Tri-Tech Holding Reports Fiscal Year 2013 Financial Results

BEIJING, July 23, 2014 /PRNewswire/ -- Tri-Tech Holding Inc. (TRITF), which provides turn-key water resources management, water and wastewater treatment, industrial safety and pollution control solutions, announced its financial performance for fiscal year ended December 31, 2013. Highlights include the following:

  • As a result of effectively losing control over Beijing Satellite Service & Technology Co., Ltd, ("BSST"), BSST's financial results were deconsolidated as of November 27, 2013. Accordingly, all 2012 numbers in this release reflect BSST's financial results, while all 2013 numbers include BSST only through the date of deconsolidation.
  • Total revenues decreased by 39.5% in 2013 from the same period of 2012.
  • Total cost of revenues decreased by 36.5% from 2012 to 2013.
  • Total operating expenses were $20,373,754 for 2013, an increase of 11.3%, compared with the amount in 2012.
  • Operating loss was $11,458,511 in 2013, compared with operating income of $810,846 in 2012.
  • Net loss attributable to TRITF was $13,933,160 for 2013, including net loss of BSST of $1,071,399 from January 1 to November 27, 2013. The loss on deconsolidation of BSST was $3,781,800 for 2013. Net loss attributable to TRITF was $2,264,075 for 2012.
  • Weighted average number of diluted shares outstanding was 8,342,056 compared to 8,211,089 in FY2012.
  • Diluted Earnings Per Share was a loss of $1.67 compared to a loss of $0.28 from 2012.

Plans for Annual Shareholder Meeting for Year Ended December 31, 2013

TRITF will hold its annual shareholder meeting for the year ended December 31, 2013 in the fourth quarter of 2014 at the company's office located at 10th Floor of Tower B, Baoneng Center, Futong East Road, Chaoyang District, Beijing 100102 China. Further details will follow in the proxy materials to be provided to shareholders on or about September 30, 2014.

In light of the timing of the shareholder meeting, all shareholder proposals must be submitted to the company at the above address on or before August 31, 2014. In addition, management will use the shareholder meeting to discuss all recent developments and results from the year ended December 31, 2013.

Shareholders will notified of the actual date of the shareholder's meeting for 2013 in the near future.

Recent Developments

On July 18, 2014, TRITF received a Decision (the "Decision") from the Listing and Hearing Review Council (the "Council") of The NASDAQ Stock Market LLC, notifying the Company that the Council affirmed the prior decision of the NASDAQ Hearings Panel ("Panel") to deny the Company continued listing on the NASDAQ Capital Market. The Council's Decision was based on a determination that the Panel was justified in its decision based on NASDAQ Listing Rules 5101, 5250(b)(1) and 5250(c)(1). The NASDAQ Board of Directors may call the Decision for review pursuant to NASDAQ Listing Rule 5825, or the Company may appeal the Decision to the Securities and Exchange Commission. As of the time of this release, the Company has not yet determined its next step.

FY2013 Financial Performance Metrics

Revenue

The Company's revenue for the year ended December 31, 2013 was $43,934,506, a decrease of 39.5%, compared with $72,629,552 in 2012. This decrease is primarily attributable to the decrease in the system integration category revenue, which decreased from $67,961,198 for the year ended December 31, 2012 to $37,159,081 in 2013. The Ordos project, which belongs to system integration category, decreased from $6,838,176 for the year ended December 31, 2012 to $1,416,790 in 2013 because the project was primarily completed. Similarly the Xushui project decreased from $10,056,749 for the year ended December 31, 2012 to $3,287,959 in 2013 because it was primarily completed. Revenue of the India projects decreased by $7,838,746 from 2012 to 2013 because of the delay.

Prior to its deconsolidation, BSST's revenue from January 1, 2013 to November 27, 2013 contributed $9,040,834 of the total revenue for 2013.

BSST contributed $8,465,764 of the revenue for 2012.

