China Recycling Energy Corporation Reports Third Quarter Results and Raises Full-year 2010 Guidance for Net Profit
- Record Revenue Growth of 29% for Nine Months Ended September 30 2010
- Company Completed and Delivered Zhongbao 7MW WHPG System
- Raise full-year 2010 Guidance for Non-GAAP Net Profit From $18M - $20M To $22M
XI'AN, China, Nov. 15, 2010 /PRNewswire-Asia-FirstCall/ -- China Recycling Energy Corp. (Nasdaq: CREG; "CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced its financial results for the three months and nine months ended September 30, 2010 and raised its full-year 2010 guidance for net profit.
Highlights
For the three months ended September 30, 2010:
- Revenues were $11.12 million, as compared to $18.43 million for the quarter ended September 30, 2009.
- Net income was $3.05 million, as compared to $3.8 million for the quarter ended September 30, 2009.
- Total Operating Income grew by 14.6% to $6.91 million from $6.03 million for the quarter ended September 30, 2009.
- Fully diluted earnings per share ("EPS") of $0.06, as compared to $0.08 for the three months ended September 30, 2009.
- On adjusted non-GAAP measures, as defined below, non-GAAP net income grew to $5.27 million, or non-GAAP fully diluted EPS of $0.11, as compared to $5.24 million, or fully diluted EPS of $0.11, for the same period of 2009.
For the nine months ended September 30, 2010:
- Revenues were $43.78 million, an increase of 29% as compared to $33.89 million for the nine months ended September 30, 2009.
- Net income was $10.23 million, up 26.3% from $8.11 million for the nine months ended September 30, 2009.
- Total Operating Income grew by 73.1% to $21.39 million from $12.36 million for the nine months ended September 30, 2009.
- Fully diluted EPS of $0.21, as compared to $0.19 for the nine months ended September 30, 2009.
- On adjusted Non-GAAP measures, as defined below, non-GAAP net income grew to $16.57 million, or non-GAAP fully diluted EPS of $0.34, as compared to $10.15 million, or fully diluted EPS of $0.23, for the same period of 2009.
Summary of Financial Results |
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(In '000s of U.S. Dollars, except for per share data) |
NINE MONTHS ENDED SEPT.30 |
THREE MONTHS ENDED SEPT.30 |
|||
2010 |
2009 |
2010 |
2009 |
||
Revenue |
43,783 |
33,886 |
11,119 |
18,426 |
|
Gross profit |
11,020 |
8,240 |
2,956 |
4,246 |
|
Total Operating Income |
21,391 |
12,357 |
6,909 |
6,030 |
|
Net income |
10,227 |
8,108 |
3,047 |
3,797 |
|
Diluted EPS |
0.21 |
0.19 |
0.06 |
0.08 |
|
Adjusted Net Income in non-GAAP(1) |
16,570 |
10,145 |
5,271 |
5,242 |
|
Adjusted EPS in Non-GAAP(1)(2) |
$0.34 |
$0.23 |
$0.11 |
$0.11 |
|
(1) CREG provides adjusted net income and earnings per share on a non-GAAP basis that excludes non-cash, share-based compensation expense and non-cash interest expense on the amortization of the beneficial conversion feature for the convertible notes and non-cash deferred income tax expenses, as described below, to enable investors to better assess the Company's operating performance. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "Non-GAAP Financial Measures"; (2) Non-GAAP diluted weighted average shares outstanding were calculated based on outstanding shares, issued options, and estimated shares under the assumption that they would be converted from our convertible debentures. |
|||||
Mr. Guohua Ku, Chairman and CEO of CREG commented, "We are very pleased with the Company's performance in the third quarter and remain highly confident that we will reach our stated financial goals for the year. Although the revenues posted were modest in comparison to our year ago quarter, we achieved solid income and continue to execute well on our BOT business model and growth strategy. In the quarter, we successfully completed and delivered to Zhongbao Binhai Nickel Co., a 7 MegaWatt ('MW') capacity Waste Heat Power Generation ('WHPG') system that has a term of nine years. We are now ardently focused on completing Phase II and III of the Erdos Power Generation Project in the final months of 2010 and preparing for a very busy, successful 2011 project year."
