2014

Wowjoint Holdings Limited Reports First Quarter 2012 Financial Results - Q1 2012 revenue of $1.2 million in-line with guidance

- Order backlog is $18.7million as of March 31, 2012

- Accounts receivable reduced by $7 million from Q1 2011, to $9.5 million

- Q2 2012 revenue guidance: $1-2 million

BEIJING, May 15, 2012 /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 first quarter 2012.

First Quarter Ended March 31, 2012

  • Revenues for the Company's first quarter ended March 31, 2012 was $1.2 million as compared to $6.6 million in the first quarter of 2011.
  • Revenue from leasing increased by 333% to $1.1 million compared to the first quarter of 2011. These services, as well as technical service sales, continue to be a focus for Wowjoint as they provide a more stable source of cash flows and higher margins compared to machinery sales.  
  • Gross profit was $0.4 million compared to $1.4 million for the same period last year. Gross margins increased 1330 basis points to 34.6% in the first quarter 2011 compared to 21.3% in the same period in 2011.
  • Operating income was a loss of $1.0 million for the first quarter 2012 compared to operating income of $0.3 for the first quarter 2011.
  • Net loss for the first quarter 2012 was $0.4 million, compared to net income of $0.4 million in same period 2011.

Cost of sales for the three months ended March 31, 2012 was approximately $0.8 million as compared to $5.2 million for the three months ended March 31, 2011. The lower cost of sales in first quarter 2012 was due to lower sales volume. Operating expenses for the three months ended March 31, 2012 were approximately $1.5 million compared to $1.1 million for the same period in 2011, due to the increase in sales staff. Selling expenses for the three months ended March 31, 2012 totaled $0.3 million compared to $0.2 million in the same period of 2011, due to a continued increase in sales force.

"The first quarter gross margins are a substantial increase from the first quarter 2011, due to a focus on reducing the material costs for our projects, as well as the diversification of our revenue stream, specifically with lease revenue. Lease revenue was very strong and we believe that will continue to grow, along with international sales and revenue from technical services," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "In addition, during the first quarter we offered a stock dividend to our shareholders and commenced a warrant exchange to our warrants holders. We believe that both of these events demonstrate our belief in Wowjoint and provides for a solid capitalization structure."

Balance Sheet as of March 31, 2012

  • Cash and cash equivalents totaled $1.5 million as of March 31, 2012, compared to $3.0 million at March 31, 2011.
  • Accounts receivable were $9.5 million as of March 31, 2012 as compared to $16.8 million as of March 31, 2011. This substantial reduction in account receivables is due to a concentrated effort by the Company to collect its outstanding payables.
  • Inventories decreased to $3.7 million, due to reduced sales.
  • Working capital was $6.6 million on March 31, 2012.
  • The Company had total stockholders' equity of $22.0 million, with total assets of $46.3 million versus total liabilities of $24.3 million on March 31, 2012.

"We continue to progress in our expansion of sales and order backlog. The additions we've made to our sales and marketing team have enabled us to secure new customers, enter new vertical markets and continue our international expansion," stated Mr. Yabin Liu, Chairman and CEO of Wowjoint.

Business Updates

Since the beginning of 2012, Wowjoint announced a contract to provide two Movable Scaffolding Systems in Malaysia. In addition, the Company signed a contract with Titan Peru S.A.C. to provide a tire gantry. These are both new international markets for Wowjoint and enable entry into Southeast Asia and South America. These emerging markets are expected to see vast infrastructure growth in the near future.

"We continued to expand our customer base, having signed contracts for projects in Malaysia and Peru since the beginning of 2012. Those contracts demonstrate our continued focus on sales and marketing to expand our reach beyond the large infrastructure possibilities in China," stated Mr. Liu. "The addition of our new R&D and manufacturing facility in Zhenjiang provides us with an ideal location in a strong economic zone and the facilities to provide enhanced services to our international customers, as well as the new projects we expect to receive through our partnership with Beijing Jiaotong University Yangtze River Delta Institute Wanqiao."

Revenue Guidance and Contract Backlog

Management issued revenue guidance for the second quarter of 2012 of approximately $1 to $2 million. As of March 31, 2012, Wowjoint's backlog of signed contracts totaled approximately $18.7 million.

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, marine hoists and special purpose equipment. The Company's innovative design capabilities have resulted in patent grants and proprietary products. Wowjoint believes it 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 http://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.