Gross Margin

The Company's gross margin decreased from 24.1% in 2012 to 20.3% in 2013. (Such results include BSST's financial result from January 1 to November 27, 2013 and whole year of 2012.) This decrease was largely a result of increases in material and equipment costs and labor subcontracting costs. The BT projects (Xushui and Ordos), which featured higher gross margin, were nearly completed, also contributing to the lower gross margin.

Operating Expenses

The Company's total operating expenses increased to $20,373,754 in the year ended December 31, 2013 from $18,310,880 in the same period of 2012, an increase of 11.3%. The increase was attributed to growth in selling and marketing expenses; general and administration expenses and research and development expenses. Due to the deconsolidation of BSST, the Company recorded bad debt in general and administration expenses, so the total operating expenses increased.

Prior to its deconsolidation, BSST's operating expenses from January 1, 2013 to November 27, 2013 contributed $2,028,471 of the operating expenses for 2013.

BSST contributed $2,226,788 of the operating expenses for 2012.

Selling and Marketing Expenses

Selling and marketing expenses decreased from $4,148,861 in the year ended December 31, 2012 to $3,141,502 in the same period of 2013, a decrease of 24.3%. Decreased headcount of our sales force contributed to the decrease of every related expense such as travel expenses, compensation-related expenses and entertainment expenses.

Prior to its deconsolidation, BSST's selling and marketing expenses from January 1, 2013 to November 27, 2013 contributed $571,839 of the selling and marketing expenses for 2013. BSST contributed $681,941 of the selling and marketing expenses for 2012.

General and administrative expenses consist primarily of compensation costs, rental expenses, professional fees, and other overhead expenses. General and administrative expenses increased from $13,987,293 in 2012 to $15,400,013 in 2013, an increase of 10.1%.

Prior to its deconsolidation, BSST's general and administrative expenses from January 1, 2013 to November 27, 2013 contributed $1,278,601 of the general and administrative expenses for 2013.

BSST contributed $1,544,847 of the general and administrative expenses for 2012.

The salaries, human resource expenses, endowment and other social insurance all decreased from 2012 to the same period 2013 because of the downsizing, the decrease ranged from 6.6% to 25.5%. $184,280 was for rent decreased by 17.1%, from 2012 to 2013 due to office relocation. Professional fees decreased by 61.1%, from $2,458,774 to $955,266, which was mainly for the decreased project consulting service fee. Amortization expense of intangible assets and software decreased by 3.5%, from $907,548 in 2012 to $876,139 in the same period of 2013. Depreciation expense increased by 18.8%, from $309,387 in 2012 to $367,614 in 2013. Other general and administrative expenses increased by 87.6%, from $4,291,150 to $8,050,302 in 2013, including office expenses, utilities, travel, communication, other services support option expense and mainly because of the bad debt expense related to BSST due to its deconsolidation. We had a $427,004 non-cash option expense as a part of other general and administrative expense in 2013. The bad debt expenses of $1,718,041, which came from Tri-Tech (Beijing) Co., Ltd. and was previously recorded as amount due from BSST, was considered here and recorded as bad debt due to BSST control issue. It also attributed to the increase of general and administrative expenses.

General and administrative expenses for 2013 and 2012 were approximately 35.1% and 19.3% of total revenues, respectively.

Loss before Income Taxes

In the year ended December 31, 2013, the Company's net loss before provision for income taxes was $14,626,265, an increase of $13,682,807 compared to that in 2012. The Company's provision for income taxes decreased by 88.6%, from $1,808,415 in 2012 to $206,659 in 2013. Some of the entities were income tax free in 2013 because of loss while the others were taxable, so the total income taxes in 2013 showed a significant decrease. In the year ended December 31, 2013, net loss attributable to the shareholders of TRITF was $13,933,160, a decrease of 515.4%, from net income of $2,264,074 for the year ended December 31, 2012.

