NEW YORK, March 31 /PRNewswire-Asia/ --
- 2009 revenue of $82.56
million, up 153% compared to $32.68
million in 2008
- 2009 net income of $15.44
million, up 144% compared to $6.34
million in 2008
- 2009 earnings per share (EPS) of $0.58, up 100% compared to $0.29 in 2008
- Positive signs of economic growth in China, anticipates earnings growth momentum to
continue into 2010
SmartHeat Inc. (Nasdaq: HEAT; website:
www.smartheatinc.com), a market leader in China's clean technology energy savings
industry announced today record audited 2009 financial results for
the fiscal year ended December 31,
2009. SmartHeat's products significantly reduce heat energy
costs, increase energy efficiency and reduce air pollution.
James Jun Wang, Chairman &
CEO of SmartHeat, commented, "We are excited to announce our
outstanding financial performance for the fiscal year ending in
2009 which exceeded our expectations. Our 2009 financial results
are the result of a continued favorable market environment for our
industry and the successful execution of our growth strategies.
China's energy savings industry
continues to be supported by the Chinese government and receives
significant funding through government initiatives. In addition,
China's economic rebound in the
fourth quarter has created a positive environment for growth in
2010 as we expect significant benefits from the continued
transition to cleaner technologies and energy saving
equipment."
Fiscal Year 2009 Financial Performance
Revenues were $82.56 million in
fiscal year 2009 compared to $32.68
million in 2008, a 153% increase. The significant revenue
increase was due to significant sales growth across all product
lines as a result of:
- Increasing our traditional heat supply sales as a result of
growth in the China domestic
infrastructure construction industry, accounting for $37.62 million or 45.6% of total sales; and
- Adding new customers in the chemical, engineering, electric
power and metal smelting industries, accounting for $25.42 million or 30.7% of our total sales;
and
- Rising heat meter sales, accounting for $7.98 million or approximately 9.7% of total
sales.
Gross profit was $29.10 million in
fiscal year 2009 compared to $10.96
million in 2008, a 165.51% increase. Gross profit increased
primarily due to the decreased cost of goods sold as a percentage
of sales while our sales continued to increase.
Operating expenses were $10.92
million in fiscal year 2009 compared to $3.42 million in 2008, a 219% increase. Operating
expenses increased because of the higher general and administrative
expenses incurred as a result of our growth in sales and production
and fees and expenses associated with becoming a public company in
2008.
Operating income was $18.18
million in fiscal year 2009 compared to $7.54 million in 2008, a 141.11% increase.
Operating income increased as a result of continued economies of
scale in production costs combined with the rapid growth in
revenues and improved operating efficiency.
Net income was $15.44 million in
fiscal year 2009 compared to $6.34
million in 2008, a 144% increase. Earnings per share were
$0.58 in fiscal year 2009 compared to
$0.29 in 2008 a 100% increase. In
addition to the increased revenue and income from operations, net
income and EPS both benefited from a decrease in the tax rate
during the year from 18% to 15%.
During the fourth quarter of 2009 we recognized one-time
extraordinary expenses of approximately $1.77 million of which approximately $487,000 related to PHE research and development,
approximately $700,000 related to a
consulting fee paid in connection with the expansion of sales
network and market development in nuclear power industry and
approximately $585,000 related to an
accrued expense for after sale service reserve.
Management Comments: 2009 Financial Results and 2010 Market
Guidance
Mr. Wang commented: "Our audited 2009 financial results exceeded
management's financial performance targets as we described in early
2009. SmartHeat expects to experience significant product sales in
2010 as we anticipate a broader domestic economic expansion in
China. China's businesses and residences are in the
process of becoming more energy efficient and environmentally
friendly due to economic incentives and policies. SmartHeat will
benefit from this process. As a result, SmartHeat anticipates
continued strong product sales and earnings growth in 2010 from all
sectors of our customer base: government, industrial, commercial
and consumers.
During the fourth quarter of 2009 we experienced one-time
expenses incurred to prepare the company for future growth.
We do not expect these extraordinary expenses to reoccur in
2010 and expect our SG&A to return to approximately 13 percent
of sales in 2010. Without these extraordinary expenses
SmartHeat would have met its earnings guidance in the fourth
quarter.”
Investor Conference Call Instructions:
SmartHeat management will host an earnings conference call to
discuss its 2009 financial results and business outlook for
2010.
Date and time: 7:30 am U.S.
Eastern Daylight Time, Wednesday March 31,
2010
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Participant dial-in
numbers:
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U.S. toll free
number:
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1 888 339-2688
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International direct
dial-in:
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1 617 847-3007
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Conference pass code:
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119 470 41
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To listen to a replay of the
earnings conference call:
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U.S. toll free
number:
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1 888 286-8010
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International direct dial
in:
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1 617 801-6888
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Conference pass code:
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628 492 79
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About SmartHeat Inc.
Founded by James Jun Wang, a
former executive at Honeywell China, SmartHeat Inc.
(www.smartheatinc.com) is a NASDAQ Global Market listed (Nasdaq:
HEAT) US company with its primary operations in China. SmartHeat is a market leader in
China's clean technology energy
savings industry. SmartHeat manufactures standard plate heat
exchangers (PHEs), custom plate heat exchanger units (PHE Units)
and heat meters. SmartHeat's products directly address air
pollution problems in China where
massive coal burning for cooking and heating purposes 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 as well as 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 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.
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Corporate Communications Contact:
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Ms. Jane Ai, Corporate
Secretary
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SmartHeat Inc.
