China Valves Technology, Inc. Announces Fourth Quarter and Full Year 2009 Results
KAIFENG, China, March 29 /PRNewswire-Asia-FirstCall/ -- China Valves Technology, Inc. (Nasdaq: CVVT) ("China Valves" or the "Company"), a leading Chinese metal valve manufacturer, today announced its fourth quarter and full year financial results ended December 31, 2009.
Fourth Quarter 2009 Highlights
-- Fourth quarter net revenue reached $25.4 million, up 24.6%
year-over-year
-- Gross profit increased 55.6% year-over-year to $12.4 million
-- Gross profit margin was 48.9% compared to 39.2% for the fourth quarter
2008
-- Net income was $16.4 million or $0.52 per fully diluted share, compared
with a loss of $12.3 million for the fourth quarter of 2008
-- Adjusting for non-cash compensation expenses related to the release of
make good shares in 2008, the reversal of such expenses in 2009, and
non-cash items related to the change in fair value of derivative
instruments, non-GAAP net income was $6.3 million, or $0.20 per diluted
share, compared with non-GAAP net income of $2.6 million, or $0.09 per
diluted share, for 2008
-- Began trading on the NASDAQ Global Market
-- Raised $24.7 million in capital through a registered direct offering of
its common stock
Full Year 2009 Highlights
-- Net revenue climbed to $95.4 million, up 43.3% from 2009
-- Gross profit increased 76.9% to $46.8 million
-- Gross profit margin was 49.1% compared with 39.8% for 2008
-- Net income totaled $23.4 million, or $0.75 per fully diluted share,
compared with a loss of $4.2 million, or ($0.18) per fully diluted
share, in 2008. Adjusted net income totaled $24.9 million, or $0.80 per
diluted share for 2009 compared with $10.7 million, or $0.46 per
diluted share for 2008
-- Acquired Taizhou Wote Valve Co., Ltd. for cash of $3 million in April
-- Signed a Letter of Intent to Acquire Yangzhou Rock Valve Lock
Technology, Inc.
-- Completed expansion of a new manufacturing facility at its Kaifeng
location
"China Valves had a very successful year in 2009. We achieved strong financial performance, closed a successful acquisition, raised $24.7 million in capital and listed our stock on the NASDAQ Global Market. Our robust sales in the fourth quarter, especially to the power supply and water supply industries, allowed us to exceed our net income guidance for the year," said Mr. Siping Fang, the Chairman and CEO of China Valves. "Moreover, we made significant strides towards the end of the year in executing on our growth strategy through identifying and negotiating with new acquisition targets to drive our future growth."
Fourth Quarter 2009 Results
For the quarter ended December 31, 2009, total revenue was $25.4 million, up 24.6% from $20.3 million in the same quarter last year. This revenue growth was mainly due to strong sales of high pressure gate valves and two-way metal sealing butterfly valves to the power supply and water supply industries, partially supported by increased production from the expansion of our Kaifeng facility.
Gross profit for the quarter was $12.4 million, an increase of 55.6% from $8.0 million for the same period of 2008. Gross margin was 48.9% for the quarter, an increase of 970 basis points from 39.2% for the same period in 2008 due to a shift in product mix towards higher-margin, more technologically advanced, higher-end products, strengthened production cost control and lower raw material costs compared to the year ago period.
General and administrative expenses increased 15.4% to $1.8 million from $1.6 million in the fourth quarter of 2009. The increase was primarily attributable to an increase in salary expense to support the Company's sales and administrative staff as the Company expands. Additionally, travel expenses, auditing, accounting and legal fees also increased due to an increase in acquisition activities and the Company's capital market activities.
Selling expenses decreased 5.4% year-over-year to $1.7 million from $1.8 million for the fourth quarter of 2008 mainly due to the Company's new centralized sales policy, which requires business from major clients be processed by the headquarters without incurring sales commission.