Prior to its deconsolidation, BSST's loss before income taxes from January 1, 2013 to November 27, 2013 contributed $1,088,532 of loss before income tax for 2013.

BSST contributed $187,825 of loss before income tax for 2012.

Net loss and EPS

Diluted EPS was a loss of $1.67, based on net loss of approximately $13.9 million and 8,342,056weighted average of diluted shares outstanding for the year ended December 31, 2013, compared to a loss of $0.28 in 2012, based on net loss of approximately $2.3 million and 8,211,089 weighted average diluted shares outstanding.

Liquidity and Capital Resources

As highlighted in the consolidated statements of cash flows, the Company's liquidity and available capital resources are impacted by four key components: (i) cash and cash equivalents, (ii) operating activities, (iii) financing activities and (iv) investing activities.

Cash and Cash Equivalents

At December 31, 2013, the Company's cash and cash equivalents (BSST was deconsolidated since November 27, 2013 therefore not included) amounted to $3,972,553. It decreased by 50.9%, from $8,098,657 on December 31, 2012, mainly due to the implementation of current projects. The current portion of restricted cash (BSST was deconsolidated since November 27, 2013 therefore not included) as of December 31, 2013 and 2012 amounted to $3,221,411 and $4,352,443, respectively, which is not included in the total of cash and cash equivalents. The cash equivalent and restricted cash balance of BSST as of November 27, 2013 was $409,459 and 90,623, respectively. The restricted cash was on deposit as collateral for the issuance of letters of credit on projects. Our subsidiaries that own the deposits do not have material cash obligations to any third parties. Therefore, the restriction does not impact the liquidity of the Company.

Operating Activities

Net cash used in operating activities decreased by $19,158,870 to $1,095,647 in the year ended December 31, 2013, from $20,254,517 in the same period of 2012. Net accounts receivable increased from $18,598,110 on December 31, 2012 to $19,830,742 on December 31, 2013, an increase of 6.6%. Allowance for doubtful accounts increased by 205.8% from December 31, 2012 to December 31, 2013 due to the deconsolidation of BSST and the bad debt of Buerjin project. Allowance caused by BSST deconsolidation was $1,718,041, mainly came from the amount due from BSST to other internal companies. . Allowance related to Buerjin project was $1,603,351 during the year 2013, because the Company saw a breach of certain payment and under the mutual agreement, and finally decided to stop the project. Currently the Company doesn't expect any repaid debt or future revenues from Buerjin project. Current unbilled receivables decreased by $13,847,894from $27,954,525 on December 31, 2012 to $14,106,631 on December 31, 2013, which decreased mainly from the billing of Ordos project. The remaining was mainly caused by the decreased inventory and prepayments to suppliers, due to the total revenue decline.

Investing Activities

Net cash provided by investing activities was $9,658,275 in the year ended December 31, 2013, compared to net cash used in investing of $1,155,435 in the same period of 2012. The increase was mainly due to the received cash from the sale of the Baoding property. Compared to what was required in 2012, we required much less investment in 2013, and at the end of 2013, the Company did not have further plans to invest in such property.

Financing Activities

The cash used in financing activities was $12,026,709 in 2013, compared to $18,138,246 provided by financing activities in the same period of 2012. For the year ended December 31, 2013, the Company repaid $10,661,106 in bank loans and further raised $9,357,830 in bank loans. The Company also repaid corporate bonds in August 2013 that used $8,204,936 cash. In addition of bank loans and corporate bonds, we borrowed loans from third party companies for an aggregated amount of $9,573,959.

