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Tri-Tech Holding Inc. Q3 Revenue Up 131% to $4.9M; Net Income Up 112% to $1.1M BEIJING, Nov. 12 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc.
(Nasdaq: TRIT - News), a premier Chinese company that engineers, manages and monitors
China's municipal sewer systems, natural waterways and resources, announced
today that revenue for the third quarter ended September 30, 2009 increased
131% to $4.9 million from $2.1 million in the third quarter of 2008. Diluted
earnings per share for the quarter were $0.27 based on net income of $1.1
million. This compares with net income of $506,000 or $0.14 diluted EPS a year
ago.
Third Quarter 2009 Highlights
-- Revenue for Q3 2009 increased 131% to $4.9 million from $2.1 million in
Q3 2008.
-- Gross profit (exclusive of depreciation and amortization) increased
112% to $1.9 million for Q3 2009 from $0.9 million in Q3 2008.
-- Q3 2009 gross margins decreased slightly at 39.1%, vs. 42.6% for Q3
2008.
-- Income from operations increased 150% to $1.3 million from $536,000 in
Q3 2008.
-- Net income increased 112% to $1.1 million from $506,000 in Q3 2008.
-- Diluted earnings per share increased to $0.27, from $0.14 in Q3 2008.
-- Weighted average number of diluted shares outstanding was 3.95 million
as of September 30, 2009, compared to 3.56 million as of September 30,
2008.
-- Completed an initial public offering of 1,700,000 ordinary shares at a
price of $6.75 per share, traded on NASDAQ Capital Market on September
10, 2009.
-- Awarded $960,000 in Mountain Torrent Forecasting contracts covering
eight projects in four provinces.
-- Awarded $1.6 million Municipal Sewage Treatment contract in Kuancheng
County of Hebei Province.
Third Quarter 2009 Financial Performance Total revenue was $4.9 million in the quarter ended September 30, 2009, a 131% increase from $2.1 million in the quarter ended September 30, 2008. The increase was mostly because of increased sales of system integration services in the wastewater and tail gas treatment segment, which generated revenue of $3.8 million, or 77.4% of revenues in Q3 2009 compared to $1.2 million, or 58% of revenues in Q3 2008. Revenue from Tri-Tech's other business segment -- water resources management -- was approximately $1.1 million in Q3 2009, accounting for 22.6% of total quarter revenues. Net income in the quarter increased to $1.1 million or $0.27 per diluted share, compared to net income of $506,000 or $0.14 per diluted share in the quarter ended September 30, 2008. Gross profit (exclusive of depreciation and amortization) was $1.9 million in the quarter, a 112% increase from $0.9 million a year ago. This strong increase was primarily due to an increase in the number and size of contractual engagements as a result of the growth of its client base and improvement of its project execution capabilities. Gross margin (exclusive of depreciation and amortization) was 39.1% compared to 42.6% in the quarter ended September 30, 2008. This decrease was due to relatively higher costs of the hardware products compared to system integration and software products. Gross margins in the wastewater and tail gas business and water resources management segments were 39.2% and 38.7% respectively. Operating income was $1.3 million, a 150% increase from $536,000 in the quarter ended September 30, 2008. Operating margin was 27.3%, compared to 25.2% in the three months ended September 30 2008. As a certified software hi-tech enterprise, Tri-tech received a partial tax rebate of $26,275 from the Chinese government for value added tax (VAT) paid on sold software. This partial rebate was classified as other income. Liquidity and Capital Resources The cash balance following the IPO was approximately $10.3 million. As of September 30, 2009, the Company had long-term debt of $69,000 and short-term debt of $695,000. The Company had working capital of $17.4 million. Stockholders' equity totaled $18.3 million compared to $5.8 million as of September 30, 2008. Net cash provided in financing activities totaled $10.5 million. Initial Public Offering On September 10, 2009, Tri-Tech completed an initial public offering of 1,700,000 ordinary shares at a price of $6.75 per share. Net proceeds from the initial public offering, after deducting underwriting discounts, commissions and offering expenses, totaled $10 million. Nine months 2009 Financial Performance For the first nine months of 2009, revenue was $10.9 million, an increase of 96.5% over $5.6 million for the comparable period last year. Net income for the first nine months was up 97.3% at $2.5 million compared to $1.3 million for the first nine months of 2008. Diluted EPS was $0.68 compared to $0.36 for the first nine months of 2008. Warren Zhao, Tri-Tech's Chief Executive Officer, said, "We are pleased with our Q3 2009 financial results and our first financial report as a public company. We believe our over triple digit growth in Q3 revenue and our operational performance demonstrated the strength of our business model and our competitive position in enhancing water quality and people's health in China. Several factors contributed to our strong performance including our patented technology, the increasing efforts of our sales force and growth of our customer base. We feel confident that our water resources management business and wastewater and tail gas treatment businesses will continue