During the quarter, the Company reversed an accrual recorded in the first nine months of 2009 of $11.3 million of non-cash compensation expenses related to the release of 4,194,344 make good shares associated to meeting its make good target of $21 million in net income for fiscal year 2009. Due to changes in accounting treatment of non-cash compensation expenses effective December 15, 2009, the Company ceased treating the release of escrowed shares to Mr. Siping Fang as compensation expense. In the fourth quarter of 2008, the Company recorded $15.0 million in non-cash compensation expenses related to the release of make good shares as a result of achieving the 2008 make good target. For more information, please refer to the Company's Form 10-K filed on March 29, 2010.
Total other expenses were $1.5 million for the fourth quarter of 2009, compared to $0.4 million for the same period the previous year, mainly due to a non-cash expense of $1.2 million for the fourth quarter 2009 due to changes in fair value of derivative instruments compared to a gain of $65,739 for the same period in 2008.
Income tax expense was $2.2 million, compared to $1.6 million for the fourth quarter of 2008. Income tax increased mainly due to increased taxable earnings.
Net income for the fourth quarter 2009 was $16.4 million, compared with a net loss of $12.3 million for the fourth quarter 2008. Diluted earnings per share were $0.52 for the fourth quarter 2009, compared to a diluted loss per share of $(0.43) for the fourth quarter 2008.
After adjusting for the aforementioned reversal of non-cash compensation expenses of ($11.3) million and the expense from changes in fair value of derivative instruments of $1.2 million for the fourth quarter of 2009 and non-cash compensation expenses of $15.0 million and gain from changes in fair value of derivative instruments of $65,739 for the fourth quarter of 2008, the Company achieved net income of $6.3 million, or $0.20 per diluted share for the fourth quarter of 2009 compared with $2.6 million, or $0.09 per diluted share, for the fourth quarter of 2008. Please see the table below for a reconciliation of adjusted financial information to GAAP financial information.
Full Year 2009 Results
For the year ended December 31, 2009, net revenue increased 43.3% to $95.4 million, from $66.6 million for the year ended December 31, 2008. Gross profit increased 76.9% to $46.8 million for the year ended December 31, 2009 from $26.5 million for fiscal year 2008. Gross profit margin was 49.1% compared with 39.8% for the previous year. The increase in gross profit margin was mainly due to a shift in product mix towards higher-margin, more technologically advanced, higher-end products, strengthened production cost control and lower raw material costs compared to 2008.
Selling expenses increased 28.2% year-over-year from $4.9 million to $6.3 million mainly due to increased sales volume. General and administrative expenses increased 15.4% from $6.3 million to $7.3 million, mainly due to more staff and fees incurred from capital market activities. Total operating expenses for 2009 were $13.8 million compared with $26.5 million for 2008, which included $15.0 million in non-cash compensation expenses related to the release of the make good shares.
The Company had $1.1 million in other expenses for fiscal year 2009, including a non-cash expense of $1.5 million for changes in fair value of derivative instruments, compared with $0.2 million in other income for 2008, including a non-cash gain of $0.1 million for changes in fair value of derivative instruments.
Income taxes were $8.6 million for the year ended December 31, 2009, compared to $4.4 million for the year ended December 31, 2008, an increase of $4.2 million, or 95.4% year-over-year, primarily due to a significant increase in income from operations.
Net income was $23.4 million, or $0.75 per fully diluted share, for the year ended December 31, 2009, compared with a net loss of $4.2 million, or $0.18 per fully diluted share, for the year ended December 31, 2008.
After adjusting for the aforementioned $1.5 million non-cash expense related to the changes in fair value of derivative instruments for 2009 and $15.0 million in non-cash compensation expenses related to the release of the make good shares and $0.1 million non-cash gain related to the changes in fair value of derivative instruments for 2008, adjusted net income for fiscal year 2009 was $24.9 million, or $0.80 per diluted share, a 133.2% increase from adjusted net income of $10.7 million, or $0.46 per diluted share, for fiscal year 2008. Please see the table below for a reconciliation of adjusted financial information to GAAP financial information.