Restricted Net Assets

Although we do not anticipate paying dividends in the foreseeable future, our ability to pay dividends is primarily dependent on our receiving distributions of funds from our subsidiaries and VIEs (BSST was consolidated as of December 31, 2012 and was deconsolidated beginning on November 27, 2013), which is restricted by certain regulatory requirements. Relevant PRC statutory laws and regulations permit payments of dividends by our PRC subsidiaries and VIEs only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries and VIEs are required to, and have, set aside at least 10% of their after-tax profit, after deducting any accumulated deficit, based on PRC accounting standards each year to its general reserves until the accumulated amount of such reserves reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Our off-shore subsidiaries, including Tri-Tech Infrastructure LLC and Tri-Tech International Investment, Inc. do not have material cash obligations to third parties. Therefore, the dividend restriction does not impact the liquidity of the companies.  There is no significant difference between accumulated profit calculated pursuant to PRC accounting standards and those reflected in the financial statements prepared in accordance with U.S. GAAP. As of December 31, 2013 and 2012, restricted retained earnings were $2,292,259 and $2,246,910, respectively, and restricted net assets were $1,924,325 and $4,878,975, respectively. The unrestricted retained earnings as of December 31, 2013 and 2012 were $3,025,095 and $17,038,396, respectively, which were the amounts ultimately available for distribution if we were to pay dividends; however, the Company does not have any current plans to pay dividends.

Working Capital and Cash Flow Management

As of December 31, 2013, the Company's working capital was $23,505,777, with current assets totaling $88,361,017 and current liabilities totaling $64,855,240. Of the current assets, cash and cash equivalents was $3,972,553. However, the Company incurred net losses of $14,832,924 and $2,751,873 for the years ended December 31, 2013 and 2012, respectively. In addition, net cash used in operating activities was $1,095,647 and $20,254,517 for the years ended December 31, 2013 and 2012, respectively.

Management Actions and Plans

In the future, the Company plans to take the following actions to meet working capital needs:

  • We plan to look into the possibility of optimizing our funding structure by obtaining short- and/or long-term debt through commercial loans. We are actively exploring opportunities with major Chinese and American banks to obtain such commercial loans. Given the negative recent developments affecting the Company, such as its suspension and subsequent delisting from the NASDAQ Capital Market, decreased revenues and increased net losses, the Company has faced difficulties in securing loans in the same amounts and on the same terms as it was able to achieve in the past. The Company's difficulty in obtaining bank financing has brought additional pressure on cash flow.  Other financing instruments into which we are currently looking include supply chain financing, project financing, trust fund financing and capital leasing. The Company expects the further communication efforts with financing institutions previously made fund available to the Company; furthermore, the Company expects to develop other venues of funding through a variety of different financing institutions.
  • We continue to focus on our collection of accounts receivable. Most of our clients are central, provincial and local governments. As the changes of Chinese economy and the adjustments of Chinese fiscal policy, some local governments, for example Ordos government, met some fiscal challenges which brought some risks for the Company to get the clients' payment on schedule.
  • Currently the Company is considering to realign the business focus and to dispose unprofitable business to ease the cash flow pressure. The Baoding land and property deal and the selling of Yuanjie were all important actions of cash flow improvement and cash flow risk management. The Company will continue to evaluate its ongoing lines of business and employees serving such lines of business to determine areas that may be streamlined or divested if necessary.
  • The Company also plans to get some financial assistance from third parties or individuals with higher interests to meet urgent cash demands.

We believe that our existing balances of cash and cash equivalents and amounts expected to be provided by operating activities will provide us with sufficient financial resources to meet our cash requirements for operations, working capital, and capital expenditures for the next twelve months.

However, in the event of unforeseen circumstances, unfavorable market developments or unfavorable results from operations, there can be no assurance that the above actions could be successfully implemented as expected, and cash flows may be adversely affected.

Backlog and Pipeline

The Company's backlog represents the amount of contract work remaining to be completed, that is, revenues from existing contracts and work in progress in current period expected to be recognized, based on the assumption that these projects will be completed on time according to the project schedules. The following tables show comparisons of the year ended December 31, 2013 against the year ended December 31, 2012 assuming the inclusion and exclusion of BSST and Yuanjie from 2012 backlog and pipeline numbers.

The following table provides backlog by segment (BSST and Yuanjie excluded) as of December 31, 2013, in comparison to that (BSST and Yuanjie included) as of December 31, 2012.