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Tel: 011-86-24-25363366
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Email: info@SmartHeatinc.com
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SMARTHEAT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 and 2008
2009 2008
ASSETS
CURRENT ASSETS
Cash & cash equivalents $48,967,992 $1,435,212
Restricted cash 1,301,573 462,048
Accounts receivable, net 31,887,785 11,390,169
Retentions receivable 885,642 290,852
Advances to suppliers 7,657,791 412,524
Other receivables, prepayments and
deposits 3,572,600 698,834
Inventories 11,259,273 6,107,583
Notes receivable -bank acceptances 397,248 14,631
---------------------------
Total current assets 105,929,904 20,811,853
NON-CURRENT ASSETS
Restricted cash 48,361 219,472
Accounts receivable, net 237,384 310,810
Retentions receivable 349,931 166,912
Intangible assets, net 4,071,021 1,155,131
Property and equipment, net 7,739,609 2,436,553
--------------------------
Total noncurrent assets 12,446,306 4,288,878
--------------------------
TOTAL ASSETS $118,376,210 $25,100,731
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $3,493,196 $1,210,906
Unearned revenue 2,130,637 850,408
Taxes payable 2,140,627 1,327,775
Accrued liabilities and other payables 3,685,272 1,330,812
Due to minority shareholder - 5,303
Notes payable - bank acceptances 1,806,564 -
Loans payable 4,393,544 2,443,450
--------------------------
Total current liabilities 17,649,840 7,168,654
DEFERRED TAX LIABILITY 8,526 38,854
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value;
75,000,000 shares authorized,
32,794,875 and 24,179,900 shares
issued and outstanding at
December 31, 2009 and 2008, respectively 32,795 24,180
Paid in capital 74,917,370 8,223,453
Statutory reserve 2,872,006 1,150,542
Accumulated other comprehensive income 969,988 984,629
Retained earnings 21,231,484 7,510,419
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Total Company stockholders' equity 100,023,643 17,893,223
NONCONTROLLING INTEREST 694,201 -
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TOTAL EQUITY 100,717,844 17,893,223
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TOTAL LIABILITIES AND EQUITY $118,376,210 $25,100,731
==========================
SMARTHEAT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31,
2009 2008
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Net sales $82,563,869 $32,676,082
Cost of goods sold 53,467,805 21,717,735
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Gross profit 29,096,064 10,958,347
Operating expenses
Selling expenses 3,934,749 1,564,977
General and administrative expenses 6,986,116 1,851,693
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Total operating expenses 10,920,865 3,416,670
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Income from operations 18,175,199 7,541,677
Non-operating income (expenses)
Interest income 409,221 405,266
Interest expense (518,382) (314,192)
Financial expense (30,304) -
Other income 116,795 11,738
Other expenses (2,838) (13,709)
Exchange loss (26,255) (12,044)
Subsidy income 165,598 16,230
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Total non-operating income, net 113,835 93,289
Income before income tax 18,289,034 7,634,966
Income tax expense 2,858,186 1,293,660
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Income from operations 15,430,848 6,341,306
Less: Income (loss) attributable to
noncontrolling interest (11,681) 5,966
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Net income to SmartHeat Inc. 15,442,529 6,335,340
Other comprehensive item
Foreign currency translation (14,641) 510,770
-------------------------
Comprehensive Income $15,427,888 $6,846,110
=========================
Basic weighted average shares outstanding 26,535,502 22,176,322
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Diluted weighted average shares outstanding 26,592,066 22,176,432
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Basic earnings per share $0.58 $0.29
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Diluted earnings per share $0.58 $0.29
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SMARTHEAT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
2009 2008
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CASH FLOWS FROM OPERATING ACTIVITIES:
Income including noncontrolling interest $15,430,848 $6,341,306
Adjustments to reconcile income including
noncontrolling interest to net cash used
in operating activities:
Depreciation and amortization 635,368 252,598
Unearned interest on accounts receivable 120,522 (127,819)
Stock option compensation expense 3,292 5,613
Changes in deferred tax liability (30,353) (163)
(Increase) decrease in current assets:
Accounts receivable (20,724,401) (4,943,868)
Retentions receivable (777,062) (74,797)
Advances to suppliers (7,233,127) 62,759
Other receivables, prepayments and
deposits (2,230,595) 182,577
Inventory (5,143,857) 2,405,678
Increase (decrease) in current
liabilities:
Accounts payable 4,051,684 (2,389,649)
Unearned revenue 1,278,907 (2,993,636)
Taxes payable 811,275 779,408
Accrued liabilities and other
payables (5,776,850) (261,040)
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Net cash used in operating activities (19,584,349) (761,033)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restricted cash (667,502) (108,040)
Cash purchased at acquisition - 55,426
Acquisition of property & equipment (942,442) (439,861)
Notes receivable - (14,635)
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Net cash used in investing activities (1,609,944) (507,110)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash contribution from noncontrolling
interest 705,882 -
Change in due to minority shareholders - (663)
Repayment to shareholder - (343,913)
Proceeds from short term loans 4,552,774 5,136,069
Repayment on short term loans (1,870,976) (7,583,873)
Warrants exercised 380,850 -
Shares issued 65,007,390 5,100,000
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Net cash provided by financing activities 68,775,920 2,307,620
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EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH
EQUIVALENTS (48,847) 2,588
NET INCREASE IN CASH & CASH EQUIVALENTS 47,532,780 1,042,065
CASH & CASH EQUIVALENTS, BEGINNING OF YEAR 1,435,212 393,147
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CASH & CASH EQUIVALENTS, END OF YEAR $48,967,992 $1,435,212
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Supplemental Cash flow data:
Income tax paid $1,500,415 $660,127
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Interest paid $338,513 $274,969
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SOURCE SmartHeat Inc.