Mr. Ku continued, "On the product side, we announced in our second quarter earnings release that we had further expanded our recycling capabilities, entering into the exciting biomass industry. Our contract with PuCheng Biomass Power Generation Company is for 15 years and will bring in a minimum of $3.3 million per year for the duration of the contract. We believe that this renewable energy resource will add to our sales growth on a long term basis starting in 2010 and help further expand the capabilities of our waste-to-energy business model and R&D platform."
"In August 2010, we proudly announced that CREG entered into a strategic and capital based cooperation agreement with China Cinda Asset Management Co. ("Cinda"), one of the largest state-owned financial institutions providing diverse financial services in China. Through this agreement, our Company has attained the funding to sustain the development of our large projects such as the Phases IV and V of the joint venture between Xi'an TCH and Erdos Metallurgy. Moreover, like our relationship with Carlyle Asia Group, we also gained a strategic long term partner that will help us grow our business organically, increase our customer base to incorporate other large industrial players and further our market share in the burgeoning waste-to-energy space. We look forward to sustained growth in the months and years to come," commented Mr. Ku.
Financial Results for the Three Months Ended September 30, 2010
Net sales for the three months ended September 30, 2010 were $11.12 million as compared to net sales for the three months ended September 30, 2009 of $18.43 million, a decrease of $7.31 million. Third quarter 2010 sales were primarily attributed to the sale of the Zhongbao WHPG system in the amount of $10.56 million and contingent rental income of $0.56 million from actual usage of electricity generated in addition to the minimum lease payments from our Shengwei Group-Tongchuan Project, Erdos Project and Shenmu Project, as compared to the same period of 2009 in which the Company recognized the sale of the Shenmu Waste Gas Power Generation ("WGPG') system in the amount of $18.43 million.
Gross profit was $2.96 million for the three months ended September 30, 2010 as compared to $4.25 million for the same period of 2009, representing a gross margin of 27% and 23%, respectively. The increase in gross profit as a percentage of revenue was a result of the recorded profit of the sales-type leases of Zhongbao WHPG system with a gross profit margin of about 23% and the contingent rental income with an average gross profit margin of about 4%, while in the comparable period of 2009, the gross profit was from the sales type lease of Shenmu WGPG system that had a gross profit margin of 23%.
Operating income was $6.91 million for the third quarter 2010, as compared to $6.03 million for the same period of 2009, an increase of $0.88 million. The growth in operating income was mainly due to the sale of the Zhongbao WHPG system, and increase in interest income from the sales-type lease systems, which were derived from two TRT systems, two CHPG systems, one WGPG system, one biomass power generation system, and two waste heat power generating systems associated with our Erdos Phase I project. The interest income for the three months ended September 30, 2010 was $3.95 million, an increase of 2.17 million, as compared to interest income of $1.78 million in the same period of 2009, which was derived from two TRT and two CHPG systems only.
Operating expenses totaled $1.80 million for the three months ended September 30, 2010 as compared to approximately $1.38 million for the same period in 2009, an increase of $0.42 million. This increase was mainly due to proportional increases in our payroll, welfare and marketing expenses as a result of our increased sales and expansion of our business. In addition, we recorded $0.51 million compensation expenses for stock options and warrants during the three months ended September 30, 2010, compared to $0.69 million for the comparable period in 2009. We also recorded $0.60 million stock compensation cost resulting from a settlement with a consulting firm during the three months ended September 30, 2010.
Net income for the three months ended September 30, 2010 was $3.05 million, as compared to $3.80 million for the same period in 2009, a decrease of $0.75 million. This decrease in net income was mainly due to the sale of the Zhongbao WHPG system at $10.56 million in the third quarter of 2010, while in the comparable period of 2009, the sale of the Shenmu WGPG system was at $18.43 million. For the quarter ended September 30, 2010, GAAP diluted EPS was $0.06, compared with $0.08 in the same period of 2009.
Financial Results for the Nine Months Ended September 30, 2010
Revenue for the nine months ended September 30, 2010 was $43.78 million, as compared to $33.89 million in the same 2009 period, an increase of $9.9 million. The increase was primarily due to the completion and sale of the second 9MW capacity power station of Erdos Phase I project through sales-type lease in the first quarter of 2010, the completion of transformation and sale of Pucheng Biomass Power Generation System and the Zhongbao WHPG system.