December 31, 2013
(BSST and Yuanjie Excluded)

December 31, 2012
(BSST and Yuanjie Included)




USD Million

% of Total Backlog

USD Million

% of Total Backlog

% Change

Segment 1:

31.4

76.4%

38.7

64.4%

(18.9)

%

Segment 2:

5.1

12.4%

6.7

11.1%

(23.9)

%

Segment 3:

4.6

11.2%

14.7

24.5%

(68.7)

%

Total

41.1

100.0%

60.1

100.0%

(31.6)

%

Backlog decreased moderately in Segments 1 and 2 and significantly in Segment 3. This reflects both (i) the recognition of revenues in projects in Segments 1, 2 and 3 in 2012 and (ii) that such recognized revenues were not replaced with an equivalent amount of new projects in such Segments. Segment 1 had 64.4% of the total backlog in 2012, but only contributed 17.3% of the total revenues in 2013. It was mainly related to the nearly completed Ordos project and delayed India projects. The details related to the delay are discussed in greater detail in the operating results section. Backlog in Segment 3 declined significantly because of the deconsolidation of BSST, the amount of new projects also decreased.

The following table provides backlog by segment (BSST, $6.7 million, and Yuanjie, $1.1 million, excluded) as of December 31, 2013, in comparison to that (BSST, $4.4 million, and Yuanjie, $2.0 million, excluded) as of December 31, 2012.

December 31, 2013 (BSST and Yuanjie Excluded)

 December 31, 2012 (BSST and Yuanjie Excluded)


 USD Million 

 % of Total Backlog

 USD Million 

 % of Total Backlog

 % Change

 Segment 1:

31.4

76.4%

36.7

61.1%

(14.4)

%

 Segment 2:

5.1

12.4%

6.7

11.1%

(24.5)

%

 Segment 3:

4.6

11.2%

10.6

17.6%

(56.3)

%

 Total 

41.1

100.0%

54.0

89.9%

(23.9)

%

Backlog decreased moderately in Segments 1 and 2 and significantly in Segment 3. This reflects both (i) the recognition of revenues in projects in Segments 1, 2 and 3 in 2012 and (ii) that such recognized revenues were not replaced with an equivalent amount of new projects in such Segments.

Pipeline represents the values of projects we have been actively pursuing. Our pipeline as of December 31, 2013 was $11.7 million in Segment 1, $13.5 million in Segment 2 and $1.1 million in Segment 3.


 December 31, 2013

 December 31, 2012




 USD Million 

 % of Total Pipeline

 USD Million 

 % of Total Pipeline

 %
Change

 Segment 1:

11.7

44.5%

50.7

57.6%

(76.9)

%

 Segment 2:

13.5

51.3%

2.5

2.8%

440.0

%

 Segment 3:

1.1

4.2%

34.8

39.4%

(96.8)

%

 Total 

26.3

100.0%

88.0

100.0%

(70.1)

%

Having a dynamic nature, the value of projects moves from pipeline into backlog when we secure the project and from backlog to revenue based on percentage of completion. We cannot guarantee that projects represented in pipeline will ultimately become projects in our backlog.

–FINANCIAL TABLES –

TRI-TECH HOLDING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




December 31,


December 31,



2013


2012

ASSETS





Current assets





Cash

$

3,972,553

$

8,098,657

Restricted cash


3,221,411


4,352,443

Accounts and notes receivable, net of allowance for doubtful
accounts of $4,512,446 and $1,475,771 as of December 31, 2013
and 2012, respectively


19,830,742


18,598,110

Unbilled revenue


14,106,631


27,954,525

Other current assets, net of allowance for doubtful accounts of
$1,718,041 and nil as of December 31, 2013 and 2012, respectively


