BEIJING, May 13 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc. (Nasdaq: TRIT), a leading Chinese company that engineers, manages and monitors China's municipal sewer systems, natural waterways and resources, announced today that revenue for the first fiscal quarter ended March 31, 2010 increased 48.7% to $4.2 million from $2.9 million in Q1 2009. Net income for the quarter was $817,614 or $0.15 per diluted share compared with net income of $600,252 or $0.17 diluted EPS in Q1 2009.
Additional First Quarter 2010 Highlights -- Revenue from Wastewater/Tail Gas operations increased 65.8% to $2.6 million. -- Revenue from Water Resource Management increased 23.8% to $1.6 million. -- Revenue from Industrial Pollution Control was $60,643. Industrial Pollution Control is a new reportable segment for 2010. -- Gross profit (exclusive of depreciation and amortization) increased 65.3% to $1.8 million from $1.1 million in Q1 2009. -- Gross margin improved to 41.7% vs. 37.5% for Q1 2009. -- Income from operations increased 24.6% to $827,732 from $664,145 in Q1 2009. -- Weighted average number of diluted shares outstanding was 5.56 million as of March 31, 2010, compared to 3.56 million as of March 31, 2009.
On April 20, 2010, the company completed a secondary public offering of 2,142,750 ordinary shares at an offering price of $14.00 per share. The company received aggregated gross proceeds of approximately $30 million before underwriter commissions and discounts and other expenses, On May 4, 2010, the underwriters of the secondary public offering of common stock partially exercised their over-allotment option, which resulted in the issuance of an additional 224,083 ordinary shares. This over-allotment exercise brought the gross proceeds from the secondary offering to $33.1 million. The company expects to use the net proceeds of the offering for working capital and potential targeted acquisitions as well as new product development and sales and marketing. As of May 11, 2010, the company had 7,791,833 ordinary shares issued and out-standing.
First Quarter 2010 Financial Performance
Total revenue was $4.2 million in the quarter ended March 31, 2010, an increase of $1.4 million or 48.7%, compared to revenue of $2.9 million in the same period of 2009. The increase was primarily driven by an increase in larger contracts, several of which exceeded $1.1 million. Revenue attributable to Wastewater and Tail Gas Treatment was $2.6 million, an increase of 65.8% compared to Q1 2009. Water Resource Management revenue was up 23.8% to $1.6 million and Industrial Pollution Control revenue was $60,643.
Net income attributable to shareholders was $817,614, an increase of $0.2 million, or 36.2%, compared to $600,252 in the same period of 2009. Diluted earnings per share attributable to shareholders for the quarter were $0.15 based on net income of $817,614. This compared with net income of $600,252 or $0.17 diluted EPS in Q1 2009.
Gross profit (exclusive of depreciation and amortization)
Gross profit (exclusive of depreciation and amortization) increased 65.3% to $1.8 million for the quarter from $1.1 million in the Q1 2009. This increase reflected significant Chinese government infrastructure spending along with tight construction timelines and strong market demand. These factors result in high market value for construction projects, and such projects are driving our revenue growth. We also emphasized tight cost containment, which was aided by continued sourcing of more locally made, lower priced equipment. Gross margin (exclusive of depreciation and amortization) for the quarter was 41.7%, compared to 37.5% for the same period.
Operating income increased 24.6% to $827,732 from $664,145 in Q1 2009. Operating margin decreased from 23.3% in Q1 2009 to 19.5%. This decrease was mainly due to rapid growth of general and administrative expenses and selling expenses, which largely reflected an increased number of sales personnel, increased travel expenses in pursuit of new contracts and professional service fees associated with being a publicly traded company since September 2009.
Liquidity and Capital Resources
As of March 31, 2010, cash and cash equivalents were $7.2 million including a U.S. dollar deposit of $1.6 million and an equivalent RMB deposit of $5.6 million. Working capital was $18.7 million, including cash and cash equivalents of $7.2 million.
Chief Executive Officer, Warren Zhao said, "2010 is off to an excellent start with good performance from our Wastewater/Tail Gas Treatment and Water Resources Management segments and our rapidly emerging Industrial Pollution Control segment, which we believe also has significant potential for growth.
"We continue to pursue smaller river basin flood monitoring and forecasting systems and groundwater monitoring systems across China. In the fiscal quarter ended March 31, 2010, we received awards for two projects for smaller river basin flood and forecasting systems in Zunyi and Anshun in Guizhou Province.
"In 2010, we are closely tracking post-disaster reconstruction projects led by the Water Authority of Sichuan Province, Guangdong drought control projects, Henan drought control protects and Guangxi international river monitoring projects.
