BWOWU Wowjoint Holdings (MM)

In the news release, Wowjoint Holdings Limited Reports Second Quarter 2011 Financial Results, issued on August 15, 2011 by Wowjoint Holdings Limited (Nasdaq: BWOW) over PR Newswire, we are advised by the company that in the section titled "Six Months Ended June 30, 2011", the last bullet should read, "Net income for the first six months of 2011 was $1.3 million, or $0.17 per share based on 7.9 million weighted average shares outstanding, compared to net loss of $1.2 million in same period 2010" rather than "Net income for the first six months of 2011 was $1.8 million, or $0.22 per share based on 7.9 million weighted average shares outstanding, compared to net loss of $1.2 million in same period 2010". Also, in the "Unaudited Consolidated Statement of Income", "Net income attributed to ordinary shareholders" for the column of "Six Months Ended, June 30, 2011", should read "1,314" rather than "1,780", while "Earnings per share, Basis", for the same column, should read "0.17" rather than "0.22", and "Earnings per share, Diluted", for the same column, should also read "0.17", rather than "0.22", as originally issued inadvertently. The complete, corrected release follows:

Wowjoint Holdings Limited Reports Second Quarter 2011 Financial Results -- Q2 2011 revenue of $8.4 million in-line with guidance, represents a 228% increase compared to Q2 2010 -- Gross margins increase to 28.9% for Q2 2011, an increase of 570 basis points compared to Q2 2010 -- Order backlog is strong at $22 million as of June 30, 2011 -- Q3 2011 revenue guidance: $5-7 million -- Management to host earnings conference call August 15, 2011 at 4:30 p.m. EDT

BEIJING, Aug. 15, 2011 /PRNewswire-Asia/ -- Wowjoint Holdings Limited ("Wowjoint," or the "Company") (Nasdaq: BWOW), China's innovative infrastructure solutions provider of customized heavy duty lifting and carrying machinery, reported today financial results for the second quarter 2011.

Second Quarter Ended June 30, 2011

• Revenues for the Company's second quarter ended June 30, 2011 increased 228% to $8.4 million as compared to $2.6 million in the second quarter of 2010.
• Technical service sales were $0.3 million for the quarter, compared to $1.5 million in the same quarter last year. Lease revenue was $0.2 million for the second quarter 2011, which is a recent addition to Wowjoint's revenue stream and it will continue to be a focus for increased revenue due to its higher margins.
• International based revenues accounted for approximately 53% of total sales, an increase from 3% of total sales in the same period 2010.  
• Gross profit increased substantially to $2.4 million from $0.6 million in the year ago period. Gross margins increased 570 basis points to 28.9% in the second quarter 2011 compared to 23.2% in the same period in 2010.
• Operating income increased to $1.5 million for the second quarter 2011 compared to a loss of $0.8 million for the second quarter 2010.
• Net income for the second quarter 2011 was $1.0 million, or $0.13 per share based on 7.9 million weighted average shares outstanding, compared to net loss of $0.4 million in same period 2010.

Cost of sales for the three months ended June 30, 2011 was approximately $6.0 million as compared to $2.0 million for the three months ended June 30, 2010. The higher cost of sales in second quarter 2011 was due to higher sales volume. Operating expenses for the three months ended June 30, 2011 were approximately $0.9 million compared to $1.4 million for the same period in 2010. The second quarter 2011 reflects a focused reduction in expenses from the Company's average operating costs, as well as a reduction in bad debt expense. Selling expenses for the three months ended June 30, 2011 totaled $0.4 million compared to $0.3 million in the same period of 2010.

"Our financial results for the second quarter 2011 show a significant increase over the first half of 2010. Gross margins remain strong and this quarter's increase was directly related to our International contracts which provide a higher gross margin than our domestic contracts," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "We continue to stay stringent on our spending, which is evidenced by our reduction in SG&A, leading to greater operating income. During this quarter we were pleased to announce numerous leasing contracts totaling $8.7 million. Our leasing contracts represent a steady income flow and will assist the Company in trying to minimize the ebb and flow that occurs in China's infrastructure spending."

Balance Sheet as of June 30, 2011

• Cash and cash equivalents totaled $4.3 million at June 30, 2011, as compared to $3.0 million at March 31, 2011.
• Accounts receivable were $15.8 million at June 30, 2011 as compared to $16.8 million at March 31, 2011.  The slight reduction shows the continued focus on reducing the receivables while still driving sales. The majority of the receivables are from extremely large Blue Chip companies in China; therefore collection of the receivables is relatively secure.
• Inventories amounted to $8.4 million, which was flat from $8.5 million at March 31, 2011, but an increase from year-end due to additional materials that were purchased for production of equipment and were in-line with the sales increase.
• Working capital was $15.1 million on June 30, 2011.
• The Company had total stockholders' equity of $22.2 million, with total assets of $44.7 million versus total liabilities of $22.5 million on June 30, 2011.  