7,269,687


3,825,770

Inventories


9,510,318


8,459,073

Deposits on projects


1,401,206


1,469,550

Prepayments to suppliers and subcontractors


15,364,083


8,376,944

Assets held for sale


13,684,386


11,828,493

Total current assets


88,361,017


92,963,565

Long-term unbilled revenue


39,945,424


51,219,694

Long-term accounts receivable


880,584


413,770

Plant and equipment, net


1,425,660


1,764,784

Construction in progress


135,065


2,560

Intangible assets, net


2,274,448


5,407,891

Long-term restricted cash


2,930,512


3,464,524

Goodwill


847,179


1,441,278

Total Assets

$

136,799,889

$

156,678,066






LIABILITIES AND EQUITY





Current liabilities





Accounts payable

$

9,298,109

$

5,890,511

Costs accrual on projects


15,444,203


23,637,751

Advance from customers


990,319


1,157,247

Advance from buyer of assets


10,225,451


-

Loans from third party companies and individual


9,526,579


6,400,659

Amount due to noncontrolling interest investor


5,213,975


9,047,068

Amount due to related party


1,333,054


1,656,420

Other payables


443,275


461,258

Taxes payable


3,987,386


5,577,533

Accrued liabilities


669,801


485,354

Payable on investment consideration


280,559


582,966

Deferred income taxes


1,387,968


1,782,786

Deferred revenue


-


289,485

Short-term bank borrowing (including VIE short-term borrowing of the consolidated VIEs without recourse to Tri-Tech Holdings of $5,889,860 and $2,754,158 as of December 31, 2013 and 2012, respectively)


6,054,561


8,150,041

Total current liabilities  


64,855,240


65,119,079

Noncurrent deferred income taxes


4,158,498


3,699,790

Long-term bank borrowings


10,003


17,976

Corporate Bond


-


7,935,122

Total Liabilities


69,023,741


76,771,967






Equity





Tri-Tech Holding Inc. shareholders' equity





Ordinary shares ($0.001 par value, 30,000,000 shares authorized; 8,470,874 and 8,259,506 shares issued as of December 31, 2013 and 2012, respectively; 8,449,774 and 8,238,406 shares outstanding as of December 31, 2013 and 2012, respectively)


8,471


8,259

Additional paid-in-capital


50,848,628


50,119,428

Statutory reserves


2,292,259


2,246,910

Retained earnings


3,025,095


17,038,396

Treasury shares (21,100 shares in treasury as of December 31, 2013 and 2012, respectively)


(193,750)


(193,750)

Accumulated other comprehensive income


6,978,700


5,086,827

                  Total Tri-Tech Holding Inc. shareholders' equity


62,959,403


74,306,070

Noncontrolling interests


4,816,745


5,600,029

Total equity


67,776,148


79,906,099

Total Liabilities and Equity

$

136,799,889

$

156,678,066

 

TRI-TECH HOLDING INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS




 For The Years Ended,



2013


2012

 Revenues:





               System integration


37,159,081


67,961,198

               Hardware products


6,775,425


4,668,354

       Total revenues


43,934,506


72,629,552

 Cost of revenues





               System integration


29,413,109


51,800,856

               Hardware products


5,606,154


3,328,662

       Total cost of revenues


35,019,263


55,129,518

 Gross profit


8,915,243


17,500,034

 Operating expenses:





               Selling and marketing expenses


3,141,502


4,148,861

               General and administrative expenses


15,400,013


13,987,293

               Research and development expenses


1,832,239


174,726

       Total operating expenses


20,373,754


18,310,880

 Loss from operations


(11,458,511)


(810,846)

 Other expense:





               Other income, net


2,849,221


1,958,119

               Interest income


219,347


230,920

               Interest expense


(2,454,522)


(2,407,209)

               Loss on deconsolidation of BSST


(3,781,800)


-

              Fair Value change on contingent investment consideration


-


85,558

 Total other expenses


(3,167,754)


(132,612)

 Loss before provision for income taxes


(14,626,265)


(943,458)