their robust growth through the remainder of 2009. "Our business in water resources, flood control and mitigation, water quality monitoring and assessment, municipal water and wastewater management, water reuse, and odor control are poised to benefit from China's massive ongoing investments in infrastructure. Government investment in the water resources sector last year was up over 54% and is expected to increase $11.7 billion in 2009 and $45 billion over the next three years. "We are excited to move forward into the last quarter of 2009 and the year 2010 in a strong and flexible financial position. We expect to take advantage of long-term opportunities driven by the urgent need for water treatment projects for commercial, industrial and residential uses and the solid support from the government for water resources projects. We intend to use the proceeds from the IPO to reinforce our competitive position. We plan to undertake new projects in municipal projects, and to focus our research and development on improved water treatment systems to maximize water disposal capacity and disposal rates at a lower cost. "We are currently pursuing over 100 smaller river basin flood monitoring and forecasting systems and groundwater monitoring systems for over 100 counties across the country with a market potential of approximately $145 million. Through local distributors and partnerships, we also expect to promote our proprietary products targeting the water monitoring and dispatching systems of the Northward Rerouting of Southern River engineering project with a market potential of approximately $43.5 million. "We expect an increase in sales associated with the South-North Water Transfer Project with dozens of major urban water supply tasks and six nation-wide projects of flood forecasting and hydrological monitoring proposed by the Ministry of Water Resources. "Based on multiple contracts for sewage treatment plants won in Hebei Province recently, we will continue to target our wastewater treatment business in the Tianjin area and Hebei Province. Within the next few years, Tianjin Binhai New Area plans to construct over 40 large-scale pumping stations and over 30 sewage treatment plants with a total market potential of approximately $8.7 billion. Hebei Province plans to construct over 50 sewage and grey water reuse treatment plants in the next two years with total spending of approximately US$ 1.23 billion. "We will also actively pursue opportunities in the industrial wastewater and process tail gas treatment market in the petrochemical industry, such as the SINOPEC Yanshan Plant, the Petro China Jilin Plant, the SINOPEC Anqing Plant, and Dalian Petro China Plant. Currently almost all newly designed sewage treatment plants have odorous gases containment and control requirements. As such, we expect an increase in sales of our proprietary biofiltration odor control systems," Zhao said. Conference Call Tri-Tech CEO Warren Zhao, President Phil Fan and CFO Peter Dong will host a conference call at 10:00 AM Eastern Time tomorrow November 13, 2009 (11:00 PM Beijing/Hong Kong Time on November 13) to review the company's financial results and respond to questions and comments. To participate, call U.S. Toll Free Number 1-877-941-4775 approximately 10 minutes before the call. International callers, please dial 1-480-629-9761. The conference ID number is 4182163. A live webcast of the call will be available at http://viavid.net/dce.aspx?sid=00006CEE . An MP3 file will be available approximately one hour after the call and a transcript within 48 hours after the call. These will be archived for 90 days via http://www.tri-tech.cn and http://www.hawkassociates.com .
--FINANCIAL TABLES--
TRI-TECH HOLDING INC.
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(Unaudited)
For the Nine Months Quarter Ended
ended September 30, September 30,
2009 2008 2009 2008
USD USD USD USD
Revenues:
System integration 7,523,762 4,708,939 4,145,404 1,753,264
Hardware products: 1,878,048 64,489 483,907 29,112
Software products
revenues: 1,503,359 777,938 281,522 340,122
Total revenues 10,905,169 5,551,366 4,910,833 2,122,498
Cost of revenues:
(exclusive of
depreciation and
amortization shown
separately below)
System integration 4,907,767 3,161,601 2,552,799 1,202,537
Hardware products 1,586,613 35,492 437,290 15,020
Cost of software 42,064 3,935 -- 189
Total cost of
revenues(exclusive
of depreciation and
amortization shown
separately below) 6,536,444 3,201,028 2,990,089 1,217,746
Operating expenses:
Depreciation and
amortization expenses 75,449 59,722 30,049 20,705
Other operating expenses 1,370,115 1,015,065 550,498 348,233
Total operating expenses 1,445,564 1,074,787 580,547 368,938
Income from operations 2,923,162 1,275,551 1,340,198 535,813
Other income (expenses):
Other expense (4,694) (1,291) (3,542) 223
Interest income 25,126 16,544 24,291 865
Interest expense (4,173) (2,389) (514) (1,462)
Tax rebates 49,042 65,243 26,275 356
Total other income
(expenses), net 65,301 78,108 46,511 (19)
Income before provision for
income taxes and
noncontrolling interests
income 2,988,463 1,353,659 1,386,709 535,795
Provision for income taxes 450,466 60,476 314,371 20,276
Net income 2,537,997 1,293,183 1,072,338 515,519
Noncontrolling Interests
Income 12,452 13,525 (1,273) 9,078
Net income attributable to
Tri-Tech Holding Inc 2,525,545 1,279,658 1,073,611 506,441
Other comprehensive income
