GC China Turbine Corporation Reports Financial Results for Fiscal Year 2010
Apr 01, 2011, 10:38 ET
NEW YORK, April 1, 2011 /PRNewswire/ -- GC China Turbine Corporation ("GC China" or the "Company") (GCHT.OB) today announced record revenue and profit growth for the fiscal year ended December 31, 2010, providing related operational and financial highlights.
Key Highlights
- Revenues of approximately $58.2 million for FY10 compared to approximately $12.8 million for FY09;
- Net income of approximately $11.4 million for FY10 compared to approximately $340 thousand for FY09; and
- Shipments of 100 turbines in 2010 compared to 16 turbines in 2009.
"We are pleased to announce record results in terms of revenue, profit and shipments for the fiscal year ended December 31, 2010," said Hou Tiexin, GC China's Chairman. "Throughout 2010, we expanded our business in several key areas that will position GC China for continued strong growth.
"We are committed to improving product quality and advancing our research and development program. The design and development of 1.1MW and 2.5MW turbines which meet increasingly rigorous market standards is an important milestone in our business. We look forward to moving into production, and to achieving key certifications of these technologies starting this year. In addition, we are expanding our sales efforts to capture opportunities in fast-growing markets," concluded Chairman Hou.
Financial Results for the Year Ended December 31, 2010
The Company reported sales of US$58,199,785 compared to US$12,760,248 for the year ended December 31, 2009. This increase of US$45,439,537 or 356%, was due to an increase in the number of units sold during 2010 as compared with 2009. For 2010, we recorded sales of 100 units of 1.0 MW wind turbines, as compared to 16 wind turbines sold in 2009.
Gross profit increased to US$16,296,610, an increase from US$2,968,171 in 2009, with gross margin of 28.00% and 23.26%, respectively. The improvement in gross margins was due to certain economies of scale achieved through increased production levels, and the Company's release of royalty obligations to Nordic Windpower.
Net income attributable to shareholders for the year ended December 31, 2010 was US$11,394,527, an increase of US$11,054,880 from net income attributable to shareholders of US$339,647 for the year ended December 31, 2009. Earnings per diluted share were $0.17 and $0.01, respectively.
As of December 31, 2010, the Company had a net accounts receivable balance of US$58,182,615 which is comprised of amounts due from four customers.
As of December 31, 2010, the Company had cash and cash equivalents of US$1,788,138, other current assets of US$71,340,151 and current liabilities of US$45,047,487. Other current assets included US$1,056,972 six-month term deposit and US$2,551,304 restricted cash used as security against bank drafts. As of the date hereof, the Company has collected US$498,287 billed receivable from the customers, and management anticipates collecting approximately US$10 million from customers in the second quarter of 2011.
The Company has a loan facility in the amount of US$18,119,520 (RMB120,000,000) from a PRC bank for procuring raw material purpose, which is guaranteed by a related party, Wuhan Guoce Science & Technology Corp. and four shareholders of the Company, and collateralized by the same amount of our accounts receivable. As of December 31, 2010, GC China is in compliance with all the covenant requirements under this loan agreement., with US$4,529,880 (RMB30,000,000) available from the loan facility for future withdrawal.
Product Update
In addition to the current 1.0MW two-blade wind turbine, the Company's 1.1MW turbine has been completed its designing process and is under prototype assembly stage at the moment. In addition, another 2.5MW turbine is also under development. In contrast to the 1MW turbine, these two newly developed products will enable the Company to expand its business into wind farms that require turbines to have larger unit power and Low Voltage Ride Through Capability ("LVRT"), a new requirement issued by PRC's State Electricity Regulatory Commission for wind turbines to be capable to maintain continuous operation during and after abrupt voltage dips and allow the power grid to be adjusted more quickly, thereby improving the overall safety and stability of the grid.
As a result of new PRC requirements, certain orders previously announced by the Company that have not been executed may be cancelled as the 1.0MW turbine does not qualify for the LVRT requirements. However, management does not anticipate that these LVRT requirements will affect GC China's current orders that have already been executed, while they may take effect in its future business activities.
The Company's development strategy for 2011 is focused on the further development and EU certifications of its 1.1MW and 2.5MW wind turbines while emphasizing low-cost control, suitable for its target markets. It expects to have its 1.1MW prototype and 2.5MW prototype turbines produced and EU certifications applied for in the second quarter and third quarter of 2011, respectively.
About GC China Turbine Corp.
Based in Wuhan City of Hubei Province, China, GC China Turbine Corp. is a manufacturer of state-of-the-art 2-blade and 3-blade wind turbines, leveraging soft-design technology to reduce costs, reduce the overall total cost of ownership and increase turbine lifetime. It has approximately 600MW annual assembly capacity. For more information visit www.gcchinaturbine.com.
Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, completion of definitive agreements with local and provincial governments, wind farms and utility companies, number of wind turbine systems ordered, manufactured, delivered and installed, the Company's future strategic plans, the outlook for the Company's markets and the demand for its products, estimated sales, the development, costs and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
GC China Turbine Corp. |
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CONSOLIDATED BALANCE SHEETS |
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(Amounts expressed in US dollars, except share data) |
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December 31, 2010 |
December 31, 2009 |
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ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 1,788,138 |
$ 3,803,446 |
||
Term deposit |
1,056,972 |
- |
||
Restricted cash |
2,551,304 |
2,880,281 |
||
Accounts receivable, less allowance for doubtful accounts of $267,423 and nil as of December 31, 2010 and 2009, respectively |
58,182,615 |
12,128,711 |
||
Inventories |
2,116,022 |
5,087,326 |
||
Advance to suppliers |
2,349,826 |
3,734,728 |
||
Amount due from related parties |
4,667,146 |
2,325,212 |
||
Prepaid expenses and other current assets |
323,472 |
155,780 |
||
Deferred tax assets |
92,794 |
276,206 |
||
Total current assets |
73,128,289 |
30,391,690 |
||
Property, plant and equipment, net |
3,314,939 |
1,402,839 |
||
Intangible assets, net |
- |
744,175 |
||
Prepaid land use right |
363,108 |
- |
||
Equity investment |
110,176 |
- |
||
Long-term accounts receivable |
3,711,852 |
532,387 |
||
Deferred tax assets |
139,982 |
37,157 |
||
Other assets |
141,119 |
165,490 |
||
Total assets |
$ 80,909,465 |
$ 33,273,738 |
||
LIABILITIES & EQUITY |
||||
Current liabilities: |
||||
Short-term borrowings |
$ 13,589,640 |
$ - |
||
Accounts payable |
13,086,475 |
2,543,843 |
||
Notes payable |
6,175,208 |
2,030,865 |
||
Accrued expenses and other current liabilities |
8,216,598 |
2,770,488 |
||
Deferred revenue |
- |
1,856,413 |
||
Income tax payable |
3,249,273 |
1,416,643 |
||
Amount due to related parties |
730,293 |
- |
||
Total current liabilities |
45,047,487 |
10,618,252 |
||
Convertible promissory note |
- |
1,182,750 |
||
Warrant liability |
85,889 |
1,267,388 |
||
Other long-term liabilities |
2,609,269 |
473,198 |
||
Total liabilities |
47,742,645 |
13,541,588 |
||
Commitments and contingencies |
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EQUITY |
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Common share (US$0.001 par value; 100,000,000 shares authorized, 59,470,015 and 58,970,015 shares issued and outstanding as of December 31, 2010 and 2009, respectively) |
59,470 |
58,970 |
||
Additional paid-in capital |
21,016,395 |
19,884,645 |
||
Retained earnings (accumulated deficit) |
11,022,150 |
(372,377) |
||
Accumulated other comprehensive income |
1,001,158 |
158,757 |
||
Total GC China Turbine Corp. shareholders' Equity |
33,099,173 |
19,729,995 |
||
Non controlling interest |
67,647 |
2,155 |
||
Total equity |
33,166,820 |
19,732,150 |
||
Total liabilities and equity |
$ 80,909,465 |
$ 33,273,738 |
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GC China Turbine Corp. |
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CONSOLIDATION STATEMENTS OF OPERATIONS |
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(Amounts expressed in US dollars, except share data) |
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Year ended December 31 |
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2010 |
2009 |
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Revenues |
$58,199,785 |
$12,760,248 |
||
Cost of sales |
41,903,175 |
9,792,077 |
||
Gross profit |
16,296,610 |
2,968,171 |
||
Operating expenses: |
||||
Selling and marketing expenses |
1,021,277 |
144,440 |
||
Research and development expenses |
918,732 |
90,437 |
||
General and administrative expenses |
2,244,811 |
973,965 |
||
Other operation income |
(186,055) |
(79,047) |
||
Total operating expenses |
3,998,765 |
1,129,795 |
||
Income (loss) from operations |
12,297,845 |
1,838,376 |
||
Interest expense |
346,192 |
159,229 |
||
Interest income |
(302,278) |
(47,529) |
||
Other expense (income), net |
3,090 |
54,356 |
||
Loss from debt extinguishment |
- |
57,802 |
||
Gain from change in fair value of warrant liability |
(1,181,499) |
(65,493) |
||
Income (loss) before provision for income tax and equity investment income |
13,432,340 |
1,680,011 |
||
Provision (benefit) for income tax |
2,066,875 |
1,340,364 |
||
Income (loss) before equity investment income |
11,365,465 |
339,647 |
||
Equity investment income, net of tax |
4,410 |
- |
||
Net income (loss) |
11,369,875 |
339,647 |
||
Net loss attributable to noncontrolling interest |
(24,652) |
- |
||
Net income (loss) attributable to GC China Turbine Corp. shareholders |
$11,394,527 |
$ 339,647 |
||
Earnings (loss) per share- basic |
$ 0.19 |
$ 0.01 |
||
Earnings (loss) per share- diluted |
$ 0.17 |
$ 0.01 |
||
Weighted average common share outstanding- basic |
59,246,727 |
36,899,821 |
||
Weighted average common share outstanding- diluted |
60,022,853 |
38,115,890 |
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Investor Relations
Todd M. Pitcher
Aspire Clean Tech Communications
Hayden Communications, International
Phone: 760-798-4938
[email protected]
SOURCE GC China Turbine Corporation