Inc.
Tel: +1-203-682-8200
SOURCE China Solar & Clean Energy, Inc.
672.59 (7.26%)