"Our Wastewater and Tail Gas Treatment business segment focuses on Tianjin City and Hebei Province. Services include pump stations, treatment plants, odor control systems and controls and instruments. In the fiscal quarter ended March 31, 2010, we won contracts for the Beitang Wastewater Treatment Plant and the Hejian Wastewater Treatment Plant in Hebei Province.
"We are making excellent progress in penetrating adjacent industry vertical opportunities in the industrial wastewater and process tail gas treatment markets in the petrochemical industry. We are also pursuing opportunities in the power generation industry and the oil and gas industry. In the fiscal quarter ended March 31, 2010, we won an industrial wastewater treatment contract in Jinxi City of Liaoning Province from Jinxi Petrochemical Co., a subsidiary of PetroChina. We are increasing our efforts to obtain these types of contracts.
"In a similar manner, we are further developing our water resource management services from partial management solutions to full management solutions for large scale river basin projects. We believe the Chinese government's decision to initiate new programs and allocate significant investment for their implementation offers our company significant business opportunities. In addition, the severe drought in Southwest China will accelerate investment in water conservancy.
"In our municipal wastewater business, we plan to expand beyond our existing base of operations. In our current business footprint, local governments are building 80 new wastewater treatment plants. This growth represents development activities in only two provinces. We believe significant opportunities exist in the other 32 provinces, municipalities and autonomous regions in China."
Tri-Tech CEO Warren Zhao, President Phil Fan and CFO Peter Dong will host a conference call at 10:00 AM EDT tomorrow, Friday, May 14, (10:00 PM Beijing/Hong Kong Time on May 14) to review the company's financial results and respond to questions and comments.
To participate, call U.S. Toll Free Number 1-877-941-8416 approximately 10 minutes before the call. International callers, please dial 1-480-629-9812. The conference ID number is 4299302. A live webcast of the call will be available at http://viavid.net/dce.aspx?sid=0000753F . Both an MP3 file one hour after the call and a transcript 48 hours after the call will be available. These will be archived for 90 days via http://www.tri-tech.cn and http://www.hawkassociates.com .
About Tri-Tech Holding Inc.
Tri-Tech designs customized sewage treatment and odor control systems for China's municipalities and its larger cities. These systems combine software, information management systems, resource planning and local and distant networking hardware that includes sensors, control systems, programmable logic controllers, supervisory control and data acquisition systems. The company also designs systems that track natural waterway levels for drought control, monitor groundwater quality and assist the government in managing its water resources. The company is also moving into the industrial pollution control market. Tri-Tech owns seven software copyrights and two technological patents and employs 140 people. Please visit http://www.Tri-Tech.cn for more information.
An online investor kit including a company profile, press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.hawkassociates.com/profile/trit.cfm . To subscribe to future releases via e-mail alert, visit http://www.hawkassociates.com/about/alert/ .
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. Among other things, expectations about expansion into adjacent industry verticals, growth of our Industrial Pollution Control Services, and the potential development of the company's other existing service lines contain forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact: Investor Contact: Hawk Associates Frank Hawkins Amy Lin Phone: +1-305-451-1888 Email: [email protected] - FINANCIAL TABLES - TRI-TECH HOLDING INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2010 2009 (Unaudited) ASSETS Current Assets Cash $ 7,202,236 $ 7,171,464 Restricted cash -- 1,501,128 Accounts receivable, net of allowance for doubtful accounts of $62,448 and $56,491 as of March 31, 2010 and December 31, 2009, respectively 3,568,779 4,338,239 Unbilled revenue 6,471,224 3,952,763 Other receivables 359,784 273,602 Inventories 1,989,636 1,573,324 Deposits on projects 978,687 585,153 Prepayments to suppliers and subcontractors 3,088,153 1,898,900 Total current assets 23,658,499 21,294,573 Long-term unbilled revenue 1,724,331 1,723,852 Plant and equipment, net 432,226 374,009 Proprietary technology, net 1,073,497 797,854 $ 26,888,553 $ 24,190,288 LIABILITIES AND EQUITY Current liabilities Accounts payable and cost accrual on projects $ 3,912,821 $ 3,367,056 Customer deposits 628,796 494,047 Billings in excess of revenue -- 8,650 Other payables 120,228 8,633 Accrued liabilities 72,433 103,190 Deferred income taxes -- 141,478 Income taxes payable 239,106 144,232 Total current liabilities 4,973,384 4,267,286 Long-term liabilities 47,277 58,171 5,020,661 4,325,457 Equity Tri-Tech Holding Inc. shareholders' equity Common stock ($0.001 par value, 30,000,000 shares authorized;, 5,389,000 and 5,255,000 shares issued as of March 31, 2010 and December 31, 2009, respectively; as of March 31, 2010, 340,000 shares issued were held in escrow.) 