For additional information contact:  

Wowjoint Holdings:    
Aubrye Foote, Vice President, Investor Relations
Tel:  +1-530-475-2793
Email: aubrye@wowjoint.com
Website: www.wowjoint.com

 

WOWJOINT HOLDINGS LTD

Unaudited Consolidated Balance Sheet

(US dollars in thousands)





March 31,

March 31,


2012

2011

ASSETS



Current Assets:



Cash and cash equivalents

1,484

3,009

Accounts receivable(net)

9,504

16,789

Other receivables

1,553

1,347

Advances to suppliers

8,857

5,449

Inventories

3,697

8,559

Costs and estimated earnings in excess of billings

4,480

4,575

Amount due from related parties

76

73

Restricted cash

649

794

Total Current Assets

30,300

40,595




Long-term investment

-

305

Property, plant and equipment

14,886

4,263

Intangible asset, net

1,061

1,047

Prepaid expense - Long-term

-

179

Total Assets

46,247

46,390




TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



Current Liabilities:



Short-term loans

2,701

3,813

Accounts payable and accrued expenses

12,047

11,757

Advances from customers

3,647

2,226

Unearned lease income

-

500

Taxes payable

4,347

4,760

Other payables

474

498

Billings in excess of costs and estimated earnings

-

566

Long-term loan due within one year

477

-

Total Current Liabilities

23,693

24,119




Long-term loan 

635

1,525




Total Liability

24,328

25,644




Stockholders' Equity:



Common stock 

8

8

Additional paid in capital

10,336

10,300

Statutory surplus reserves

3,025

3,025

Retained earnings

6,757

6,251

Accumulated other comprehensive income

1,793

1,162

Total Stockholders' Equity

21,919

20,746

Total Liabilities and Stockholders' Equity

46,247

46,390

 

WOWJOINT HOLDINGS LTD

Unaudited Consolidated Statement of Income

(US dollars in thousands, except for EPS and share data)






Three Months Ended


March 31,

December 31,

March 31,


2012

2011

2011

Sales




Machinery sales

85

1,111

5,748

Technical service

0

151

613

Lease income

1,105

2,749

255

Total sales

1,190

4,011

6,616





Cost of goods sold

778

2,527

5,209

Gross profit

412

1,484

1,407





Operating expenses:




Selling expenses

323

331

227

General and administrative expenses

1,133

1,217

835

Total operating expenses

1,456

1,548

1,062





Income from operations

(1,044)

(64)

345





Other expenses:




Interest expense (net)

79

74

46

Bank expense

13

3

-

Foreign currency exchange loss(gain)

60

317

(62)

Other expense (profit)

(804)

(58)

(1)

Total other expenses

(652)

336

(17)





Income before income taxes

(392)

(400)

362





Income taxes (Benefits) expenses

-

60

72





Net income attributed to ordinary shareholders 

(392)

(340)

290





Earnings per share 




 Basis

0.00

0.00

0.04

 Diluted 

0.00

0.00

0.04





Weighted average number of shares used in computing earnings per share




 Basis

7,971,465

7,949,965

7,949,965

 Diluted 

7,971,465

7,949,965

7,949,965

 

WOWJOINT HOLDINGS LTD

Statement of Cash Flows

(US dollars in thousands)



March 31, 2012

December 31, 2011


(unaudited)

(unaudited)




CASH FLOWS FROM OPERATING ACTIVITIES:



Net income (loss)

(392)

1,224

Adjustments to reconcile net income to net cash provided by operating activities:

-

-

Depreciation and amortization

226

725

Bad debt expense

90

111

Other

-

-

Changes in operating assets and liabilities:

-

-

Accounts receivable

2,714

4,519

Other receivables

102

(933)

Advances to suppliers

98

(5,432)

Inventories

282

(334)

Costs and estimated earnings in excess of billings

(66)

(1,511)

Prepaid expense – Short-term

-

-

Accounts payables and accrued expenses

(2,156)

6,546

Other payables

(7)

310

Unearned lease income

-

(748)

Advances from customers

(1,667)

4,895

Taxes payable

(244)

(459)

Billings in excess of costs and estimated earnings

-

(897)

Total adjustments

(627)

6,792

Net cash (used in) provided by operating activities

(1,019)

8,016




CASH FLOWS FROM INVESTING ACTIVITIES:



Long term investment

-

-

Purchase of property, plant and equipment

(522)

(10,526)

Prepaid expense - Long-term

-

101

Net cash used in investing activities

(522)

(10,425)




CASH FLOWS FROM FINANCING ACTIVITIES:



Net cash provided by acquisition

-

-

Repayment of short-term loans

(791)

(1,510)

Proceeds from short-term loans

-

3,492

Repayment of long-term loans

(475)

-

Proceeds from long-term loans

-

1,587

Restricted cash

(71)

344

Due from related parties

-

6

  Due to related parties

(54)

54

Net cash provided by (used in) financing activities

(1,391)

3,973




NET INCREASE (DECREASE) IN CASH

(2,932)

1,564

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(211)

895

CASH, BEGINNING OF PERIOD

4,627

2,168




CASH, END OF PERIOD

1,484

4,627




SUPPLEMENTAL DISCLOSURES:



Cash paid during the period for:



Interest paid

81

220

Income tax paid

61

427

SOURCE Wowjoint Holdings Limited



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http://www.wowjoint.com

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