 Provision for income taxes


206,659


1,808,415

 Net loss


(14,832,924)


(2,751,873)

 Less: Net loss attributable to noncontrolling interests


(899,764)


(487,799)

 Net loss attributable to Tri-Tech Holding Inc. shareholders

$

(13,933,160)

$

(2,264,074)

 Net loss


(14,832,924)


(2,751,873)

 Other comprehensive income





               Foreign currency translation adjustment


1,891,873


527,672

 Comprehensive loss


(12,941,051)


(2,224,201)

 Less: Comprehensive loss attributable to noncontrolling interests


(783,284)


(487,799)

 Comprehensive loss attributable to Tri-Tech Holding Inc.

$

(12,157,767)

$

(1,736,402)

 Weighted average number of ordinary shares outstanding:





               Basic


8,342,056


8,211,089

               Diluted


8,342,056


8,211,089

 Net loss attributable to Tri-Tech Holding Inc. shareholders per share are:





             Basic

$

(1.67)

$

(0.28)

             Diluted

$

(1.67)

$

(0.28)

 



TRI-TECH HOLDING INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


Ordinary shares

Additional paid-in-capital

Retained earnings

Treasury Stock

Accumulated other comprehensive income

Noncontrolling interests

Total equity


Shares

Amount

Statutory reserves

Unrestricted

BALANCE, January 1, 2012

8,203,299

8,203

48,772,307

1,866,994

19,682,386

(193,750)

4,593,046

6,017,739

80,746,925

Capital injection by noncontrolling
interest shareholder  

-

-

-

-

-

-

-

36,198

36,198

Issuance of common share

56,207

56

301,575

-

-

-

-

-

301,631

Amortization of option

-

-

1,045,546

-

-

-

-

-

1,045,546

Net loss

-

-

-

-

(2,264,074)

-

-

(487,799)

(2,751,873)

Transfer to statutory reserve  

-

-

-

379,916

(379,916)

-

-

-

-

Foreign currency translation
Adjustment

-

-

-

-

-

-

493,781

33,891

527,672

BALANCE, December 31, 2012

8,259,506

8,259

50,119,428

2,246,910

17,038,396

(193,750)

5,086,827

5,600,029

79,906,099

Issuance of common share

211,368

212

343,445

-

-

-

-

-

343,657

Deconsolidation of BSST

-

-

-

(34,792)

-

-

-

-

(34,792)

Amortization of option

-

-

385,755

-

-

-

-

-

385,755

Net loss

-

-

-

-

(13,933,160)

-

-

(899,764)

(14,832,924)

Transfer to statutory reserve  

-

-

-

80,141

(80,141)

-

-

-

-

Foreign currency translation
Adjustment

-

-

-

-

-

-

1,891,873

116,480

2,008,353

BALANCE, December 31, 2013

8,470,874

8,471

50,848,628

2,292,259

3,025,095

(193,750)

6,978,700

4,816,745

67,776,148



TRI-TECH HOLDING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



For The Years Ended December 31,



2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES:





Net loss

$

(14,832,924)

$

(2,751,873)

Adjustments to reconcile net loss to cash used in operating activities:





Share-based compensation expense


729,412


1,117,227

Depreciation and amortization


1,178,548


1,224,646

Provision for doubtful accounts


5,153,807


855,302

Fair value change on contingent investment consideration


-


(85,558)

Loss on disposal of plant and equipment


87,197


9,756

Loss on deconsolidation of BSST


3,781,800


-

Deferred income taxes


(251,317)


1,634,308

(Increase) decrease in current assets :


-



Accounts receivable


(13,895,771)


22,835

Unbilled revenue


25,861,337


(12,837,189)

Restricted cash


1,698,496


(3,174,767)

Other current assets


(432,378)


(1,022,956)

Inventories


(1,757,028)


(752,618)

Prepaid expenses


225,170


(203,302)

Prepayments


(8,449,341)


(4,723,440)

(Increase) decrease in current liabilities :


