SHANGHAI, March 3, 2011 /PRNewswire-Asia/ -- China Energy Recovery Inc. (CGYV.PK) ("CER"), an international leader in the design, fabrication and installation of waste heat recovery systems, today announced financial results for the first three months of fiscal 2010, ending March 31, 2010, as compared with restated figures for the same period in 2009.
Highlights for the quarter (YoY)
- Revenues increased 213% to $4.1 million.
- Gross profit increased 397% to $618,000.
- Net income increased 119% to $189,000.
First quarter 2010 results
Revenues for the three-month period ended March 31, 2010, were $4.1 million, up from a restated $1.31 million in the same period a year ago.
Gross profit in the quarter increased to $617,576 or 15.1 percent of sales, compared to a restated $124,360 or 9.5 percent of sales in the same period a year ago. The company's operating loss narrowed considerably in the period to $538,513 compared to a restated loss of $824,027 in the same quarter a year ago.
Benefiting from increases in non-operating income, net income increased to $188,579 or $0.01 per share compared to a restated net loss of $984,162 or $0.03 per share in the same period a year ago.
"Revenue growth in the quarter is an indication of how the market is growing for CER's waste heat recovery technology and systems," CER Chief Executive Officer Qinqhuan Wu said. "In the first quarter of 2010, CER's production constraints limited its growth, a condition that persisted through fiscal 2010 while our new manufacturing facility was under construction. With the opening of our new facility in the fourth quarter of 2010, CER's ability to take on new contracts at an increased rate improved materially."
Restated results for the first three months of fiscal 2009
CER's 2010 filings have been delayed in the transition to a new independent auditor, PricewaterhouseCoopers, which has carried out a review of CER's financials that resulted in the restatement of certain financial figures for the three-month period ended March 31, 2009.
Total revenue of $1,310,027 for the quarter ended March 31, 2009 represents an additional $47,779 to the previously reported $1,262,248. Gross profit of $124,360 for the quarter ended March 31, 2009 represents an additional $62,467 to the previously reported $61,893. Operating loss of $824,027 for the quarter ended March 31, 2009 is $654,671 less than the previously reported loss of $1,478,698. Net loss of $984,162 for the quarter ended March 31, 2009 is $486,048 less than the previously reported loss of $1,470,210.
What is Waste Heat Energy Recovery?
Industrial facilities release significant amounts of excess heat into the atmosphere in the form of hot exhaust gases or high-pressure steam. Energy recovery is the process of recovering as much as two-thirds of that wasted energy and converting it into usable heat energy or electricity, dramatically lowering energy costs. Energy recovery systems are also capable of lowering heat pollution and capturing harmful pollutants that would otherwise be released into the environment. It is estimated that if energy currently wasted by all the U.S. industrial facilities could be recovered, it could produce power equivalent to 20% of U.S. electricity generation capacity without burning any additional fossil fuel, and could help many industries to meet stringent environmental regulations.
About China Energy Recovery, Inc.
CER is an international engineering and manufacturing company that specializes in the design, construction and installation of waste heat energy recovery systems that captures and converts industrial waste energy produced by heavy industrial processes such as petroleum and chemicals refining, paper manufacturing and refining into low-cost electrical power, which enables industrial manufacturers to reduce their energy costs, shrink their emissions footprint and generate salable emissions credits. The company's primary focus is the Chinese market; however, CER's systems are operating in heavy industrial plants located in Egypt, Korea, Vietnam and Malaysia. CER is building China's first state-of-the-art, energy recovery system research and fabrication facility, which will allow CER to meet increased demand for its products and services. For more information on CER, please visit: http://www.chinaenergyrecovery.com/s/Home.asp. Information on CER's website does not comprise a part of this press release.
Forward-Looking Statement Disclaimer
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, as amended. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that CER believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors that CER believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of CER and may not materialize, including, without limitation, the efficacy and market acceptance of CER's products and services, CER's ability to execute on its business plan and strategies and CER's ability to successfully complete orders and collect revenues therefrom. Investors are cautioned that any such statements are not guarantees of future performance. Actual results or developments may differ materially from those projected in the forward-looking statements as a result of many factors. Furthermore, CER does not intend (and is not obligated) to update publicly any forward-looking statements, except as required by law. The contents of this release should be considered in conjunction with the warnings and cautionary statements contained in CER's filings with the Securities and Exchange Commission.
China Energy Recovery, Inc. and Subsidiaries
Consolidated Statements of Operations and Other Comprehensive (loss) Income
for the Three Months Ended March 31, 2009 and 2010 (Unaudited)
Three months ended March 31,
COST OF REVENUES
Total cost of revenues
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
LOSS FROM OPERATIONS
OTHER INCOME/(EXPENSE), NET:
Change in fair value of warrants
Change in fair value of derivative liabilities
Non-operating (loss)/income, net
Total other (loss)/income, net
(LOSS)/INCOME FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES
BENEFIT/(PROVISION) FOR INCOME TAXES
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment
(LOSS)/ EARNINGS PER SHARE:
WEIGHTED AVERAGE SHARES OUTSTANDING:
China Energy Recovery, Inc. and Subsidiaries
Consolidated Balance Sheets
as of December 31, 2009 and March 31, 2010 (Unaudited)
Accounts receivable, net of allowance for doubtful accounts
Other current assets and receivables
Deferred financial cost - current
Deferred tax assets - current
Advances on purchases
Total current assets
Plant and equipment, net
Deferred tax assets
Deferred financial cost
Long-term accounts receivable
Total non-current assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued expenses and other liabilities
Advances from customers
Short-term bank loans
Convertible note, current
Derivative liability, current
Long-term loan, current
Total current liabilities
Total non-current liabilities
Consolidated Balance Sheets & Shareholders Equity, continued
Preferred stock ($0.001 par value; 50,000,000 shares authorized, 662,963 and 200,000 shares issued and outstanding as of December 31, 2009 and March 31, 2010, respectively)
Common stock($0.001 par value; 100,000,000 shares authorized, 30,638,720 and 30,883,818 shares issued and outstanding as of December 31, 2009 and March 31, 2010, respectively)
Accumulated other comprehensive loss
Total shareholders' equity
Total liabilities and shareholders' equity
SOURCE China Energy Recovery Inc.