Foreign currency
Translation adjustment 67,115 306,542 50,372 83,417
Comprehensive income 2,605,112 1,599,725 1,122,710 598,936
Comprehensive income
attributable to
noncontrolling interests 13,158 24,206 (508) 11,580
Comprehensive income
attributable to Tri-Tech
Holding Inc. 2,591,954 1,575,519 1,123,218 587,356
Net income attributable to
Tri-Tech Holding Inc. per
share:
Basic 0.69 0.36 0.27 0.14
Diluted 0.68 0.36 0.27 0.14
Shares used in computation:
Basic 3,679,542 3,555,000 3,924,565 3,555,000
Diluted 3,689,604 3,555,000 3,954,422 3,555,000
TRI-TECH HOLDING INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2009 2008
(Unaudited) (Restated)
ASSETS
Current Assets
Cash $10,306,076 $732,418
Accounts receivable, net of allowance
for doubtful accounts of $51,285 and
$62,286 as of September 30, 2009 and
December 31, 2008, respectively 4,125,163 3,105,859
Unbilled revenue 4,213,095 1,429,846
Notes receivable 594,523 7,316
Other receivables 327,531 166,395
Inventories 1,651,819 1,466,468
Deposits on projects 580,161 266,973
Deferred income taxes -- --
Prepayments to suppliers and
subcontractors 364,501 567,346
Total current assets 22,162,869 7,742,621
Plant and equipment, net 325,148 174,128
Proprietary technology, net 820,186 857,475
Total assets $23,308,203 $8,774,224
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and cost accrual on
projects $2,844,743 $1,589,103
Commercial paper and other short-term
notes payable
Non-related parties 695,370 271,041
Related party -- 14,631
Customer deposits 350,017 436,372
Billings in excess of revenue 108,275 30,639
Other payables 45,946 81,721
Accrued liabilities 52,978 84,660
Deferred income taxes 327,257 83,643
Income taxes payable 181,249 141,818
Other taxes payable 138,145 90,908
Total current liabilities 4,743,980 2,824,536
Long-term liabilities 69,069 --
Total liabilities 4,813,049 2,824,536
Shareholders' equity
Tri-Tech Holding Inc. shareholders'
equity
Common stock (30,000,000 shares
authorized and $0.001 par value,
5,255,000 and 3,555000 issued as of
September 30, 2009 and December 31,
2008, 340,000 shares issued were held
in escrow. See note 11 for more
discussions.) 5,255 3,555
Additional paid-in-capital 12,852,713 2,914,058
Statutory reserves 50,655 50,655
Retained earnings 5,008,118 2,482,573
Accumulated other comprehensive
income 427,737 361,328
Total Tri-Tech Holding Inc.
shareholders' equity 18,344,478 5,812,169
Noncontrolling Interests 150,676 137,519
Total shareholders' equity 18,495,154 5,949,688
Total liabilities and shareholders'
equity $23,308,203 $8,774,224
TRI-TECH HOLDING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months ended
September 30,
2009 2008
USD USD
Cash flows from operating
activities:
Net income 2,537,997 1,293,183
Adjustments to reconcile net
income to cash:
Depreciation 37,826 27,445
Amortization 38,116 72,011
Allowance for doubtful
accounts (11,047) 26,921
Deferred income taxes 251,765 11,408
Changes in operating assets
and liabilities:
Accounts receivable (1,005,397) (1,308,486)
Unbilled revenue (2,780,854) 329,785
Other receivables (494,253) (178,636)
Inventories (184,068) 83,927
Prepayments and deferred
expenses 99,301 (149,336)
Accounts payable 1,190,555 99,485
Customer deposits (80,481) 328,867
Billings in excess of
revenue 93,774 --
Other payables (35,826) 72,891
Accrued liabilities (31,738) 56,225
Taxes payable 86,438 (36,158)
Net cash provided by operating (287,892) 729,533
activities
Cash flows from investing
activities:
Loan to the other parties (586,944) --
Additions to equipment (188,778) 26,103
Net cash provided by investing
activities (775,722) 26,103
Cash flows from financing
activities:
Common stock 10,038,847 --
Borrow money from third parties 522,234 459,322
Repayments to third
parties of advances (43,911) (76,372)
Repayment from a related party
of an advance -- --
Net cash provided by (used in)
financing activities 10,517,170 382,950
Effect of exchange rate changes on
cash and cash equivalents 120,102 101,827
Net increase in cash 9,573,658 1,240,413
Cash, beginning of year 732,418 367,713
Cash, end of period 10,306,076 1,608,126
Supplemental Data:
Income taxes paid 17,496 --
Interest paid on debt 4,173 2,388
About Tri-Tech Holding Inc. Tri-Tech designs customized sewage treatment and odor control systems for China's municipalities and its larger cities. These systems combine software, information management systems, resource planning and local and distant networking hardware that includes sensors, control systems, programmable logic controllers, supervisory control and data acquisition systems. The company also designs systems that track natural waterway levels for drought control, monitor groundwater quality and assist the government in managing its water resources. Tri-Tech owns seven software copyrights and two technological patents and employs 108 people. Please visit http://www.Tri-Tech.cn for more information. An online investor kit including a company profile, press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.hawkassociates.com/profile/trit.cfm . To subscribe to future releases via e-mail alert, visit http://www.hawkassociates.com/about/alert/ . Tri-Tech Holding Inc. has based these forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact:
Investors Contact:
Hawk Associates
Susan Zhou
Tel: +1-305-451-1888
Email: tritech@hawkassociates.com
Source: Tri-Tech Holding Inc.
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