5,389 5,255 Additional paid-in-capital 14,128,162 12,942,650 Statutory reserves 50,655 50,655 Retained earnings 7,150,957 6,333,343 Accumulated other comprehensive income 374,567 377,097 Total Tri-Tech Holding Inc. shareholders' equity 21,709,730 19,709,000 Noncontrolling Interests 158,162 155,831 Total equity 21,867,892 19,864,831 $ 26,888,553 $ 24,190,288 TRI-TECH HOLDING INC. CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME For The Three Months Ended March 31, 2010 2009 (Unaudited) (Unaudited) Revenues: System integration $3,508,085 $ 1,319,603 Hardware products 347,081 1,097,155 Software products 382,948 434,049 Total revenues 4,238,114 2,850,807 Cost of revenues: (exclusive of depreciation and amortization shown separately below) System integration 2,151,215 883,633 Hardware products 309,740 887,880 Software products 10,283 10,211 Total cost of revenues (exclusive of depreciation and amortization shown separately below) 2,471,238 1,781,724 Operating expenses: Depreciation and amortization expense 40,442 21,583 Selling and Marketing expenses 202,194 104,306 General and Administrative expenses 696,508 279,049 Total operating expenses 939,144 404,938 Income from operations 827,732 664,145 Other income (expenses): Other expense (4,850) (390) Interest income 9,694 435 Interest expense (1,629) -- Tax rebates 56,965 -- Total other income (expenses), net 60,180 45 Income before provision for income taxes and noncontrolling interests income 887,912 664,190 Provision for income taxes 67,773 63,563 Net income before allocation to noncontrolling interests 820,139 600,627 Less: Net income attributable to noncontrolling interests 2,525 375 Net income attributable to Tri-Tech $817,614 $ 600,252 Holding Inc Other comprehensive income Foreign currency translation adjustment (2,724) 13,208 Comprehensive income $817,415 $ 613,835 Less: Comprehensive income attributable to noncontrolling interests 2,331 349 Comprehensive income attributable to Tri-Tech Holding Inc. $815,084 $ 613,486 Net income attributable to Tri-Tech Holding Inc. per share: Basic $0.16 $ 0.17 Diluted $0.15 $ 0.17 Weighted Average number of common shares outstanding: Basic 5,269,011 3,555,000 Diluted 5,559,260 3,555,000 TRI-TECH HOLDING INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For The Three Months Ended March 31, 2010 2009 (Unaudited) (Unaudited) Cash flows from operating activities: Net income before allocation to noncontrolling interests $ 820,139 $ 600,627 Adjustments to reconcile net income before noncontrolling interests to net cash provided by (used in) operation activities: Amortization of option expenses 91,480 -- Amortization of warrants 8,766 -- Depreciation and amortization 40,442 21,748 Provision for doubtful accounts 5,940 10,178 Deferred income taxes (149,838) 42,668 Changes in operating assets and liabilities: Restricted cash 1,501,414 -- Accounts receivable 764,660 258,395 Unbilled revenue (2,517,140) (744,534) Other receivables (479,436) 51,281 Inventories (359,426) (368,318) Prepayments and deferred expenses (1,164,248) 340,332 Accounts payable 488,386 256,795 Customer deposits 134,600 167,149 Billings in excess of revenue (8,652) -- Other payables 175,051 (23,449) Accrued liabilities (30,782) -- Taxes payable 94,825 189,667 Net cash (used in) provided by operating activities (583,819) 802,539 Cash flows from investing activities: Payment to purchase plant and equipment (80,766) (950) Payment to purchase intangible asset (292,959) -- Payment of installment of vehicle purchase (10,909) -- Short-term loan to third parties -- (213,584) Net cash used in investing activities (384,634) (214,534) Cash flows from financing activities: Proceeds from exercise of warrants into common stock 1,085,400 -- Net cash provided by financing activities 1,085,400 -- Effect of exchange rate changes on cash and cash equivalents (86,175) (171,539) Net increase in cash and cash equivalents 30,772 416,466 Cash and cash equivalents, beginning of period 7,171,464 732,418 Cash and cash equivalents, end of period $ 7,202,236 $1,148,884 Supplemental Data: Income taxes paid $ 122,786 $ -- Interest paid on debt $ 1,629 $ --
SOURCE Tri-Tech Holding Inc.