Gross profit was $11.02 million for the nine months ended September 30, 2010, as compared to $8.24 million for the same period in 2009, representing a gross margin of 25% and 24%, respectively. The increase in gross profit was mainly from the sale of the Erdos Phase I second 9MW capacity power station in the first quarter of 2010, Pucheng Biomass power generation system in the second quarter of 2010 and Zhongbao WHPG system in the third quarter of 2010, while in the same period of 2009, it was mainly for the sale of the Jinyang Shengwei heat power generation system and Shenmu WGPG system, as well as for the operating lease business in connection with the leasing out of two energy recycling power generation equipment systems after April of 2008.
Operating income was $21.39 million for the nine months ended September 30, 2010 as compared to $12.36 million for the same period of 2009, an increase of $9.03 million. The growth in operating income was mainly due to the increase in interest income from selling and leasing our energy saving systems through sales-type leasing. Interest income on sales-type leasing for the nine months ended September 30, 2010 was $10.37 million, as compared to $4.12 million for the same period in 2009, an increase of $6.25 million.
Operating expenses were $4.54 million for the nine months ended September 30, 2010 compared to $2.73 million for the same period in 2009, an increase of $1.81 million or 66%. The increase was due to proportional increases in our payroll, welfare and marketing expenses as a result of the sales on the second 9MW capacity power station of Erdos Phase I project, Pucheng biomass power generation system, Zhongbao WHPG system and continuous expansion of our business. In addition, as discussed above, we recorded $1.92 million compensation expense for stock options and warrants during the nine months ended September 30, 2010, compared to $1.13 million for the same period in 2009 and a $0.60 million stock based compensation resulting from a settlement with a consulting firm.
Net income for the nine months ended September 30, 2010 was $10.23 million, compared to $8.11 million for the same period in 2009, an increase of $2.12 million. This increase in net income was mainly due to the sales of the second 9MW capacity power system of Erdos Phase I project, Pucheng 12MW biomass power generation system and Zhongbao 7MW capacity WHPG system, as well as increased interest income for energy saving systems comparing with comparable period of 2009.
For the nine months ended September 30, 2010, GAAP diluted EPS was $0.21, compared with $0.19 in the same period of 2009.
As of September 30, 2010, the Company had cash and cash equivalents of $6.49 million, other current assets were $11.92 million and current liabilities were $25.90 million. Total investments in sales-type leases were $93.37 million, compared with $52.5 million as of the end of December 2009. Total shareholders' equity was $61.76 million, compared with $46.1 million at December 31, 2009.
Net cash flow provided by operating activities was $13.46 million during the nine months ended September 30, 2010, as compared to $4.13 million provided in the comparable period of 2009. The increase in net cash inflow was mainly due to the increase in net income, as well as increase in accounts payable outstanding, excluding the payment of $10 million for construction in progress of Erdos Phase II and III projects, which was considered an operating activity due to the similar nature of producing an inventory for sale.
As of September 30, 2010, the Company had 38,778,035 shares of common stock outstanding.
Non-GAAP Financial Measures
We believe that "adjusted net income" and "adjusted earnings per share" information, when taken in conjunction with reported results, provide a useful measure of financial performance since they eliminate the impact of certain non-recurring, non-cash charges. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Additionally, the non-GAAP financial measures used by CREG may not be comparable to non-GAAP financial measures used by other companies.
(In '000s of U.S. Dollars, except for per share data) |
NINE MONTHS ENDED |
THREE MONTHS ENDED |
|||
Adjusted Net Income and EPS |
2010 |
2009 |
2010 |
2009 |
|
Net Income attributed to CREG |
10,227 |
8,108 |
3,047 |
3,797 |
|
Adjustments |
|||||
Deferred Income Taxes |
2,496 |
908 |
664 |
758 |
|
Interest expense related to beneficiary conversion feature of convertible debentures |
1,326 |
-- |
446 |
-- |
|
Stock based compensation expenses |
2,521 |
1,129 |
1,114 |
687 |
|
Adjusted Net Income |
16,570 |
10,145 |
5,271 |
5,242 |
|
Diluted Weighted Average Shares Outstanding (Shares) |
49,371,944 |
43,915,609 |
49,246,265 |
47,900,894 |
|
Adjusted EPS in Non-GAAP |
$0.34 |
$0.23 |
$0.11 |
$0.11 |
|
Non-GAAP net income, as defined above, was $5.27 million, or non-GAAP diluted EPS of $0.11, for the third quarter of 2010, compared with $5.24 million of Non-GAAP net income, or $0.11 in Non-GAAP diluted EPS for the same period ended in 2009.