-


-

Accounts payable


4,513,041


(5,695,882)

Notes payable


-


(1,174,203)

Cost accrual on projects


(5,376,354)


4,440,666

Advance from customers


(376,692)


(756,745)

Other payables


1,502,012


1,568,225

Taxes payable


(128,825)


1,739,367

Accrued liabilities


(31,360)


22,681

Deferred revenue


(294,476)


289,003

Net cash used in operating activities

$

(1,095,647)

$

(20,254,517)

CASH FLOWS FROM INVESTING ACTIVITIES:





Cash proceeds from asset sale


10,089,921


-

Payment in business acquisition


-


(114,910)

Cash proceeds from disposal of PPE


30,175


-

Payment to purchase plant and equipment


(317,129)


(643,607)

Cash paid to acquire intangible asset


-


(128,681)

Cash paid for construction in progress


(144,692)


(814,293)

Payment of loan to third-party companies


-


(158,438)

Collection of loan to third-party companies


-


704,494

Net cash provided by (used in) investing activities

$

9,658,275

$

(1,155,435)

CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from bank borrowings


9,357,830


18,831,078

Payment of bank borrowing


(10,661,106)


(18,693,584)

Proceeds from the issuance of ordinary shares


-


230,937

Proceeds from the Issuance of corporate bond


-


8,052,449

Payment of the corporate bond


(8,204,936)


-

Capital inject by shareholders


-


477,247

Proceeds from amount due from shareholder


248,824


31,373

Payment of amount due to shareholder


(92,295)


(52,891)

Proceeds from loan from third-party companies and individuals


9,573,959


8,130,386

Payment of loan from third-party companies and individuals


(7,341,898)


-

Proceeds from loan from non-controlling shareholders


-


(475,315)

Payment of loan from non-controlling shareholders


(4,907,087)


1,606,566

Net cash (used in) provided by financing activities

$

(12,026,709)

$

18,138,246

EFFECTS OF EXCHANGE RATE CHANGE IN CASH


(662,023)


(565,383)

DECREASE IN CASH

$

(4,126,104)

$

(3,837,089)

CASH, beginning of the period


8,098,657


11,935,746

CASH, end of the period


3,972,553


8,098,657

Supplemental disclosure for cash flow information:





Income taxes paid


165,815


204,019

Interest paid on debt


2,180,181


1,029,602

Supplemental disclosure for noncash investing activity:





Gain on long-term investment to India Joint Venture


-


78,558

Addition in construction in progress


657,350


725,569

Issuance of 196,368 and 30,207 ordinary shares as one of the
consideration in business combination for years ended
December 31, 2013 and 2012, respectively


302,407


229,875

Issuance of 15,000 and nil ordinary shares as compensation to
service provided


41,250


-

Addition in plant and equipment by transferring from
construction in progress


-


40,740






About Tri-Tech Holding Inc.

Tri-Tech is an innovative provider of consulting, engineering, procurement, construction and technical services. The Company supports government, state owned entities and commercial clients by providing efficiency oriented solutions focused on treatment of water and waste water, management of water resources and water-efficient irrigation, as well as industrial emission and safety controls. With software copyrights, product patents, and capable employees in China, the U.S. and India, Tri-Tech's capabilities span the cycle of innovation. Please visit www.tri-tech.cn for more information.

An online investor kit including a company profile, presentations, press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.tri-tech.cn/ir. To subscribe to future releases via e-mail alert, visit http://www.tri-tech.cn/ir/info/request .

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of 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:

Tri-Tech Holding Inc.
www.tri-tech.cn
IR Department
+86 10 57323666
ir@tri-tech.cn

Logo - http://photos.prnewswire.com/prnh/20100603/CNTH016LOGO

SOURCE Tri-Tech Holding Inc.



RELATED LINKS
http://www.tri-tech.cn/ir
http://www.tri-tech.cn/ir/info/request
http://www.Tri-Tech.cn

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