Financial Condition
As of December 31, 2009, China Valves had $14.5 million in cash and cash equivalents, $39.3 million in working capital and a current ratio of 2.6:1. The Company had $5.2 million in short term loans, including $0.2 million in short term loans to related parties, and no long term debt on its balance sheet. At year end, shareholders' equity stood at $113.4 million up from $76.6 million at the end of 2008.
The Company generated $25.1 million in cash from operating activities for the year ended December 31, 2009, compared to cash of $0.9 million used in operating activities in 2008. The strong cash flow from operating income was mainly due to net income. The Company used $25.7 million for investing activities, mainly due to purchases of equipment for the new Kaifeng plant and deposits for acquisitions.
Subsequent Events
Following the entry into a definitive securities purchase agreement dated December 30, 2009 with certain accredited investors, China Valves sold 2,414,113 shares of its common stock in January 2010 at a price of $9.00 per share for gross proceeds of approximately $21.70 million. In addition, the Company issued to the investors warrants to purchase 362,116 shares of common stock at a price of $9.00 per share, exercisable for 30 days starting from January 6, 2010. As of March 26, 2010, 358,782 warrant shares, including 50,000 warrants in connection with the securities purchase agreement dated December 27, 2009, have been exercised and 3,334 warrant shares have been forfeited. The Company raised an additional $3.2 million in gross proceeds as a result of the exercise of these warrants.
In January 2010, the Company closed the acquisition of Yangzhou Rock Valve Lock Technology, Inc. for $7.3 million in cash. The Company expects Yangzhou Rock to contribute approximately $8.6 million in revenue and $3.0 million in net income for 2010.
In February 2010, the Company closed the acquisition of Able Delight (Changsha) Valve Co., Ltd. Consideration for the acquisition is approximately $15 million in cash. The Company expects Able Delight to contribute approximately 140 million RMB ($20.5 million) in revenue and 34 million RMB ($5.0 million) in net income for 2010.
In February 2010, the Company signed a letter of intent to purchase 100% equity ownership in Shanghai Pudong Hanwei Valve Co., Ltd.
Business Outlook
"We started this year on a strong note by closing two acquisitions and committing to a third target. These acquisitions help strengthen our product portfolio and allow us to access several patents, broaden our distribution network, and establish our position in end-user applications that we consider potential high-growth markets for valves, such as applications within the hydropower and petrochemical industries. So far, we have been successful in integrating our completed acquisitions, allowing us to secure orders from significant projects, such as the Shanghai Qingcaosha Water Resources project," said Mr. Fang. "We believe these acquisitions will help us move towards higher margin products and services, which should further support our high gross margin going forward in 2010, even though raw material costs may increase. In response to higher raw material costs, we have implemented an alloy surcharge to partially transfer higher costs to our customers. Given the vast expansion in production capacity throughout 2009 and in the first months of 2010, we believe we are well positioned to meet our net income guidance for 2010."
The Company reaffirms its previously issued guidance of $40 million in net income for 2010. The guidance includes the impact of the acquisition of Hanwei Valve, which the Company expects to close shortly, but does not include the impact of any additional potential acquisitions. This guidance excludes the impact of non-cash compensation expenses, if any, related to the release of make good shares and changes in fair value of derivative instruments.
"We plan to continue pursuing additional acquisitions on an opportunistic basis as we find targets that support our existing end-user markets, strengthen our product portfolio, help us access new end-user markets, or expand our current production capacity. Because of the recognition that China Valves has attained in the valve industry in China, we enjoy a preferential position compared to our competitors," concluded Mr. Fang.
Conference Call
The Company will host a conference call at 9:00a.m. EDT on Monday, March 29, 2010 to discuss the fourth quarter and full year 2009 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 359-2871. International callers should dial +1 (702) 224-9509. When prompted by the operator, mention the conference passcode 65365413. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Monday, March 29, 2010 at 10:00 a.m. EDT. To access the replay, please dial (800) 642-1687 and enter the passcode 65365413. International callers should dial +1 (706) 645-9291 and enter the same passcode, 65365413.