For the nine months ended September 30, 2010, Non-GAAP net income was $16.57 million, or non-GAAP diluted EPS of $0.34, compared with $10.15 million of Non-GAAP net income, or $0.23 in Non-GAAP diluted EPS for the same period ended in 2009
2010 Business Guidance
The Company reaffirms its guidance for revenue for 2010 in the range of $68 million -$72 million, but raises its guidance for net income, excluding non-cash charges, from previous $18 million - $20 million, to $22 million. The reason for raising the guidance for net income is due to the estimated increase of profit margin, as a result of contingent rental income that is earned from actual electricity charge in addition to minimum lease payments of some projects for the year.
These targets are based on the Company's current views on operating and market conditions, which are subject to change.
Third Quarter 2010 Results Conference Call
The Company plans to host its third quarter 2010 results conference call today at 9:00 a.m. ET. Investors are invited to participate on the live call by dialing (877) 407-0784, International investors should dial (201) 689-8560 both parties should reference event ID: 360881. A replay of the call will be available for 1 week following the call. Domestic investors can dial (877) 870-5176 and International investors can call (858) 384-5517 both parties can enter pass code 360881.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that exclude the effect of non-cash, non-operating expenses related to the Convertible Notes issued in April 2008, and the compensation expenses for the fair value of stock options, as well as deferred income tax expenses. The Company uses non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal budgeting and performance measurement. The Company believes that providing the non-GAAP measures is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand CREG's financial performance in comparison to historical periods, and it allows investors to evaluate CREG's performance using the same methodology and information as that used by the Company's management. However, investors need to be aware that non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP, and they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure.
About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1% of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://www.creg-cn.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact: |
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In China: |
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Mr. Leo Wu |
|
Investor Relations |
|
China Recycling Energy Corp. |
|
Tel: +86-29-8765-1096 |
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Email: [email protected] |
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In USA: |
|
Mr. Howard Gostfrand |
|
American Capital Ventures, Inc. |
|
Tel: +1-305-918-7000 |
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Email: [email protected] |
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CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES |
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September 30, 2010 (Unaudited) |
December 31, 2009 |
||
ASSETS |
|||
CURRENT ASSETS |
|||
Cash & cash equivalents |
$ 6,488,518 |
$ 1,111,943 |
|
Restricted cash |
2,253,361 |
1,461,659 |
|
Investment in sales type leases, net |
6,635,231 |
4,396,395 |
|
Interest receivable on sales type leases |
766,580 |
437,626 |
|
Prepaid expenses |
154,798 |
445,458 |
|
Other receivables |
414,248 |
184,355 |
|
Subscription receivable |
430,500 |
- |
|
VAT receivables – current |
1,268,448 |
383,027 |
|
Total current assets |
18,411,684 |
8,420,463 |
|
NON-CURRENT ASSETS |
|||
VAT receivables – noncurrent |
1,053,437 |
957,567 |
|
Investment in sales type leases, net |
86,733,485 |