"Wowjoint continues to progress in reducing our accounts receivable and in expanding our sales. We've made significant headway in our International expansion efforts by adding people to our sales and marketing team and expect to see our International sales as a larger percentage of our sales revenue as the year's progress," stated Mr. Liu.

Six Months Ended June 30, 2011

• Revenues for the six month period ended June 30, 2011 increased 250% to $15.0 million as compared to $4.3 million for the six month period ended June 30, 2010.
• Technical service sales for the first six months of 2011 were $1.0 million compared to $1.6 million in the same period in 2010. Lease revenues for the six months ended June 30, 2011 were $0.5 million.  
• International based revenues accounted for approximately 41% of total sales, a substantial increase from 3% of total sales in the same period 2010.  
• Gross profit increased to $3.8 million from $0.9 million in the year ago six month period. Gross margins increased 510 basis points to 25.5% in the first six months of 2011 compared to 20.4% in the same period in 2010.
• Operating income for the six months ended June 30, 2011 increased to $1.9 million for compared to a loss for the same period in 2010.
• Net income for the first six months of 2011 was $1.3 million, or $0.17 per share based on 7.9 million weighted average shares outstanding, compared to net loss of $1.2 million in same period 2010.

Cost of sales for the six months ended June 30, 2011 was approximately $11.2 million as compared to $3.4 million for the six months ended June 30, 2010. Operating expenses for the six months ended June 30, 2011 were approximately $2.0 million compared to $2.2 million for the same period in 2010. Selling expenses for the six months ended June 30, 2011 totaled $0.6 million compared to $0.3 million in the same period of 2010, due to larger sales for the period.

Business Updates

Wowjoint continues to diversify its business and during the second quarter 2011, announced over $8 million in new lease agreements and deeper penetration into the China market by adding new customers. The Company is pursuing vertical markets such as highway and bridge maintenance, subway systems and clean tech power plants. These vertical markets will utilize Wowjoint's core competency of specialized engineering of large equipment.  The Company is actively pursuing International contracts and has conducted outreach to numerous potential clients. During 2011, Wowjoint plans on attending conferences in the US and in other countries to enhance its visibility in the market.

"In recent months we've experienced a slight reduction in China's infrastructure spending, although projects still remain in the large government plan and the reduction is based on timing of those projects. To mitigate its impact, the Company has placed a concerted effort on International sales and in lease revenue. Wowjoint has signed $22.3 million in new contracts since the beginning of 2011, with a substantial percentage of those contracts being in either leasing, technical services or International sales," stated Mr. Liu. "A key competitive advantage remains our ability to produce custom-made equipment, which solves complex construction and logistical problems for our customers.  We believe our determination and drive to expand our business into other countries and vertical markets will result in the growth Wowjoint is capable of."

Revenue Guidance and Contract Backlog

Management issued revenue guidance for the third quarter of 2011 of approximately $5 to $7 million. As of June 30, 2011, Wowjoint's backlog of signed contracts totaled approximately $22 million.

Conference Call

A conference call will take place at 4:30 p.m. EDT on Monday, August 15, 2011. Interested participants should call 1-877-941-4778 when calling within the United States or 1-480-629-9811 when calling internationally (pass code 4466047).

A playback will be available through August 22, 2011. To listen, please call 1-877-870-5176 within the United States or 1-858-384-5517 when calling internationally. Utilize the pass code 4466047 for the replay.

The call will also be webcast. To join the webcast please go to: http://viavid.net/dce.aspx?sid=00008B98

About Wowjoint Holdings Limited

Wowjoint is a leading provider of customized heavy duty lifting and carrying machinery used in large scale infrastructure projects such as railway, highway and bridge construction. Wowjoint's main product lines include launching gantries, tyre trolleys, special carriers and marine hoists. The company's innovative design capabilities have resulted in patent grants and proprietary products. Wowjoint is well positioned to benefit directly from China's rapid infrastructure development by leveraging its extensive operational experience and long-term relationships with established blue chip customers. Information on Wowjoint's products and other relevant information are available on its website at www.wowjoint.com.

Forward Looking Statements

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in this press release include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Wowjoint undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. All forward-looking statements are qualified in their entirety by this cautionary statement. All subsequent written and oral forward-looking statements concerning Wowjoint or other matters and attributable to Wowjoint or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wowjoint does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release.

– Financial Tables Follow –

SOURCE Wowjoint Holdings Limited