Non GAAP Financial Measures
To supplement the Company's condensed consolidated financial statements for the three and twelve months ended December 31, 2009 and December 31, 2008 presented on a GAAP basis, the Company provided adjusted financial information in this release that exclude the impact of non-cash stock compensation expense related to the release of escrowed shares to our Chairman in connection with a make good arrangement entered into in connection with the Company's private placement financings and changes in fair value of derivative instruments. The Company's management believes that these adjusted measures, adjusted net income and adjusted diluted earnings per share, provide investors with a better understanding of how the results relate to the Company's current and historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies. Management believes that these adjusted financial measures are useful to investors because they exclude non-cash expenses that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes that these adjusted measures reflect the essential operating activities of the Company. In addition, the provision of these adjusted measures allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Adjusted measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the adjusted financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded. A reconciliation of each adjusted measures to the nearest GAAP measure is appears in the table below.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
Three Months Ended Twelve Months Ended
December 31 December 31
2009 2008 2009 2008
Income From
Operations 20,088,385 (10,386,662) 33,038,664 (8,757)
Add back
(Deduct):
Non-Cash
Compensation
Expenses (11,279,336) 14,998,974 -- 14,998,974
Adjusted
Income from
Operations 8,809,049 4,612,312 33,038,664 14,990,217
Net Income
(Loss) 16,419,061 (12,308,541) 23,353,093 (4,236,845)
Add back
(Deduct):
Changes in
fair value of
derivative
instruments 1,198,854 (65,739) 1,508,997 (100,479)
Non-Cash
Compensation
Expenses
Related to
Make Good (11,279,336) 14,998,974 -- 14,998,974
Adjusted Net
Income 6,338,579 2,624,694 24,862,090 10,661,650
Diluted EPS 0.52 (0.43) 0.75 (0.18)
Add back
(Deduct):
Changes in
fair value of
derivative
instruments 0.04 (0.00) 0.05 (0.00)
Non-Cash
Compensation
Expenses
Related to
Make Good (0.36) 0.53 -- 0.65
Adjusted EPS 0.20 0.09 0.80 0.46
About China Valves Technology, Inc.
China Valves Technology, Inc. through its subsidiaries, Zhengzhou Zhengdie Valve Co, Ltd., Henan Kaifeng High Pressure Valve Co., Ltd., Tai Zhou Tai De Valve Co., Ltd., Yangzhou Rock Valve Lock Technology Co., Ltd., and Able Delight (Changsha) Valve Co., Ltd., is engaged in development, manufacture and sale of high-quality metal valves for the electricity, petroleum, chemical, water, gas and metallurgy industries. The Company has one of the best known brand names in China's valve industry, and its history can be traced back to 1959 when it was formed as a state-owned enterprise. The Company develops valve products by extensive research and development and owns a number of patents. It enjoys significant domestic market shares and exports to Asia and Europe. For more information, visit http://www.cvalve.com .
Safe Harbor Statements
Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to develop and market new products, the ability to access capital for expansion, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, changes in relationships with customers, changes in principal product profits and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise. This press release was developed by China Valves, and is intended solely for informational purposes and is not to be construed as an offer or solicitation of an offer to buy or sell the Company's stock. This press release is based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by China Valves to be accurate, nor does China Valves purport it to be complete. Opinions expressed herein are those of management as of the date of publication and are subject to change without notice.
For further information, please contact:
China Valves Technology, Inc.