48,147,738 |
|
Property and equipment, net |
172,524 |
97,311 |
|
Construction in progress |
45,907,791 |
34,858,845 |
|
Total non-current assets |
133,867,237 |
84,061,461 |
|
TOTAL ASSETS |
$ 152,278,921 |
$ 92,481,924 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
CURRENT LIABILITIES |
|||
Accounts payable |
$ 6,208,498 |
$ 3,583,219 |
|
Notes payable - bank acceptances |
2,999,508 |
1,461,659 |
|
Interest on loans payable |
2,509,889 |
- |
|
Taxes payable |
1,707,112 |
681,707 |
|
Accrued liabilities and other payables |
2,945,354 |
2,785,796 |
|
Advance from related parties, net |
4,036,492 |
468,475 |
|
Convertible note, net of discount due to beneficial conversion feature |
3,980,937 |
- |
|
Accrued interest on short term convertible note |
127,939 |
- |
|
Deferred tax liability-current |
54,466 |
148,193 |
|
Loans payable – current |
1,343,063 |
- |
|
Total current liabilities |
25,913,258 |
9,129,049 |
|
NONCURRENT LIABILITIES |
|||
Shares to be issued |
12,812,971 |
- |
|
Deferred tax liability, net |
5,446,238 |
2,762,115 |
|
Convertible notes |
3,000,000 |
8,000,000 |
|
Accrued interest on long term convertible notes |
346,668 |
353,024 |
|
Loans payable |
40,761,965 |
25,570,429 |
|
Total noncurrent liabilities |
62,367,842 |
36,685,568 |
|
Total liabilities |
88,281,100 |
45,814,617 |
|
CONTINGENCIES AND COMMITMENTS |
|||
STOCKHOLDERS' EQUITY |
|||
Common stock, $0.001 par value; 100,000,000 shares authorized, 38,778,035 shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively |
38,779 |
38,779 |
|
Additional paid in capital |
42,583,642 |
38,319,163 |
|
Statutory reserve |
4,288,441 |
2,497,724 |
|
Accumulated other comprehensive income |
4,929,794 |
3,709,490 |
|
Retained earnings |
9,922,599 |
1,485,914 |
|
Total Company stockholders' equity |
61,763,255 |
46,051,070 |
|
Non-controlling interest |
2,234,566 |
616,237 |
|
Total equity |
63,997,821 |
46,667,307 |
|
TOTAL LIABILITIES AND EQUITY |
$ 152,278,921 |
$ 92,481,924 |
|
CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES (unaudited) |
|||||||
NINE MONTHS ENDED |
THREE MONTHS ENDED |
||||||
2010 |
2009 |
2010 |
2009 |
||||
Revenue |
|||||||
Sales of systems |
$ 42,477,423 |
$ 27,938,697 |
$ 10,556,114 |
$ 18,425,620 |
|||
Contingent rental income |
1,305,836 |
- |
563,198 |
- |
|||
Rental income from operating lease |
- |
5,946,892 |
- |
- |
|||
Total revenue |
43,783,259 |
33,885,589 |
11,119,312 |
18,425,620 |
|||
Cost of sales |
|||||||
Cost of systems |
32,763,130 |
21,497,172 |
8,162,970 |
14,179,421 |
|||
Rental expense |
- |
4,148,572 |
- |
- |
|||
Total cost of sales |
32,763,130 |
25,645,744 |
8,162,970 |
14,179,421 |
|||
Gross profit |
11,020,129 |
8,239,845 |
2,956,342 |
4,246,199 |
|||
Interest income on sales-type leases |
10,371,093 |
4,117,305 |
3,952,830 |
1,783,833 |
|||
Total operating income |
21,391,222 |
12,357,150 |
6,909,172 |
6,030,032 |
|||
Operating expenses |
|||||||
General and administrative expenses |
4,542,859 |
2,730,971 |
1,796,686 |
1,375,230 |
|||
Total operating expenses |
4,542,859 |
2,730,971 |
1,796,686 |
1,375,230 |
|||
Income from operations |
16,848,363 |
9,626,179 |
5,112,486 |
4,654,802 |
|||
Non-operating income (expenses) |
|||||||
Interest income |
44,444 |
29,702 |
23,010 |
29,702 |
|||
Interest expense |
(1,826,547) |
(320,546) |
(638,098) |
113,222 |
|||
Other income (expenses) |
1,523 |
(71,561) |
5,091 |
(66,408) |
|||
Total non-operating income (expenses), net |
(1,780,580) |
(362,405) |
(609,997) |
76,516 |
|||
Income before income tax |
15,067,783 |
9,263,774 |
4,502,489 |
4,731,318 |
|||
Income tax expense |
4,250,562 |
1,166,684 |
1,352,519 |
941,962 |
|||
Net Income from operations |
10,817,221 |
8,097,090 |
3,149,970 |
3,789,356 |
|||
Less: Income (loss) attributable to non-controlling interest |
589,819 |