Ray Chen, VP of Investor Relations
Tel: +1-650-281-8375
+86-13925279478
Email: [email protected]
Web: http://www.cvalve.com
CCG Investor Relations
Linda Salo, Sr. Financial Writer
Tel: +1-646-922-0894
Email: [email protected]
Crocker Coulson, President
Tel: +1-646-213-1915
Email: [email protected]
Web: http://www.ccgirasia.com
CHINA VALVES TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(LOSS)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
Three Months Ended December Twelve Months Ended
31, December 31,
2009 2008 2009 2008
(Unaudited) (Unaudited) (Audited) (Audited)
REVENUE $25,361,458 20,347,050 $95,370,012 $66,555,056
COST OF
GOODS SOLD 12,962,105 12,379,430 48,527,336 40,082,152
GROSS PROFIT 12,399,353 7,967,620 46,842,676 26,472,904
EXPENSES:
Selling
expense 1,663,479 1,758,778 6,317,766 4,929,728
General and
administrative 1,791,511 1,551,937 7,312,439 6,335,261
Research and
development 88,257 44,593 126,750 217,698
Non-cash stock
compensation
expense 47,057 14,998,974 47,057 14,998,974
Reversal of
non-cash stock
compensation
expense
related to
release of
make good
shares (11,279,336) -- -- --
Total
Operating
Expenses (7,689,032) 18,354,282 13,804,012 26,481,661
INCOME (LOSS)
FROM
OPERATIONS 20,088,385 (10,386,662) 33,038,664 (8,757)
OTHER
(INCOME)
EXPENSE :
Other income,
net 302,051 370,446 (510,692) (537,767)
Interest and
finance
expense, net (9,513) 63,326 128,518 486,946
Change in
fair value of
derivative
instruments 1,198,854 (65,739) 1,508,997 (100,479)
Total Other
Expense
(Income), net 1,491,392 368,033 1,126,823 (151,300)
INCOME BEFORE
PROVISION
FOR INCOME
TAXES 18,596,993 (10,754,695) 31,911,841 142,543
PROVISION
FOR INCOME
TAXES 2,177,932 1,553,846 8,558,748 4,379,388
NET INCOME
(LOSS) 16,419,061 (12,308,541) 23,353,093 (4,236,845)
OTHER
COMPREHENSIVE
INCOME
Foreign
currency
translation
(loss) gain 8,932 608,572 (7,075) 2,985,232
COMPREHENSIVE
INCOME (LOSS) $16,427,993 $(11,699,969) $23,346,018 $ (1,251,613)
BASIC EARNINGS
(LOSS) PER
SHARE:
Weighted
average
number of
shares 31,404,868 28,442,552 30,771,356 22,987,213
Basic
earnings
(loss) per
share $ 0.52 $ (0.43) $ 0.76 $ (0.18)
DILUTED
EARNINGS
(LOSS) PER
SHARE:
Weighted
average
number of
shares 31,574,295 28,442,552 30,946,392 22,987,213
Diluted
earnings
(loss) per
share $ 0.52 $ (0.43) $ 0.75 $ (0.18)
CHINA VALVES TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
ASSETS
December 31,
2009 2008
CURRENT ASSETS:
Cash and cash
equivalents $ 14,485,408 $ 16,427,883
Restricted cash 1,047,389 3,191,237
Notes receivable 414,193 880,200
Accounts receivable, net of
allowance for doubtful
accounts of $908,338 and
$1,163,457 as of December 31,
2009 and 2008, respectively 32,341,042 26,119,447
Other receivables 4,481,610 4,841,691
Inventories, net 9,246,801 11,244,442
Advances on inventory
purchases 1,321,914 1,108,512
Advance on inventory
purchases - related party 385,066 1,367,446
Prepaid expenses 246,046 52,921
Rental prepayment -
short-term 307,630 --
Total current assets 64,277,099 65,233,779
PLANT AND EQUIPMENT, net 28,468,866 16,184,894
OTHER ASSETS:
Accounts receivable - retainage,
long term 1,523,395 2,541,418
Deposits for acquisition 13,215,650 --
Advances on equipment purchases 654,931 2,001,733
Rental prepayment - long-term 307,630 --
Long-term receivable 440,100 382,552
Goodwill 20,811,767 20,811,767
Intangibles, net 9,639,180 823,331
Other investments, at
lower of cost or market 764,515 764,515
Total other assets 47,357,168 27,325,316
Total assets $ 140,103,133 $ 108,743,989
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 6,953,499 $ 6,630,574
Short-term loans 5,048,246 7,839,960
Short-term loans - related parties 184,517 596,791
Other payables 2,662,930 4,453,881
Other payables - related party 1,707,353 1,975,462
Notes payable 733,500 2,934,000
Accrued liabilities 2,033,626 2,382,138
Customer deposits 3,325,906 3,129,708
Taxes payable 2,293,346 1,227,338
Total current liabilities 24,942,923 31,169,852
WARRANT LIABILITIES 1,730,837 924,291
Total liabilities 26,673,760 32,094,143
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $0.001 par value;
300,000,000 shares authorized;
31,727,212 shares and 31,192,552
shares issued and outstanding as
of December 31, 2009 and 2008,
respectively 31,726 31,192
Additional paid-in-capital 70,534,943 66,935,968
Common stock
subscription receivable -- (9,834,000)
Statutory reserves 5,534,575 2,958,659
Retained earnings 31,176,227 10,399,050
Accumulated other
comprehensive income 6,151,902 6,158,977
Total shareholders' equity 113,429,373 76,649,846
Total liabilities and
shareholders' equity $ 140,103,133 $ 108,743,989
CHINA VALVES TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 23,353,093 $ (4,236,845)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating
activities:
Depreciation 1,694,675 933,714
Amortization 261,050 68,506
Bad debt provision (254,963) 819,711
Loss on disposal of fixed assets 87,876 26,559
Gain from acquisition (252,183) --
Debt forgiven as government grant -- (264,060)
Stock compensation cost 47,057 14,998,974
Change in fair value of warrant
liabilities 1,508,997 (100,479)
Inventory allowance 432,707 --
Change in operating assets and liabilities:
Restricted cash due to export covenant (113,814) (53,193)
Notes receivable 465,721 (864,900)
Accounts receivable (5,040,954) (10,741,517)
Other receivables 455,396 (256,434)
Inventories 1,563,708 32,045
Advance on inventory purchases (213,271) (606,957)
Advance on inventory purchases-related
party 981,778 (1,343,676)
Prepaid expenses (185,647) 493,732
Long term receivable (57,513) --
Accounts payable-trade 322,728 (269,003)
Other payables (1,552,141) (287,629)
Accrued liabilities 317,514 516,849
Customer deposits 196,078 120,439
Taxes payables 1,065,354 86,752
Net cash provided by (used in)
operating activities 25,083,246 (927,412)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of intangible assets (1,524,071) (419,492)
Advance on equipment purchases -- (1,654,128)
Purchases of plant and equipment (10,393,345) (9,074,257)
Proceeds from sale of equipment 11,729 65,575
Advance on lease (614,882) --
Investment deposit (13,209,395) --
Net cash used in investing activities (25,729,964) (11,082,302)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash due to covenant 57,162 (105,616)
Restricted cash due to notes payable 2,199,183 (2,934,000)
Other payables-related party (471,648) (976,466)
Proceed from notes payable -- 2,883,000
Repayment of notes payable (2,199,150) --
Proceeds from short term debt 3,232,751 5,753,375
Proceeds from short term loans-related
parties -- 457,436
Repayments of short term loan (6,982,848) (5,751,304)
Repayments of short term loans-related
parties (161,782) (576,721)
Proceeds from private placement financing 2,850,000 26,688,246
Net cash (used in) provided by
financing activities (1,476,332) 25,437,950
EFFECTS OF EXCHANGE RATE CHANGES ON CASH 180,575 226,385
(DECREASE) INCREASE IN CASH (1,942,475) 13,654,621
CASH and CASH EQUIVALENTS, beginning 16,427,883 2,773,262
CASH and CASH EQUIVALENTS, ending $ 14,485,408 16,427,883
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 302,058 $ 571,139
Cash paid for income taxes $ 8,020,771 $ 4,001,458
Additional Non-cash investing and financing
activities
Cashless exercise of warrants $ 756,012 $ --
Common stock issued for real estate
acquisition $ 9,834,000 $ --
Long-term prepayment transferred to
construction-in-progress $ 2,001,733 $ 347,605
SOURCE China Valves Technology, Inc.
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