(10,897) |
103,246 |
(7,739) |
|||
Net income attributable to China Recycling Energy Corp |
10,227,402 |
8,107,987 |
3,046,724 |
3,797,095 |
|||
Other comprehensive item |
|||||||
Foreign currency translation gain |
1,220,304 |
34,743 |
899,696 |
35,835 |
|||
Foreign currency translation gain |
82,297 |
- |
58,957 |
- |
|||
Comprehensive income attributable to China Recycling Energy Corp |
$ 11,447,706 |
$ 8,142,730 |
$ 3,946,420 |
$ 3,832,930 |
|||
Comprehensive income (loss) attributable to noncontrolling interest |
$ 672,116 |
$ (10,897) |
$ 162,203 |
$ (7,739) |
|||
Basic weighted average shares outstanding |
38,778,035 |
37,829,964 |
38,778,035 |
38,778,035 |
|||
Diluted weighted average shares outstanding * |
49,371,944 |
43,915,609 |
49,246,265 |
47,900,894 |
|||
Basic net earnings per share |
$ 0.26 |
$ 0.21 |
$ 0.08 |
$ 0.10 |
|||
Diluted net earnings per share * |
$ 0.21 |
$ 0.19 |
$ 0.06 |
$ 0.08 |
|||
* Interest expense on convertible notes is added back to net income for the computation of diluted EPS. |
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CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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NINE MONTHS ENDED SEPTEMBER 30, |
|||
2010 |
2009 |
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
Income including noncontrolling interest |
$ 10,817,221 |
$ 8,097,090 |
|
Adjustments to reconcile income including noncontrolling |
|||
interest to net cash provided by operating activities: |
|||
Depreciation and amortization |
9,298 |
23,155 |
|
Amortization of discount related to conversion feature of convertible note |
1,326,274 |
- |
|
Stock options and warrants |
1,919,102 |
1,129,328 |
|
Stock compensation expense |
602,000 |
- |
|
Accrued interest on convertible notes |
121,583 |
60,182 |
|
Changes in deferred tax |
2,495,828 |
1,731,344 |
|
(Increase) decrease in current assets: |
|||
Interest receivable on sales type lease |
(315,675) |
(379,331) |
|
Prepaid expenses |
294,464 |
3,828,438 |
|
VAT receivable and other receivables |
(1,163,901) |
(113,744) |
|
Increase (decrease) in current liabilities: |
|||
Accounts payable |
4,004,280 |
847,314 |
|
Taxes payable |
996,753 |
(1,917,728) |
|
Unearned revenue |
- |
(658,655) |
|
Interest payable |
2,470,914 |
- |
|
Accrued liabilities and other payables |
112,574 |
(260,167) |
|
Construction in progress |
(10,226,469) |
(8,255,441) |
|
Net cash provided by operating activities |
13,464,246 |
4,131,785 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
Initial investment in sales type leases |
(30,724,470) |
(11,032,444) |
|
Collection of principal on sales type leases |
3,267,917 |
1,547,527 |
|
Increase investment in subsidiary |
- |
(16,100) |
|
Restricted cash |
(752,116) |
(4,393,159) |
|
Acquisition of property & equipment |
(81,526) |
(15,096) |
|
Net cash used in investing activities |
(28,290,195) |
(13,909,272) |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
Insurance of common stock |
- |
2,000,000 |
|
Insurance of convertible notes |
- |
3,000,000 |
|
Cash contribution from noncontrolling interest |
908,279 |
263,439 |
|
Proceeds from loans |
15,800,376 |
2,927,358 |
|
Advance from related parties |
3,504,613 |
- |
|
Net cash provided by financing activities |
20,213,268 |
8,190,797 |
|
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS |
(10,744) |
2,646 |
|
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS |
5,376,575 |
(1,584,044) |
|
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD |
1,111,943 |
7,267,344 |
|
CASH & CASH EQUIVALENTS, END OF PERIOD |
$ 6,488,518 |
$ 5,683,300 |
|
Supplemental Cash flow data: |
|||
Income tax paid |
$ 1,307,901 |
$ 1,307,406 |
|
Interest paid |
$ 269,083 |
$ 319,086 |
|
SOURCE China Recycling Energy Corp.
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